The Core Lithium Ltd (ASX: CXO) share price is having a tough start to the day.

In morning trade, the lithium developer’s shares are down 7% to $1.37.

Why is the Core Lithium share price sinking?

The Core Lithium share price is falling on Wednesday amid weakness in the lithium sector following a poor night of trade on Wall Street.

For example, it isn’t just Core Lithum that is sliding today. The likes of Liontown Resources Limited (ASX: LTR), Pilbara Minerals Ltd (ASX: PLS), and Sayona Mining Ltd (ASX: SYA) shares are all under significant pressure as well.

What else?

While a good number of lithium miners are falling today, the Core Lithium share price is falling more than most.

This is likely to be due to traders taking a bit of profit off the table today following some very strong gains in 2022.

Thanks to a range of positive announcements, such as its agreement with electric vehicle giant Tesla, Core Lithium’s shares have been well and truly smashing the market this year.

In fact, even though the company’s shares are now trading 18% below their recent high, they are still up a staggering 117% since the start of the year and approximately 500% over the last 12 months.

The post Why is the Core Lithium share price sinking 7% today? appeared first on The Motley Fool Australia.

More reading

• These are the best ASX lithium stocks so far in 2022
• 5 ASX mining shares rocking all-time highs on Friday
• Why BHP, Core Lithium, Tabcorp, and Talga shares are racing higher
• Why is the Core Lithium (ASX:CXO) share price up 6% to a record high?
• 5 ASX lithium and green metals shares hitting new 52-week highs today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The EML Payments Ltd (ASX: EML) share price increased by around 25% in March 2022.

Over the same period, the S&P/ASX 200 Index (ASX: XJO) rose by 6.4%. That means EML shares beat the ASX 200 by close to 20% in just one month.

However, the gains have just reversed most of the decline seen by the business since the start of the year.

In 2022, the EML share price is now down around 9%.

What have investors been concentrating on recently with the EML share price?

Every buyer and seller has different reasons for transacting at different prices.

At the end of March, brokers at Macquarie called EML a buy, with a price target of $3.95. This was an increase from the previous target of $3.80.

Rising interest rates are expected to benefit EML.

EML had $2.7 billion as stored float on 31 December 2021. Around $2.3 billion of this was held in cash and a further $400 million was in high-rated, low-risk bonds.

Based on the current banking arrangements, if rates across all jurisdictions were to rise by 1%, this would add between $14 million to $15 million to EML’s earnings before interest, tax, depreciation, and amortisation (EBITDA).

By FY24, EML could be generating $45 million of interest revenue, according to Macquarie.

In the middle of March 2022, UBS reiterated that it thinks the EML share price is a buy, with a price target of $4.55. This came after the news that EML was entering the European employee benefits market with Up Spain.

Up Spain partnership

On 16 March 2022, EML announced that it would be working with Up Spain, covering meal vouchers and employee benefit solutions, “initially” through a multi-year agreement with Up Spain.

EML said that the employee benefits market is worth more than A$88 billion globally and is expected to grow by A$20 billion between 2021 to 2025. Europe represents 35% of this market, worth more than A$30 billion per year.

Up Spain is one of the three largest providers in Spain, with over one million users across approximately 4,700 corporate clients and a network of more than 30,000 restaurants in Spain.

EML says this deal can showcase its technology and the company can use it as the basis for potential future growth in the segment within Spain and, over time, in other countries.

The ASX payments share also pointed out that Up Spain is a subsidiary of the Up Group, which offers employee benefits and incentive programs in 28 countries including Portugal, France, Germany, Belgium, Italy, Turkey, and Poland.

This program is expected to go live in the first quarter of FY23.

While EML indicated this announcement was market sensitive for the EML share price, it also said that it didn’t expect the program with Up Spain to make a material contribution to EML’s revenue or EBITDA in FY23.

However, management did say that the win validates EML’s strategy of focusing on this segment and it provides an opportunity for material future growth.

The post The EML share price jumped 25% in March 2022. What happened? appeared first on The Motley Fool Australia.

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• Here’s why ASX 200 shares still have ‘a pretty good growth outlook’

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended EML Payments. The Motley Fool Australia owns and has recommended EML Payments. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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After tumbling 39% in February, the Boral Limited (ASX: BLD) share price continued to suffer through March.

Weighing it down last month was a taxation-related announcement and a guidance downgrade.

As of the end of March, the Boral share price was $3.46, 4.68% lower than it was at the end of February.

For context, the S&P/ASX 200 Index(ASX: XJO) gained 6.39% last month, indicating the Boral share price underperformed the index by 11%.

So, what impacted the building products and construction materials company’s stock in March? Let’s take a look.

Why did Boral’s stock struggle in March?

The Boral share price struggled last month, dragged lower by two price-sensitive announcements.

The first related to the company’s $3 billion capital return, announced in February.

The capital return saw investors receiving an unfranked 7-cent dividend and a $2.65 per share capital reduction. Hence, the stock tumbled 40% on its ex-dividend and ex-capital return date in February.

It didn’t stop there, though. After the market closed on 2 March, Boral released an anticipated update on the taxation of shareholders’ payouts.

The company said the Australian Taxation Office had published a class ruling concerning the capital return, as was expected.

The ruling confirmed no part of the capital return would be assessable as a dividend for tax purposes.

Shareholders were encouraged to seek professional advice on the tax implications of the payout.  

The Boral share price dipped 0.28% following the announcement. However, the worst was yet to come.

Boral’s stock tumbled when the company downgraded its earnings guidance on 22 March.

Devastating floods in parts of Queensland and New South Wales and rising fuel and coal prices dinted the company’s outlook for the financial year 2022.

It now expects its earnings before interest and tax (EBIT), excluding property, to be between $145 million and $155 million.

For context, Boral reported $78 million of EBIT excluding property for the first half of the financial year. It previously expected the second half to bring stronger earnings.

The floods are expected to dint its earnings by around $23 million.

Meanwhile, Boral’s exposure to coal prices is unhedged this half, while hedging is in place on its expected diesel usage until April.

Higher fuel prices have also worsened the company’s supply chain issues.

The Boral share price slipped 3.48% on the release of its guidance downgrade, hitting a new 52-week low of $3.21.

Boral share price snapshot

As of the end of March, the Boral share price was 44% lower than it was at the start of 2022.

Right now, it’s 39% lower than it was this time last year.

The post Why did the Boral share price have such a lousy month in March? appeared first on The Motley Fool Australia.

More reading

• These were the worst performing ASX 200 shares during the first quarter
• Why did the Boral (ASX:BLD) share price have such a positive day?
• Worried about how the federal budget might impact your ASX shares? Here’s what Goldman says
• Why A2 Milk, Atlas Arteria, Block, and Boral shares are tumbling today
• ASX 200 (ASX:XJO) midday update: BHP and New Hope storm higher, Boral slumps

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Leading fund manager Tim Carleton from Auscap Asset Management has outlined why ASX shares could be the best way to go right now.

Talking to Livewire, Carleton suggests that Australian shares have proven themselves over the long term. He says the lucky country could be the best place to invest over the United States and European markets.

How bullish should investors be about ASX shares?

Carleton suggests that investors should consider investing in Australian shares as much as possible. Livewire quoted him saying:

There is a massive push to diversify out of Australia, but I think you want to be as overweight Australia as you can possibly stomach for the rest of our lifetimes.

That’s certainly been the right way over the last 100 years, with the Australian market delivering the best returns of any developed market, at around 12% a year, and I see no reason for that to change and if anything, we’re in a better position now than we have been.

Rising inflation and worries regarding interest rates may be hurting the valuations of businesses overseas. But Australia’s inflation is currently lower, and wage growth may also be slower.

Australia has a number of advantages

According to Auscap, Australia has a number of useful advantages.

The first is the country’s “natural resource advantage”, which could help us in the transition to green energy. Some of the biggest ASX shares are resource giants like BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG).

Another advantage, according to Auscap, is the relatively strong population growth over the medium term.

Australia’s proximity to the “high growth and rapidly developing” Asian economies is another advantage.

The final advantage that Australia has is its democratic and rules-based political system including the protection of property rights. This is a reason to expect Australia will continue to provide one of the best investing environments in the world.

Which ASX shares does Auscap like?

Tim Carleton refers to four ASX shares that Auscap has invested in recently.

Macquarie Group Ltd (ASX: MQG)

Macquarie is a global investment bank that is well-liked. It makes profit from across the world, with more than two-thirds of earnings coming from international sources. It also has “exceptional returns on invested capital.” The company has achieved long-term earnings per share (EPS) and the fund manager thinks growth can continue.

Mineral Resources Limited (ASX: MIN)

Mineral Resources is an iron ore and lithium miner. According to Carleton, it’s the world’s fifth-biggest lithium producer and this could drive the company’s growth.

The fund manager referred to Albemarle’s prediction that demand for lithium is going to increase by 8x by the end of the decade.

Nick Scali Limited (ASX: NCK)

Nick Scali is one of Australia’s largest furniture businesses. This ASX share is Carleton’s favourite pick at the moment, referring to the company’s average return on equity (ROE) of over 50% in the past decade.

A key reason for the bullishness is the potential of the business to keep growing revenue and profit over the coming years through multiple avenues. Some of those ways to grow the business include a store rollout, e-commerce growth, and the ability to raise profit margins.

Nick Scali recently acquired the furniture business Plush-Think Sofas.

HomeCo Daily Needs REIT (ASX: HDN)

This business is a real estate investment trust (REIT) that has a portfolio of more than 50 homemaker centres in Australia. Its tenants are predominately ASX shares or large global names.

Carleton says that the business has a forecast dividend yield of 6.6%. It also has contracted rental growth built into its leases, at an average of 3.6%. This could provide a good starting point for returns, according to the fund manager. Carleton thinks the REIT can achieve above-market rental growth for quite a while.

Another interesting thing about this business for Auscap is that the ‘site coverage’ is only 38%. So there is more land that it can develop on. The business comes with a development pipeline of $500 million.

The post Be as overweight ‘as you can possibly stomach’ in ASX shares right now: fundie appeared first on The Motley Fool Australia.

More reading

• Is a bubble forming for ASX green metals shares?
• Mineral Resources share price leaps on ‘unprecedented’ lithium demand update
• 2 lithium ASX shares to buy in April 2022: experts
• Macquarie share price lifts despite ASIC legal action
• ASX 200 (ASX:XJO) midday update: IGO dealt blow, Block’s data breach, Xero jumps

Motley Fool contributor Tristan Harrison owns Fortescue Metals Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

On Tuesday, shares of Amazon.com (NASDAQ: AMZN) fell by a little — about 2.3% as of 2:30 p.m. ET — on some big news. The company is, of course, most famous for its e-commerce business, though it actually makes far more of its profits from cloud computing. And now, it plans to spend billions of dollars to build another brand new business. 

In space.

So what

Let’s get specific.

Project Kuiper is Amazon’s plan to mimic SpaceX’s Starlink by putting a constellation of 3,000-odd small satellites into orbit that will allow it to sell broadband internet access from space.

Well, on Tuesday morning, Amazon announced plans to kick Project Kuiper into high gear, revealing it had signed contracts with Arianespace (largely owned by Airbus and Safran), United Launch Alliance (a joint venture of Boeing and Lockheed Martin), and Blue Origin (led by Amazon founder Jeff Bezos). Together, the three will provide up to 83 rocket launches that will put Amazon’s satellites into orbit.  

The press release was a bit short on details. There was no specific date given for the first satellite launch, for example, nor did the company mention the cost of all these rocket launches it’s buying. Commenting on the news, however, our friends over at Ars Technica speculated that “Amazon is likely paying at least $10 billion for these launches.”

Now what

Is that a lot of money, or a little? Investors selling off Amazon stock Tuesday may think it’s a lot — but when you consider that the company earned more than $33 billion in profits last year alone, I’d argue that $10 billion is actually a relatively small amount for a company of its size. That’s especially true given that the rocket launches in question are expected to be spread out over five years — and $2 billion a year would amount to only about 6% of Amazon’s annual profits.

Of more concern to me is the fact that Amazon has made deals to send its satellites to space aboard rockets that mostly don’t exist yet — or, at least, haven’t yet been proven able to fly successfully. According to the press release, Amazon plans to hire rides on:

• Arianespace’s Ariane 6 (which has never yet flown);
• United Launch Alliance’s Vulcan Centaur (which likewise has never flown);
• And, of course, Blue Origin’s New Glenn (and not only has that one never flown, Blue Origin has yet to put any rockets at all into Earth orbit).

Granted, I expect that if given enough time, most of these rockets will eventually be proven spaceworthy and reach orbit, such that they’ll eventually be able to help Amazon out with its new space project. Still, it’s more than a little strange that Amazon is strapping such a high-profile project to the backs of unproven launch vehicles. That doesn’t bode well for the chances of Project Kuiper coming to fruition anytime soon.

Then again, if that means Amazon might not actually end up spending $10 billion on rocket launches, investors might decide that’s actually good news. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Amazon stock rocketed off course today appeared first on The Motley Fool Australia.

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Rich Smith has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lockheed Martin. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Vulcan Energy Resources Ltd (ASX: VUL) share price is pushing higher on Wednesday morning.

At the time of writing, the lithium developer’s shares are up 3% to $10.50.

Why is the Vulcan share price rising?

Investors have been bidding the Vulcan share price higher today following the announcement of a new offtake agreement.

However, this offtake agreement isn’t for lithium as you might expect. Rather, it is for renewable heat from its geothermal wells.

According to the release, Vulcan and MVV Energie AG have executed a 20-year binding purchase agreement for at least 240 gigawatt hours per year of renewable heat.

MVV is the largest municipal energy supplier in Germany and generates an annual revenue of 4.1 billion euros.

The agreement with MVV commences in 2025 and includes the supply of a minimum of 240,000MWh per year to a maximum of 350,000MWh per year to households in Mannheim, outside of Frankfurt, Germany.

Vulcan advised that this heat will be supplied from the company’s planned geothermal wells in the area surrounding the City of Mannheim. Heat will be transferred via heating grids and a series of underground pipes that deliver hot water or steam to buildings in the local community.

Vulcan is developing its Mannheim licence as part of a planned larger Phase 2 of the Zero Carbon Lithium Project.

Management commentary

Vulcan’s Managing Director, Dr Francis Wedin, was pleased with the agreement and believes it will help Germany transition away from Russian gas. He commented:

“Vulcan is committed to playing a leading role in Germany’s “Wärmewende”, or heat transition as the country looks to reduce its reliance on Russian energy. This agreement represents a real and immediate step taken by a German energy utility to achieve energy security whilst not compromising on climate goals.

“We believe that Geothermal renewable energy on a mass scale, combined with lithium extraction from the same deep geothermal source, can and will play an important part in achieving Europe and Germany’s energy security and independence. We are proud to partner with MVV, a leader in German energy supply, dedicated to making a lasting and sustainable contribution to the local community through the provision of renewable energy and heat.

Our binding offtake agreement for regional geothermal energy positions MVV to deliver secure, sustainable, economical and environmentally friendly heating for its industrial, commercial and private household customers. Vulcan intends to build several further distributed geothermal renewable energy plants across the Upper Rhine Valley region and we are in discussions with other regional communities regarding additional heat offtake agreements.”

The post Vulcan share price up on new offtake agreement appeared first on The Motley Fool Australia.

More reading

• March was a stellar month for the Vulcan Energy (ASX:VUL) share price. Here’s why
• Vulcan (ASX:VUL) share price lifts amid company quest to replace Russian gas
• Experts name 3 of the best ASX lithium stocks to buy now
• Here’s why the Vulcan (ASX:VUL) share price is charging higher today
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It’s no secret that we’re in the midst of a commodities super-cycle in 2022.

Experts agree that the upside’s been spurred on by a pipeline of macroeconomic catalysts – and this pipeline isn’t carrying gas or oil.

Sanctions on Russian exports, loose-running inflation, COVID-19, supply chain bottlenecks, conflict in Europe, commodity shortages, electric vehicle demand – can we name any more? – have all weighed into spot markets this year. This has resulted in price surges.

However, we are now presented with a mix of events that many haven’t seen in a lifetime.

As Russia attempts to avoid default on its debt obligations – an event that sent global markets into shakedown when it last happened in 1998 – the US Treasury has dealt its hand once more.

Bloomberg reports the US Treasury has opted to halt dollar-denominated debt payments from Russia’s accounts at US banks, further complicating its efforts to meet coupon payments on its bonds.

Here’s the take of Gary Kirk of TwentyFour Asset Management (as quoted by Bloomberg):

Clearly the latest announcement by the US Treasury is designed to put additional pressure on the Russians.

The alternative payment methods are significantly more punitive and more challenging for Russia and hence it does increase the chance of a technical default.

What’s the fallout from the commodities surge?

The momentum has carried well for those investors tied into ASX 200 commodity shares.

As TMF reported this week, most of the upside for Aussie listed miners in March “was underscored by roaring commodity markets that have continued to surpass all expectations”.

“The spillover is set to produce hefty free cash flow yields and potentially record dividends and/or buybacks for ASX miners and their shareholders.”

Iron ore has priced at an average US$118 per tonne in 2022 so far, Bloomberg data shows, only marginally down on last year’s entire result.

LNG exports are also expected to more than double in Australia this year to $70 billion. Spot prices are likely to remain frothy as well.

Australia could be a benefactor from this surge, not to mention ASX players such as Rio Tinto Ltd (ASX: RIO) and Santos Ltd (ASX: STO).

Their share prices have surged 20% and 28% respectively in 2022 so far. Meanwhile, the sector has seen heavy inflows to exchange-traded funds (ETFs) focused on resources exposure.

The  Betashares Australian Resources Sector ETF (ASX: QRE) and Vaneck Australian Resources ETF (ASX: MVR) have also spiked to similar levels and are well in the green.

Not only that, but the price of coal has bottomed for now after lunging to 10-year highs in February. It has since cooled off but ASX coal miners have clipped gains across the board.

As well, investors continue backing ASX coal mining shares as the EU considers a ban on fuel imports from Russia, Bloomberg reports.

Russia supplied around 18% of global coal exports in 2020, it says, and Europe was the largest buyer of its black rock.

Yancoal Ltd (ASX: YAL) has spiked 77% since January 4 whereas Whitehaven Coal Ltd (ASX: WHC) is up nearly 60% at the time of writing.

Meanwhile, the S&P/ASX 300 Metals & Mining Index (ASX: XMM) has powered 17% higher this year to date and is up another 5% in the past month of trade.

The post ASX 200 commodities players were the major winners in March. Take a look appeared first on The Motley Fool Australia.

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• Why now is the time to sell Santos shares: fund manager
• 5 things to watch on the ASX 200 on Wednesday
• Here are the 5 best-performing ASX exchange-traded funds over the March quarter
• Here’s what drove the Santos share price 6% higher in March
• 3 ASX shares to buy in the hottest sector right now: experts

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Weebit Nano Ltd (ASX: WBT) share price is charging higher for a second day in a row.

In morning trade, the memory technology developer’s shares are up 8% to $3.15.

This means the Weebit Nano share price is now up 20% in the space of two days.

Why is the Weebit Nano share price shooting higher?

The catalyst for the rise in the Weebit Nano share price on Wednesday has been the release of a promising announcement.

According to the release, demo chips integrating its embedded Resistive Random-Access Memory (ReRAM) module have successfully completed their functional testing phase. Management notes that this is a key step towards delivering a commercial product.

Testing included programming and reading of the entire ReRAM array using smart algorithms, error correcting code, and various data manipulations. It also included testing the operation of the complete sub-system, comprising all communication interfaces and system peripherals.

Positively, the entire chip is performing as expected.

Weebit Nano’s ReRAM is aiming to address the growing need for significantly higher performance and lower power memory solutions in a range of new electronic products such as Internet of Things (IoT) devices, smartphones, robotics, autonomous vehicles, 5G communications and artificial intelligence.

What’s next?

As a result of the above, potential customers can now use the demo chips to test Weebit’s ReRAM technology ahead of commercial orders and volume production.

Ahead of potential orders, chips based on a similar design are currently being prepared for fabrication in SkyWater Technology’s US production fab.

Once the module is qualified at SkyWater, volume production can commence. The transfer of Weebit’s embedded ReRAM technology to SkyWater’s production fab is progressing on schedule.

Weebit Nano’s CEO, Coby Hanoch, said: “Our team tested the complete demo chip including the full memory array, the advanced features of our memory module, and the entire system, and confirmed that it functions as expected. This is the first time we can see Weebit’s innovative memory technology operating live in a fully functional chip. We are now moving into a new phase of our roadmap during which customers can confidently begin designing Weebit ReRAM into their SoCs. The characterisation process is now underway and will be immediately followed by full qualification.”

The post Weebit Nano share price jumps 8% on ReRAM update appeared first on The Motley Fool Australia.

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• Own ASX renewable energy shares? Here’s why ‘the energy transition will be good for us’

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The PolyNovo Ltd (ASX: PNV) share price is on the rise on Wednesday morning.

At the time of writing, the medical device company’s shares are up 13% to $1.22.

Why is the PolyNovo share price on the move?

Investors have been bidding the PolyNovo share price higher following the release of a third quarter update.

According to the release, PolyNovo delivered unaudited revenue of A$12.26 million during the third quarter of FY 2022. This represents a 59.3% increase on the revenue of A$7.69 million reported during the prior corresponding period.

This reflects a 79.4% increase in US sales to a record US$6.89 million (A$9.53 million) and an 81.9% lift in ANZ sales to A$1.16 million. It also includes income of A$1 million relating to BARDA and A$0.1 million from a Victorian State Government grant.

This means that PolyNovo’s year to date revenue is now A$30.4 million, which implies an annual run rate of A$48 million.

PolyNovo’s Chair, David Williams, explained that this result was driven by an increase in its salesforce and easing COVID-19 headwinds.

He said “More sales reps equals a wider geographical footprint and increased sales. More reps and the diminishing effects of Covid, have driven record sales in US, UKI and Australia.”

What else?

One thing that has been weighing on the PolyNovo share price this year has been concerns over its dwindling cash balance and the potential requirement of a capital raising in the near future.

Positively, the heavily shorted company’s cash balance increased during the third quarter even before taking into account the sale of its Lorimer Street property.

At the end of March, PolyNovo had cash of A$3.8 million, which was up A$0.5 million since the end of December. This will soon be boosted by a further A$6.35 million from the Lorimer Street property sale when the process completes in June.

Finally, management advised that its clinical trial programmes remain on track. This includes recruitment for the pivotal burn trial and enrolment of the first patients for the DFU trial.

PolyNovo is also on track to file for the 510K approval for the Matrix product during this financial year and work on the prototypes for Hernia development and new designs for BTM are also on track.

The post Why is the PolyNovo share price surging 13% higher today? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended POLYNOVO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in Woolworths Group Ltd (ASX: WOW) have staged a comeback in March and rallied almost 5% in that time. The retail giant is set to open higher again today. On Tuesday, it finished the session with a splash in the green at $37.14.

Cyclical names such as Woolworths are clawing back gains after a frosty start to the year. In the last 12 months, the share price has gained just 3%. But with a recent shift in market tone, it appears investors are prepared to throw risk on the table once more.

How did Woolworths go in March?

Analysts at UBS say that with the economy reopening again, consumer confidence for the next 12 months has touched record levels.

Findings from its 11th quarterly Evidence Lab consumer survey demonstrate that cost pressures are rising for consumers, despite growth in savings and asset values.

Curiously, the firm noted that the best avenue for investors to get position to reflect consumer behaviour is are young affluent types in the large city areas of Australia.

That’s important for Woolworths as retailers are more exposed to this kind of consumer, with the conglomerate front and centre on many levels through its offering.

With a string of recent portfolio updates, the group isn’t showing any signs of slowing operations either. It recently unveiled its $184 million Heathwood Distribution Centre (DC), located a short way from the Brisbane CBD.

The venture is set to create more than 200 jobs during construction, Woolworths reports, plus approximately 300 jobs for Queenslanders, it says.

What’s the outlook

Sentiment is mixed on the stock but tilted towards a buy right now. Exactly 50% of analysts covering it urge clients to buy, Bloomberg data shows. The remainder either say to hold or sell, whilst the consensus price target is $37.03.

Analysts at JP Morgan are bullish on the stock and rate it a buy to clients. It has four catalysts that it feels will form the bedrock of Woolworths’ growth in the coming years.

With inflation rearing its head in just about every pocket of the market, perishables like food are set to produce high operating cash flows for Woolworths, the broker says.

It also likes the group’s Everyday Needs segment, whilst Big W and the online platform are equally attractive catalysts to move the needle, it argues.

The firm values Woolworths at $39.50 per share which suggests more than a $2 per share upside if its thesis comes through.

Meanwhile, Mohsen Crofts, analyst at Bloomberg Intelligence, submits that Woolworths’ revenue is “set to establish long-term, post-Covid trend” in a recent note.

“Woolworths’ grocery-segment growth has been elevated during the Covid period but now looks set to normalize around its long-term trend of about 4% a year,” the analyst wrote.

“This represents population expansion of 1-1.5% and food-price inflation of about 2.5-3%,” he added.

“In the next two to three years, more competition from new entrants such as Aldi and Costco, and Amazon.com’s move into packaged food, have further potential to curb store-sales growth”.

The post Are Woolworths shares positioned for ‘a long-term, post-COVID trend?’ appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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