The Creso Pharma Ltd (ASX: CPH) share price is up 2% in afternoon trade.

The company closed yesterday’s trading at 51 cents and its shares are currently fetching 52 cents, after hitting an intraday high of 55 cents this morning.

Those gains will be welcomed by Creso Pharma shareholders who’ve watch the ASX medicinal cannabis share tumble 35% over the past month.

So, what’s the good news for the Creso Pharma share price today?

Cross-selling opportunities progress

Today, Creso Pharma announced further progress for cross-selling opportunities with its acquisition target, Sierra Sage Herbs LLC.

Creso initially reported its acquisition intentions for the United States-based consumer packaged goods company on 3 February. Sierra Sage Herbs’ portfolio includes a range of CBD (cannabidiol) products.

The Creso Pharma share price closed up 5.9% on the day of the announcement.

In today’s release, the company reported it’s about to send 35,000 of its CannaQIX 50 lozenge products from its Switzerland-based facility to Sierra Sage Herbs in the US. Those will then be marketed through SSH’s leading Good Goo brand.

Creso said that the potential cross-selling opportunities could increase its sales in the US and accelerate new product launches.

Commenting on the progress, Creso Pharma’s CEO William Lay said:

The initial shipment of Creso Pharma Switzerland products marks an important milestone and will allow us to test the market, as well as learn how consumers will engage with the Company’s product suite. This will build an important foundation for us as we progress towards larger product launches upon closing of the transaction.

We are also very pleased with the completion of an initial ImpACTIVE product line through the group’s contract manufacturer. By leveraging SSH’s manufacturing relationships, as well as marketing, branding, e-commerce and big box retailer expertise and networks, we expect to significantly accelerate impACTIVE’s route to market.

The Creso Pharma share price may also be getting a lift from the company’s reiteration that it expects “another revenue stream for the company” from the launch of these products in the coming months.

Creso Pharma share price snapshot

If the past month has been difficult for the Creso Pharma share price, the past 12 months have been downright demanding.

Creso Pharma shares have tumbled 72% since this time last year. For some context, the All Ordinaries Index (ASX: XAO) has gained 5% over that same time.

The post Down 35% in a month, why there’s good news for the Creso Pharma (ASX:CPH) share price today appeared first on The Motley Fool Australia.

More reading

• Why did this ASX cannabis share burn 10% today?

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 Boss Energy Ltd (ASX: BOE) share price has been placed on ice today.

Before market open, the uranium producer requested its shares be halted pending a capital raising announcement.

Yesterday’s closing price for Boss Energy shares stood at $2.42 apiece.

What’s the details in Boss Energy’s update?

The Boss Energy share price remained frozen today despite the company releasing the details regarding its capital raise.

According to its morning release, Boss Energy launched a $125 million equity raise to fund the development of its Honeymoon Uranium Project in South Australia.

The capital raising comprises a two-tranche share placement to raise up to $120 million (before costs) and a share purchase plan (SPP) to be offered to eligible shareholders to raise up to an additional $5 million.

Both the placement and SPP are priced at $2.15 a share, which represents an 11.2% discount off the last closing price and a 17% discount off the 5-day volume-weighted average price.

The proceeds of the capital raise will be used to progress a number of strategic initiatives that include the following:

• Complete front end engineering design (FEED) study
• Fund $113 million development costs (including contingency)
• Secure long-lead time items to further de-risk development
• Restart development – post FEED and subject to COVID-19 logistic and sourcing issues
• Continue engagement with utilities for long-term contracts
• Use of equity to fund development de-risks project and retains maximum financial flexibility through commissioning and for future growth initiatives
• Continue exploration focus – substantial scope to extend life of mine (LOM) and/or increase production profile

A SPP booklet will be dispatched to eligible Boss Energy shareholders on 25 March, along with the offer opening up.

The issue of the new shares under the SPP will occur on 13 April 2022.

Management commentary

Boss Energy managing director, Duncan Craib commented:

The capital raising will ensure Boss is funded through to the start of production at Honeymoon.

We have deliberately structured our funding to maintain a highly conservative and robust balance sheet with no debt, $135m of net cash and an additional $100m contingency from our existing strategic uranium inventory.

We have not attained any debt as it requires fixing the uranium price through long term contracts. Boss anticipates that committing to long-term contracts in the current rising uranium price environment would adversely impact the long-term upside potential of Boss and we intend to wait for further increases in contract prices before making any offtake commitments.

With the uranium market’s continuing recovery, Boss to be funded (post equity raising) and Honeymoon having a unique short timeframe to production with all permits in place, Boss will be perfectly positioned to become the uranium producer of choice for investors and customers alike.

Boss Energy share price snapshot

With the uranium spot price rising to unprecedented levels, the Boss Energy share price has accelerated by 90% in the past year.

The company’s shares rocketed to an all-time high of $3.08 in November, before retracing to today’s level of $2.42 per share.

Boss Energy presides a market capitalisation of roughly $690.86 million with approximately 285.48 million shares on its registry.

The post ‘Australia’s next uranium producer’: Why the Boss Energy (ASX:BOE) share price is halted today appeared first on The Motley Fool Australia.

More reading

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• What a Boss! Why the Boss Energy (ASX:BOE) share price is soaring 13% today
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Motley Fool contributor Aaron Teboneras 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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One ASX 200 share takes the prize for the top dividend payer on the planet.

This company’s shares are falling slightly today but have surged 9% year to date.

Let’s take a look at which ASX 200 company delivers the biggest dividend to shareholders.

ASX 200 share BHP tops the list

BHP Group Ltd (ASX: BHP) paid the top dividend in the world in 2021, according to a report from Janus Henderson Investors.

The report stated:

BHP paid the world’s largest ever mining dividend at $12.5bn for the year, with Fortescue Metals not far behind at $11.6bn.

Rio Tinto and Newcrest also made very large increases.

BHP beat global giants including Microsoft Corporation, Samsung Electronics, AT&T Inc, Exxon Mobile Corp, and Apple within the top 10.

BHP had only made the cut as one of the world’s top 10 dividend payers one other time during the past six years, in 2019.

Global dividends surged 16.8% in 2021 to a record $1.47 trillion overall, the report revealed. Europe, the UK, and Australia were among those countries delivering the rapid growth. Banks and miners delivered three-fifths of a $212 billion boost in payouts overall.

In the February reporting season, BHP declared a dividend of US$1.50 (A$2.08) per share. This will be paid on 28 of March.

BHP share price recap

The BHP share price has dropped nearly 7% in a week, shedding more than 6% over the past month.

However, year to date, BHP shares have gained almost 9%.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has lost around 4% so far this calendar year.

BHP has a market capitalisation of $229 billion based on its current share price.

The post This ASX 200 share has the honour of being the biggest dividend payer in the ENTIRE world appeared first on The Motley Fool Australia.

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• Cash machines: 6 ASX 200 shares with the highest dividend yields right now
• The ASX 200 is up, so why is the BHP (ASX:BHP) share price falling today?

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

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Few stocks see as much market action as Netflix (NASDAQ: NFLX) and Nvidia (NASDAQ: NVDA). On an average market day, Netflix shares worth roughly $2.8 billion are changing hands. Nvidia’s daily dollar volume is an even beefier $12.1 billion. Furthermore, both of these are seen as high-octane growth stocks, and investors must have made many of the trades mentioned above after weighing these two against each other.

So let’s run through that comparison right now. Should you buy Netflix stock today, or is Nvidia a better buy?

Why should you buy Netflix?

These are still early days in the making of a global entertainment giant.

TV networks and feature films are moving online as we speak; 25 million American families dropped their cable TV packages between 2012 and 2020, and the transition is not slowing down. On the silver screen, global box office totals were stagnant for a decade while video-streaming services moved from zero to 1 billion subscribers.

Netflix has been leading the charge all along. The top media-streaming service now has 222 million paying subscribers, generated $29.7 billion of top-line sales last year, and regularly dominates the media industry’s awards season.

And the growth story is far from over. According to data from Nielsen, Netflix accounted for just 6.4% of media-consuming screen time in December 2021. Old-school options still dominate the domestic media universe as 26% of that month’s screen hours were directed at broadcast TV, and cable/satellite channels won the day with a 37% slice of the pie.

And that’s in one of the most mature and saturated media-streaming markets in the world. Netflix and rivals should be able to triple in size during this market transition, and the growth opportunity is even more significant in most of the markets overseas.

And investors seem to have lost sight of this fantastic growth story. Its shares barely kept up with the market in recent years, and then a temporary subscriber-growth speed bump slashed share prices in half.

Netflix shares are on fire sale, but the long-term growth story is as clear as ever. So this is a no-brainer buy in my book.

Why should you buy Nvidia?

Like Netflix, Nvidia has several powerful growth drivers:

• As always, its number-crunching chips are locked in battle with Advanced Micro Devices over the lucrative market for video game systems and gaming consoles.
• The company is also making inroads in the data center, focusing on the computing-intensive sub-sector of artificial intelligence.
• Nvidia also provides a complete platform for self-driving cars, opening the door to yet another high-octane growth market.
• Cryptocurrency mining is another important target market, though management keeps brushing that particular business under the rug. Given the crypto sector’s propensity for sudden and massive swings, this is both an explosive growth vector and a source of significant risk.

So Nvidia is tapping into a plethora of promising market trends, often as a clear-cut front-runner. Wall Street is paying attention to this company’s success, and Nvidia has been crushing the broader market over the last five years.

The stock has taken a 30% haircut in the last three months as investors backed away from richly valued growth stocks. Many see it as a great buy after this substantial price drop, but Nvidia still looks expensive with shares trading at 55 times trailing earnings and 20 times sales.

Final verdict: Buy Netflix, hold Nvidia

We could very well be looking at two long-term winners here, but I’m much more comfortable with buying Netflix at today’s prices.

The media-streaming growth story is much clearer than the ever-changing semiconductor industry. At the same time, Netflix’s stock has been stuck in neutral or worse for years while Nvidia’s stock is skyrocketing in the five-year perspective.

Therefore, Netflix is simply a fantastic buy today while Nvidia’s stock might already have much of the upcoming business growth priced in.

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

The post Better buy: Netflix vs Nvidia appeared first on The Motley Fool Australia.

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Anders Bylund owns Netflix. The Motley Fool owns and recommends Advanced Micro Devices, Netflix, and Nvidia. The Motley Fool has a disclosure policy.

 

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

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The Boral Limited (ASX: BLS) share price has been one of the stranger performers in 2022 thus far. Or so it appears from a quick look at this ASX 200 construction company’s share price. Back in early February, the company was rising high at over $6.50 a share, having appreciated almost 15% over the week leading up to 3 February.

But between 3 and 4 February, the company’s shares seemingly cratered by over 40%. Bad earnings? Turmoil at the company’s top? The answer (thankfully for shareholders) was none of the above.

This drop was actually the result of Boral completing a monster $3 billion capital return program. After Boral unloaded several of its businesses, including North American Building Products and Meridian Brick, it opted to return the capital straight to shareholders, in the process becoming a far smaller company. As we covered at the time, this saw Boral give each investor a $2.65 per share capital return, which partially explains why its share price seemingly cratered at the time.

Today, Boral is being priced at $3.31 a share, up 0.61% at the time of writing. 

But simultaneously, Boral also resumed paying out dividends. After ditching shareholder payouts in the second half of 2020 and all of 2021, 2022 has seen the company pay out a single unfranked dividend of 7 cents per share. That gives Boral a trailing dividend yield of 2.11% on the current share price. 

Is the Boral share price a buy for dividend income?

So if Boral pays out another dividend of equal value later this year, it will likely boost the company’s yield to over 4%. So that begs the question: is Boral a buy today for dividend income? Well, let’s take a look at what one ASX broker reckons.

Investment bank and broker JPMorgan looked at Boral last month. It rated the company as Neutral, albeit with a 12-month share price target of $4, which implies an upside of over 20% over the next year. 

But turning to dividends, JPMorgan is confident they will continue to flow out of the company. It is anticipating total dividends for FY22 of 12 cents per share, which would mean another dividend later this year amounting to 5 cents per share. For FY23, it is expecting another 12 cents per share in dividends, before a rise to 14 cents per share in FY24. That implies a potential forward yield of 3.63% for both FY22 and FY23, and 4.23% for FY24.

Nothing to shoot the lights out on an income basis, one could say. But it’s still a pretty meaty dividend for ASX standards, if JPMorgan’s predictions turn out to be true.

At the current Boral share price, this ASX 200 construction materials company has a market capitalisation of $3.63 billion. 

The post Are Boral (ASX:BLD) shares worth buying for dividends? appeared first on The Motley Fool Australia.

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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Sebastian Bowen owns JPMorgan Chase. 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 is charging higher on Wednesday afternoon.

At the time of writing, the payments company’s shares are up 4% to $2.39.

Why is the EML share price charging higher?

Investors have been bidding the EML share price higher on Wednesday following the release of a positive announcement.

According to the release, the company has entered the Employee Benefits Market (EBM) in Europe, covering meal vouchers and employee benefit solutions, initially through a multi-year agreement with Up Spain.

The release notes that the EBM market is worth over A$88 billion globally and is expected to grow by A$20 billion between 2021 to 2025.

The good news for EML is that the European market represents a sizeable 35% slice of this market, which equates to in excess of A$30 billion per annum. This makes it one of the largest prepaid verticals in Europe.

Up Spain is one of the three biggest providers in Spain with over 1 million users across approximately 4,700 corporate clients and a network of over 30,000 restaurants in Spain.

What’s next?

Management believes the deal with Up Spain provides EML with a platform to showcase its proprietary technology enabling real-time benefit and payment with just one transaction, accessing multiple accounts and data in the background to orchestrate a seamless user experience.

EML will be working to have this contract act as the basis for potential future growth in this segment within Spain and in time, countries outside of Spain. And given that Up Spain is part of the much wider Up Group, which offers employee benefits and incentive programs in 28 countries, EML will be well-placed to deliver on this target if this contract is a success.

‘Milestone agreement’

EML’s Managing Director & Group CEO, Tom Cregan, believes the deal is a milestone for the company.

He said: “This contract with Up Spain is a milestone agreement for us given the size of the EBM and the continued transition of meal voucher programs transitioning from physical vouchers to digital payment solutions. Up Spain is a proven market leader and we look forward to launching this program with them and continuing to build out our presence in the EBM industry, following on from the success we have had with Salary Packaging solutions in Australia and opportunities that we are targeting in the evolving Earned Wage Access industry.”

And while management doesn’t expect this deal to make a material contribution to its revenue or earnings in FY 2022 or FY 2023, it “provides an opportunity for material future growth.”

The post EML Payments (ASX:EML) share price storms higher on ‘milestone’ European deal 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 EML Payments. The Motley Fool Australia owns and has recommended EML Payments. 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.

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Shiba Inu (CRYPTO: SHIB), the top-performing cryptocurrency in 2021, skyrocketed more than 40,000,000% during the year. Meme-stock mania carried over to digital assets, pushing the prices of some tokens to new heights for no fundamental reason. Profit-seeking investors want a repeat performance this year. 

With Shiba Inu down 30% so far in 2022 (as of 9 March), some speculators might be hoping for a quick bull run that turns things around. Wild price swings are normal when it comes to cryptocurrencies, and, as a result, people are tempted to try and time the market. But this could be a losing game, especially with a cryptocurrency like Shiba Inu, whose future is questionable. 

Here’s why. 

Where’s the competitive edge? 

Shiba Inu is a token that is compatible with the Ethereum (CRYPTO: ETH) network, meaning that it has exposure to the Ethereum ecosystem, which includes availability on popular wallets and decentralized applications (dApps). However, Shiba Inu is constrained by the same issues facing the world’s second most valuable cryptocurrency. These center around slow transaction processing times and high fees. 

The developers at Shiba Inu have a layer-2 solution in the works, called Shibarium, to help speed up transactions and lower costs. If implemented without any major hiccups, Shiba Inu’s network could introduce gaming and metaverse applications, building much-needed utility into the system. 

Solving the scalability issue is probably the most important topic in the crypto world today, with the smartest minds working on the problem. Some are skeptical that Shiba Inu, with its lack of differentiation and resources, could make a huge breakthrough here. Even if it does, there are already popular gaming and metaverse options bringing in capital. 

Nonetheless, the possible introduction of Shibarium, as well as a potential listing on the Robinhood Markets app, could be catalysts that push SHIB’s price higher in the near term.  

Arguably, the viability and staying power of a cryptocurrency depend on its potential to create real-world utility. Shiba Inu seriously lags behind other projects, particularly Ethereum, in that space. Developers and users will continue to be attracted to larger and more proven blockchains, potentially leaving Shiba Inu in the dust. 

Ignore the FOMO 

The fear of missing out, or FOMO, is something that investors constantly struggle with, especially in today’s digitally connected age. We hear others talk about making money from investing in certain stocks or cryptocurrencies. We then feel the need to jump right in as well. News flash: Copying what everyone else is doing is not a viable investment strategy. 

The feeling of FOMO is exacerbated in the world of cryptocurrencies, where massive price swings in excess of 20% can happen on any given day. There is no shortage of stories out there about people who became millionaires overnight because of a lucky bet on some digital asset. Like Shiba Inu in 2021, meme tokens definitely encourage this type of behavior.

But as I touched on above, a project like Ethereum could be a much better place to park your capital for the long term. It is already making great strides in introducing various decentralized applications (dApps), like decentralized finance services, which bring in more users. This money inflow leads to more developers working on Ethereum in a virtuous cycle. Can Shiba Inu really compete with this momentum? 

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

The post Is Shiba Inu ready for a bull run? appeared first on The Motley Fool Australia.

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Neil Patel owns Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Ethereum. The Motley Fool Australia owns and has recommended Ethereum. 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 Altium Limited (ASX: ALU) share price has fallen by almost 30% since the start of 2022. It begs the question: Has the ASX tech share dropped so much that it’s too cheap to ignore?

Altium is one of many technology businesses that have declined substantially this year. For example, the Xero Limited (ASX: XRO) share price has dropped 35% in 2022 while the Appen Ltd (ASX: APX) share price has sunk 38%.

There are plenty of issues making headlines right now such as the impacts of the Russian invasion of Ukraine, global inflation, potential interest hikes, and supply chain problems.

But, after the Altium share price decline, is it excellent value?

Analyst thoughts on the Altium share price

After seeing Altium’s recent FY22 half-year result, Macquarie analysts rated the ccompany as ‘underperform’.

The result and management commentary were stronger than Macquarie had forecast, though the broker expects the second half of FY22 to show slower growth. It also noted that Altium’s outlook for acquisitions is better given the decline in valuation of many technology businesses.

The Altium price target from Macquarie is just $25.90. That’s almost 20% lower than it is today.

However, Citi is a bit more optimistic. Citi is ‘neutral’ on the ASX tech share. The broker’s Altium share price target is $34.10, suggesting a possible upside of 8% over the next year. Citi is expecting ongoing investment into research and development by Altium, which may impact profit margins.

FY22 half-year report wrap

For investors who didn’t see the result, Altium achieved growth in most areas of its business in the first six months of the 2022 financial year.

Altium’s revenue grew by 28% to US$102 million. Octopart, the electrical parts search engine division, saw revenue surge by 105% to US$22 million. Octopart is being helped by tailwinds from the global electronic parts shortage.

There was double-digit revenue growth from all regions, except China, which only grew by 6% as the nation felt the temporary impact of regional COVID-19 lockdowns.

Annual recurring revenue (ARR) rose 43% year on year and recurring revenue now accounts for 74% of total revenue, up from 65% in the same period last year.

Earnings per share (EPS) rose by 37% to 17.4 cents and operating cash flow jumped 78% to US$33 million. The board decided to increase the interim dividend by 11% to AU$0.21 per share.

Growth outlook

For Altium, a key part of its growth plan is scaling its cloud offering. Altium 365 allows engineers to collaborate and access their designs from anywhere. It is proving to be popular. In the first six months of FY22, its number of monthly active users reached 19,700 – this was a 54% increase since August 2021.

The ASX tech share upgraded its revenue guidance for FY22 to the high end of the forecast range. Revenue is expected to grow between 18% to 20% to a range of US$213 million to US$217 million for the financial year.

Altium share price valuation

Based on Citi’s FY22 profit estimates, Altium shares are valued at 62x forecast earnings.

However, Macquarie’s lower profit estimate puts the Altium share price at 63x FY22’s forecast earnings.

The post Is the Altium (ASX:ALU) share price too cheap to ignore? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Altium, Appen Ltd, and Xero. The Motley Fool Australia owns and has recommended Appen Ltd and Xero. 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Bank of Queensland Limited (ASX: BOQ)

According to a note out of Morgans, its analysts have retained their add rating and $11.00 price target on this regional bank’s shares. Morgans highlights that Bank of Queensland is trumping its peers when it comes to growth momentum. In light of this and the faster-than-expected realisation of synergies from the ME Bank acquisition, the broker sees significant value in its shares at the current level. The Bank of Queensland share price is trading at $8.27 this afternoon.

Breville Group Ltd (ASX: BRG)

Another note out of Morgans reveals that its analysts have retained their add rating and $32.00 price target on this appliance manufacturer’s shares. This follows news that Breville has agreed to acquire Italian prosumer coffee machine company Lelit. Morgans believes the acquisition is consistent with the company’s strategic objective of adding a premium Italian espresso brand to its stable. Outside this, the broker likes Breville due to its belief that it is positioned to deliver double-digit sales growth consistently over the next few years as it grows its market share. The Breville share price is fetching $27.48 on Wednesday.

Rio Tinto Limited (ASX: RIO)

Analysts at Goldman Sachs have retained their buy rating and $131.50 price target on this mining giant’s shares. The broker was pleased with news that Rio Tinto is aiming to acquire the remaining stake of Turquoise Hill that it doesn’t own for US$2.7 billion. Doing so will increase its stake in the Oyu Tolgoi copper project to 66%. Goldman believes the miner would be getting a very good deal, estimating that the offer represents a 43% discount to its valuation. The Rio Tinto share price is trading at $107.02 today.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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• Is the Rio Tinto (ASX:RIO) share price a buy following the miner’s latest acquisition news?
• Brokers name 3 ASX mining shares to buy today
• Leading brokers name 3 ASX shares to sell today
• Why are ASX 200 mining shares having such a dire day?
• ASX 200 (ASX:XJO) midday update: Uniti jumps on takeover speculation, Rio Tinto and Yancoal tumble

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 A2 Milk Company Ltd (ASX: A2M) share price has had a few weeks to forget.

In the past 3 weeks, the embattled company’s shares have lost more than 12%, making it one of the worst performers across the sector. By comparison, the rival Bubs Australia Ltd (ASX: BUB) share price lost 4.4% across the same timeframe.

At the time of writing, A2 Milk shares are edging into the green at $5.17, up 0.19%.

Why did the A2 Milk share price fall?

It’s no secret that cross-border trade issues have led to the fall of the A2 Milk share price.

COVID-19 has severely disrupted the company, causing logistical challenges between Australia and China.

This has weighed on investor sentiment, fuelling the sell-off in A2 Milk shares.

As such, demand/supply volatility has caused excess inventory levels, along with the Chinese infant nutrition market experiencing reduced growth. This follows the release of China’s 2020 birth numbers, showing a reduction in the nation’s birth rate.

In its interim results, A2 Milk noted the challenging market conditions but insisted it is making good progress in stabilising sales.

Previously, the company had to write off stock and deliberately slow sales in the fourth quarter of FY21. This was due to the significant decline in its English-label infant milk formula (IMF) sales through both daigou/reseller and e-commerce channels.

Management noted that the market landscape has experienced unprecedented change over the past 12 months, requiring the company to adapt.

Nonetheless, A2 Milk expects to deliver revenue growth this year after reporting a 2.5% decline to $661 million in H1 FY22.

It is worth noting though that while the revenue outlook has been improved, this will not translate into higher earnings.

The company is focused on increasing its brand investment to drive consumer demand along with other growth strategic priorities.

Does the current share price represent good value?

A number of brokers believe the A2 Milk share price is currently trading at a bargain.

Following the company’s half-year financial scorecard, Macquarie analysts raised their 12-month price target for A2M Milk shares by 7.7% to $5.60. Based on the current share price, this implies an upside of 8.1% for investors.

On the other hand, the team at Citi lowered its outlook on the company’s shares by 1.8% to $7.02.

While the broker reduced its assessment on A2 Milk, it still sees value in the fresh milk and infant formula company. The price target represents a potential upside of 35.5% from where it trades today.

The post The A2 Milk (ASX:A2M) share price has spilled another 12% in 3 weeks. Is now the time to pounce? appeared first on The Motley Fool Australia.

More reading

• Why this broker sees 40% upside for the A2 Milk (ASX:A2M) share price
• Hot or cold? Here’s how the A2 Milk (ASX:A2M) share price performed in February
• A2 Milk (ASX:A2M) share price slips amid ‘long-term implications’ of flooding
• Why this top broker rates these ASX shares as buys in March
• What’s next for the A2 Milk (ASX:A2M) share price?

Motley Fool contributor Aaron Teboneras owns A2 Milk. 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 A2 Milk and BUBS AUST FPO. 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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