S&P/ASX 200 Index (ASX: XJO) shares as a whole haven’t gotten off to the strongest of starts in 2022.

After gaining 13% in 2021, the ASX 200 is currently down 9.5% since the opening bell on 4 January, as at intraday trading on Friday morning.

Yesterday the index even entered a technical correction for the year, defined as any pullback of more than 10%.

With today’s intraday gains factored in, and going from the closing bell on 31 December, the ASX 200 has dropped 7.5%.

Some stocks, as you’d expect, have done it much harder. Others have managed to post strong gains.

With the first 4 weeks of 2022 now behind us, below we look at the top two ASX 200 shares to have held so far in the new year.

Top two ASX 200 shares for 2022

Our top performer is, drum roll please, AGL Energy Limited (ASX: AGL).

The AGL share price is up 14.4% in 2022, trading for $7.02 per share.

AGL received some positive broker coverage earlier in January, with Credit Suisse and JP Morgan joining the bullish bandwagon for the outlook of the Aussie power company in 2022.

Credit Suisse came out with a price target of $8.50 per share with JP Morgan targeting $7.55 per share. Both forecasts would see the AGL share price have significantly more upside from here.

For income investors, AGL also pays a compelling 9.2% trailing dividend yield, unfranked.

The number 2 performer

Moving on, the second best performing ASX 200 share of 2022 is Woodside Petroleum Limited (ASX: WPL).

The Woodside share price is up 12.7% since the closing bell on 31 December, currently at $24.85 per share.

Among other tailwinds, the oil and gas giant has benefited from soaring oil and LNG prices.

On 31 December, international benchmark Brent crude oil was trading for US$77.78 per barrel. At time of writing, the same barrel is fetching US$89.34, up 15%.

Woodside also delivered a strong quarterly report on 20 January, indicating a surge in quarterly revenue and record revenue for the 2021 financial year. Woodside reported it expects FY21 revenues to come in at US$6.97 billion, up from US$3.61 billion in FY20.

Management of the ASX 200 energy share also forecast a year-on-year increase in production for FY22.

Woodside pays a 2.3% trailing dividend yield, fully franked.

The post Top two ASX 200 shares of 2022 to date revealed appeared first on The Motley Fool Australia.

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• 3 reasons not to panic in this ASX 200 correction

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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Key Points

• AnteoTech shares sink on additional request for information by the TGA
• The company submitted a performance report last week to the TGA
• Study timeline date impacted by Omicron outbreak and staff shortage across healthcare system

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The AnteoTech Ltd (ASX: ADO) share price is freefalling today regardless of the All Ordinaries (ASX: XAO) edging higher.

At the time of writing, the nanotechnology company’s shares are down 23.81% to 24 cents. This brings its week’s losses to a tad over 35% for shareholders.

In comparison, the broader ASX index is up 0.19% to 7,128.2 points.

AnteoTech receives additional request information

Investors are selling AnteoTech shares after digesting the company’s update regarding its EuGeni Reader and COVID-19 Rapid Diagnostic Test (RDT).

In its release, AnteoTech received a request for further information for its COVID-19 RDT by the Therapeutic Goods Administration (TGA). This relates to the collection of additional clinical data, together with other aspects of information.

The latest update follows the company’s submission last week providing a performance report of the RDT’s detection of SARS-CoV-2 variants.

Currently, the TGA is collaborating with AnteoTech on how best to address the clinical data requirements.

Late last year, the company supplemented its EuGeni studies by conducting a prospective clinical trial at the Alfred Hospital and Burnet Institute in Melbourne. This was conducted through a prospective clinical trial to further evaluate the performance of the EuGeni SARS- CoV-2 Ag RDT.

AnteoTech stated that the trial could provide further data in which the TGA may need to meet the clinical data requirements.

However, due to the current Omicron outbreak and healthcare staff shortage, the study timeline has been pushed back.

About the AnteoTech share price

Despite today’s heavy losses, the AnteoTech share price has advanced by more than 120% over the past 12 months.

The company’s shares reached an 8-month high of 41.5 cents last week, before crashing back down.

Based on today’s price, AnteoTech has a market capitalisation of roughly $473.78 million, with more than 1.97 billion shares outstanding.

The post Why is the AnteoTech (ASX:ADO) share price is plummeting 23% on Friday appeared first on The Motley Fool Australia.

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• AnteoTech (ASX:ADO) share price gains 42% in a week amid RAT race
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• AnteoTech (ASX:ADO) share price surges amid ambition to join scramble for RATs
• Why Anteotech, Brainchip, RAIZ, and Santos shares are pushing higher

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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At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a much-needed positive note. The benchmark index is currently up 1% to 6,903.7 points.

Here’s what is happening on the ASX 200 today:

ResMed’s Q2 update misses expectations

The ResMed Inc. (ASX: RMD) share price is edging lower today after its second quarter update fell a touch short of expectations. The sleep treatment company reported a 12% increase in revenue to US$894.9 million and a 12% lift in net income to US$201.8 million. Goldman Sachs commented: “2Q22 revenue came in -3% below consensus (Visible Alpha Consensus Data), driven primarily by -4-7% misses in devices (largely a reflection of limited component availability and broader supply chain challenges).”

Newcrest shares fall

The Newcrest Mining Ltd (ASX: NCM) share price is falling today following a decline in the gold price and the release of its second quarter update. In respect to the latter, for the three months ended 31 December, Newcrest delivered gold production of 436koz and copper production of 26kt. This was an increase of 10% and 7.7%, respectively, quarter on quarter. This led to half year gold production of 832.3koz. Investors appear to be doubting whether Newcrest will have what it takes to achieve its FY 2022 guidance of 1,800koz to 2,000koz.

PointsBet sink following Q2 update

The PointsBet Holdings Ltd (ASX: PBH) share price is sinking today following the release of its second quarter update. The sports betting company reported an 11% increase in group turnover to $1,326 million and net win growth of 61% to $71.9 million. However, also growing were its losses. PointsBet’s operating loss widened to $51.8 million.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the Champion Iron Ltd (ASX: CIA) share price with a 6% gain. This morning Citi retained its buy rating and lifted its price target on the iron ore miner’s shares to $6.50. Going the other way, the worst performer has been the PointsBet share price with a 6.5% decline following its update.

The post ASX 200 (ASX:XJO) midday update: ResMed and PointsBet disappoint appeared first on The Motley Fool Australia.

More reading

• PointsBet (ASX:PBH) share price sinks 6% as losses widen to $52m
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• 2 ASX dividend shares now offering big yields
• ResMed (ASX:RMD) share price on watch after Q2 update disappoints
• 5 things to watch on the ASX 200 on Friday

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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd and ResMed Inc. 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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Key points

• OZ Minerals shares are down 11% so far since last Friday’s close
• Despite the bearishness, the team at Citi upgraded its rating to a buy
• The broker raised its price target on the stock by 8% to $29.10 in doing so
• Meanwhile, analysts at Jefferies dropped their recommendation from a buy to a hold, alongside a suite of other brokers

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The OZ Minerals Ltd (ASX: OZL) share price has been in the red since the market open today and is now trading 2.63% lower at $24.84.

Today’s slip continues an 11% run into the red that OZ Minerals shares have embarked on this trading week. They have also plunged by 12% over the past month.

Despite the weakness, the team at investment bank Citi are constructive on the OZ Minerals share price and revised its rating on the stock in a note today.

Citi upgrades OZ Minerals from neutral to ‘buy’

Investors were quick to punish OZ Minerals following the release of its Q4 earnings and activities update yesterday. Moreover, the company also laid out guidance that was weaker than expected, and the OZ Minerals share price ended the day 2.89% lower

Yet, despite the bearishness, the team at Citi have a contrarian flavour to its view and reckon the company can outperform in 2022.

The broker lifted its rating on the stock from neutral to a ‘buy’ in its assessment. Citi’s move is underscored by its positive outlook on copper, which the firm is also bullish on.

Copper shot to fame throughout the pandemic. However, prices have since cooled off and have been largely trading sideways since May last year. Even so, the brown metal is now trading 24% higher than it was 12 months ago and has a strong growth outlook given demand out of China and a growing addressable market.

These factors make OZ’s share price and earnings outlook more attractive given the risk-reward calculus that could be skewed in the investor’s favour.

“We concede Oz Minerals is not a free cash flow yield stock but its growth options and low-risk asset locations make it a standout on the global stage,” Citi said.

Citi also notes its buy thesis “requires investors to be on board with Citi’s multi-year decarbonisation-driven bull thesis of US$4.0/lb long term”.

The broker raised its price target on the stock by 8% to $29.10 in its research update, concurrently rating OZ Minerals as a ‘buy’ in doing so.

What do other brokers say about the OZ Minerals share price?

A slew of other brokers slashed their valuations on the company and readjusted their bullish stance on its outlook. Goldman Sachs, JP Morgan, Macquarie and Morgan Stanley wound back their valuations of the stock following the result.

Analysts at Jefferies also changed posture on the OZ share price following the revised guidance outlook that was provided in the company’s quarterly report.

“While we have increased our cumulative project capex estimates for Prominent Hill and Carrapateena out to 2025, we have also redistributed such that more is being incurred during 2022 and 2023,” the firm says.

The broker subsequently dropped its recommendation from a buy to a hold today, revaluing the company at $27.50 – in direct contrast to its counterpart Citi.

OZ Minerals share price snapshot

In the last 12 months, the OZ Minerals share price has climbed by around 33%. However, it has struggled this year to date and is down 12.5%.

The post The OZ Minerals (ASX:OZL) share price has dumped 11% this week. Is it a bargain? appeared first on The Motley Fool Australia.

More reading

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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 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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Needless to say, shareholders of Flight Centre Travel Group Ltd (ASX: FLT) have endured a turbulent journey over the past year or two.

Flight Centre was, of course, one of the worst-hit ASX shares of the original COVID-19 crash of 2020. But saying that, the past year has actually been very kind to this ASX travel company.

Until about a fortnight ago, the Flight Centre share price had gained roughly 20% over the preceding 12 months. Even as it stands today, Flight Centre shares are still up by 7.7% over the past year.

At the time of writing, the Flight Centre share price is $15.51, up 0.06% today.

Now, shareholders are awaiting the next set of results from Flight Centre. This will be the company’s half-year earnings report for FY2022, which is due on 24 February.

But in the meantime, let’s talk about dividends.

Flight Centre used to be a relatively strong ASX dividend-paying share. Back in 2018, the company paid out 2 dividends. They were a 70 cents per share interim payment and a $1.07 per share final dividend.

In 2019, Flight Centre ratcheted this up significantly. Not only did the company pay an interim dividend of 60 cents and a final dividend of 98 cents, it also doled out a special dividend of $1.49 per share.

Unfortunately, Flight Centre shareholders’ dividend income stream has all but dried up. The company has not paid out any income whatsoever since that final dividend in October 2019.

So when might that change for Flight Centre? When will this company’s dividends take to the sky once more, if you’ll pardon the pun?

When will Flight Centre’s dividends get off the ground again?

Well, that’s a tough question. For Flight Centre to be able to pay out dividends again, it first needs to be profitable. An unprofitable company can’t fund dividend payments, at least not for very long.

And unfortunately, it doesn’t look like Flight Centre is close to being sustainably profitable. Back in its last quarterly trading update, Flight Centre reported a net operating outflow of $41 million for the 3 months to 30 September 2021. Over FY2021, the company also reported a net underlying loss of $507 million before tax.

So obviously with no positive cash flow, there can’t be any dividends for shareholders.

Until this situation reverses, it’s highly unlikely that Flight Centre will be able to fund dividend payments. So we’ll have to wait and see what Flight Centre’s half-year earnings tell us next month.

Given the emergence of Omicron, it’s unlikely that the company’s balance sheet over the second half of last year improved enough to reach strong profitability. But we shall have to wait and see what the company says next month to know for sure.

At the current Flight Centre share price, this ASX travel share has a market capitalisation of $3.09 billion.

The post When will Flight Centre (ASX:FLT) pay a dividend again? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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 recommended Flight Centre Travel 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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Owners of Santos Ltd (ASX: STO) shares might want to keep an eye on the company’s Papua New Guinea assets amid rumours of a sell down.

One top broker flagged that the potential sale could bring a $3.25 billion payday for the oil and gas producer, while moving to sell its Alaskan interests could bring another $1.42 billion.

At the time of writing, the Santos share price is $6.99, 0.36% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) has gained 0.43% this morning.

Let’s take a closer look at the sale Santos is reportedly gearing up for.

Santos may be eyeing asset sales

According to reporting by The Australian, Santos is actively moving to sell down its stake in PNG LNG – boosted by its takeover of Oil Search.

The merged group owns 42.5% of the LNG project after Oil Search’s 29% stake was added to Santos’ 13.5% holding.

Previously, the now-joined companies flagged that the merger would grant the resulting entity the flexibility to sell down some of its stake.

Now, Santos managing director and CEO Kevin Gallagher is reportedly pushing for a fast sale to Total – the operator of the Papua LNG project.

Santos and Oil Search flagged that the sell-down of PNG LNG would realign its interests across PNG LNG, P’nyang, and the Papua LNG project, improving coordination and accelerating the development of Papua LNG.

Total has no interest in PNG LNG or P’nyang.

The Australian reports that Total would be willing to buy as much of the project as Santos is willing to sell, with at least 10% needing to change hands to transfer voting rights.

Morgan Stanley has reportedly stated a 10% stake in the project could bring Santos as much as $3.25 billion if sold at a 25% discount on its valuation.

Additionally, Santos might be eyeing the sale of its stake in the Pikka Project – located in Alaska. The broker reportedly believes that the asset could bring a $1.42 billion payday.

How has Santos been performing on the ASX?

While the ASX 200 has been suffering this year, the Santos share price has been performing relatively well.

It has gained 10% since the final close of 2021. Meanwhile, the ASX 200 has slipped 7%.

The post Is Santos (ASX:STO) about to enjoy a $3 billion payday? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• Why are ASX 200 energy shares tumbling on Tuesday?
• Why AGL (ASX:AGL) and Origin (ASX:ORG) shares tumbled today
• 5 things to watch on the ASX 200 on Monday

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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Key points

• The Firefinch share price is dropping 3% today
• The move coincides with its latest quarterly activities report
• Firefinch is positioning for production growth in gold and lithium

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The Firefinch Ltd (ASX: FFX) share price is falling today.

The price move follows Firefinch’s latest quarterly West African-based mining activities and cash flow update. At the time of writing, the Firefinch share price is down 3.17% to 61 cents.

So what’s been going on with the gold and lithium miner to make its share price drop?

Let’s take a deeper look…

Firefinch’s quarterly cash flow

The miner’s quarterly corporate snapshot (as of 31 December 2021) is as follows:

• Cash (and cash equivalents available) is $152 million
• $5.6 million in gold sold (proceeds not received by date)
• Share purchase plan “heavily oversubscribed” and raised $51.36 million at 58 cents apiece
• $100 million institutional placement at 67 cents a share completed in December

Since the end of the quarter, the Firefinch share price has decreased by 33%.

Further, the miner has had “aggressive growth plans” on its mind leading into 2022, as it aims to increase annual production.

In fact, it’s aiming to hit a target of 100,000 ounces of gold this year and double that by 2024. It also wants to rapidly progress its lithium site and believes it is now “fully funded” to hit these targets.

Now, moving away from its corporate targets — what practical advancements has the company? Let’s take a look…

Firefinch mining activity snapshot

Morila Gold Mine (Mali, West Africa):

• 11,115 ounces of gold produced (within guidance)
• A new “high grade” zone found in the eastern side of its Super Pit
• Pre-stripping of the pit underway (in order to increase production to 100,000 oz this year)
• Mining and haulage is underway at its Viper satellite pit
• Additional mineralisation at Viper location found and to be explored

Goulamina Lithium Mine (Mali, West Africa):

• The Lithium site received a post-tax, net present value (NPV) of $4.1 billion
• It had an internal rate of return (IRR) of 83% (more than double the prior definitive feasibility study)
• 50:50 joint venture with Jiangxi Genfeng Lithium Co Ltd to develop Goulamina is nearing “formal finalisation” (though still subject to conditions)
• Required Chinese regulatory approval achieved and Mali Government also in support
• JV parties agreed a final investment decision and early-stage engineering and drilling programs to begin
• Essential sterilisation of the waste rock facility underway
• Lithium production from the site expected early 2024

As announced in August, the Goulamina mine is set to be demerged from Firefinch and placed under its new entity, Leo Lithium Limited (Leo). In its latest update, Firefinch said the necessary regulatory documents were being prepared.

The demerger is scheduled for March but is still subject to shareholder approval (the miner has assured investors that no cost will be incurred). The ASX listing is expected by the end of the 2022 first quarter.

Firefinch share price summary

Over the past 12 months, the Firefinch share price has increased by a staggering 221%.

It saw its highest point of the year earlier this month at 92 cents apiece. This compares to its lowest point (almost a year to the day) of 17 cents.

But since its high point, the Firefinch share price has decreased, seeing a 7% drop coinciding with a Morila Gold Mine update. There was also a share price fall around the time of appointing Leo Lithium’s new managing director.

The company has a market capitalisation of $712 million and a price-to-earnings ratio (P/E) of -86.

The post Why is the Firefinch (ASX:FFX) share price suffering today? appeared first on The Motley Fool Australia.

More reading

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Key points

• A2 Milk shares are in a 51% drawdown from January 2020 highs of circa $10 per share.
• The visibility on the future of A2 Milk’s share price future remains unclear.
• The team at Bell Potter are constructive on A2 Milk and rate it a buy right now

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Shares in A2 Milk Company Ltd (ASX: A2M) have struggled this week and are down 2.86% at the time of writing.

It’s been a challenging year for A2 Milk both operationally and on the chart this past year. Shareholders have witnessed their holdings peak at a 52-week high of $10.79 in January last year, before free diving off the cliff face to bottom at $5 in May.

After a lumpy revival period throughout the remainder of 2021, where shares attempted a snapback rally on a few occasions, the A2 Milk share price now trades back at these levels, having closed the session at $5.24 on Thursday.

As shown on the chart below, that’s a 51% drawdown from that January 2020 high, meaning the A2 Milk share price now needs to spike over 100% in order to break even at that point once more. Can it be done? Let’s take a look.

Can A2 Milk thrust towards former highs?

Underpinning the large company’s lacklustre performance on the chart is its operational performance throughout FY21.

For instance, in its FY21 report, the company recognised a 30% decrease in revenue to NZ$1.2 billion whereas net profit after tax (NPAT) decreased by almost 80%.

Underpinning the weak result was a shift in the demand dynamics out of A2’s largest export customer, China. Demand from China came in softer last year meaning the company had to write down its inventory values.

Now there are reports that Canadian dairy processing giant Saputo could be set to embark on the acquisition scale, as conveyed by Motley Fool at the time.

Doing so could provide the opportunity to unlock long-term value and trend upwards to its pre-COVID earnings profile, where it recognised NZ$1.73 billion in revenue in FY20.

Hence the visibility on the future of A2 Milk’s share price future remains unclear. This point was even hammered in by management itself most recently, stating that because of “these uncertainties and the range of potential outcomes, it is very difficult to define future state targets and when they will be achieved – the path is also unlikely to be linear”.

The team at Bell Potter are constructive on A2 Milk and rate it a buy right now amid the strengthening fundamentals and a positive earnings outlook over the coming 5 years.

For example, it reckons that A2 Milk can focus can double EPS by FY26 should it successfully convert on its China offline expansion strategy. As such, the broker values the company at $7.70.

With that in mind, Bell Potter doesn’t believe the market is currently “reflecting this potential” within A2 Milk’s growth and normalisation outlook.

In fact, when checking the consensus of analyst estimates provided by Bloomberg Intelligence, the price target on A2 Milk shares is $6.50 and sentiment is normally distributed across each of buy, hold and sell recommendations.

Importantly, no brokers value A2 Milk close to its previous highs of $10. The highest price target from this group is $7.70 out of Bell Potters’ camp, for instance, whereas Macquarie rate it as a sell at $5.20.

A2 Milk share price snapshot

A2 Milk investors are swimming in a sea of red, with the share price down 52% in the last 12 months and 7% already this year to date.

The selling pressure has spilled over into this week and shares are down 5% this week.

The post Can the beaten down A2 Milk (ASX:A2M) share price get back to $10? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• Why A2 Milk, Baby Bunting, Codan, and Sezzle shares are surging higher
• Why the A2 Milk (ASX:A2M) share price is jumping 8% despite the market selloff
• A2 Milk (ASX:A2M) share price awaits judgement day as earnings draw near
• Broker tips A2 Milk (ASX:A2M) share price to rise over 50%

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 recommended A2 Milk. 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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Key points

• The PointsBet share price is moving lower today on its second-quarter figures
• Operating cash outflows increased to $51.8 million on $65.6 million in marketing expenses
• PointsBet is now one of only six betting operators to cover New York, New Jersey, and Pennsylvania

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The PointsBet Holdings Ltd (ASX: PBH) share price is unable to find its footing on Friday following the release of its second-quarter results.

In early morning trade, shares in the sports betting company are down 5.96% to $4.73 per share.

PointsBet share price slumps on solid second-quarter update

• Group turnover increased 11% from prior corresponding period to $1,326 million
• Sports betting net win up 61% year-on-year to $71.9 million
• Total group net win increased 73% to $77.3 million
• United States cash active clients up 210% to 211,113
• Operating cash outflows increase from $38.7 million to $51.8 million
• Cash and cash equivalents at the end of the quarter sat at $523.2 million

What else happened during the quarter?

For the three months ending December 2021, PointsBet achieved growth across all of its major metrics compared to the prior corresponding period. Importantly, the total turnover (money wagered) through its platform increased 11% to $1,326 million.

However, this appears to not be what shareholders were hoping for as the PointsBet share price moves lower this morning.

The group’s growth in turnover didn’t come from the United States as per usual. Instead, the Australian segment lifted 34% compared to a 9% contraction in turnover in the US.

Despite this, operations abroad pulled in an exceptionally improved gross win for the company. Compared to Australia’s gross win growing by 22% year-on-year, the US notched up an increase of 425% to $41.6 million in gross win for PointsBet.

Although, the improved win rates were not enough to counter the company’s marketing spend during the quarter. Between Australia and the US, PointsBet forked out $65.6 million for marketing and sales in the second quarter. As a result, the company widened its net operating losses to $51.8 million compared to $38.7 Q2 FY21.

On a positive note, the company has been able to expand its reach across the US. PointsBet is now one of only six operators with coverage across New York, New Jersey, and Pennsylvania.

PointsBet share price snapshot

It has been a difficult start to the year for the PointsBet share price. Since celebrating the start of 2022, the sports betting company has witnessed a 32% fall in the value of its shares.

The weakening share price has not been from a lack of business developments either. In the last couple of weeks, PointsBet has made three product update announcements. These have included being awarded a wagering and gaming license in Pennsylvania and launching its iGaming product in West Virginia.

Shares in PointsBet are down 68% in the last 12 months.

The post PointsBet (ASX:PBH) share price sinks 6% as losses widen to $52m appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. 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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Key points

• The EML share price has sunk close to 20% in 2022, is it too low to be ignored?
• CBI is now going allow EML to keep signing new customers and launch new programs
• EML keeps growing at a fast pace and is rated as a buy by UBS

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The EML Payments Ltd (ASX: EML) share price has fallen by not far off 20% in 2022. Considering this year is only a few weeks old, that’s a sizeable decline.

Share markets around the world are dropping as investors worry about the size and pace of the central bank interest rate rises.

However, whilst share prices are dropping, it can lead to some ASX shares being opportunities for investors.

With that in mind, here are some reasons why the EML share price could be an opportunity:

De-risked by the Central Bank of Ireland (CBI) update

EML shares went through a savage sell-off last year as the company warned that a substantial part of its European business could see its growth significantly impacted by potential limitations put on it by the CBI.

However, two months ago EML announced some CBI news that heartened investors. The broker UBS said that it de-risked the business.

EML said that the CBI will permit its Irish subsidiary to sign new customers and launch new programs whilst staying within the material growth restrictions. EML is confident it can meet these obligations. It has been removing higher volume, lower yielding programs to enable it to comply with a material growth restriction and is confident it can meet these obligations.

The ASX share said that the remediation plan is on track.

EML also revealed that the CBI said that broad based reductions in limit controls on programs will not be imposed. The CBI is satisfied to continue engaging with EML’s subsidiary, with a view to agreeing appropriate limits under its risk management and controls framework.

The company said that the CBI intends to impose a material growth limitation over the total payment volumes for 12 months, or rescinded earlier after third party confirmation that the remediation plan has been effectively implemented.

Fast growth

A business that is growing quickly may give itself a better chance of producing outsized returns over time. The EML share price could benefit if the business keeps growing quickly.

EML is creating instant and secure payment solutions that connects its customers with their customers. Its technology is being used for a variety of uses including open banking, gift cards, e-gift cards, general purpose reloadable cards, buy now, pay later and so on.

It’s growing quickly across a number of areas. In FY21 total gross debit volume grew 42% to $19.7 billion. Revenue went up 60% to $194.2 million. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew 65% to $53.5 million. Underlying net profit after tax (NPATA) rose 54% to $32.4 million.

EML is benefiting from a few different trends, including the rise of fintechs as well as the shift of payments going from cash to electronic.

FY22 is expected to be another year of growth.

Gross debt volume is expected to be between $93 billion to $100 billion, which includes Sentenial and Nuapay. The EML component is expected to be between $24 billion to $26 billion, representing growth of 20% to 30%.

Revenue is expected to be between $220 million to $255 million, EBITDA is expected to be between $58 million to $65 million. However, the NPATA guidance range is $18 million to $34 million with an increase in compliance costs, insurance costs and the impact of Sentenial.

EML share price valuation

Multiple brokers rate EML shares as a buy, including UBS and Ord Minnett.

The UBS price target on UBS is $4.40. That’s a potential increase of 60% over this year. The broker is expecting growing profit in the coming years.

EML shares are valued at 23x FY23’s estimated earnings.

The post Down almost 20% in 2022, is the EML share price now too good to ignore? appeared first on The Motley Fool Australia.

More reading

• 2 fast-growing ASX shares rated as buys in this correction
• 2 ASX fintech shares that could rocket this year
• Why is EML payments (ASX:EML) share price having a rollercoaster start to the year?
• Here’s why the EML (ASX:EML) share price could be a big opportunity
• 2021 was a year to forget for the EML (ASX:EML) share price. Here’s why

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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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