Key points

• Mesoblast shares finished higher today after the release of the company’s quarterly update
• The company saw a 7% gain in royalty income from the same time last year
• It also secured a new debt facility of US$90 million from Oaktree Capital
• Mesoblast is also meeting with the US FDA to progress approval of its lead drug candidates

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Shares in regenerative medicine company Mesoblast Limited (ASX: MSB) shot 3.21% higher today. They finished the session at $1.125 apiece after peaking at $1.15 earlier in the day.

The Mesoblast share price caught bids today following the release of the company’s operational and financial activity report for the second quarter ended 31 December 2021.

Mesoblast share price surges on royalty gain, FDA clearance

The company outlined several investment highlights for the quarter, including:

• Revenues were US$3.5 million – including US$2.3 million from TEMCELL HS royalties on sales for SR-aGvHD in Japan
• All up, royalties were 7% higher year on year
• Net cash usage of US$19.8 million in the quarter, a year on year reduction of 38%
• Refinancing of senior secured debt – a new US$90 million 5-year facility provided by Oaktree Capital Management
• Cash on hand at the end of the quarter was US$94.8 million.

What else happened this quarter for Mesoblast?

Most of the operational updates from Mesoblast this quarter were around the potential resubmission of the Biologics License Application (BLA) for the company’s remestemcel-L therapy.

The BLA submission will be used to investigate remestemcel-L in the treatment of children with steroid-refractory acute graft versus host disease (SR-aGVHD). This is a potentially life-threatening complication of an allogeneic bone marrow transplant.

Mesoblast says it’s also held a meeting with the US Food and Drug Administration (FDA)’s Office of Tissues and Advanced Therapies (OTAT) division to address items identified in a complete response letter (CRL) for the compound.

A CRL is issued by the FDA when it asks for more information on new drug applications. Its queries can cover the compounds themselves to the manufacturing facility where the drugs are set to be made.

Mesobolast received its CRL regarding the advancement of remestemcel-L in October of 2020. Back then, the “the FDA recommended that Mesoblast conduct at least one additional randomized, controlled study in adults and/or children to provide further evidence of the effectiveness of remestemcel-L for SR-aGVHD”.

In essence, Mesoblast must establish the relevance of the compound’s immunomodulatory activity to a set of clinical outcomes to move forward, according to the company’s report today.

Previous studies on the drug, published in the Journal of Bone Marrow Transplantation, showed remestemcel-L treatment was associated with a “64% survival in children with biomarker levels predictive for highest mortality [of SR-aGVHD] compared with only 10% survival in controls treated with other available therapies”.

Aside from that, the FDA also confirmed that two primary outcome measures that Mesoblast has chosen for its upcoming studies are “clinically meaningful endpoint[s]” to observe the efficacy of rexlemestrocel-L.

Mesoblast will also conduct successive studies on the drug for treating lumbar disc pain and in reducing cardiovascular mortality.

What’s next for Mesoblast?

The company didn’t provide any specific sales or earnings guidance for final quarters of FY22.

However, it noted it has completed a refinancing of its senior secured debt facility recently. It has now secured a new US$90 million facility that will mature in 5 years, provided by fund manager Oaktree Capital Management, L.P.

It is also preparing to file a formal submission to the FDA of the “detailed analyses of outcomes in high-risk [heart failure and low ejection fraction] HFrEF patients with diabetes and/or myocardial ischemia” to identify a pathway to approval for rexlemestrocel-L.

With respect to its dealings with the FDA, Mesoblast will provide updated data and “address all other outstanding items as required for resubmission of the BLA”.

Mesoblast share price snapshot

In the last 12 months, the Mesoblast share price has slipped almost 53% into the red. This year to date, it is down 20%.

Over the previous month of trading, the company’s shares are 18% lower.

The chart below show’s Mesoblast’s (blue) 12 month underperformance relative to the S&P/ASX Small Ordinaries index (ASX: XSO) and the S&P/ASX 200 Index (ASX: XJO).

The post Here’s why the Mesoblast (ASX:MSB) share price leapt higher today appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares
• Why is the Mesoblast (ASX:MSB) share price taking off on Wednesday?
• The Mesoblast (ASX:MSB) share price has tumbled 25% in a month. What’s going on?

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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Exchange traded funds (ETFs) can be a fantastic way to balance out your portfolio. This is because ETFs provide investors with easy access to a large and diverse group of shares.

With that in mind, I have picked out two ETFs that are popular with investors right now. Here’s what you need to know about them:

iShares S&P 500 ETF (ASX: IVV)

The first ETF for investors to look at is the iShares S&P 500 ETF. It aims to provide investors with the performance of the famous S&P 500 Index. As its name implies, this index comprises 500 of the largest listed companies on the US stock market.

BlackRock, which manages the ETF, believes it would be appropriate for an investor seeking capital growth with a medium to high risk/return profile, rather than one with a short investment timeframe. It also notes that it could be used to diversify internationally.

Among the ETF’s largest holdings are giants such as Alphabet, Amazon, Apple, Warren Buffett’s Berkshire Hathaway, Facebook/Meta, JP Morgan, Microsoft, and Tesla, to name just a handful.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

Another ETF for investors to consider is the VanEck Vectors Video Gaming and eSports ETF. This ETF gives investors exposure to a portfolio of the largest companies involved in video game development, eSports, and related hardware and software globally.

This is a very large market. For example, VanEck estimates that there are 2.7 billion active gamers in the world. This is more more than Netflix subscriptions and active Apple devices.

Furthermore, competitive video gaming audiences are expected to reach 646 million people globally in 2023, driven in part by rising population of digital natives. All in all, this bodes well for companies included in the fund such as graphics processing units (GPU) giant Nvidia and games developers Take-Two Interactive (GTA, Red Dead) and Electronic Arts (FIFA, Sims, Apex Legends).

The post 2 popular ETFs for ASX investors to buy this week appeared first on The Motley Fool Australia.

More reading

• 2 excellent ETFs for ASX investors in February
• Why Vanguard MSCI Index International Shares and this ETF could give your portfolio a boost
• 2 ASX ETFs with strong growth potential
• The VanEck Video Gaming and Esports ETF (ASX:ESPO) looks set for a major shakeup. Here’s why
• Here are 2 ASX tech ETFs to buy after recent weakness

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 recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF and iShares Trust – iShares Core S&P 500 ETF. 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 fall again on the back of a quarterly business update
• Management noted high barriers to market entry
• Company still in collaboration with TGA regarding regulatory approval for its RDT

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The AnteoTech Ltd (ASX: ADO) share price tumbled today following the release of a business update from the company.

At market close, the nanotechnology company’s shares finished down 13.33% to 19.5 cents.

Ever since AnteoTech’s announcement last week regarding its EuGeni Reader and COVID-19 Rapid Diagnostic Test (RDT), its shares have dropped by 45%.

AnteoTech signals challenging market entry

Investors have continued to sell off AnteoTech shares after digesting the company’s business update for the second quarter of FY22.

According to the release, AnteoTech advised that its engagement with the Therapeutic Goods Administration (TGA) is ongoing. The company is hoping to achieve regulatory approval for its EuGeni Reader and COVID-19 RDT.

Management noted that governments worldwide are continuing to heavily regulate in-vitro diagnostic (IVD) devices for market entry.

The products must be supported by the manufacturer and integrate the support of OEM suppliers, distributors and supply chain organisations. While many companies close to AnteoTech have failed to adhere to the stringent guidelines, this has forced them to remove product batches or entire products from the market.

For AnteoTech, being associated with these companies has caused valuable reputational damage and is hindering further developments.

At the Annual General Meeting in November, CEO Derek Thomson presented the CY22 Revenue Generation Approach, outlining the four key areas of focus. These areas were increasing market footprint, regulatory approvals, building reputation, and maximising revenues.

The business team is expected to drive sales and marketing processes to sell to target segments. This will be executed by utilising the company’s global distribution network.

Looking at a financial standpoint, AnteoTech advised that cash receipts for the quarter totalled $2.13 million. This primarily came from a $1.96 million refund under the Federal Government’s Research & Development (R&D) tax incentive scheme.

Net cash outflows from operating activities stood at $0.61 million.

The Company stated it remains well-funded to support its near-term commercial and clinical milestones.

At the end of the calendar year, AnteoTech had $16.62 million cash on hand and no debt.

About the AnteoTech share price

Despite today’s heavy losses, the AnteoTech share price has advanced by 100% over the past 12 months.

The company’s shares reached an 8-month high of 41.5 cents on 24 January, before crashing back down.

Based on today’s price, AnteoTech has a market capitalisation of roughly $394.81 million, with more than 1.97 billion shares outstanding.

The post Why did the AnteoTech (ASX:ADO) share price tumble 13% on Monday appeared first on The Motley Fool Australia.

More reading

• Why Ansell, AnteoTech, Dubber, and NIB shares are dropping
• Why AnteoTech, Newcrest, Nitro, and ResMed shares are falling
• Why the AnteoTech (ASX:ADO) share price is plummeting 23% on Friday
• Why Anteotech, Appen, Boral, and Kogan shares are rising today
• AnteoTech (ASX:ADO) share price gains 42% in a week amid RAT race

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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Key points

• The team at Morgans like Fortescue’s iron ore business
• However, it isn’t a fan of the Fortescue Future Industries business
• Its analysts believe the business will make Fortescue more reliant on its iron ore earnings

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The Fortescue Metals Group Limited (ASX: FMG) share price started the week on a positive note.

The iron ore giant’s shares rose 2% to end the day at $19.87.

This appears to have been driven by another rise in the benchmark iron ore price to US$129.96 a tonne on Friday night.

Can the Fortescue share price keep rising?

One leading broker has been looking at the Fortescue share price and has cautioned investors against investing.

According to a note out of Morgans, its analysts have retained their hold rating but lifted their price target on the company’s shares to $20.20 following the release of its second quarter update. This is broadly in line with where the Fortescue share price is trading today.

What is the broker saying?

Morgans has mixed feelings with Fortescue. While it is a fan of the core iron ore business, it isn’t positive at all on the Fortescue Future Industries (FFI) business. In fact, rather than diversifying its operations, Morgans believes it will make Fortescue even more reliant on its iron ore earnings.

In respect to its second quarter update, Morgans said: “A good operational result from FMG’s core iron ore business, while the 3Q22 recovery in iron ore prices has helped to support short-term earnings, FCF generation and dividend potential.”

But that’s where the positives largely stop due to the FFI business.

What’s wrong with Fortescue Future Industries?

Morgans notes that Fortescue is making a very aggressive push into a large number of ESG-themed industries in different geographies.

It commented: “Our concern here is FMG’s low starting point in each of the new markets it is pursuing, which suggests capital efficiency will be the first victim before getting to any considerations around the possible long-term return profile.”

“With potential for steel activity to mature in 2022 we are interested to see how FMG’s large ESG-themed investment framework sustains a downcycle in iron ore.”

“While seeking to diversify outside of iron ore, we would argue that the move into FFI (which could see a long period of losses while FMG gets established), is actually equivalent to increasing FMG’s dependence on iron ore earnings,” it added.

This view echoes concerns that other brokers such as Goldman Sachs have on the business. However, Goldman is far more bearish with its sell rating and $13.50 price target on its shares.

All in all, the Fortescue share price will be one to watch closely in the coming years as its ESG push gathers pace. Time will tell whether it creates or destroys value for shareholders.

The post Why this broker is bearish on the Fortescue Future Industries business appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to sell next week
• What has driven the Fortescue (ASX:FMG) share price up 40% in three months?
• Top brokers name 3 ASX shares to sell today
• Broker tips Fortescue (ASX:FMG) share price to sink 30% and warns of dividend cuts
• 5 things to watch on the ASX 200 on Thursday

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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Key points

• IAG share price has fallen 0.94% today
• The company’s shares are still outperforming the ASX 200 Financials Index
• The majority of brokers still rate the company as a buy

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The Insurance Australia Group Ltd (ASX: IAG) share price is sliding again today despite no news from the company.

At market close on Monday the insurer’s shares finished down 0.94%, at $4.24. However, in earlier trade they hit a low of $4.20.

Let’s take a look at what’s happening at the company.

What’s happening at IAG?

The IAG share price may be in the red lately, but it is not alone. Since market close on Monday 24 January, the company’s shares have fallen 3.19%.

IAG is the largest insurance company in Australia and New Zealand, insuring individuals and businesses.

The share price movement so far this year follows a tough 2021 when the company’s shares fell 9%.

However, despite being down, the IAG share price is outperforming the S&P/ASX 200 Financials Index (ASX: XFJ) today. The financials index closed Monday down 1.84%.

Furthermore, since market close on 31 December, the financials index has fallen more than 6.5%. Meanwhile, the benchmark S&P/ASX 200 Index is down 6.35% year to date. Overall, IAG is outperforming both the financials index and broader ASX.

As my Motley Fool colleague Zach Bristow noted on Friday, most of the brokers covering the company rate it as a buy.

JP Morgan, for example, values the company at $5.45 per share and is bullish about its prospects:

IAG has a strong position in the Australian and NZ personal lines market, but has suffered in recent times from concerns around COVID-19 Business Interruption losses and concerns on market share losses in personal lines.

In early January, IAG finalised its catastrophe reinsurance program for 2022, maintaining its catastrophe cover for losses claims at up to $10 billion.

IAG Australia will be providing its half year results to the market in just under two weeks, on Friday 11 February.

IAG share price snapshot

The IAG share price has fallen 12.58% in a year and is down 0.47% this year to date.

In the past month, shares have fallen 1.85%, while they are down 2.75% the past week.

For perspective, the benchmark ASX 200 has returned 5.51% over the past year.

The company has a significant market capitalisation of $10.5 billion based on today’s share price.

The post Why did the IAG (ASX:IAG) share price slump to fresh, 9-year lows today? appeared first on The Motley Fool Australia.

More reading

• Here’s what 67% of brokers think of the current IAG (ASX:IAG) share price
• Own IAG (ASX:IAG) shares? Here’s what you’re really invested in
• Leading brokers name 3 ASX shares to sell today
• Could this help take pressure off IAG (ASX:IAG) shares in the future?
• Why this broker tips IAG (ASX:IAG) shares as a buy in 2022

Motley Fool contributor Monica O’Shea 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 owns and has recommended Insurance Australia 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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Key points

• ASX shares are down in 2022 but retail investors remain committed
• The Aussie economy is seen as a potential risk to investment outlooks
• Healthcare shares are believed to set to outperform

ASX shares have struggled so far in the new year.

Since the opening bell on 4 January, the All Ordinaries Index (ASX: XAO) is down 8.1%.

In the face of rising interest rates, ASX tech shares have fared even worse, as witnessed by the 17.1% year-to-date drop in the S&P/ASX All Technology Index (ASX: XTX). And that’s after factoring in today’s 2.9% gain.

With ASX shares under pressure, we look at what Aussie investors are planning as per the results from global multi-asset investment platform eToro’s latest global Retail Investor Beat report.

ASX shares preferred to global shares

e-Toro surveyed its global pool of investors.

For the purposes of this article, with our focus on ASX shares, we’ll stick to the answers provided by Aussie investors.

With that said, 51% of Aussie respondents said they want control over their own investments rather than relying on Robo advisors or professional advisors.

While 28% of respondents are invested in global stocks, fully 66% are invested in ASX shares. That figure is higher among the older age groups.

Cryptocurrencies are also rising on investors’ radars, with 24% saying they intend to invest in crypto in the year ahead. That rises to 50% for the 18 to 34-year-old age group and falls to a meagre 6% for those 55 and over.

ASX tech shares, healthcare, Bitcoin and dividends…

Asked which sectors should see the best performing ASX shares in the first quarter of 2022, 36% believed healthcare stocks will present the best investment buying opportunities. That was followed closely by tech shares, with 35% saying those will offer up the best opportunities over the next 3 months.

Despite recent pullbacks, or perhaps because of them, many respondents were also bullish on their outlook for Bitcoin (CRYPTO:BTC). Overall, 30% of Aussie respondents said Bitcoin was the best investment buying opportunity over the next 3 months. 

As for dividends, income investing remains very popular among the older cohort. 47% of respondents in the 55-plus age group said dividends were important in their investment decisions compared to 17% of 18 to 34-year-olds.

Ethical investing is also front and centre for many ASX share investors, with 40% of respondents overall saying they consider clean technology when making their investment decisions.

An eye on risks 

Asked about the biggest risk to their ASX share holdings and other investments over the coming quarter, the state of the Australian and global economies topped the list.

46% of survey respondents named a shaky global economy as the biggest potential risk to their investments over the next 3 months. The state of the Aussie economy was a close second, with 39% saying this was the biggest risk to their investments in the first quarter.

Despite these concerns, 59% said they hadn’t repositioned their holdings to protect them for these risks.

Commenting on the results, eToro’s global markets strategist, Ben Laidler said:

Our latest Retail Investor Beat suggests investors are confident in their investments despite the cloudy economic outlook. Over the past two years retail investors have stolen a march in many ways over their institutional competitors and seem to be allocating their investments shrewdly with an eye on future developments.

Ultimately no one has a better handle on the situation ‘on the ground’ than an everyday investor who has to go to the supermarket to buy groceries or fill their car with fuel.

The post ASX shares have had a shaky start to 2022. Here’s what investors are planning: survey appeared first on The Motley Fool Australia.

More reading

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• Has the case for Bitcoin as an inflation hedge crumbled?
• Thank Bitcoin for making this stock so cheap in 2022
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• What? 2 days of gains for Bitcoin, Ethereum, and Dogecoin?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Bitcoin. The Motley Fool Australia owns and recommends Bitcoin. 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

• Domino’s shares were on form on Monday
• A bullish broker note out of Domino’s help drive the gains
• Broker still sees 32% upside for its shares over the next 12 months

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The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price was a strong performer on Monday.

The pizza chain operator’s shares charged 4% higher to $103.40.

Why did the Domino’s share price charge higher?

Investors were bidding the Domino’s share price higher on Monday in response to a bullish broker note out of Goldman Sachs.

According to the note, the broker has retained its buy rating but trimmed the price target on the company’s shares to $136.20.

Even after the strong gain by the Domino’s share price today, this implies potential upside of 32% over the next 12 months.

What did the broker say?

Goldman notes that Domino’s will be announcing its half year results in the coming weeks. Ahead of the release, the broker has been updating its estimates to account for store openings, inflationary pressures, and the rebasing of market multiples.

The broker commented: “While impact of cost inflation is not straight-forward for DMP as a result of the significant franchisee operations, we factor in c. 6% inflation in both FY22 and FY23e as a result of the stronger than expected increase in forward contract prices for key commodities like Cheese and Wheat which were up +3.1% and +12.1% respectively through 1H22 on a yoy basis and which have been up an average of +9.9% and +21.1% respectively in the month of January.”

“We also update our earnings outlook to adjust for the actual store roll-out YTD at +3, +36 and +86 respectively in ANZ, Europe and Japan regions for 1H22 and incorporate the latest FX forecasts. Overall, this results in a revision of our group EBITDA forecasts by -5.2% and -3.5% respectively over FY22 and FY23e,” it added.

What should investors expect in the first half?

Goldman is forecasting first half earnings before interest, tax, depreciation and amortisation (EBITDA) of $198.2 million pre AASB16 and $229.7 million post AASB16. The latter represents an increase of 5.5% over the prior corresponding period.

This is expected to be driven by same store sales growth in the ANZ and Europe markets, offsetting weaker sales in Asia.

Goldman concluded: “Overall, we expect the group to see SSS growth at +2.4% for the half, resulting in total network sales of A$2,010.2mn and Revenue of A$1,183.8mn. We forecast group NPAT to be at A$101.8mn, up 5.9% yoy.”

“DMP continues to offer a strong growth outlook of c. 15.4% CAGR growth at the EBIT level FY21-24e at a valuation which remains attractive on a growth relative basis vs. other global restaurant peers. We maintain our Buy rating on DMP,” it added.

The post Top broker says Domino’s (ASX:DMP) share price has 32% upside appeared first on The Motley Fool Australia.

More reading

• 2 ASX growth shares to buy in February with 40% upside
• $20,000 invested in these ASX shares 10 years ago is worth how much today?
• 2 stellar ASX growth shares analysts rate as buys
• 3 buy-rated ASX shares
• Why Domino’s, Fortescue, Medibank, and Metcash shares are falling

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 recommended Dominos Pizza Enterprises 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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Key points

• Both Bubs and Pushpay are fast-growing ASX shares with big growth plans
• Bubs is a globally-growing infant formula business which is seeing rapid uptake in Asia
• Pushpay is a leading digital payments business specialising in helping churches to process electronic donations and it also provides church management systems

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Some ASX shares are generating slow-and-steady growth, whereas others are growing really quickly. A good portion of these rapidly-rising businesses have significant, long-term plans.

Australia is typically a good country to do business in, but being able to expand internationally gives them a much larger total addressable market.

These two ASX shares could be ones to keep an eye on:

Bubs Australia Ltd (ASX: BUB)

Bubs is a leading provider of infant formula, specialising in goat milk products. But it also has growing products in the (organic, grass-fed) cow milk infant formula range.

This company currently aspires to be the leading global family nutrition brand from Australia. It’s looking for ways to grow through market and products expansion.

It recently released its FY22 second quarter trading update. It showed quarterly gross revenue of $19.9 million, which was up 56% year on year and up 8% quarter on quarter. For the FY22 first half, gross revenue was up 73% and up 57% half on half. The Bubs infant formula gross revenue went up 83% across all markets year on year and 13% quarter on quarter.

Gross revenue of branded products in domestic retailers was up 17% quarter on quarter for the ASX share. China gross revenue was up 121% year on year and up 21% quarter on quarter. International revenue, excluding China, gross revenue for Bubs products was up 66% year on year and 141% quarter on quarter. Bubs family nutrition new product portfolio is now being shipped to Africa, China, Singapore and Pacific Islands.

Bubs said that the corporate daigou channel demand has now completely returned. Demand has now exceeded pre-COVID levels.

In other words, it is seeing growth across the board.

The company’s USA e-commerce sales are now live on leading retail platforms with Walmart, Amazon and Thrive. Plans are “well progressed” to secure distribution into bricks and mortar retail outlets during the second half.

It was cashflow positive for the second consecutive quarter, with a balance sheet of $30.6 million of cash.

Before this update, it was rated as a buy by the broker Citi with a price target of $0.63.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is a leading electronic donation business with tools for both processing digital payments as well as church management. Its client base is currently an array of large and medium US churches.

The ASX tech share has continued to grow its processing volume and net profit after tax. In the first six months of FY22 it saw total processing volume grow by another 9%. It’s expecting more volume as more customers use more products and more people give digitally.

Net profit jumped 43% to US$19.1 million for the six-month period. This was partially helped by the increase of its gross profit margin, which went up from 68% to 69%.

Pushpay is looking to replicate its success in the Protestant segment of the market as it expands its services in the Catholic segment of the market “where significant long-term opportunity exists”. But it is focused on further market share growth in the Protestant area too.

Parishstaq is targeted at the Catholic segment, with the majority of customers adopting this platform, which validates management’s thoughts that a full product solution is what churches want.

The Catholic growth is a longer-term initiative for the ASX share, as it looks to grow the number of products purchased by customers as well as increasing the number of customers, as well as integrating the video streaming Resi Media business.

The post 2 fast-growth ASX shares with major plans appeared first on The Motley Fool Australia.

More reading

• Why Airtasker, ARB, Bubs, and Sezzle shares are pushing higher
• Bubs (ASX:BUB) share price jumps 14% amid strong daigou-fuelled Q2 growth
• 2 ASX shares that could soar in 2022: experts
• Here’s why the Pushpay (ASX:PPH) share price could be significantly undervalued
• Can the Bubs (ASX:BUB) share price bounce back in 2022?

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 PUSHPAY FPO NZX. The Motley Fool Australia owns and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended 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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Highlights:

• Some ASX building materials shares could outperform in 2022, according to JPMorgan
• The macro backdrop for the sector is positive despite headwinds from supply chain disruption and a cooling property market
• The broker says the best buys are CSR, James Hardie, and Adbri

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The CSR Limited (ASX: CSR) share price is outperforming today after JPMorgan listed it as one of its top buy ideas for 2022.

Shares in the building materials supplier are 2.19% higher at $5.60 just before market close. In comparison, the S&P/ASX 200 Index (ASX: XJO) is struggling to reach breakeven.

But CSR could keep outperforming the broader market this year thanks to a supporting macro backdrop, according to JPMorgan.

Headwinds and risks are overplayed

This isn’t to say the sector is without risks. The broker points out COVID-19 supply chain disruptions are weighing on ASX building material shares and costs pressures are rising.

The housing market is also showing signs of cooling and these headwinds could take the gloss off the upcoming ASX reporting season.

CSR share price trading at a discount

But, according to the broker, much of the bad news may be already priced into shares like CSR. The sector is trading at a discount to historical averages if you exclude the Boral Limited (ASX: BLD) share price and the Reece Ltd (ASX: REH) share price.

“The recent pullback in share prices has seen relative value step back into the sector,” JPMorgan said.

“Our coverage is currently trading on a weighted average [price to earnings ratio] PER of 17.6x (ex. BLD and REH), a -9% discount to the ASX 200 Industrials, below the LT average premium of 8%.

“With earnings set to improve in 2022 and undemanding multiples, this provides an attractive buying opportunity in our view.”

CSR share price among JPMorgan’s top ideas

According to the investment bank’s analysts, the type of ASX shares that investors should be targeting are those with a strong track record of execution. Further, ASX shares with relative pricing power and local manufacturing are best placed to outperform, JPMorgan said.

This means companies offering lightweight building products have an edge in this environment. This is why the broker believes that the CSR share price is a lower-risk proposition.

Best ASX shares to buy in 2022

But CSR isn’t the only one on JPMorgan’s top buy list for the sector. The broker also has an “overweight” recommendation on the James Hardie Industries plc (ASX: JHX) share price due to its exposure to the US housing market.

“Despite a strong 2021, US housing remains our preferred exposure for 2022, given historically low levels of housing stock and pent up demand,” said JPMorgan.

Finally, the Adbri Ltd (ASX: ABC) share price is also on the broker’s top buy list. JPMorgan believes too much bad news is priced into the shares in the cement manufacturer and the broker says it is primed for a re-rating.

The post Why the CSR (ASX:CSR) share price is on this broker’s top 2022 buy list appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau owns CSR Limited, James Hardie Industries plc, and Reece Australia 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 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 ARB Corporation share price is currently up 9.49%, trading at $46.83
• The gains follow the release of a market update detailing a 26.5% revenue increase
• Over the first half of financial year 2022 the company has recorded $359 million of unaudited sales revenue

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The ARB Corporation Limited (ASX: ARB) share price is reaching higher ground on Monday after the company announced a revenue surge.

At the time of writing, the ARB Corporation share price is $46.83, 9.49% higher than its previous close.

Though, that’s down from its intraday high of $49.50 – representing a 15% gain.

Let’s take a closer look at the news boosting the company’s stock on Monday.

ARB Corporation share price launches on market update

The ARB Corporation share price is surging higher after the company announced it’s likely to report a 26.5% revenue increase for the first half of this financial year.

Around this time last year, the company released an update stating it had received $284 million of unaudited sales revenue over the first half of financial year 2021.

That figure is set to be $75 million higher this year, reaching $359 million.

The increased revenue is expected despite impacts from COVID-19, delays in new vehicle availability, and economic uncertainty.

Additionally, based on its preliminary, unaudited management accounts, ARB Corporation’s profit before tax for the first half of financial year 2022 will likely be between $90 million and $92 million.

That’s compared with around $72 million recorded for the prior comparable period.

In today’s release, ARB Corporation commented:

The company maintains a positive outlook based on its strong customer order book and improved inventory levels… ARB is focused on managing customer expectations, global supply chain pressures and pursuing various market opportunities.

While its preliminary earnings look positive, bullish investors have to wait a few weeks before their hopes will be confirmed. ARB Corporation is expected to release its results for the first half on 22 February.

Despite today’s boost, the ARB Corporation share price is nearly 11% lower than it was at the end of 2021. Though, it’s still 33.23% higher than this time last year.

The post ARB Corporation (ASX:ARB) share price goes into overdrive, up 9% on revenue surge appeared first on The Motley Fool Australia.

More reading

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• These were the worst performing ASX 200 shares last week
• An ASX XI to take on the world
• Leading brokers name 3 ASX shares to sell today

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 recommended ARB Corporation 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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