Key points

• The Rhythm Biosciences share price finished the day up by more than 8% after earlier jumping by 19%
• The diagnostics company released its latest quarterly results today
• Its colorectal cancer detection product, ColoSTAT, is set to gain EU and UK commercial exposure

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The Rhythm Biosciences Ltd (ASX: RHY) share price surged today following the company’s latest quarterly activity update.

Among the business results, the diagnostic technology company released an update on its core product, ColoSTAT — a low-cost blood test used for the detection of colorectal cancer.

At the close of trading, the Rhythm Biosciences share price was up 8.43% at $1.35. During intra-day trade, it hit a high of $1.49, a gain of 19.2% on its previous closing price.

Let’s dive in and dissect this update…

What did Rhythm Biosciences report?

The Rhythm Biosciences share price jumped into the green after the company reported a total of $5.5 million cash in the bank for the period ending 31 December 2021. (This excluded a placement of $6.5 million before costs which was completed this month).

Secondly, it received a rebate of $2.4 million from its R&D Tax Incentive claim, in which the Australian government “encourages companies to engage in R&D programs by providing a refundable tax offset of up to 43.5% on eligible activities”.

Thirdly, it made three executive and non-executive enrolments to its board, including CEO Glenn Gilbert additionally taking on the role of managing director.

But probably most notable for the healthcare company was the progressing commercialisation of its product — the ColoSTAT.

ColoSTAT EU exposure

Rhythm Biosciences’ ColoSTAT product was recently granted a “CE Mark”. This means it has met all provisions of EU legislation required to be sold within the European Economic Area (EEA).

According to Listcorp, colorectal cancer — which the ColoSTAT aims to detect — is the third most common form of cancer for men, and second for women.

This certification exposes the company to 231 million people and a market valued at US$12 billion.

And since the quarter, its CE Mark certification now encapsulates England, Wales, Scotland, and Northern Ireland.

While the company is continuing to test its product to ensure “highly accurate, consistent and reproducible results” — at 84% sensitivity and 95% specificity — it has confirmed the product “significantly outperforms the current market testing regime, by as much as 33%”.

The company is therefore confident it will perform well in the market.

Looking forward, Rhythm Biosciences has employed a “platform expansion program”, using similar technology of ColoSTAT to diagnose other types of cancers.

Breast, cervical, lung, gastric, and pancreatic cancers are to be targeted for similar commercial pathways.

Rhythm Biosciences share price snapshot

The Rhythm Biosciences share price has jumped by 48% in the last six months. However, it is down around 12% this year to date.

The company has a market capitalisation of $265.99 million and over 213 million shares outstanding.

The post Here’s why the Rhythm Biosciences (ASX:RHY) share price soared 8% today appeared first on The Motley Fool Australia.

More reading

• Here’s why the Rhythm (ASX:RHY) share price is up 11% today

Motley Fool contributor Alice de Bruin 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:

• ResMed share price is swept up in the market sell-off but JP Morgan believes 2022 will be a strong year for the company
• The product recall by rival Philips gives ResMed time and opportunity to build and hold market share
• JP Morgan upgraded ResMed to “overweight” from “neutral” on the back of this more bullish outlook

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The ResMed CDI (ASX: RMD) share price isn’t spared from the market de-rating, but JP Morgan believes 2022 will be a strong year for the company.

The broker’s conviction was strong enough for it to upgrade the ResMed share price to “overweight” from “neutral”.

This news could bring relief to shareholders that have seen the sleep disorder treatment devices company tumble 13% since the start of the year, including a 3.86% fall today.

Why the ResMed share price is copping a de-rating

Market sentiment towards the ResMed share price has recently soured due to interest rate expectations and  COVID-19 supply chain disruptions.

The threat of higher interest rates is knocking the wind out of high price-to-earnings (P/E) shares. This is because the valuations of ASX shares trading at a market premium tend to suffer more when rates increase.

COVID chaos hurting sales

Meanwhile, ResMed’s supply chain problems are hardly unique as well. The difficulty in securing components and delays in shipping are driving up costs for the company.

“Our channel checks indicate ResMed’s deliveries fell short of customer expectations late in the December quarter,” JP Morgan said.

“This reflects both supply chain challenges (a shortage of key components) and the increased freight times as the Christmas rush exacerbated the pandemic-induced challenges.”

Brightening outlook for ResMed

But there are reasons to feel bullish on the ResMed share price despite these headwinds. The broker believes production should ramp up over the coming months as the chip and component shortage eases.

This will allow the company to increase sales of its devices into the end of the financial year and quite possibly into FY23.

Perhaps more significant for ResMed’s fortunes is the product recall by its key competitor, Philips. It seems that the time it will take Philips to rectify this issue will be longer than for ResMed to overcome the supply chain bottleneck. This gives the ASX-listed entity an opportunity to take and hold market share.

What is the ResMed share price worth?

“While Philips has stuck to its 12-month guidance to deal with the recall we expect this will prove optimistic given the supply chain challenges reported by ResMed and others,” said JP Morgan.

“We also note the recall is the largest in medical device history and seems to have attracted a significant level of regulatory scrutiny.”

Also worth noting is that ResMed has started charging a $12 surcharge for all its devices in 2022 to help offset rising costs. The broker estimates that approximately half of the gross margin decline caused by the component and freight cost challenges will be offset by the surcharge.

JP Morgan lifted its 12-month price target on the ResMed share price to $37.90 from $36 a share. That suggests a potential 20% upside on the current share price of $31.40.

The post Why broker thinks falling ResMed (ASX:RMD) share price is a buying opportunity appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
• $20,000 invested in these ASX shares 10 years ago is worth how much today?
• 3 ASX shares brokers have named as buys
• 2 excellent blue chip ASX 200 shares to buy this month
• 3 buy-rated ASX shares

Motley Fool contributor Brendon Lau 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 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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The past month has been a dark one for ASX investors. As most readers would be aware, the ASX has been in the grips of a nasty share selloff. With today’s near-2% slide for the S&P/ASX 200 Index (ASX: XJO), we have now officially entered ‘correction’ territory. A correction is arbitrarily defined as a fall of 10% or more for an index’s most recent high. And given the ASX 200 has gone from 7,632.8 points back in August to a low of 6,758.2 points today (a drop of 11.46%), we are well and truly in correction territory.

So this is undoubtedly a tough time for many investors out there. Share market falls of this magnitude usually impact most investors’ share portfolios in a meaningful way. And it’s never fun to see the shares you have bought with your hard-earned dollars lose their value at the whim of the market.

But it’s of paramount importance from a wealth-protection standpoint not to let disappointment in what the share market has done become full-fledged panic. So here are 3 reasons why investors shouldn’t panic right now:

3 reasons not to panic during this ASX 200 correction

Look to history

Although it can be hard to see the forest for the trees on days like today, remember, share market corrections and crashes are a normal and healthy part of the investing journey. The ASX’s history is littered with bumps and falls, corrections and crashes. And yet, the markets have never once failed to overcome a previous all-time high.

We all remember the very frightening COVID-induced crash of 2020. That saw the ASX 200 lose more than 30% of its value over just a month or so. And yet, looking back, it took just over a year for the ASX 200 to fully recover from that crash and climb to previously-unseen highs. No one knows how this current period of turbulence will last for. But history tells us that time eventually heals all share market wounds.

There are always dividends

Even though your share portfolio might have taken a nasty haircut recently, remember that there’s not much in the way of returns if you have your cash in the bank instead. With interest rates still at record lows, many investors would have bought ASX shares to put their cash to work and get some dividends in return. And companies are still paying dividends. So even though it doesn’t feel like it, your cash is still at work, and potentially delivering dividends too.

This could be a buying opportunity

The legendary investor Warren Buffett is famous for doing most of his share buying during market corrections or crashes. In fact, he once likened it to ‘putting out a washtub when it’s raining gold’. The reality is that while buying shares during market corrections can be downright terrifying, it’s also usually some of the rare occasions where good-quality companies go on sale at cheap share prices.

So keep an eye on your best investing ideas. Hopefully, these are companies that have such strong business fundamentals and pricing power that they can handle almost anything the world throws at them. You might not get a cheaper price to buy those companies than what we have recently seen. They don’t say that more millionaires are minted during share market crashes than at any other time for nothing! 

The post 3 reasons not to panic in this ASX 200 correction appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts on Thursday
• Bargain bonanza? Scott Phillips’ advice for a glass-half-full approach to falling ASX share prices
• It’s official – ASX 200 sinks into correction territory
• From hero to Xero (ASX:XRO): share price tumbles 8% to hit 52-week low
• ASX 200 (ASX:XJO) midday update: Premier impresses but Kogan disappoints again

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 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

• ASX gold shares broadly trailing the index
• Gold prices sliding
• Goldman Sachs releases bullish outlook for the yellow metal

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ASX gold shares are taking a beating today.

The broader S&P/ASX 200 Index (ASX: XJO) itself is down 2.2% at time of writing. That brings it into official correction territory, down 10.3% so far in 2022. (Details here.)

But some of the top ASX gold shares are doing it far harder.

Newcrest Mining Ltd (ASX: NCM), for example, is down 4.8% today. Meanwhile the Northern Star Resources Ltd (ASX: NST) share price has dropped 7.9% today.

Trailing the pack is ASX 200 gold share Evolution Mining Ltd (ASX: EVN), down 11.4% today and 15.2% in 2022. Atop the wider woes impacting share markets in general and gold stocks in particular, investors appear to be pushing down the Evolution share price following the company’s quarterly update this morning.

What’s happening with gold?

ASX gold shares are under particular strain this week with a slipping gold price. Gold came under renewed pressure following hawkish comments from US Federal Reserve chair Jerome Powell, which caught many investors by surprise.

Gold, which doesn’t pay a yield, is viewed by many analysts as a store of wealth, and so often falls in the face of rising interest rates.

Since Wednesday the yellow metal has fallen 1.8%, currently trading for US$1,815 (approximately AU$2,545) per troy ounce.

As for our ASX gold shares, gold miners are said to be leveraged to the price of gold. That’s largely because their fixed costs are, well, fixed. Meaning any rise or fall in the price of bullion directly impacts their bottom line.

Take a step back to 2 June, when the gold price stood at US$1908 per ounce, 5% above today’s level, and you can see how ASX gold shares have performed as gold slides.

Since 2 June the Newcrest share price has dropped 17.9%; Northern Star shares are down 24.9%; and Evolution mining has lost 34.2%.

The ASX 200 is down a more subdued 5.6% over that same period.

To be sure, there are many factors at play in determining the share price of gold miners. But the gold price is certainly a big one.

Why things could be looking up for ASX gold shares in 2022

While gold has come under pressure from expectations of rising interest rates, the yellow metal still has appeal for many as an inflation hedge and a haven asset during times of global conflict.

Goldman Sachs Group Inc, for one, believes bullion is set for a solid run higher.

As Bloomberg reports, following Powell’s hawkish comments on a slowing global growth outlook alongside higher inflation, Goldman raised its 12-month outlook for gold to US$2,150 an ounce, up from US$2,000. That’s some 13% above today’s price.

According to Bloomberg analyst Mikhail Sprogis, “This combination of slower growth and higher inflation should generate investment demand for gold, which we consider to be a defensive inflation hedge.”

If Goldman has this one right, it should also provide some significant tailwinds for ASX gold shares.

The post ASX gold shares fall hard. Is now the time to buy? appeared first on The Motley Fool Australia.

More reading

• Why Evolution, Cettire, Hipages, and Kogan shares are sinking
• Why is the Evolution (ASX:EVN) share price sinking 10% today?
• ASX 200 (ASX:XJO) midday update: Premier impresses but Kogan disappoints again
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Tuesday

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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On Wednesday, we looked at three ASX shares that brokers have given buy ratings to this week. Unfortunately, not all shares are in favour with brokers right now.

Three ASX shares that have just been given sell ratings by brokers are listed below. Here’s why they are bearish on them:

Fortescue Metals Group Limited (ASX: FMG)

According to a note out of Goldman Sachs, its analysts have retained their sell rating and $13.50 price target on this iron ore giant’s shares. This follows the release of the company’s second quarter update earlier this week. While Fortescue delivered a second quarter result in line with Goldman’s expectations, it still has big issues with its valuation. The broker notes that its shares are trading at 1.65x net asset value (NAV), which is notably higher than its two largest peers at 0.9x NAV. Goldman also has concerns over its Fortescue Future Industries business and the huge cost involved with the decarbonisation of its Pilbara operations. The Fortescue share price is trading at $19.47 today.

Mineral Resources Limited (ASX: MIN)

A note out of Ord Minnett reveals that its analysts have downgraded this mining and mining services company’s shares to a sell rating with a trimmed price target of $45.00. This follows the release of a quarterly update which fell short of the broker’s expectations. In addition to this, Ord Minnett continues to believe its shares are overvalued at the current level. The Mineral Resources share price is fetching $53.85 on Thursday.

Premier Investments Limited (ASX: PMV)

Another note out of Goldman Sachs reveals that its analysts have retained their sell rating and $23.40 price target on this retail giant’s shares. Goldman has had a quick look at Premier Investments’ trading update. And while it notes that Premier Retail’s earnings easily beat its expectations, this was driven largely by one-off rental benefits. Overall, the update hasn’t done anything to ease the broker’s longer term concerns. The Premier Investments share price is trading at $26.99 this afternoon.

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

More reading

• Why Beach, Jumbo, Premier Investments, and Western Areas are pushing higher
• Broker tips Fortescue (ASX:FMG) share price to sink 30% and warns of dividend cuts
• ASX 200 (ASX:XJO) midday update: Premier impresses but Kogan disappoints again
• Mineral Resources (ASX:MIN) share price falls 5% following brokerage downgrade
• Premier (ASX:PMV) share price jumps 9% after solid growth despite losing 42,000 trading days

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 Premier Investments 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

• The Westgold share price has been in a sea of red all day
• The gold producer released a positive quarterly update
• The miner achieved record gold production in the quarter

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The Westgold Resources Ltd (ASX: WGX) share price has gone underground again today, off the back of an already depressed trading week.

Today’s drop also coincides with the company’s latest quarterly report and investor update, which has revealed a record amount of gold produced for the quarter.

Despite the positive news, the Westgold share price is down 7.96% trading at $1.83 at the time of writing.

So what’s going on with the Western Australian-focused gold miner?

Let’s take a look…

What did Westgold report?

Diving straight in, Westgold’s business and production results for the period ending 31 December 2021 include:

• A record gold production for the quarter of 66,688 ounces
• Ore production above milling capacity
• Hedges increased to 175,000 ounces at an average of $2,262 per ounce
• Actual gold sales achieved $2,380 per ounce, generating revenue of $195 million
• Closing cash, unsold bullion and liquid assets amounting to $110 million.

The company highlighted several challenges in the quarter:

• Escalation in coronavirus-related costs
• Risk to supply chain on an industry-wide scale — prevented by increasing inventory of “critical spares and consumables” to preserve continuity of operations
• An increase of “labour, fuel, flights and consumables” related costs, raising basic cash costs (C1) to $1,446 per ounce and all-in sustaining cost (AISC) to $1,714 per ounce

Despite the road bumps, the gold miner is confident in maintaining its FY22 production and cost guidance, with total production at 31 December 2021 totalling 132,861 ounces @ C1 of $1,396 per ounce and AISC at $1,648 per ounce.

Westgold added it was “mining more than we can process on a monthly basis” from a number of its sites — Paddy’s Flat had a record month, and commercial production is underway at its Bluebird mine.

Comment from management

Westgold executive director Wayne Bramwell said delivering another production record was “an exceptional effort considering persistent labour shortages and costs were further exacerbated this quarter by COVID vaccination deadlines, seasonal absence, and border closures”.

Positively, our key mines continued to advance, with Bluebird reaching its steady state production rate, Paddy’s Flat achieving a monthly production record and Big Bell continuing to grow in output.

This evidences an increasing number of Westgold’s key mines beginning to meet or outperform budgeted production levels, strengthening the capacity of the business to consistently deliver group targets.

Westgold share price snapshot

The Westgold share price has seen a difficult 12 months, dropping 23%. In fact, Westgold was listed as one of the five worst ASX 200 mining shares in 2021, alongside a handful of other gold miners that suffered last year.

Shares in the miner saw their lowest point of the year in September, hitting $1.60 apiece.

Westgold has a market capitalisation of $775.4 million and a price-to-earnings ratio (P/E) of 10.08.

The post Why is the Westgold (ASX:WGX) share price down 8% despite record gold production? appeared first on The Motley Fool Australia.

More reading

• These were the 5 worst ASX 200 mining shares to hold in 2021

Motley Fool contributor Alice de Bruin 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 Xref share price hit a 9-year high of 80 cents after the company released a trading update
• The company’s sales improved by 96% compared to the previous half
• The All Technology Index is down 5% today

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ASX tech shares may be crashing today but one company hit a nine-year high this morning. The Xref Ltd (ASX: XF1) share price is currently up 0.7% at 71.5 cents. However, in intra-day trade, it hit 80 cents, a nine-year high. The last time Xref shares hit more than 80 cents was mid-2012.

For perspective, the S&P/ASX All Technology Index (ASX: XTX) is currently down 5.2%.

This movement in the Xref share price comes after the human resources technology company reported a 96% rise in sales in its latest trading update.

Let’s take a look at what the company revealed today.

Xref share price soars on results

The Xref share price soared this morning after the company provided an update for the second quarter and first half of financial year 2022. Highlights included:

• $10 million total sales for the first half of FY22, soaring 96% on previous corresponding half
• $8.2 million total revenue for the first half of FY22, up 68% on the previous corresponding half
• Sales of $4.6 million, up 71% on the previous corresponding quarter
• Revenue of $4.3 million, a 65% gain on the previous corresponding quarter
• Cash receipts of $4.7 million
• Cash surplus of $0.2 million

What else did this ASX tech share report?

Xref revealed it has increased its ability to gain new clients digitally during the COVID-19 pandemic. This has reduced its dependence on traditional sales methods.

The company has also been able to reduce its spend on marketing by 50%.

New clients in the quarter included Fortescue Metals Group Limited (ASX: FMG), Chartered Accountants Australia and New Zealand, The University of the Sunshine Coast, and St Vincent’s Health Australia.

Globally, this ASX tech share also attracted clients including English Premier League football club Wolverhampton Wanderers, along with the University of British Columbia, Trulioo, and the Evangelical Lutheran Church in North America.

The company’s credit use improved 52%, while RapidID’s net revenue soared 363%. RapidID is a technology platform that allows companies to verify the ID of the people they employ.

The net revenue from RapidId improved due to more bulk discounts from third-party vendors.

What did management say?

Commenting on the results and future direction of this ASX tech share, Xref CEO and executive director Lee-Martin Seymour said:

We are starting to see historical Australian seasonal fluctuations reduced by stronger demand in the sector and the growth of both RapidID and our overseas operations.

While only halfway complete, we have already built a strong foundation for FY2022. Both new business demand and current client usage during the holiday season has been unprecedented and suggests that our Q3 and Q4 FY2022 performance will be strong.

In tandem, we are preparing to launch products to grow the marketplace and platform subscriptions. It is a very exciting period in our growth journey.

Xref share price snap shot

The Xref share price has soared 97% in the past year. In the past month, it has gained around 11%, but it has fallen more than 4% in the past week.

Meanwhile, the broader S&P/ASX 200 Index (ASX: XJO) has returned 0.74% in the past 12 months. The All Technology Index has fallen by 21% over the same period.

Xref has a market capitalisation of around $131.5 million based on its current share price.

The post ASX tech shares are plummeting today but this one just hit a 9-year high appeared first on The Motley Fool Australia.

More reading

• Why is the Westgold (ASX:WGX) share price down 8% despite record gold production?
• Why Beach, Jumbo, Premier Investments, and Western Areas are pushing higher
• 3 ASX small cap shares landing on an expert’s buy list
• These 3 ASX 200 shares are topping the volume charts on Thursday
• Woodside (ASX:WPL) share price slightly retraces following Myanmar withdrawal

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Xref Limited. The Motley Fool Australia has recommended Xref 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

• The Transurban share price has slumped 12% since the end of 2021 to trade at $12.12
• That’s despite no news having been released by the company
• However, its home sector has also suffered during the new year so far

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January has been a bumpy road for many ASX stocks, and the share price of Transurban Group (ASX: TCL) hasn’t come out unscathed.

In fact, the company’s stock has slipped 12.30% so far this year for no obvious reason.

At the time of writing, the Transurban share price is $12.12, down its final close of 2021 – $13.82.

For context, the S&P/ASX 200 Index (ASX: XJO) has struggled through this month as well. It has fallen 8% year to date.

Let’s take a look at what might be weighing on the toll road operator’s share price in 2022.

Why is the Transurban share price suffering in 2022?

The Transurban share price has tumbled since the end of last month despite no news having been released by the company.

However, its seemingly tracking its home sector – the S&P/ASX 200 Industrials Index (ASX: XNJ) – to a tee. Take a look at the graph below to compare the pair’s performance over 2022 so far.

Its also worth mentioning the company has been hit hard by COVID-19 outbreaks in the past, as lockdowns saw road traffic plunge.

While the current Omicron outbreak hasn’t seen Australians officially stuck at home, it might have impacted the market’s sentiment for the toll road operator’s shares.

Fortunately, the Transurban share price isn’t alone in its suffering. It’s been a dismal start to the year for many of the industrial sector’s participants.

None of them have come up in the green for 2022 so far. Though, Sydney Airport (ASX: SYD) has come in close. Its share price has slipped just 0.4% since the end of last year.

Meanwhile, the Reece Ltd (ASX: REH) share price is bringing up the rear, having slumped 24% over the same time frame. It’s worth noting, Reece’s stock hit multiple 52-week highs in late December and early January.

While there’s been no price-sensitive news out of Transurban since mid-December, the market isn’t expected to wait much longer for an update on the company.

Transurban has pencilled 17 February as the day it will drop its results for the first half of financial year 2022.

The last time the company released half year results, its share price slumped 0.6% on news of COVID-19 impacts.

The post Why has the Transurban (ASX:TCL) share price tumbled 12% so far in 2022? appeared first on The Motley Fool Australia.

More reading

• 2 ASX dividend shares Morgans rates as buys
• Brokers name 2 ASX 200 dividend shares to buy
• Own Transurban (ASX:TCL) shares? Here’s what its 2022 dividends might look like
• 2 top ASX shares for a retirement portfolio
• Why analysts slapped buy ratings on these ASX shares

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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another disappointing decline. At the time of writing, the benchmark index is down 1.9% to 6,830.4 points.

Four ASX shares that are defying the selloff are listed below. Here’s why they are pushing higher:

Beach Energy Ltd (ASX: BPT)

The Beach Energy share price is up 9% to $1.42. This follows the release of a number of bullish broker notes in response to its recent quarterly update. One of those notes came from Morgans, which retained its add rating and increased its price target to $1.72. It suspects the company could upgrade its guidance with its half year results.

Jumbo Interactive Ltd (ASX: JIN)

The Jumbo share price is up 3% to $17.33. Investors have been buying this lottery ticket seller’s shares after it announced an agreement to acquire UK-based StarVale Group for $32.1 million. StarVale is a leading External Lottery Manager (ELM) and a digital payments company. The company provides a full range of Society Lottery services (weekly lottery and raffle) and prize draw services.

Premier Investments Limited (ASX: PMV)

The Premier Investments share price is up 1.5% to $26.97. This morning the retail giant revealed that it expects to achieve first half sales and earnings growth despite losing 42,000 trading days. The Premier Retail business’ sales are expected to come in at $769 million and EBIT is expected to be $209.5 million to $211.5 million. This represents growth of 0.5% on the top line and 4.2% to 5.3% on the bottom line.

Western Areas Ltd (ASX: WSA)

The Western Areas share price is up 3% to $3.55. This follows the release of the nickel producer’s quarterly update. For the three months ended 31 December, Western Areas delivered a 12.2% increase in total mined nickel to 4,600 tonnes. This underpinned a 13% increase in nickel sold to 4,511 tonnes. Western Areas also revealed that its realised nickel price increased to $12.48 per pound from $11.90 per pound.

The post Why Beach, Jumbo, Premier Investments, and Western Areas are pushing higher appeared first on The Motley Fool Australia.

More reading

• In a sea of red, this ASX All Ordinaries share is hitting 2-year highs. Here’s why
• Jumbo Interactive (ASX:JIN) share price leaps 6% on acquisition announcement
• ASX 200 (ASX:XJO) midday update: Premier impresses but Kogan disappoints again
• Premier (ASX:PMV) share price jumps 9% after solid growth despite losing 42,000 trading days
• Why are ASX 200 energy shares tumbling on Tuesday?

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 Jumbo Interactive Limited. The Motley Fool Australia has recommended Jumbo Interactive Limited and Premier Investments 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

• The ASX 200 has officially entered correction territory as the market dives further on Thursday
• Small-cap ASX shares have performed poorly compared to the benchmark
• One fund manager picks out three small-cap companies that could be worth a look

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The S&P/ASX 200 Index (ASX: XJO) has officially entered a correction on Thursday. This is defined as a fall of more than 10%. Unfortunately, ASX small-cap shares have been experiencing intensified selling pressure compared to their larger peers.

To illustrate this, the S&P/ASX Small Ordinaries Index (ASX: XSO) is now down 14.4% since the beginning of the year.

Despite this, one portfolio manager has ventured off into the storm, looking for shares that could be a buy. From this, we’ve come away with three small-cap ASX shares that might be worth a look.

Let’s take a look at which companies make the list for QVG Capital fund manager, Josh Clark.

Could this ASX share pull a 180?

It may be down 46% from its 52-week high, but that hasn’t deterred Clark from Life360 Inc (ASX: 360). In his recent interview with Livewire, the fundie outlined his case for why the family-centred technology company is a buy.

In Clark’s eyes, the company has a few tailwinds at its disposal, providing forward momentum for the business. This has allowed Life360 to reach revenue growth in excess of 40%.

Importantly, the fund manager considers the founder-led management team to be of high quality. A key characteristic feature of the team is its ability to create value for customers. Clark goes on to say — by adding more features — churn should reduce, bringing an increase in lifetime customer value.

The Life360 share price is up 87% compared to the same time a year ago. However, the company’s valuation has been sliding since the Tile acquisition announcement.

Getting connected with another buy

Aussie Broadband Ltd (ASX: ABB) is another ASX small-cap share that has had a bad run recently. The telecommunications company has watched on as its share price has tumbled nearly 25% since 1 December 2021.

The fast-growing telecom player is now trading on a price-to-sales (P/S) ratio of roughly 2.5 times. While the industry is highly competitive in nature, Clark believes the current valuation is compelling based on the earnings expected to be coming through over the next couple of years.

As such, this small-cap has found a spot on the fund manager’s buy list. Currently, shares in Aussie Broadband are swapping hands at $4.10 a pop.

Bringing it home

The third and final ASX small-cap share making a nest in Clark’s buy list is Frontier Digital Ventures Ltd (ASX: FDV). This company holds a portfolio of online automotive and property marketplaces, predominantly scattered across underdeveloped countries.

It is worth noting that Clark is cautious that the company is trading at more than 10 times its revenue. More concerning is that those types of businesses are getting smashed in the current market selloff.

However, the fund manager is more optimistic about the company over the long term. Mainly on the basis that online classifieds have demonstrated their ability to provide remarkable returns in the past.

Take REA Group Limited (ASX: REA) and Carsales.com Ltd (ASX: CAR) for example — both of which have returned in excess of 95% over the last five years.

With an extensive portfolio of opportunities, Clark noted that only a few of these need to hit for Frontier Digital Ventures to be a winning ASX share.

The post 3 ASX small cap shares landing on an expert’s buy list appeared first on The Motley Fool Australia.

More reading

• Life360 (ASX:360) share price pushes higher after reaching 35.5m users in Q4
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• 2 ASX tech shares to buy after the market meltdown
• 2 explosive ASX growth shares analysts love right now
• Analysts name 2 fantastic ASX shares to buy right now

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 Aussie Broadband Limited, Frontier Digital Ventures Ltd, and Life360, Inc. The Motley Fool Australia has recommended Aussie Broadband Limited, Frontier Digital Ventures Ltd, REA Group Limited, and carsales.com 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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