The Boral Limited (ASX: BLD) share price is climbing as Seven Group Holdings Ltd (ASX: SVW) gets tantalisingly close to winning its battle for control of the construction supplies company.

Right now, the Boral share price is trading at $7.38, 0.41% higher than its previous closing price.

At the same time, shares in Seven Group have boosted 2% higher to trade at $23.31.

While Seven Group doesn’t yet have full voting power, it now holds a majority stake in Boral.

Let’s take a closer look at today’s news in the battle for Boral.

Seven Group’s takeover comes to fruition

The Boral share price is lifting despite Seven Group being only a hair’s breadth away from gaining control of the company.

According to the announcement from Seven Group, it currently holds 52.65% of all of Boral’s outstanding shares.

But, in this case, that doesn’t give it majority voting power as 3.33% of Seven Group’s Boral shares are part of an equity swap transaction.

Therefore, it only holds 49.32% of Boral’s voting power.

As The Motley Fool reported yesterday, if Seven Group’s voting power in Boral surpasses 50%, the takeover bid will be extended for another fortnight.

It’s now a race against time for Seven Group to get a hold of an additional 0.68% of Boral’s outstanding shares before 7pm today when the takeover bid closes.

Seven Group is confident it will secure 50% of Boral’s voting power before the cut off. However, the pressure doesn’t seem to be damaging the Boral share price.

What next?

Seven Group has stated, if it wins control, it plans to retain a majority of independent directors on Boral’s board. In today’s release, it said:

Having a majority of independent directors has been an important feature of SGH’s corporate governance for many years, helping to drive value for the benefit of all SGH shareholders, and it looks forward to following the same approach for Boral.

According to reporting by the Australian Financial Review today, Seven Group will also request a number of changes.

These include creating additional board seats, speeding up Boral’s overhaul of its Australian business, and pushing for increased discipline in the company’s capital management.

The Australian has reported, if Seven Group wins control of Boral, it will instate its CEO Ryan Stokes as Boral’s chair, replacing Kathryn Fagg. Additionally, Seven Group’s chief financial officer Richard Richards will be put back onto Boral’s board.

Boral share price snapshot

This year has been a good one for the Boral share price. It has gained 48% year to date and is 95% higher than it was this time last year.

And Seven Group…

Despite pushing higher today, the Seven Group share price is still 2.7% lower than it was at the beginning of 2021.

However, it has gained 32% since this time last year.  

The post Boral (ASX:BLD) share price gains as Seven’s hold surpasses 50% appeared first on The Motley Fool Australia.

More reading

• Boral (ASX:BLD) share price falls as Seven’s hold nears 50%
• The Boral (ASX:BLD) share price is up 9% in a month. What’s next?
• These 3 ASX 200 shares were big movers this Monday
• Boral (ASX:BLD) share price slips as Seven Group’s stake surpasses 40%
• Here are 3 of the most traded ASX 200 shares 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) is having a bit of a topsy-turvy time during trading today. At the time of writing, the ASX 200 is down 0.18% to 7,341 points after playing jump rope with the break-even line all day so far. But the Digital Wine Ventures Ltd (ASX: DW8) share price isn’t joining in the game.

Digital Wine shares are currently sitting at 9.1 cents a share. That’s exactly where they ended up in yesterday’s afternoon trading. And that’s where they will be staying, at least for a while.

That’s because Digital Wine announced it had requested a trading halt for DW8 shares just before market open this morning.

Unfortunately, that’s pretty much all we know at this stage.

All the company said on the matter was the following:

Digital Wine Ventures Limited… requests an immediate trading halt over the company’s securities pending the release of an announcement in relation to a material acquisition and capital raising. The trading halt is requested until the earlier of commencement of trading on Monday, 19 July 2021, or the company releasing the announcement.

So it looks as though Digital Wine is undertaking an acquisition, which will be (either partly or fully) funded by a capital raising program. We will have to wait for more information from the company before we know much more.

About the Digital Wine share price

Digital Wine Ventures is an online-only retailer of alcoholic beverages, primarily wine (as its name suggests). While dabbling in bulk wine production and processing, its primary business is selling wine in the growing Asian wine market.

Last month, the company caused quite a stir of excitement when it announced it had formed a partnership with the e-commerce giant Amazon.com Inc (NASDAQ: AMZN).

This deal will involve Digital Wine using Amazon’s logistic and payments infrastructure and will enable wine suppliers to more easily enter the Australian marketplace. Investors reacted very positively to this news at the time.

At the current Digital Wine share price, the company has a market capitalisation of $149.9 million. Digital Wine shares are currently up 127.5% year to date, and a whopping 203% over the past 12 months. However, the Digital Wine share price is also down almost 50% since early April.

The post Why isn’t the Digital Wine (ASX:DW8) share price trading today? appeared first on The Motley Fool Australia.

More reading

• What these 2 best performing ASX shares have in common….and what to expect next
• Why the Wellnex Life (ASX:WNX) share price is crashing 75% lower on Thursday
• Why is the A2 Milk (ASX:A2M) share price down almost 3% on Thursday?
• Why the Rhythm Biosciences (ASX:RHY) share price is racing 6% higher
• The Whitehaven Coal (ASX:WHC) share price lifts after quarterly update

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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. owns shares of and has recommended Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Yesterday I penned an article detailing the 5-best performing ASX shares of the 2021 financial year (FY21). (You can find that here.)

To avoid the potential distortions from the high volatility often experienced with microcap stocks, I limited the scope to ASX shares trading on the All Ordinaries Index (ASX: XAO). The All Ords contains the 500 largest companies by market cap.

For reference, the All Ords gained 25% in FY21, which ran from 1 July 2020 through to 30 June 2021.

What these 2 best ASX shares have in common

Today I’d like to draw your attention back to 2 of those ASX shares. Namely Vulcan Energy Resources Ltd (ASX: VUL) and Piedmont Lithium Inc (ASX: PLL).

Over the course of FY21, Vulcan Energy saw its share price fly 1,275% higher. That made Vulcan Energy the number 1 best performing ASX share on the All Ords.

Piedmont Lithium, the fourth best ASX share to own during the financial year gone by, soared 1,033%.

And remember, the benchmark we’re holding them up to gained ‘only’ 25% over that same time.

So, what do both of these ASX shares have in common?

The answer lies in Piedmont’s name.

Yep, lithium.

Vulcan Energy is working to become a major supplier of lithium to power the booming European electric vehicle (EV) markets. Already a growth market, the European Union has just signalled its intent to ban new combustion engine vehicles by 2035, meaning EVs are likely to dominate.

Piedmont Lithium is more focused on the huge opportunities presented by the United States’ changing energy needs. Both with EVs and grid storage batteries. Piedmont’s Carolina Lithium project is forecast to become one of the biggest, lowest-cost producers of lithium hydroxide in the world.

That’s the year gone by.

But what next for ASX lithium shares?

What next for lithium shares?

With the world increasingly intent on decarbonising our energy sources, analysts are broadly bullish on the outlook for lithium prices. And higher prices will offer a healthy tailwind for ASX shares involved in exploring for and producing lithium.

For example, Credit Suisse research analyst Matthew Hope said (quoted by the Australian Financial Review):

Lithium prices have risen sharply since February and we do not believe it is temporary. The lithium supply glut has ended and the market is now tightening as the electric vehicle revolution accelerates, [meaning] supply will need to stretch to meet demand…

The mines and salt lakes currently producing, together with those under construction, and idle operations that can be restarted, are insufficient to meet demand and will see growing deficits.

James Stewart, co-portfolio manager of Ausbil’s global resources fund, is also bullish on lithium prices:

What was a concept story a few years ago, is all of a sudden real now. Over the next six to 12 months, in particular, we can’t see significant lithium volume coming online to meet the phenomenal demand for electric vehicles we’re seeing across Europe, China and the US.

This should come as welcome news to ASX shares working on recycling and digging up lithium.

The post What these 2 best performing ASX shares have in common….and what to expect next appeared first on The Motley Fool Australia.

More reading

• The 5 best ASX shares of FY21 revealed
• ASX lithium shares are surging on Tuesday. Here’s why
• Why Australian Pharma Industries, Audinate, NRW, & Vulcan are racing higher
• Why the Vulcan Energy (ASX:VUL) share price is surging higher today
• These 5 ASX lithium shares energised investor portfolios in FY21

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

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The Wattle Health Australia Ltd (ASX: WHA) share price has returned to the ASX boards this morning under both a new name and ticker code after over 18 months in suspension.

Wattle Health is now known as Wellnex Life Limited (ASX: WNX) and returns to trade after the ASX provided conditional approval for the reinstatement of its securities.

Unsurprisingly, after such a long time in suspension, investors have been finally able to offload shares this morning at long last.

This has led to the Wellnex Life share price crashing to 12.5 cents. This is down 75% from its pre-suspension share price of 50.1 cents.

What’s changed?

Wellnex Life calls itself an Australian brand and distribution company of customer-focused health and wellness products. It was established when Wattle Health acquired the Brand Solutions Australia and Pharma Solutions Australia businesses.

Management notes that the combined company is now on a mission to deliver health, wellness and vitality solutions to consumers worldwide.

These acquisitions mean the company has an existing portfolio of consumer brands already in stores and on shelves and a pipeline of new brands that are ready-to-ship. These include Uganic nutritional milk, Iron Gummies, Little Innoscents skincase, Simply7 Lentil Chips, Wagner Ibuprofen and paracetamol, and Wakey Wakey energy gummies.

Management also highlights that it has ~$20 million in annualised revenue and a 10-year agreement with Chemist Warehouse.

Wellnex Life is targeting the Australia vitamin and dietary supplements market, which is currently worth an estimated $3.1 billion. It also has plans to expand into the $1.3 billion sports nutrition segment in the future.

Though, it is worth remembering from its lack of success in the infant formula market, that just having a large market opportunity doesn’t guarantee sales. For example, prior to the rebrand and acquisition, Wattle Health recorded cash receipts of just $0.5 million during the third quarter of FY 2021.

Wellnex Life returns to the ASX board today with a total of 321,730,670 shares outstanding. Based on the current Wellnex Life share price, this gives it a market capitalisation of $40.2 million.

The post Why the Wellnex Life (ASX:WNX) share price is crashing 75% lower on Thursday appeared first on The Motley Fool Australia.

More reading

• Why is the A2 Milk (ASX:A2M) share price down almost 3% on Thursday?
• Here’s why the A2 Milk (ASX:A2M) share price is down 64% in 12 months
• A2 Milk and Zip were among the most traded ASX shares last week
• These are the 10 most shorted shares on the ASX
• A2 Milk (ASX:A2M) share price in focus following update

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 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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The S&P/ASX 200 Index (ASX: XJO) is having a rather shaky start to trading this Thursday. At the time of writing, the ASX 200 is down 0.099% to 7,347 points. One ASX share that is faring worse today though is A2 Milk Company Ltd (ASX: A2M).

A2 Milk shares are currently down a nasty 2.52% so far today to $6.95 a share. This fall continues a trend we have seen playing out all week. Since Monday morning, A2 shares are now down near 4%, somewhat reversing the recent recovery in A2 Milk shares.

Remember, this is an ASX 200 share that has had a very rough 12 months or so. The A2 Milk share price is still down more than 40% year to date, and almost 65% down over the past year. A series of earnings downgrades, largely sparked by a collapse in the Chinese-driven daigou trade, are largely to blame here.

In saying that, we have also seen some strong signs of life in recent months too. Back in mid-May, A2 Milk shares bottomed out at a new multi-year low of just $5.04 a share. Since then, the company is now up an impressive 35%, even after today’s fall.

But let’s get back to why the A2 Milk share price is under pressure today. What’s going on?

Why is the A2 Milk share price under pressure today?

Well, the first thing to note is that there are no official news or announcements out of the company today that can easily explain this fall.

But we are seeing a number of ASX shares today that are falling by more than the ASX 200 itself. Although it might not seem like it after the year A2 has had, this company used to be thought of as a high-flying ASX growth share.

As such, it might be reacting alongside other ASX growth shares to a sharp sell-off over in the US markets last night. Yesterday’s session on the US markets saw shares like Tesla Inc (NASDAQ: TSLA), Nio Inc. (NYSE: NIO) and GameStop Corp. (NYSE: GME) sell off heavily, all losing more than 2% (nearly 7% in GameStop’s case).

Today on the ASX, not only is A2 Milk falling, but we also see similar moves from growth shares like Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and Bubs Australia Ltd (ASX: BUB). Perhaps the A2 Milk share price is just being caught up in a sell off in the ‘growth shares region’ of the market.

Whatever the reason, it’s certainly been an interesting day for A2 Milk shares so far. At the current A2 Milk Company share price, the company has a market capitalisation of $5.3 billion.

The post Why is the A2 Milk (ASX:A2M) share price down almost 3% on Thursday? appeared first on The Motley Fool Australia.

More reading

• Here’s why the A2 Milk (ASX:A2M) share price is down 64% in 12 months
• A2 Milk and Zip were among the most traded ASX shares last week
• These are the 10 most shorted shares on the ASX
• A2 Milk (ASX:A2M) share price in focus following update
• ASX 200 Weekly Wrap: COVID wobbles ASX as shares retreat

Motley Fool contributor Sebastian Bowen owns shares of Tesla and A2 Milk. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, NIO Inc., Tesla, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended A2 Milk and BUBS AUST FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Rhythm Biosciences Ltd (ASX: RHY) share price has been a strong performer on Thursday.

In afternoon trade, the early cancer detection-focused predictive diagnostics company’s shares are up 6% to 90 cents.

This latest gain means the Rhythm Biosciences share price is now up over 1,000% during the last 12 months.

Why is the Rhythm Biosciences share price charging higher today?

The catalyst for the rise in the Rhythm Biosciences share price on Thursday has been the release of an update on its US expansion strategy.

According to the release, the company has established a wholly owned US domiciled entity, IchorDX, as part of its US market entry plan. Management notes that this will enable Rhythm to pursue its international expansion activities for ColoSTAT in one of its largest priority markets.

ColoSTAT is the company’s lead product and intended to be a simple, affordable, minimally invasive and effective blood test for the early detection of bowel cancer.

The release highlights that the US market represents one of the largest diagnostic markets in the world, with a current addressable market of over 94 million people. It also sees scope for this number to grow in the short term by a further 21%. This follows the US Preventative Services Task Force’s recommendation that the colorectal cancer screening age be reduced from 50 to 45 years of age.

In light of this, it isn’t hard to see why the Rhythm Biosciences share price is on the rise again today.

Rhythm’s CEO, Glenn Gilbert, commented: “The establishment of IchorDX, Inc., in the US demonstrates our commitment to accelerate our international expansion plans, offer additional optionality to our corporate structure and aim to create a global footprint for Rhythm’s transformative cancer detection technology.”

“The reality is that the global need for a simple and accurate mass screening blood test for colorectal cancer is growing. This first step to enter the US market moves Rhythm closer to meeting this need,” he added.

The post Why the Rhythm Biosciences (ASX:RHY) share price is racing 6% higher appeared first on The Motley Fool Australia.

More reading

• Why the Rhythm (ASX:RHY) share price is climbing today

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

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The Whitehaven Coal Ltd (ASX: WHC) share price is in the green today after the company released its quarterly report this morning.

Currently Whitehaven shares are exchanging hands for $2.04 a piece, 3.03% up on the day.

Let’s take a closer look at the Australian coal miner’s results in closer detail.

Whitehaven’s share price jumps despite output setbacks

Whitehaven shares lifted after the earnings release, despite reporting its fourth-quarter saleable coal production had reduced by 39%.

Today’s results also exhibit a 7% decline in saleable coal production from the same time last year, coming in at 3.8 million tonnes (Mt).

The company also detailed that run-of-mine coal output was 20.56 Mt, flat to 20.60 Mt 12 months ago.

Explaining the results, Whitehaven claimed it had faced challenges at its Narrabri mine in New South Wales this year. It stated the Narrabri operation has been undergoing longwall equipment repairs due to the surrounding environment.

The company has experienced unscheduled downtime as a result of the repairs, hurting overall production.

Whitehaven managing directory and chief executive Paul Flynn said in the report:

Unfortunately difficult geological conditions persisted at Narrabri through the second half and, having now navigated through this area, we are focused on finishing the balance of the panel expeditiously and getting to the change out scheduled for Q2 of FY22.

Surging coal prices

Although coal prices hit new highs of US$135 per tonne this week, in its report, Whitehaven stated it had received a discounted price of US$94 a tonne.

Nonetheless, the company is adamant it will realise the benefits of these price hikes later on in the year.

Speaking on this topic, Flynn mentions in the report:

Prices for high-CV thermal are at 10-year highs, and we will begin to see this materialise into strong free cash flow over the coming months.

Whitehaven share price snapshot

The Whitehaven share price has climbed 23% this year to date, extending the last 12 month’s gain of 35%.

These returns have outpaced the S&P/ASX 200 Index (ASX: XJO)’s return of 11% this year and 21% over the last year.

At the time of writing, Whitehaven has a market capitalisation of $2 billion.

The post The Whitehaven Coal (ASX:WHC) share price lifts after quarterly update appeared first on The Motley Fool Australia.

More reading

• The 3 ASX shares that top brokers just upgraded to “buy”
• Why the Whitehaven (ASX:WHC) share price is climbing today
• These were the best performing ASX 200 shares in June
• Woodside among ASX energy shares claiming financiers are pulling the pin
• ASX 200 Weekly Wrap: ASX makes it 5 out of 5

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

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The Dacian Gold Ltd (ASX: DCN) share price has tumbled today after the company released its June quarter and FY21 activities report.

Earlier, the Dacian Gold share price was down 8%. At the time of writing, shares in the gold producer and explorer have recovered slightly but are still down 4.84% to 30 cents.

Why the Dacian Gold share price is sliding

The Dacian Gold share price has been pushed lower this morning as investors respond to its quarterly activities report.

At the time of writing, approximately 7 million shares have traded hands. To add some perspective, its 10 day average volume is approximately 2.5 million.

According to the release, Dacian Gold produced 25,558 oz of gold in the June quarter, at an all in sustaining cost (AISC) of $1,742/oz.

The company’s total FY21 production came in at 106,919 oz at an AISC of $1,552/oz.

The Dacian Gold share price might be responding negatively to the fact that these operational figures missed the company’s full year guidance of 110,000 to 120,000 oz at an AISC of $1,400 to $1,550/oz.

Looking ahead

Dacian Gold is targeting FY22 production guidance of 100,000 to 110,000 oz at an ASIC of $1,550 to $1,700/oz.

The company said that it is “embarking on a significant growth investment … for the long term”, allocating $20.4 million to exploration and $66.5 million to project development.

According to the announcement, an update regarding life-of-mine for Mt Morgans and the Redcliffe project is on track for release later in the September quarter.

What did management say?

Dacian Gold Managing Director, Leigh Junk commented on the result, saying:

Whilst we delivered a robust production result for FY2021, we did fall slightly short of our planned target for the quarter. Dacian has had a significant year nonetheless with the acquisition of Redcliffe, further reductions in our debt and hedge positions, completion of over 160,000 m of exploration and resource definition drilling and re-positioning our exploration strategy towards making the next generation of discoveries, all contributing to our growth-focused endeavors ahead in FY2022.

We are keen to soon reintroduce high-grade ore from the Westralia mine area into our production profile and are busy working towards developing the Redcliffe project into production. Our upcoming life-of-mine plan will be the Company’s first opportunity to bring all these projects into a base case mine plan for our Laverton operations and we look forward to completing that work this quarter.

About the Dacian Gold share price

The Dacian Gold share price has tumbled 36% year-to-date, hitting a 2-year low of 25.5 cents on 30 June.

However, it isn’t just Dacian Gold that’s struggling.

Household ASX gold shares such as Northern Star Resources Ltd (ASX: NST) and Evolution Mining Ltd (ASX: EVN) have also slumped this year, down 19% and 7.2% this year.

The post Dacian Gold (ASX:DCN) share price down 8% on quarterly activities report appeared first on The Motley Fool Australia.

More reading

• Why the PolyNovo (ASX:PNV) share price is sinking 6% lower on Thursday
• The ASX 200 is trading near record highs – time to worry about popping bubbles?
• Why is the SelfWealth (ASX:SWF) share price frozen today?
• ASX 200 midday update: Afterpay & Zip sink again, ARB shoots higher
• Spark Infrastructure (ASX:SKI) share price rallies 7% on confirmed bid

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

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The Polynovo Ltd (ASX: PNV) share price has been the worst performer on the S&P/ASX 200 Index (ASX: XJO) on Thursday.

At the time of writing, the medical device company’s shares are down 6% to $2.16.

This leaves the PolyNovo share price trading within sight of its 52-week low of $1.98.

Why is the PolyNovo share price is tumbling?

Investors have been selling down the PolyNovo share price after analysts at Bell Potter responded negatively to yesterday’s sales update.

According to the note, the broker has held firm with its hold rating but cut its price target down to $2.65.

Bell Potter made the move after the company’s sales update fell short of its expectations. PolyNovo reported product revenue growth of 34% in FY 2021 to ~$25.6 million, whereas Bell Potter was expecting $29.1 million.

What did Bell Potter say?

Bell Potter notes that PolyNovo has now fallen short of expectations for two consecutive halves.

It commented: “Today’s announcement came as a 13% miss vs our expectations—we expected COVID recovery tailwinds would make an impact on sales in the 2H. Although we view the quantum of sales growth as positive and acceptable, much loftier market expectations have not been met this and last half, which has contributed to recent downward pressure on the stock.”

In light of this, the broker has revised its revenue forecasts lower and adjusted its target on the PolyNovo share price accordingly.

The broker concluded: “Maintaining our HOLD rating with a reduced price target of $2.65/sh (from $2.75/share) on reduced FY22-24 revenue forecasts. PNV continues to trade at a significant premium to domestic and international wound care and MedTech peers.”

Bell Potter suggests that investors wait for PolyNovo’s “full year result in late August for additional detail, especially around new account additions, momentum with group purchasing organizations, and audited revenue figures.”

The post Why the PolyNovo (ASX:PNV) share price is sinking 6% lower on Thursday appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Afterpay & Zip sink again, ARB shoots higher
• ASX 200 flat, Select Harvest jumps, Nearmap soars
• ASX 200 midday update: Nearmap rockets, Incitec Pivot jumps
• Why Nearmap, PolyNovo, Select Harvests, & Youfoodz shares are storming higher
• PolyNovo (ASX:PNV) share price jumps 8% on strong update

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 shares of and has recommended POLYNOVO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) is edging higher in morning trade, up 0.1%

At 7,363 points, the ASX 200 is only 0.3% off its all-time highs of 7,386. It reached that peak just last month on 16 June.

What’s even more noteworthy in the case of the ASX 200 – and indeed most major global indexes – is that just 16 months ago, it had crashed hard in the initial panic selling as COVID-19 morphed into a pandemic.

In a single month, from 21 February through to 20 March 2020, the ASX 200 plummeted 33% to bottom out at 4,817 points.

A bit of back of the napkin maths tells us the index rocketed more than 53% from that low to the 16 June 2021 high. Its fastest growth in history.

Is the ASX 200 in bubble territory?

New record highs are noteworthy achievements. They’re usually greeted with celebration, unless you’re short the market. Yet new records also tend to stir investor anxiety.

How high is too high? Can the bull run really keep going?

These types of questions can keep investors up at night. And depending on their conclusions, can lead to rash and potentially costly decisions.

With that in mind, we look at the recent global share market crash prediction from legendary investor Michael Burry. Along with some moderating insights from Josh Gilbert, market analyst at global multi-asset investment platform eToro.

The greatest speculative bubble of all time?

Burry, if you’re not familiar, gained recognition in the financial circles after he spotted issues with subprime lending in the United States housing market in the mid-2000s. Issues that would lead to the global financial meltdown in 2008. He took up short positions and, eventually, made a fortune for himself and his clients.

Burry really became famous after the blockbuster movie The Big Short – he was portrayed by Christian Bale – hit the screens in late 2015. Or early 2016 Down Under.

In his most recent bubble prediction (he’s made a few) Burry tweeted, “People always ask me what is going on in the markets. It is simple. Greatest Speculative Bubble of All Time in All Things. By two orders of magnitude.”

Notably, Burry posted the tweet on 15 June, 1 day before the ASX 200 hit its current record high.

So, are global markets in a speculative bubble? One where investors have been drawn in chasing high returns in a low interest rate environment, and paying more for shares than they’re fundamentally worth?

eToro’s Josh Gilbert told the Motley Fool that indeed, “Over the past 18 months, more retail investors have entered the market than ever before.”

With share markets around the globe at or near record highs, many of these investors are buying shares for the first time, driven by the age-old fear of missing out (FOMO).

But when asked if he believes we’re facing the biggest bubble in history, Gilbert replied, “At the moment, I’d say no.”

He continued:

Yes, valuations are high in specific sectors, but this is supported by solid earnings growth, where we continue to see revenues climb. As these fundamentals improve, the bubble theory, therefore, becomes less apparent. Moreover, earnings growth is continuing, and in many companies’ Q2 earnings of 2021, we expect to see a 65% year-over-year increase.

Gilbert points to investor excitement with all thing tech as having driven markets in bubble directions earlier this year:

As tech assets boomed at the start of 2021, it felt as if we were potentially heading towards bubble territory. Stocks such as Tesla [Tesla Inc (NASDAQ: TSLA)] and Nio [Nio Inc (NYSE: NIO)] saw their share prices soar as the euphoria around growth stocks rippled through the market. During this time, both assets’ share prices were increasing at a rate that earnings couldn’t match.

But it looks like a bursting bubble scenario may have been averted. “Since this period, we have seen growth in the tech sector slow down substantially, as investors have rotated towards cyclical equities,” Gilbert told us.

He added that, “There are many assets in the market that are still currently undervalued, such as the financial sector.”

Similar activity on the ASX 200

We’ve seen much the same thing play out on the ASX 200.

While tech shares led the recovery rally in 2020, they’ve been lagging the broader index this year.

The ASX 200 has gained 10% so far in 2021. By comparison the S&P/ASX All Technology Index (ASX: XTX) – which tracks 50 of Australia’s leading technology shares – is down 1% year-to-date.

As one example, tech darling and BNPL share Afterpay Ltd (ASX: APT) gained 290% during the 2020 calendar year, including the meltdown month. In 2021, however, the Afterpay share price is down 12%.

Turning to the financial sector, which Gilbert says remains undervalued, Commonwealth Bank of Australia (ASX: CBA) gained only 2% in 2020. As for 2021, the CBA share price is up 18%.

What now for global share markets and the ASX 200?

Looking ahead, Gilbert said:

This year, it’s appearing likely that the S&P 500 will hit its third year of straight gains, a rare achievement that has only been experienced twice since the 1970s. In the second half of this year, it’s plausible to see lower returns, given how strong the markets have been to date. Volatility is also expected to increase, with the VIX currently trading at pre-pandemic lows and the Federal Reserve pondering over its tapering decision.

Gilbert left off with this valuable piece general advice, “For investors still worried about a market bubble, it’s crucial that they diversify their portfolios in order to protect themselves from any potential losses.”

In other words, don’t put all your eggs in 1 basket.

Happy investing!

The post The ASX 200 is trading near record highs – time to worry about popping bubbles? appeared first on The Motley Fool Australia.

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• CBA (ASX:CBA) share price outperformed Westpac over the past 3 months
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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, NIO Inc., and Tesla. The Motley Fool Australia owns shares of and has recommended AFTERPAY T 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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