The S&P/ASX 200 Index (ASX: XJO) fell by around 0.9% today to 7,273 points.

Here are some of the highlights from the ASX:

Audinate Group Ltd (ASX: AD8)

The Audinate share price went up around 6.7% today after the business released a trading update.

Audinate announced that it generated US$25 million of revenue in FY21, up 23% from the US$20.4 million in FY20.

The company said that there was a strong finish to the year with the final quarter up 74% on the last quarter of FY20. In Australian dollar terms, FY21 saw $33.4 million of revenue, up from $30.3 million in the prior year.

Audinate also said there are uncertainties in the global supply of chips and electronic components continues to be a near-term risk for both Audiante and its original equipment manufacturer (OEM) customers. The business said it continued to meet customer demand for chips and modules over the past few months despite the minor impacts from a COVID-related shut-down of its contractor’s plant in Malaysia and some under-delivery of raw material from suppliers.

The company explained that increasing component lead times and requests by chip manufacturers for demand visibility for up to 12 months out have resulted in a record backlog of committed sales orders for FY22.

Audinate co-founder and CEO Aidan Williams said:

The recent launch of the first Dante video products manufactured by our customers was another substantial milestone and market feedback has been encouraging.

The business said that the Dante video products have been met with a positive initial response from customers.

Humm Group Ltd (ASX: HUM)

The Humm share price fell around 3% today.

Humm announced that it has potential historic exposure to Forum Finance through the decommissioned FlexiGroup managed services business.

The business explained that between 2016 and 2018, FlexiGroup’s decommissioned managed services business provided equipment finance to a number of vendor programs in the Australian market.

After recent investigations into Forum Finance Pty Ltd, Humm Group said it has done a review of historical records within the FlexiGroup managed services division, which was decommissioned in 2018.

Records indicate that the FlexiGroup managed services division generated business linked to Forum Finance between 2016 and 2018.

However, following the shutdown of FlexiGroup managed services, the majority of these assets were sold to a third party and transferred off the Humm Group balance sheet in 2018.

At this stage, it has not confirmed if the assets are fraudulent, but simply that they are associated with Forum Finance. Investigations are ongoing.

After an initial review, Humm has estimated that the maximum historical exposure to Forum Finance including receivables on-sold to be $12 after tax.

Abacus Property Group (ASX: ABP)

ASX 200 property business Abacus announced that it has seen valuation gains across its investment portfolio. The Abacus share price went up 0.3%. 

It said that 40 of its investment properties, or 34% of the group’s portfolio by number, have been valued externally as at 30 June 2021.

The ASX 200 share’s preliminary valuations have resulted in a total estimated increase of $140 million, being a 4.5% increase.

These valuations are expected to increase the pro forma net tangible assets (NTA) by around $0.17 per security to $3.43, an increase of 5.2% on the 31 December 2020 NTA.

Self storage saw the largest change in valuation, with a 10% increase in valuation.

The post ASX 200 drops, Audinate booms, Humm falls appeared first on The Motley Fool Australia.

More reading

• The ASX shares with the most to lose from a delayed COVID reopening
• Why Humm, Premier Investments, Western Areas, & Zip shares are sinking
• Why Althea, Audinate, Perenti, & Viva Energy shares are pushing higher
• ASX 200 midday update: Afterpay & CBA sink, Viva Energy jumps
• Why the Humm (ASX:HUM) share price is falling on Friday

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 shares of and has recommended AUDINATEGL FPO. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO. The Motley Fool Australia has recommended Humm 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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As electric vehicle (EV) sales continue to grow across the globe, the demand for lithium proceeds to expand. Correspondingly, ASX-listed lithium shares have benefitted from the thematic, riding the wave to new heights.

We have taken the liberty of collating the best-performing lithium shares of FY21. This could shine some light on which companies are taking full advantage of the emerging green trend.

The pool of candidates is contained to constituents of the top 500 largest companies on the ASX – also known as the All Ordinaries Index (ASX: XAO).

On that note, let’s pull the curtain on these highflyers.

Best performing Lithium shares of FY21

AVZ Minerals Ltd (ASX: AVZ)

AVZ Minerals is the first company making the list this year. It is also the smallest among the best performers, with a market capitalisation of $549 million. The company is a lithium-focused mineral explorer holding a 60% interest in the Manono Project, located in the Democratic Republic of Congo.

In addition to rising lithium prices, the company’s shares benefitted from two notable catalysts during the financial period. The first being an operational update for the Manono Project in October last year. In the update, AVZ revealed that some of the previously classified waste rock may be reported as mineable ore. The second catalyst involved the announcement of the company’s first lithium offtake agreement.

Shares in the ASX company have since jostled around between 14 cents and 23 cents. However, that shouldn’t dampen the 196% return for AVZ Minerals shareholders during the last financial year.

Galaxy Resources Limited (ASX: GXY)

The next entrant to the top performers is Galaxy Resources. This lithium producer has operations in Western Australia, Chile, and Quebec Canada. Unlike AVZ, Galaxy is already producing lithium concentrate – selling 150,630 dry metric tonnes in its 2020 full year.

Currently, Galaxy is working towards a merger with fellow lithium producer, Orocobre Limited (ASX: ORE). Both companies have agreed on the proposed $4 billion merger of equals. From there, the Supreme Court of Western Australia has made orders for Galaxy to convene a meeting for shareholders to vote on the proposal.

The Galaxy Resources share price soared 359% in FY21, putting this ASX lithium share at number 4 on the list. Yet, Macquarie thinks the returns could get even sweeter from here, with a 12-month price target of $4.70 on Galaxy.

Pilbara Minerals Ltd (ASX: PLS)

Pilbara Minerals is Orocobre’s bigger competitor with approximately 30% more annual revenue in the 2020 calendar year.

As of December 2020, the company’s trailing 12-month revenue was $105.5 million, an increase of 59.4% from December 2019. Additionally, the company’s strategy and outlook announcement on 11 May showed plans to further increase production. In January, Pilbara Minerals reported record shipments of spodumene concentrate during the December quarter, setting the pace for 2021.

Notching up an incredible year, the Pilbara Minerals share price climbed 437% in FY21.

Piedmont Lithium Inc (ASX: PLL)

Next up is an ASX-listed lithium share that is based in the United States. Piedmont is on a mission to build a United States source of lithium hydroxide to power the electric vehicle transition. Currently, the company holds ownership of its North Carolina lithium project and Sayona in Quebec.

Initially, the ignition of the Piedmont share price excitement followed the company signing a sales agreement with Tesla Inc (NASDAQ: TSLA) in September 2020. Then the company took a strategic investment in Sayona Mining Ltd (ASX: SYA). However, more recently Piedmont completed a scoping study which confirmed that its Carolina Lithium will be among the world’s biggest and lowest-cost producers of lithium hydroxide.

All of these announcements culminated together to deliver our first 10 bagger on the list. That’s right, the Piedmont share price returned 1,120% during the last financial return. Count yourself lucky if you managed to hold on for those astonishing gains.

Vulcan Energy Resources Ltd (ASX: VUL)

Finally, taking out the top spot is Vulcan Energy Resource. This ASX lithium share has gone from a tiny mineral explorer trading around 50 cents a year ago to a beastly $8.41 per share. Vulcan aims to become the world’s first lithium producer with net-zero greenhouse gas emissions.

The company’s shares were already riding the lithium boom throughout the tail-end of 2020. However, the share price went vertical in early January. At that point of time plenty of excitement circulated around a Pre-Feasibility Study (PFS) for its Zero Carbon Lithium Project in the Upper Rhine Valley of Germany.

Just how big have the gains been for shareholders? Wait for it… 1,275%.

The post These 5 ASX lithium shares energised investor portfolios in FY21 appeared first on The Motley Fool Australia.

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• Here are 3 ASX 200 shares making moves on the share market today
• Why the Vulcan Energy (ASX:VUL) share price will be in the spotlight today

Motley Fool contributor Mitchell Lawler owns shares in Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Piedmont Lithium Inc. and Tesla. 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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Renewed jitters about COVID-19 is rocking the market but there’s one ASX share that is particularly vulnerable to any delay in the economy reopening.

The S&P/ASX 200 Index (Index:^AXJO) slumped 1.2%. Not a good way to end the week but investors are worried about the economic recovery.

The Delta COVID mutation is creating a fresh headwind and you only need to look at Sydney to see why.

Europe is in no better shape and that’s dashing hopes that international borders could reopen sooner rather than later.

ASX shares exposed to a delayed COVID reopening

That spells trouble for ASX travel shares like the Qantas Airways Limited (ASX: QAN) share price and Flight Centre Travel Group Ltd (ASX: FLT) share price.

Even the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price fell around 1.5% at the time of writing despite a takeover bid.

But there’s one ASX share that has even more to lose from the COVID reopening delay. This is the Webjet Limited (ASX: WEB) share price, according to Morgan Stanley.

Webjet share price most at risk

“We expect the European summer to be severely affected by Covid in FY22, pushing recovery to FY23,” said the broker.

“The lost earnings also affect a balance sheet that has already experienced several rounds of repair at the expense of significant dilution.”

Like many other ASX shares, Webjet raised emergency capital during the initial COVID-19 outbreak last year.

Massive dilution to drown the Webjet share price recovery

However, unlike many others, Webjet issued a lot of convertible notes to get cash through the door. This is coming back to haunt shareholders as noteholders convert their holdings into Webjet shares.

Morgan Stanley reckons that the conversion will dilute the share base by more than three times! This in turn limits total shareholder returns for the Webjet share price.

Good news already priced in

“WEB’s market cap is at c. pre-Covid levels with two rounds of significant convertible note dilution to come. We think a significant rebound is being priced in,” said Morgan Stanley.

“WEB’s B2B business is heavily leveraged to the Northern Hemisphere summer, for which booking activity remains severely constrained – bookings were running at one-third of break-even levels in April and early May.”

Even the lockdown of interstate travel in Australia will limit the upside for the Webjet share price, noted the broker.

Buy, sell or hold the Webjet share price?

One would have thought that Morgan Stanley would slap a “sell” recommendation on Webjet in light of these issues. This is particularly so given that the Webjet share price is well above the broker’s $4.30 a share price target.

But Morgan Stanley reiterated its “equal-weigh” rating on Webjet because its shares are so volatile. Also, the COVID reopening is more a question of “when” and not “if”.

Given how difficult it is to time these things, shareholders could be kicking themselves if they dumped the Webjet share price now.

The post The ASX shares with the most to lose from a delayed COVID reopening appeared first on The Motley Fool Australia.

More reading

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• Can the ASX 200 hit 8,000 points by the end of the year?
• Here are 3 of the ASX 200’s most heavily traded shares today
• Why the Sydney Airport (ASX:SYD) share price flew higher again today
• ASX 200 rises, Macquarie up, Rural Funds launches capital raising

Motley Fool contributor Brendon Lau owns shares of Webjet. Connect with me on Twitter @brenlau.

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 shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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What’s so special about the Vanguard Australian Shares Index ETF (ASX: VAS)? It’s no secret that ASX exchange-traded funds (ETFs) have ballooned in popularity over the last decade or two. When the ETF vehicle came to the ASX, the only funds available were index funds, covering broad-based indexes like the S&P/ASX 200 Index (ASX: XJO). But in 2021, you can find an ETF on the ASX that covers almost anything. There are now ETFs that track gold, bank shares, mining shares, crude oil futures or the stock market of South Korea.

But one ETF is the undisputed king of the ASX ETF hill. That would be this Vanguard Australian Shares ETF. Recent research from Stockspot found that this VAS ETF remains at the top of the ASX ETF pile in terms of both size and fund inflows. VAS currently has $8.5 billion in funds under management, and, according to Stockspot, managed to attract almost $3.6 billion in net fund inflows in the 12 months to 31 March 2021. Both of those metrics beat out every other ASX ETF.

So why do ASX investors like the Vanguard Australian Share Index ETF so much? There might be a few reasons:

Why is VAS so popular on the ASX?

Simplicity

Unlike the flashy, thematic ETFs we touched on above, VAS is your typical old-school index fund. It does have a twist though. Instead of tracking the ASX 200 like most other ASX index funds, VAS instead tracks the S&P/ASX 300 Index (ASX: XKO).

This index included the 200 shares on the ASX 200, but also adds another 100 smaller cap shares. It’s the only ASX index fund to do so. This increases the diversification of VAS compared to other ASX 200 index funds, whilst reducing the heavy concentration towards ASX banks and miners that the ASX 200 is so infamous for.

We’ve also looked at the small but still present performance gap between the ASX 200 and the ASX 300 before on the Fool. This might well further add to the attractiveness of VAS for ASX investors.

Cost

This Vanguard ETF currently charges a management fee of 0.1% per annum. That figure represents a theoretical cost of $10 per year for every $10,000 invested.

This isn’t the lowest fee ETF on the ASX, or even the lowest fee from a fund tracking ASX shares. The BetaShares Australia 200 ETF (ASX: A200) for example, charges 0.07% per annum. But 0.1% is still vastly cheaper than what your typical managed fund or active ETF will charge. And even if some investors might quibble about whether to pay $7 or $10 for every $10,000 invested, a 0.1% fee is evidently low enough for Vanguard’s customers.

The ‘Vanguard effect’

Vanguard is a US-based fund manager, but one with a global reputation. It has one of the most trusted names in finance, mostly due to the philosophies and reputation of its late founder Jack Bogle. Bogle founded Vanguard back in the 1970s, and ever since its inception, kept Vanguard as a not-for-profit company.

So instead of taking the cream off the top of its revenues, Vanguard is able to cycle that excess cash back into lower and lower fees for its products. This has lead to a very powerful brand advantage that extends across all Vanguard products.

When Mr Bogle died in 2019, the great investor Warren Buffett said he had done more for the average investor than possibly anyone else on the planet. It’s that high praise that epitomises Vangaurd’s appeal.

Performance

The Vanguard Australian Shares Index ETF has returned 28.46% over the past 12 months, and has averaged 11.2% per annum over the past 5 years, and 9.72% per annum since its inception in 2009.

Now while those performance figures might not impress some thrill-seeking investors out there, the reality is that it almost perfectly reflects the performance of the entire Australian share market over more than a decade. Robust, inflation-smashing returns.

For many investors who might just follow a ‘buy and hold’ strategy using this Vanguard ETF, it has certainly delivered far more than what leaving the cash in the bank would have yielded.

The post Here are 4 reasons why the Vanguard Australian Shares Index EFT (ASX:VAS) is the most popular ASX ETF appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 Myer Holdings Ltd (ASX: MYR) share price is gaining today as Premier Investments Limited (ASX: PMV) sends in its lawyers.

Shares in Myer have shot up 6.9% as the close of trade nears, and are currently trading at 46.5 cents apiece.

Meanwhile, the Premier Investments share price is down 2.5%, sitting at $26.89. That’s lower than the broader market. The S&P/ASX 200 Index (ASX: XJO) is down 1.4% right now.

The movements follow Premier’s announcement that it’s called on its lawyers to retrieve the Myer shareholder register ahead of its plans to call an extraordinary general meeting.

Let’s take a look at why investors are driving the Myer share price higher today.

Quick refresher

The Myer share price gained a whopping 14% on Tuesday after reports emerged that Solomon Lew, the chair and largest shareholder of Premier Investments, was buying up shares in Myer through the investment company.

Lew already held 10% of Myer’s outstanding shares. He has now increased that holding to more than 15%.

Yesterday, Myer responded to Lew’s increased holding, offering up the possibility – though, not a guarantee – of a seat on the retail monolith’s board.

The latest news

Today, the niceties have gone out the window.

Premier released a 105-word statement on Myer, in which it detailed its plan for a shareholder vote on the company’s management. Premier said:

In Premier’s view, Myer’s three remaining non-executive directors should for once put its shareholders first and resign immediately. Any other action would be futile, and costly for Myer shareholders who have endured enough.

According to reporting by the Australian Financial Review (AFR), Lew believes the Myer non-executive directors have destroyed $760 million of shareholder value.

Additionally, the billionaire retailer pointed to the numerous leadership changes Myer has undergone since 2017 as one of the reasons for the losses.

Myer reported earnings before interest, tax, depreciation, and amortisation (EBITDA) of $206.2 million for the 2016 financial year. In the 2019 financial year, its EBITDA was $160.1 million. And in the 2020 financial year, its EBITDA was $93.5 million.

The Myer share price fell 76% between the release of its 2016 full-year report and its 2020 full-year report.

Myer share price snapshot

The Myer share price has gained around 55% year to date – helped along by a 20% increase which appears to be brought about by news of Premier’s increased investment.

Myer shares have also gained more than 121% since this time last year.

The retailer has a market capitalisation of around $357 million, with approximately 818 million shares outstanding.

The post Myer (ASX:MYR) share price jumps 7% as investor calls its lawyers appeared first on The Motley Fool Australia.

More reading

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• ASX 200 drops, Myer soars, Ramsay down
• Why the Myer (ASX:MYR) share price is up 9% 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 owns shares of and 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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The Westpac Banking Corp (ASX: WBC) share price is under pressure on Friday.

In afternoon trade, the banking giant’s shares are down 1% to $25.28.

Is the weakness in the Westpac share price a buying opportunity?

One leading broker that believes the weakness in the Westpac share price is a buying opportunity is Morgans.

This morning the broker has updated its forecasts, resulting in its analysts retaining their add rating and $29.50 price target.

Based on the latest Westpac share price, this implies potential upside of almost 17% over the next 12 months. And with Morgans forecasting a dividend yield of 4.5% over the same period, this potential return stretches beyond 21%.

What did the broker say?

Morgans has updated its forecasts to reflect the sale of its Westpac Life New Zealand business and potential fraud provisions relating to Forum Finance.

While this has resulted in a 2% reduction in its FY 2021 earnings estimates, its longer term forecasts are not materially impacted.

Morgans said: “WBC has also said that it has a potential exposure of ~$200m after tax to Forum Finance, with the extent of any loss dependent on the outcome of its investigations and recovery actions underway.

”We understand that the recovery process may play out over a prolonged period, and we therefore expect WBC to raise an individually assessed provision of ~$290m for the full exposure to Forum Finance in 2H21F. However, we see potential for this provision to be partially written back over time,” it added.

“We have reduced our FY21F cash EPS by 2% as a result of the higher credit impairment charge stemming from the Forum Finance exposure. We have not materially changed our cash EPS forecasts for the outer years,” Morgans concluded.

The post Is the Westpac (ASX:WBC) share price in the buy zone? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking Corporation. 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 Orocobre Limited (ASX: ORE) share price is in the red today following the lithium miner’s trading update to the ASX.

During late afternoon trade, Orocobre shares are sinking 2.07% lower to $6.61. At one point, the company’s shares reached as low as $6.48.

What did Orocobre announce?

Orocobre shares are being sold off today as investors weigh up the company’s mixed performance report.

According to its release, Orocobre advised that production for the June 2021 quarter stood at 3,300 tonnes of lithium carbonate. Pleasingly, 66% of the extracted lithium carbonate was converted into battery grade lithium carbonate. This is a significant increase from the 21% achieved in the prior corresponding period (June 2020 quarter).

The company’s flagship Olaroz Lithium Facility in Argentina recorded sales of 2,549 tonnes of lithium carbonate. The price paid per tonne for the product averaged at US$8,476. This is the Free on Board (FOB) price which excludes insurance and freight charges.

The lithium prices received jumped 45% when compared to the previous quarter of March 2021. Furthermore, over the last 9 months, lithium prices have surged by 170%.

While the company highlighted the good news, inventory levels during the June quarter amplified due to COVID-19 transport delays. In addition, the requirement to hold safety stock for the Prime Planet Energy and Solutions (PPES) contract in Japan also halted the movement of product.

Orocobre revealed that the full details of its June quarter performance will be released on 22 July.

Orocobre share price review

Over the past year, Orocobre shares have surged by more than 150%, and are close to 50% higher in 2021. The company’s share price is near its 52-week high of $7.28 reached in May following Orocobre and Galaxy Resources Limited (ASX: GXY) $4 billion merger proposition.

At the time of writing, Orocobre has a market capitalisation of roughly $2.2 billion, with approximately 344 million shares outstanding.

The post Orocobre (ASX:ORE) share price falters on trading update. Here’s why. appeared first on The Motley Fool Australia.

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

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The oOh!Media Ltd (ASX: OML) share price is having a red day. At the time of writing, shares in the advertising and communications company are swapping hands for $1.65, down 2.37%. The S&P/ASX 200 Index (ASX: XJO), for comparison, is 1.32% lower.

Despite the company not releasing any market sensitive updates in months, there are a couple of big news items that might be affecting the oOh!Media share price today.

Let’s take a closer look.

oOh!Media selling Junkee

The Sydney Morning Herald (SMH) is reporting the ASX-listed company will sell its online youth publication, Junkee Media, by the end of this year.

oOh!Media chief executive Cathy O’Connor is quoted in the paper as saying the sale will help the company focus on its core business of outdoor advertising.

“We’ve been proud owners of Junkee but the online publishing side of it is not core to… us,” Ms O’Connor told SMH.

“Digital publishing needs to contemplate new things — does it leverage… things like audio, go after video strategies — and as the CEO of oOh!Media, I just feel that those things that Junkee rightly should contemplate are not core to our strategy.”

oOh!Media bought an 85% interest in Junkee for $11.1 million, back in 2016. Ms O’Connor would not speculate on a potential price she would like to see for the sale. This may be one reason driving the oOh!Media share price today.

Sydney’s COVID restriction could be extended even further

In the 24 hours up to 8pm last night, NSW recorded its highest ever daily infections of 44 coronavirus cases – 34 of which were infectious in the community.

Premier Gladys Berejiklian signalled in her daily press conference that these numbers could mean Sydney’s lockdown could extend beyond its already delayed end date of next Friday.

Motley Fool Australia has previously reported on how lockdowns may have affected the oOh!Media share price.

In its most recent half-yearly report, revenue and earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell by 34% and 55% respectively. The company attributed the steep fall to the effect of lockdowns and the pandemic at-large.

oOh!Media share price snapshot

Over the past 12 months, the oOh!Media share price has increased 83%. It has, however, still not fully recovered from the March 2020 COVID market crash.

On the first trading day of january last year, shares in the company closed at $3.07. Today’s share price is still 46% below this level.

oOh!Media has a market capitalisation of $986 million.

The post The oOh!Media (ASX:OML) share price is falling today. Here’s why appeared first on The Motley Fool Australia.

More reading

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• COVID-19 lockdown hits oOh!Media (ASX:OML) share price

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 oOh!Media Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX Software-as-a-Service (SaaS) shares have become an area of intense and red hot interest over the past few years. And fair enough too. Scaling a business through a SaaS earnings model can be a very lucrative exercise indeed. We have seen this in action with some of the performances of the ASX’s most well known SaaS shares.

Take Xero Limited (ASX: XRO) for instance. Investors can largely thank Xero’s SaaS model, which allows Xero to develop its cloud-based accounting software as almost a ‘one-off cost’ and then on-sell it via a cloud subscription at almost no extra cost per additional customer. It’s this model which has largely allowed the Xero share price to rise from around $17 five years ago to the $132 it’s going for today.

So even though we now know the potential of a successful SaaS model, it’s worth a look to see how this sub-sector of the ASX fared over the 2021 financial year that has just ended. As your about to see, just having a SaaS model isn’t necessarily a ticket to instant success:

How some of the most popular ASX SaaS shares have performed in FY21:

ASX SaaS share	FY2021 share price performance	Market capitalisation
Pro Medicus Limited (ASX: PME)	125.7%	$5.85 billion
Xero Limited (ASX: XRO)	65%	$19.7 billion
WiseTech Global Ltd (ASX: WTC)	65%	$9.8 billion
Whispir Ltd (ASX: WSP)	21.4%	$319.2 million
Altium Limited (ASX: ALU)	13.8%	$4.88 billion
TechnologyOne Ltd (ASX: TNE)	5.8%	$2.92 billion
Nearmap Ltd (ASX: NEA)	(17.3%)	$965.5 million
Pushpay Holdings Ltd (ASX: PPH)	(19.2%)	$1.71billion
ELMO Software Ltd (ASX: ELO)	(40.5%)	$395.3 million

As you can see, healthcare SaaS company Pro Medicus was one of the best performing SaaS companies on the ASX over FY21, managing to put on a 125.7% gain over FY2021. Pro Medicus is a company that sells medical diagnostic imaging software. It has benefited from several developments over FY21.

In mid-May, Pro Medicus announced a The University of Vermont Health Network contract that is scheduled to last for 8 years. This contract will see Pro Medicus’ Visage 7 Enterprise Imaging Platform deployed across 6 hospitals operated by the University, locking in a lucrative revenue stream. Additionally, the company also announced in June that it had signed another long-term contract, this one with the US healthcare provider Mayo Clinic.

Xero and WiseTech SaaS their way to growth

The aforementioned Xero is also close to the top of this list, with a FY21 performance of 65%. It was raw growth numbers that seemed to be working in Xero’s favour last financial year.

Xero gave investors its full-year earnings for the 12 months to 31 March a few months ago. The company reported that revenues grew by 18%, subscriber numbers were up by 20% and earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 39%. As you might expect, investors were clearly impressed by this SaaS company’s model continuing to execute well.

The same could be said for SaaS logistics solutions company WiseTech Global. WiseTech also managed a 65% gain for FY21. This was spurred by the company’s half-year earnings report for FY21 that WiseTech divulged back in February. This highlighted revenue growth of 16% and EBITDA rising by a very pleasing 43%.

Communications platform provider Whispir was another SaaS share that had a relatively successful FY21. Again, it was strong growth that seemed to encourage Whispir investors. The company’s April quarterly update was emblematic of this. Whispir reported that annualised recurring revenues grew by 20.3% over the 3 months to 31 March 2021, compared to the previous year’s quarter.

SaaS doesn’t always equal success

However, it’s worth noting that not all SaaS shares soared over FY21. Some clear losers are obvious in the table above, namely Nearmap, Pushpay and ELMO Software.

Pushpay was an interesting case. Even though it delivered seemingly impressive numbers in its annual earnings report back in May, investors have not given it a very nice run at all in FY21. That was despite revenues jumping by 40% and earnings by a whopping 133%.

Turning to Nearmap, and revelations last month that it would be facing legal proceedings for alleged patent infringement really seemed to derail this company’s share price performance for FY21. It’s worth noting that Nearmap has assured investors that the company’s business remains unaffected and that it is defending these allegations vigorously.

And finally, let’s take a look at the SaaS FY21 wooden spooner in ELMO Software. ELMO did deliver some impressive numbers with its half-year earnings back in February. The company told investors that its revenues grew by almost 30% in the 6 months to 31 December 2020, helped by user numbers climbing 95.7% over the prior corresponding period.

However, as my Fool colleague Frank covered last month, ELMO has also been heavily diluting its share count over FY21, with a $90 million capital raise program that was held over May. This might at least be partially behind its poor share price performance over FY21.

Foolish takeaway

As we’ve seen with some of these ASX SaaS companies, a software-as-a-Service model can be a very efficient path for companies to grow their revenues and earnings. However, it doesn’t always work out as planned. SaaS companies can succeed, but they usually need more than just the SaaS model to do so.

The post Here’s how some of the top ASX SaaS shares performed in FY21 appeared first on The Motley Fool Australia.

More reading

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• Nearmap (ASX:NEA) share price continues to rise, up 7% today
• Why Magellan, Origin, Piedmont Lithium, & WiseTech Global are dropping
• Top broker picks the emerging ASX tech shares with the biggest upside next month
• ASX 200 midday update: Zip rockets, AMP asset sale

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 Altium, Elmo Software, Nearmap Ltd., PUSHPAY FPO NZX, Pro Medicus Ltd., Whispir Ltd, WiseTech Global, and Xero. The Motley Fool Australia owns shares of and has recommended Altium, Elmo Software, Nearmap Ltd., PUSHPAY FPO NZX, Pro Medicus Ltd., WiseTech Global, and Xero. The Motley Fool Australia has recommended Whispir Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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

Stocks keep heading higher, but anyone who’s been in the market for more than just the past few weeks knows that the market doesn’t move upward forever. Sooner or later the downticks will come, and corrections sometimes cascade into outright crashes.

Where should your money be when the going gets tough? My largest investment is Netflix (NASDAQ: NFLX). It’s held up well in previous market setbacks, and I think the leading premium streaming service has what it takes to weather the storm the next time the market crashes.

Streaming along

Netflix probably isn’t on your short list of all-weather stocks, and that’s fair. To hold up in good times and bad times, you want shares of companies like discount department stores, auto-parts retailers, and essential utilities. However, in a way, Netflix is a little bit of all of those things.

It’s a mass-market discounter in entertainment, offering quality video entertainment at a fraction of cable and satellite television plans. Netflix won’t provide you with wiper blades or motor oil, but its healthy flow of trending content will keep your engine running in social situations. And after the past year and change of sheltering in place…good luck convincing folks that streaming video isn’t an essential utility.

Even if you don’t buy Netflix as the answer to every question, the math bears out its resiliency. Netflix was one of the handful of stocks to move higher in 2008, climbing 12% that year. Keep in mind that this was during the subprime lending crisis, a global financial calamity that resulted in the S&P 500 cratering 38% the same year.

Netflix has staying power because no one can spend as much on content as it can, given its global audience of more than 200 million paying subscribers. Netflix also has pricing power. It has increased its monthly rates five times since 2014 — a total 75% increase over that period — and its audience is always larger by the time the next hike rolls around.

Consistency is what weathers a crash. Netflix shines on that front: It has rattled off 18 consecutive years of double-digit revenue growth.

Netflix is mortal, of course. It has fallen short of its own guidance, usually about once a year. The stock itself has slipped when new streaming services launch — even if its stellar long-term track record shows that there’s room for more than one ruler in this niche. Remember the Qwikster fiasco? The big takeaway in sizing up the company’s miscues and stock-price drops is that it always finds a way to bounce back.

The best thing about Netflix is that it might just be scratching the surface. Netflix is still not allowing advertising on its popular streaming platform, a market that one analyst estimates to be a $14 billion opportunity. And it’s just dipping its feet into the infinity pool of merchandising.

As Netflix transforms itself into a broader media stock than just the basic cable of streaming services, it may become vulnerable. Maybe it won’t be as resilient. However, right now all of those possibilities look like chances to build incremental revenue. If you’re still worried about a market crash coming sooner rather than later, you can do a lot worse than warming up to Netflix.

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

The post Worried about another crash? Buy Netflix appeared first on The Motley Fool Australia.

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Rick Munarriz owns shares of Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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