The Ramsay Health Care Limited (ASX: RHC) share price is edging lower on Tuesday.

At the time of writing, the private hospital operator’s shares are down 0.5% to $62.88.

Why is the Ramsay share price edging lower?

Investors have been selling Ramsay’s shares this morning after it provided an update on its attempts to acquire UK-based private hospital operator, Spire Healthcare.

According to the release, Ramsay has increased its cash offer to acquire Spire to 250 pence per share in cash. This compares to its previous offer of 240 pence per share.

This values Spire’s entire issued and to be issued share capital at approximately GBP1,041 million (A$1,900 million) on a fully diluted basis, and approximately GBP2,105.3 million (A$3,866 million) on an enterprise value basis.

Ramsay notes that the revised offer represents a premium of approximately 30% to the closing price of Spire shares on 25 May 2021. Furthermore, it is a premium of 54% to the volume weighted average Spire share price over the 180 day period ending 25 May 2021.

Final but not quite final offer

Management advised that this offer is final and will not be increased. However, Ramsay reserves the right to increase the offer price if there is an announcement of an offer or a possible offer for Spire by a third party offeror or potential offeror.

Ramsay’s CEO and Managing Director, Craig McNally, said: “We are confident that our 250 pence cash offer per Spire share, which was reached after extensive negotiations with the Spire board, is fair and reasonable. It is therefore our best and final offer.”

“Ramsay is a global health care operator delivering a wide range of acute and primary healthcare services to private and public patients from over 500 locations across 10 countries caring for 8.5 million+ patient visits and admissions per annum. We have been operating in the UK market for 15 years and as such have strong operational insight and a good appreciation of the industry dynamics and long term outlook for the market. We have called on this deep understanding to determine what we believe is a full and fair price for the Spire business,” he added.

Why acquire Spire?

Management has previously stated that it believes the acquisition will be transformational for Ramsay’s UK business. It expects the addition of Spire to create a leading private health care services provider, diversify Ramsay UK’s payor sources and case mix, and expand the geographic reach of its capabilities.

Positively, for shareholders and the Ramsay share price, the deal is expected to deliver significant value. This will be driven by benefits of at least 26 million per annum from procurement savings, improved capacity utilisation, and cessation of UK listing costs.

The Ramsay share price is up flat so far in 2021.

The post Ramsay (ASX:RHC) share price lower on UK acquisition update appeared first on The Motley Fool Australia.

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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 Ramsay Health Care 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 Strike Energy Ltd (ASX: STX) share price is charging higher on Tuesday morning.

At the time of writing, the oil and gas exploration and development company’s shares are up 3% to 35 cents.

This means the Strike Energy share price is up 20% in 2021.

Why is the Strike Energy share price charging higher?

Investors have been bidding the Strike Energy share price higher on Tuesday after it provided an update on its domestic gas business in the Perth Basin.

According to the release, this business is set for a potential series of transformational results in the second half of the year. Management notes that its multi-well Perth Basin program is targeting ~1,800 PJe of prospective conventional gas resources over the second half of 2021.

In addition to this, this the company is expecting the South Erregulla-1 well to spud in October, using one of the three Ensign 970 rig slots that Strike procured on favourable terms during the industry downturn in mid-2020.

It notes that South Erregulla represents potentially significant near-term multi-trillion cubic feet (TCF) upside for Strike. Furthermore, it has been materially de-risked through the West Erregulla exploration and appraisal campaign. This could bode well for the Strike Energy share price in the future if all goes to plan.

Strike Energy’s Managing Director and CEO, Stuart Nicholls, is very positive on the second half.

He said: “Strike is now set to start this exciting and potentially transformational phase of its Perth Basin gas resource growth strategy. Extending the Permian Gas Fairway down to South Erregulla and reinjecting new value into the Jurassic wet gas play in the South will, on success, have cascading effects across the value of all of Strike’s adjoining acreage in the Basin.”

“At the conclusion of this program, Strike aims to be in a position to support the development of its fertiliser project at Project Haber, which is a key pillar of its Net Zero 2030 target, and to take advantage of the tightening WA domestic gas market conditions expected in the mid part of the decade,” he added.

Based on the current Strike Energy share price, the company now has a market capitalisation of ~$700 million.

The post Strike Energy (ASX:STX) share price charges higher on “transformational” outlook appeared first on The Motley Fool Australia.

More reading

• Here’s why the Strike Energy (ASX:STX) share price is surging today
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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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Shares in Ramelius Resources Limited (ASX: RMS) are in the spotlight this morning after the company released a full-year production update. The Ramelius share price finished yesterday’s trade at $1.75.

Let’s take a look at how the Western Australia-focused gold producer performed over the financial year just gone.

FY21 production update

Ramelius dug 272,109 ounces of gold out of the ground over the 12 months ended 30 June 2021, setting a new company record.

That number sits comfortably within its previous guidance of between 260,000 and 280,000 ounces for the financial year.

Impressively, Ramelius’ record yearly production came about despite a poor June quarter.

Between 31 March and 30 June, the company produced 61,840 ounces of gold. Its previous production guidance for the quarter was between 65,000 and 70,000 ounces.

Of those 61,840 ounces, 35,208 were mined from the company’s Mt Magnet Gold Mine while the remaining 26,632 were from its Edna May Gold Mine.

According to Ramelius’ announcement, Edna May experienced several minor issues that impacted its production last month.

A shortage of workers and a COVID-19 lockdown limited its ability to ramp up production late in the quarter. Additionally, numerous rainfall events in the region reduced the amount of ore it could haul from its open pit project.

The company expects its all-in sustaining costs (AISC) for the June quarter to remain within its guidance of between $1,280 and $1,330 per ounce of gold produced.

Finally, Ramelius announced it now has $234 million worth of cash and gold in hand – up from $230.6 million at the end of the previous quarter.

It’s also repaid its $8.1 million financial facility and increased its net cash position by $11.5 million over the quarter just gone.

Ramelius Resources share price snapshot

Despite a record-breaking financial year for Ramelius, its share price has been slumping.

It’s fallen 1.9% since the start of 2021. It’s also dropped 12.7% since this time last year.

The company has a market capitalisation of around $1.4 billion, with approximately 814 million shares outstanding.

The post The Ramelius (ASX:RMS) share price is on watch today. Here’s why appeared first on The Motley Fool Australia.

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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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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.

What happened

Shares of Moderna (NASDAQ: MRNA) rose 27% in June, according to data from S&P Global Market Intelligence. Known for its highly effective COVID-19 mRNA vaccine, Moderna rose in tandem with the spread of the concerning delta variant across the world in June. The company also announced studies showing its vaccine was highly effective against that variant and others, and it locked up more supply agreements with the U.S. and other countries.

So what

Early in the month, Moderna secured a long-term supply agreement with UNICEF to sell the organization 34 million doses in the fourth quarter of 2021, along with up to 466 million doses in 2022. That was followed up by a purchase of 200 million doses, securing supply into the first quarter 2022, and then another 150 million doses purchased by the European Union, bringing its order commitment total to 460 million, including boosters for new variants in 2022.

The new purchase orders by major countries coincided with Moderna’s release of clinical data showing its COVID vaccine as protective against six of the newer variants, including the delta variant causing so much concern. Rival Johnson & Johnson‘s (NYSE: JNJ) vaccine has only shown to be about 60% effective against the delta variant, a lower rate than two-dose vaccines like Moderna’s.

Now what

Even after its June run, Moderna’s stock trades at a bargain valuation of less than 10 times next year’s earnings estimates. That’s because investors see the company’s huge COVID windfall as a one-time occurrence, and that those earnings will decline in 2023 and beyond. But with the delta variant causing worries — and with Moderna’s vaccine perhaps providing superior protection versus the one-dose Johnson & Johnson — investors now might be forecasting a longer life for Moderna’s COVID franchise than it had previously.

Moderna also still isn’t given much credit for its fairly large pipeline of other mRNA indications, since mRNA is only a newly commercialized technology. So despite the stock’s monster run over the past year, any new COVID variants or new mRNA indications from its pipeline could extend the rally even further.

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

The post Why Moderna shares surged 27% in June appeared first on The Motley Fool Australia.

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Billy Duberstein has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and Moderna 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.

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

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Oil prices surged higher overnight as the crisis within OPEC+ deepened, leaving ASX energy shares to reap the rewards from the mayhem.

News that the oil cartel had called off its meeting last night sent the Brent crude price jumping 1.3% to US$77.16 a barrel to a near three-year high. Its cousin, the WTI benchmark gained 1.4% to US$76.22 per barrel.

What’s more, no new date has been set and the uncertainty has further fuelled the oil price.

ASX energy shares to benefit from OPEC+ crisis

Some of our biggest ASX energy shares are likely to lead the market higher after outperforming the S&P/ASX 200 Index (Index:^AXJO) yesterday.

These include the Woodside Petroleum Limited (ASX: WPL) share price, Santos Ltd (ASX: STO) share price, Oil Search Ltd (ASX: OSH) share price and Beach Energy Ltd (ASX: BPT) share price.

The rift between OPEC’s de facto leader Saudi Arabia and the United Arab Emirates (UAE) appears to have widened.

No resolution in sight for OPEC

These once close allies are refusing to budge from their position in negotiating an extension to production quotas.

The oil price surged because the market was expecting OPEC and non-member Russia (referred collectively as OPEC+) to strike a new deal that would see global oil supply increase to meet rising demand.

But the UAE is the holdout. Its primary gripe appears to be its production baseline. That’s the level which determines how much oil each OPEC+ country can sell.

UAE wants to pump more oil

The UAE wants its baseline to be upped to 3.8 million barrels a day from 3.2 million. It feels that’s justified because it has invested heavily in boosting its production in recent years.

“We cannot extend the agreement or make a new agreement under the same conditions,” CNN quoted the UAE Energy Minister, Suhail Al Mazrouei, as saying. “We have the sovereign right to negotiate that.”

The UAE also seems reluctant to agree to lifting production quotas through to end of 2022. But it’s probably using that as a bargaining chip.

ASX energy shares fuelled by discourse

Unsurprisingly, the other OPEC+ members don’t see to agree with the fairness to adjust its baseline and that means the market won’t see an increase in oil supply in the near-term at least.

Motorists are already feeling the pain at the bowser, and it’s not only here in Australia. Americans who were taking their Fourth of July holiday road trips are paying around 44% more to fill their tanks than a year ago, reported CNN.

Is the oil price set for a painful correction?

But as I explained yesterday, the surge in the oil price may not last – particularly if the UAE carries out its threat to leave the cartel.

The key reason behind the oil price has made a dramatic recovery from its COVID-19 low is because OPEC+ worked together to manage supply.

The UAE is the third biggest oil producer in the bloc. If it leaves OPEC, it could pump as much as it wants at a time when Iran is also eager to resume selling oil to the world.

The post Why ASX energy shares are set to rise again today appeared first on The Motley Fool Australia.

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• The Centuria Capital (ASX:CNI) share price reaches new all-time high

Motley Fool contributor Brendon Lau owns shares of Santos Ltd. 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 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 Telstra Corporation Ltd (ASX: TLS) share price has been a very strong performer in 2021.

In fact, the telco giant’s shares are currently sitting at a 52-week high of $3.79.

This means the Telstra share price is now up 26% since the start of the year.

Why is the Telstra share price at a 52-week high?

There have been a number of catalysts for the rise in the Telstra share price in 2021. Chief among them is the company’s improving outlook thanks to its leadership position in 5G internet, its cost cutting and simplification plans, rational competition, and potential asset monetisation.

The sum of the above means Telstra’s outlook has improved to such a level that concerns over dividend cuts are now over and growth is being talked about for the first time in years.

In February, Telstra’s CEO, Andy Penn commented: “After a decade of disruption following the creation of the nbn, and with its rollout now declared complete, we can clearly see the path to underlying growth ahead of us.”

“Our investment in innovation and technology, digitisation and networks, improving our customer experience and being disciplined in our capital management, mean that at the start of this decade, as Australia digitises its economy, Telstra is in a strong position to grow,” he added.

Asset monetisation begins

The Telstra share price was given a boost last week when its asset monetisation plans came to fruition.

Telstra revealed that it has sold a 49% interest in Telstra InfraCo Towers to the Future Fund, Commonwealth Superannuation Corporation, and Sunsuper.

The company expects to receive $2.8 billion after transaction costs, with approximately 50% of net proceeds from the sale set to be returned to Telstra shareholders in FY 2022.

Is it too late to invest?

Analysts at Goldman Sachs believe the Telstra share price is still good value despite its strong rise.

It currently has a buy rating and $4.20 price target on its shares. Based on the latest Telstra share price, this implies a potential ~11% return over the next 12 months.

And if you include the fully franked dividends of 16 cents per share it is forecasting through to FY 2023, before a long-awaited increase to 18 cents per share in FY 2024, this potential return stretches to over 15%.

The post Telstra (ASX:TLS) share price hits 52-week high: Can it go higher? appeared first on The Motley Fool Australia.

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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 owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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A handful of S&P/ASX 200 Index (ASX: XJO) shares have been growing their dividend for a number of years.

Some businesses have seen their profit and cashflow increase over the years, which then allows the leadership to pay larder dividends.

Here are two ASX 200 shares that have been successful at increasing their dividends over the last several years:

APA Group (ASX: APA)

APA describes itself as a leading Australian energy infrastructure business. Its gas transmission pipelines span every state and territory on mainland Australia, delivering approximately half of the nation’s gas usage.

The business has direct management and operational control over its assets and the majority of its investments. It has a number of gas pipelines around the country. It’s also one of Australia’s largest owners and operators of renewable power generation assets, with wind and solar projects across Western Australia, South Australia and Queensland.

It recently announced its first hybrid energy project at the Gruyere Gold Mine in WA, combining solar energy with battery energy storage.

APA also announced the expansion of its east coast grid due to strong customer demand for transportation capacity. The expansion will be delivered in two stages and at a capital investment of around $270 million. It will increase winter peak capacity of the east coast grid by 25%. This will help transport gas from northern gas producers to southern markets.

In FY21 the ASX 200 share is paying a total distribution of 51 cents, which was an increase of 2% compared to FY20.

APA has grown its distribution every year for over a decade and a half. Based on FY21’s payout, it has a distribution yield of 5.6%.

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi is one of the largest retailers in Australia.

It owns JB Hi-Fi, which is one of the leading retailers of technology and consumer electronics. But it also owns The Good Guys, a leading retailer of home appliances and consumer electronics.

The combined business aims to have the in-demand brands, with a big range and low prices. It also wants to provide exceptional customer service provided by passionate, knowledgeable team members. JB Hi-Fi also wants to serve customers through multiple channels – in-store, online, phone and commercial.

JB Hi-Fi aims to have a few strong competitive advantages including its scale, low cost operating model, quality store locations and its supplier partnerships.

The ASX 200 dividend share has increased its dividend in consecutive years over the last several years. In the first half of FY21, it grew its interim dividend by 81.8%, representing 65% of net profit after tax (NPAT).

JB Hi-Fi said that the board will continue to regularly review its capital structure with a focus on maximising returns to shareholders and maintaining balance sheet strength and flexibility.

Credit Suisse currently rates JB Hi-Fi as a buy, with a price target of $57.39. 

The post 2 ASX 200 shares that keep growing their dividends appeared first on The Motley Fool Australia.

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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. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended APA Group. 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 rotation away from growth shares into value stocks the past 6 months has seen some ASX darlings unceremoniously kicked to the kerb.

Maybe some companies have been brought back down to their intrinsic worth. But there could now also be some gems that the market has oversold.

Two such bargains were suggested this week that could give investors some food for thought.

‘Get out of jail card’ for A2 Milk resellers

Watermark Funds Management chief investment officer Justin Braitling singled out A2 Milk Company Ltd (ASX: A2M) as “a strong buy”.

“I think it’s the stock for 2022,” he told a Livewire video.

“The 2023 estimates for a profit are a third of where they were 18 months ago. So we think as the business recovers, those profit expectations will really surprise on the upside, and the stock will recover its rating.”

A2 Milk shares had touched the $20 barrier a year ago, but have since spiralled down to $6.73.

The dairy producer has had many misfortunes since COVID-19 struck the globe last year. One of the biggest losses was the sales channel of personal Chinese expat exporters, named daigou, who were stuck with surplus stock.

Braitling’s logic is that the daigou would now come roaring back in the post-pandemic era.

“New management’s come in, they’ve basically cleared the channel, have written off all that [old] stock,” he said.

“The daigou now have got a ‘get out of jail card’ basically. The daigou now are reordering, prices are coming back up, and the brand is trading well, they’re actually picking up a bit of share. So we think that we’re all really good signs for the brand.”

‘A straight shooter’ can lead Appen out of trouble

TMS Capital portfolio manager Ben Clark picked Appen Ltd (ASX: APX) as a growth share to watch.

He said the artificial intelligence data provider has 5 big clients that contribute about 93% of its revenue. And this made for a tough COVID year.

“Those customers are either delaying projects that they were planning on using Appen’s data for or changing projects that are moving resources around, which has affected the demand for the data.”

Appen shares have gone from a 53-week high of $43.66 back in August to close Monday at $12.92.

“The market’s really concerned about competition,” said Clark.

“It’s concerned that there are some new competitors coming in who are actually using AI to create AI solutions.”

But the fund manager has much confidence in Appen’s leadership to turn it around.

“The CEO is adamant that there hasn’t been a change in the competitive landscape,” he said. 

“We followed him for many years and we think he’s a straight shooter and says it how he sees it.”

If earnings recover, Appen stocks could be an absolute bargain right now, according to Clark.

“You’re paying 22 times [price-to-earnings ratio] for a business, I think, [which] is still in a very long-term structural growth area.”

The post 2 fallen stars of ASX now worth buying: experts appeared first on The Motley Fool Australia.

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• A2 Milk (ASX:A2M) share price on watch after acquisition update
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Motley Fool contributor Tony Yoo owns shares of A2 Milk and Appen Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd. 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 Westpac Banking Corp (ASX: WBC) share price will be one to watch on Tuesday.

This follows the announcement of yet another asset sale this morning.

What did Westpac announce?

This morning Westpac announced that it has signed an agreement with Fidelity Life Assurance Company for the sale of the bank’s Westpac Life NZ business. Fidelity Life Assurance Company is New Zealand’s largest locally owned life insurer, backed by cornerstone investor the NZ Super Fund.

According to the release, the two parties have agreed a sale price of NZ$400 million (approximately A$373 million) for the business. Westpac and Fidelity have also entered into an exclusive 15 year agreement for the distribution of life insurance products to Westpac’s New Zealand customers.

Westpac advised that the sale price of NZ$400 million is expected to result in a post-tax gain on sale and add approximately 7 basis points to its group common equity tier 1 capital ratio. The transaction will also include ongoing payments from the distribution agreement to Westpac New Zealand.

Westpac’s Chief Executive Officer, Peter King, believes the sale of the Westpac Life NZ business is another milestone in its quest to build a simpler bank.

Mr King said: “This transaction is the latest step in simplifying our business while continuing to help customers with their life insurance needs. Life insurance products are important for many New Zealanders and we are pleased to be entering a long-term partnership with a life insurance specialist to continue to help our customers protect themselves and their loved ones.”

Completion of the transaction is subject to various approvals and is expected to occur by the end of 2021.

The Westpac share price has been a strong performer in 2021. Since the start of the year, the banking giant’s shares have risen an impressive 30%.

The post Westpac (ASX:WBC) share price on watch after announcing asset sale 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 2021 financial year saw an unusually high number of new non-mining ASX listings.

The enthusiasm no doubt came on the back of a market soaring out of the COVID-19 trough in autumn 2020.

But as sentiment turned away from growth into value shares late last year, some initial public offer (IPO) stocks started to turn sour.

“IPOs can give you wonderful returns if you get them right but burn your money if you don’t,” Montgomery Small Companies Fund manager Gary Rollo said.

“Because while there were some big winners – like Cettire Ltd (ASX: CTT), Aussie Broadband Ltd (ASX: ABB) and Universal Store Holdings Ltd (ASX: UNI) — there were also some clear losers.”

Rollo did notice some patterns among the ASX IPO shares that lost us the most money over the last 12 months.

Hot themes can turn pretty cold pretty quickly

The biggest observation the portfolio manager made was that investors were lured into recent IPO failures with “hot themes”.

“Remember, if you want it, there is an IPO banking team that’s got the deal for you — and during COVID times this was meal kits, e-commerce and buy now, pay later, amongst other things,” said Rollo.

“An IPO on a ‘hot theme’ can look good in the short run but can come with longer-term pain, as the hot money that chases these ‘hot’ deals does what it does best and moves on to the next shiny thing.”

That means that if the company doesn’t soon find a “real” investor base willing to pay somewhere near the IPO share price, trouble looms.

Rollo took 3 ASX debutants as an example of this support vacuum.

Youfoodz Holdings Ltd (ASX: YFZ) was priced during the IPO at $1.50 per share. After listing in December, the stock went for just 54.5 cents on Monday afternoon.

“Youfoodz tried to capitalise on the market’s appetite for meal kit delivery that boomed during COVID,” said Rollo.

“And takes the award for the worst post-COVID IPO (to date anyway).”

‘Illiquid microcap’: Adore Beauty’s unforgivable sin

He called the float of Adore Beauty Group Ltd (ASX: ABY) “opportunistic” at best.

“The business was listed on a high valuation after being acquired by private equity for a much, much lower price only a short time before.”

The online beauty retailer sold its shares for $6.75 during its IPO before listing in October. The stock was trading at $4.55 on Monday afternoon after sinking as low as $3.31.

“ABY is arguably now an illiquid micro-cap with a lot to do to rebuild its reputation with investors after its warning that it’s not growing at the rate investors expected,” said Rollo.

“A downgrade in expectations before it even delivered its first set of full-year financials as a listed company is a sin not easily forgiven by institutional investors.”

‘Screened out early’: Nuix

It’s perhaps not a massive surprise that Rollo picked Nuix Ltd (ASX: NXL) as the third example of last year’s IPO losers.

A series of downgrades from the company and shocking governance failure accusations arising from media reports has slashed the stock price from a high of $11.86 to now $2.31.

Rollo said the media investigations into its governance had done a better job of disclosure to investors than the prospectus.

“Caveat emptor… [we] screened out early.”

He added that, in the new financial year, the pool of new ASX listings could be more rational.

“Investor appetite has moderated, particularly for loss-making businesses — we see that as some ‘heat’ coming out of the market. That’s healthy and we expect a steady flow of IPOs for us to scrutinise over the coming months.”

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Motley Fool contributor Tony Yoo owns shares of Aussie Broadband Limited and Cettire Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Aussie Broadband Limited and Cettire Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited and Nuix Pty Ltd. The Motley Fool Australia has recommended Aussie Broadband Limited and Cettire 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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