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.

Trying to figure out if a company will have a market capitalization of $1 trillion in the next decade is often reserved for fast-growing technology companies looking to become the next Apple, Microsoft, or Facebook. But slow, steady growth from a megacap stock can also achieve that mark.

Johnson & Johnson (NYSE: JNJ) is already an enormous company. And its growth might not be exciting, but its consistency over time can deliver impressive results. The stock is currently worth $432 billion, meaning it only has to do a little more than double its size to reach the magic number. Breaking down each business unit and projecting the profits a decade from now might highlight the path to crossing the $1 trillion threshold.

Pharmaceuticals leads the way

The pharmaceutical segment is the largest and fastest growing of the business units. It brought in $45.6 billion last year and has grown nearly 8% per year since 2015. The company lists 24 drugs that generated more than $400 million in 2020, and 14 that produced more than $1 billion.

Its most successful was Stelara, a treatment for psoriatic arthritis and plaque psoriasis. It made up 9% of the company’s 2020 revenue and grew 21% over 2019. Another standout is Darzalex, a drug for multiple myeloma. The $4.2 billion it brought in was up 40% year over year.

That bodes well for continued growth in the segment. If it can keep up the pace, investors might expect $91 billion in revenue in 2030 generating $29.5 billion in pre-tax profit. That means a decade from now the company might make more from drugs than it made in total last year.

Medical devices could add a spark

Johnson & Johnson found tough sledding in 2020 in the medical device business. Sales dropped more than 11%. It’s nothing to be ashamed of. Other device makers like Intuitive Surgical, Smith & Nephew, and Stryker all saw sales decline last year as well. Growth had been lackluster even before the pandemic. Over the five prior years, segment sales were flat. Johnson & Johnson has made a few acquisitions to jump-start growth.

In 2019, the company purchased Auris Health. That company has a robotic surgical system focused on the lungs. Management is hoping it can expand to more procedures and compete with the leading surgical robotics companies. Johnson & Johnson also purchased Verb Surgical, its collaboration with Alphabet‘s life sciences unit Verily. That company’s robotics and data science capabilities should add new revenue sources in the years ahead. Giving it credit for modest growth, the unit might generate $33 billion in 2030 sales with nearly $8 billion in pre-tax profit.

Consumer health is an anchor

The company’s consumer health business is made up of names familiar to shoppers. Beauty supplies like Aveeno, pain relievers such as Tylenol, and oral care products like Listerine are just a few of the brands that make up its $14.1 billion in annual sales. The segment grew 1.1% year over year in 2020, combining over 7% growth in wound and oral care with roughly 9% drops in baby and women’s care. Management blamed the declines on behavior changes during the pandemic.

Overall, the business has grown less than 1% per year over the past half-decade and averaged a pre-tax income margin of 16%. That excludes 2020, when a significant litigation fee skewed results. Doing the math, investors might see $15.3 billion in sales and $2.4 billion in pre-tax income in 2030.

The sum of the parts

Johnson & Johnson has 28 products that generated more than $1 billion in sales in 2020. That illustrates just how complex the company is. At the risk of oversimplifying, projecting the growth rate a decade into the future and applying historical profit margins can provide a reasonable estimate for what the company might be worth.

Segment	2030 Revenue	2030 Pre-Tax Profit
Pharmaceuticals	$91 billion	$29.5 billion
Medical Devices	$33 billion	$7.8 billion
Consumer Health	$15 billion	$2.4 billion
Total	$139 billion	$39.7 billion

Adding it up and applying a conservative corporate tax rate of 15% (it’s been 11% per year for a decade) shows an after-tax profit of a little less than $34 billion in 2030. Going one step further, Johnson & Johnson has traded in a price-to-earnings (P/E) range of 15 to 29 during that time. Anyone who guessed that it currently trades for 29 times earnings — its richest valuation ever, using normalized earnings — gets extra credit.

Doing that math, the company could reasonably trade between a market cap of $500 billion to $980 billion. It’s an absurdly wide range, but it illustrates a key input to any valuation. Depending on how much the market is willing to pay for $1 of earnings, current shareholders might expect a return between 1% and 9% per year over that time. One thing seems certain: To reach $1 trillion, the stock will probably need to have its currently elevated valuation. Whether it remains at these levels for the next decade or experiences a dip in between is anyone’s guess.

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

The post Will Johnson & Johnson be a trillion-dollar stock by 2030? appeared first on The Motley Fool Australia.

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Jason Hawthorne owns shares of Intuitive Surgical. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Alphabet (A shares), Alphabet (C shares), Apple, Facebook, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Apple, and Facebook. 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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Shares in Australian minerals explorer Lithium Australia NL (ASX: LIT) are jumping higher during today’s session following an update to its joint venture with soon-to-be listed Charger Metals this morning.

At the time of writing, the Lithium Australia share price is climbing 10% to 11 cents.

What was announced?

The Lithium Australia share price is having a bumper day after the company advised it has progressed its joint venture with Charger Metals, announcing that the terms of the venture are now unconditional.

Charger has exercised an option to acquire a 70% interest in three battery metals assets on Lithium Australia’s balance sheet. These interests include the company’s projects at Coates, Lake Johnston and Bynoe.

Under this arrangement, Lithium Australia will retain a 30% free carried interest in the projects, and will also be the major shareholder in Charger Metals.

The company will also receive $100,000 in cash and 9.6 million fully paid ordinary shares in Charger Metals, with a valuation of $1.92 million.

Lithium Australia reports that the Charger Metals “$6 million offer closed oversubscribed and has received conditional approval to list from the ASX”. It is scheduled to list on the ASX on 8 July.

In the announcement, Lithium Australia managing director Adrian Griffin stated:

Lithium Australia retains significant exposure to raw materials through its equity in Charger, as well as its free-carried project interests. The latter potentially provide access to raw materials that the Lithium Australia group of companies can further process. Charger Metals’ specialised expertise will expedite a focused exploration effort, leaving Lithium Australia to concentrate on its core business: the ethical and sustainable supply of energy metals to the battery industry and the development of a circular battery economy. We eagerly await exploration outcomes at the Coates, Bynoe and Lake Johnston projects.

Charger Metals is in preparation for its ASX debut, having completed an oversubscribed initial public offering (IPO) last month. The company may trade under the ticker CHR, judging by its prospectus.

Lithium Australia shareholders received priority access to the IPO, with the option to subscribe for up to $500,000 worth of Charger shares at 20 cents per share.

Lithium Australia share price snapshot

Following today’s gains, the Lithium Australia share price has increased by 4.76% over the previous 5 trading sessions.

The company’s shares are also up almost 67% this year to date, which has outpaced the broad Australian indexes over this time period.

At a share price of 11 cents, Lithium Australia has a market capitalisation of almost $100 million and is trading at more than double its 52-week low of 4.5 cents.

The post Lithium Australia (ASX:LIT) share price surges 10% on joint venture update appeared first on The Motley Fool Australia.

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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 Talga Group Ltd (ASX: TLG) share price opened 6% higher this morning after the company released its Vittangi Anode Project’s detailed feasibility study (DFS).

At the time of writing, shares in Talga have fallen to $1.34 – still 1.13% higher than their previous closing price.

Talga is a technology minerals company with a focus on graphite, as well as interests in cobalt, copper, and gold. Its proposed Vittangi Project is based in northern Sweden and will produce green graphite anode.

Let’s take a closer look at the Vittangi Project’s DFS.

Vittangi Project set to rake in US$5.35 billion

The Vittangi Project’s DFS found it can produce 19,500 tonnes of Talga’s flagship green graphite anode product, Talnode-C, annually.

The anodes will be made using the 100,000 tonnes of graphite Vittangi will produce annually over its mine life – which the DFS has extended to 24 years.

Talnode-C has been found to be of high enough quality to be used in lithium-ion batteries used to power electric vehicles.

Using the Vittangi Project’s vertically integrated mine-to-anode operation, Talnode-C will be able to be sold straight to Talga’s consumers.

The DFS predicted the project will bring in around US$5.35 billion of revenue over its life span. The study also found the project’s production cost is likely to be US$2,363 per tonne of Talnode-C.

Therefore, Talga expects to receive net profits before tax of around $3.48 billion over the life of the Vittangi Project.

However, the project’s capital expenditure estimate has increased from the amount predicted in its pre-feasibility study.

This is due to US$153 million worth of extra equipment needed to satisfy the requirements of Talga’s automotive battery customers. Additionally, the company will spend an extra US$72 million to take advantage of previously identified growth opportunities.

Talga will now use the DFS to help secure financing and development partners, complete customer agreements, and begin construction of the project.

Commentary from management

Talga’s managing director Mark Thompson said:

We are excited to deliver the Vittangi Anode Project DFS to the market and to our partners…

Talga’s European-based natural green graphite anode operation is well timed to meet the unprecedented increased battery demand driven by the global megatrend towards electrification and decarbonisation. We are confident that this initial stage of operation will be a stepping stone to Talga’s larger role in the global battery and EV supply chain.

Talga share price snapshot

This year hasn’t been a good one for the Talga share price. It’s currently 27% lower than it was at the start of the year. However, it has gained 124% since this time last year.

The company has a market capitalisation of around $403 million, with approximately 303 million shares outstanding.

The post Here’s why the Talga (ASX:TLG) share price is gaining today 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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Today’s trading session has been a wild ride for the First Graphene Ltd (ASX: FGR) share price.

Shares in the company dumped nearly 9% earlier today. After opening at 29 cents, the First Graphene share price hit an intraday low of 26.5 cents.

At the time of writing, shares in First Graphene have recovered to be less than 2% lower for the day.

Lets take a look at what’s been moving the First Graphene share price.

First Graphene releases whitepaper

Earlier today, First Graphene released a whitepaper on its patented Hydrodynamic Cavitation Process.

According to the company, the report confirmed the technology’s ability to convert petroleum feedstocks into products for clean energy storage and generation.

First Graphene’s research team successfully demonstrated that the novel cavitation technology could efficiently produce graphite materials in a single step process. According to the whitepaper, the only by-product of the process was “green” hydrogen.

First Graphene noted that high purity graphite is in demand for use in the production of battery anodes. The company predicts strong growth and highlighted the potential to evolve production to a commercial scale.

First Graphene signs distribution deal

In addition to today’s announcement, First Graphene also announced a distribution agreement yesterday.

The agreement will allow Auckland-based company GtM Action to exclusively distribute First Graphene’s PureGRAPH products. GtM Action will also have the right to develop commercial opportunities for graphene technology.

According to First Graphene, the partnership with GtM Action is focused on extending the company’s sales reach and the awareness of graphene technology.

In addition to developing commercial opportunities in New Zealand, the company also aims to expose its PureGRAPH product to the concrete industry globally.

More on First Graphene

First Graphene is a supplier of high-performing, graphene products. The company has a robust manufacturing platform based on the supply of high-purity raw materials.

First Graphene recently provided an update on the commercial use of its flagship PureGRAPH product line.

At the time of writing, shares in First Graphene are slightly lower for the day and relatively flat for 2021.

The post Shares in First Graphene (ASX:FGR) are on a wild ride today appeared first on The Motley Fool Australia.

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Motley Fool contributor Nikhil Gangaram 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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It is always interesting to see which ASX shares performed the best during a financial year. To help you out, we’ve compiled a list of the five best performing ASX 200 shares in FY21.

The S&P/ASX 200 Index (ASX: XJO) is one of the most important indices in Australia. It contains all of the largest companies on our stock market, and it’s a barometer for how well our economy is doing.

Here are your top performers!

Shares making the ASX 200 A-TEAM in FY21

You might notice a bit of a pattern in this list… Mining and resource companies dominated the index during the last financial year.

An influx of demand spurred on by generous monetary policies globally elevated many commodity prices to new heights. Hence, miners have enjoyed bumper revenues and profits. Though, it might not have been the companies you would expect.

Orocobre Limited (ASX: ORE)

Orocobre is one of Australia’s largest lithium producers, with a market capitalisation of $2.15 billion. The company, which is based in Brisbane with operations spanning the world, primarily produces lithium hydroxide, carbonate, and spodumene.

Funnily enough, Orocobre made the ASX 200 index by the skin of its teeth. The company was added to the index just recently in the last quarterly rebalance. Increased demand for the material commonly used in batteries boosted the company’s share price over the year.

Interestingly, the lithium producer announced its plan to merge with Galaxy Resources Limited (ASX: GXY)

In FY21, Orocobre delivered shareholders a staggering return of 172%.

HUB24 Ltd (ASX: HUB)

Proving money could be made in something other than mining/resources in FY21, HUB24 slots into the list. The company operates in the financial sector, providing wealth management solutions to connect advisers and their clients.

HUB24’s share price ascended towards the tail end of last year. The acquisition of Ord Minnett‘s PARS portfolio service expanded the company’s funds under management (FUM) significantly. In March 2021, total FUM reached $51.39 billion, representing an increase of 237% on the prior corresponding period.

The stellar growth clearly impressed investors over the year. Shares in this ASX 200 company grew by 177% in value during the last financial year. Shareholders must be pleased with that!

Lynas Rare Earths Ltd (ASX: LYC)

Now it’s back to mining companies. Making the podium finish in FY21 is rare earths giant, Lynas Rare Earths. This company boasts a market capitalisation of $5.11 billion following a momentous rally out of the COVID-19 crash.

Rare earth elements are commonly used in rechargeable batteries for electric cars, computers, wind turbines, etc. Prices for the rare earth neodymium and praseodymium (NdPr) more than doubled between March 2020 and March 2021, pushing the Lynas share price higher.

Well, shareholders were rewarded for holding through the volatility. This ASX 200 share nearly tripled in FY21 with a gain of 197%.

Pilbara Minerals Ltd (ASX: PLS)

Would you look at that, it’s another lithium producer. 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.

It might be hard to believe, but the Pilbara share price has provided its investors with better returns than Bitcoin (CRYPTO: BTC) in the last financial year. The ASX 200 constituent gained a whopping 437%. Meanwhile, the OG cryptocurrency increased by 250%.

Chalice Mining Ltd (ASX: CHN)

It is time to take our hats off and crown the official best-performing ASX 200 share of FY21… with a mind-boggling 657% return in a twelve-month period — it is none other than Chalice Mining.

Investors of this mining explorer have struck gold. Chalice has 3 major operations in Australia including the Julimar Nickel-Copper-PGE Project, Pyramid Hill Gold Project, and Hawkstone Nickel-Copper-Cobalt Project. In addition to these, it is also involved in a number of joint ventures.

Plenty of excitement has surrounded the explorer’s Julimar project. Several releases from the company have indicated extensive nickel-copper anomalies.

The post Meet the best performing ASX 200 shares of FY21. Are yours on the list? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler owns shares of Lynas Corporation Limited and Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Hub24 Ltd. The Motley Fool Australia has recommended Hub24 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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It’s been an exhausting year keeping up with the Afterpay Ltd (ASX: APT) share price, especially through its sharp pullbacks between February and May.

But overall FY21 was a good year for Afterpay, with shares rising by 92%. Most of those gains came between July last year and January 2021.

While the Afterpay share price has seesawed back and forth over the past year, let’s take a look at what the company has planned for FY22.

What Afterpay is up to in FY22

Launch of Afterpay Money app

Back in February reporting season, the buy now, pay later (BNPL) pioneer revealed a new stand-alone app to help Australians manage their money.

The app will compete with household banking and neobank apps, offering classic features such as deposit and savings accounts. In addition, the app can link with an existing Afterpay account, bringing savings and BNPL information into one spot.

According to Afterpay’s third-quarter results, the company has a “skeleton app in production with functioning deposit and savings accounts, with … prototype testing continuing with customers ahead of launch”.

The company said its new app is expected to launch in the first half of FY22.

European expansion

On 16 March, the Afterpay share price increased 3.12% to $111.71 after a successful launch across France, Spain, and Italy through its subsidiary, Clearpay.

Following its initial launch into southern Europe, the company said: “Clearpay is on track to launch in Germany during H1 FY22”.

Afterpay believes this will bolster its ecommerce market in Europe to more than 300 billion euros (A$494 billion).

Asia expansion

Expansion into Asia came into the conversation when Chinese internet giant Tencent acquired a 5% stake in Afterpay back in May 2020.

That announcement on 4 May witnessed a 30.3% surge in the Afterpay share price to $38.00.

At the time, Afterpay co-founders Anthony Eisen and Nick Molnar said this of the move. “To be able to tap into Tencent’s vast experience and network is valuable, as is the potential to collaborate in areas such as technology, geographic expansion and future payment options on the Afterpay platform.”

Afterpay have since established a base in Singapore to drive its development for the South-East Asian market. But besides the mention that its Asian base was an “early-stage investment” back in its half-year results, we haven’t received an update since.

What happened to a potential US listing?

Afterpay’s third-quarter results said the company was working with advisors to investigate prospects of a US listing. According to Afterpay, there was no timeline set for a board decision.

At the time of writing today, the Afterpay share price is $119.30 — up 0.96% on yesterday’s close.

The post Got Afterpay (ASX:APT) shares? Here’s what the company has in store in FY22 appeared first on The Motley Fool Australia.

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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. owns shares of and has recommended AFTERPAY T FPO. 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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The PEXA Group Limited (ASX: PXA) share price has made its long-awaited appearance on the ASX boards on Thursday. This follows the completion of the online property exchange network operator’s initial public offering (IPO).

However, its first day has been a bit of a mixed one. At one stage, the PEXA share price was down over 4% to $16.40.

It has since rebounded and is now trading broadly flat at $17.12.

The PEXA IPO

PEXA’s shares landed on the ASX today after raising gross proceeds of $1.174 billion at a price of $17.13 per share. This gives the company an enterprise value of $3.3 billion.

The company notes that the IPO has introduced new institutional and retail shareholders who can support PEXA through the next phase of its growth. In addition, Link Administration Holdings Ltd (ASX: LNK) remains the company’s largest shareholder with a 42.8% interest, followed by Commonwealth Bank of Australia (ASX: CBA) with a 23.9% interest.

PEXA’s Chairman, Mark Joiner, was pleased with the outcome of the IPO.

He commented: “We are delighted with the outcome of the IPO and the support shown by institutional and retail investors. Our listing today on the ASX marks another important milestone for PEXA, as we look to explore opportunities to take our experience and expertise into new markets in Australia and internationally. I would like to thank our existing shareholders for their ongoing support and warmly welcome new investors, including many of our employees and practitioner partners, to share in the exciting journey we have ahead of us.”

Trading update

Ahead of its float, PEXA provided the market with an update on its performance.

According to the release, property market volumes remained strong at the end of FY 2021. This saw transaction volumes through the PEXA Exchange in the fourth quarter of FY 2021 increase 4% ahead of its prospectus forecasts.

More than 960,000 PEXA exchange transactions were processed, compared to its forecast of 923,000. This also represents a 48% increase over the prior corresponding period in FY 2020.

And while there was a slight issue yesterday which led to the platform being offline for almost two hours, it notes that all property settlements that were in ‘Ready’ status proceeded yesterday, with the remainder requiring rebooking. This hiccup may be what has taken some of the shine off the PEXA share price on day one.

The post The PEXA (ASX:PXA) share price is sinking 4% after its IPO 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. owns shares of and has recommended Link Administration Holdings Ltd. The Motley Fool Australia has recommended Link Administration Holdings 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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The Predictive Discovery Ltd (ASX: PDI) share price is rocketing in early afternoon trade, up 19.5% to 9.1 cents.

Predictive Discovery is an Australian gold exploration company with a range of projects located in West Africa. 

Below we take a look at the ASX resource company’s latest drill results.

What drill results did the company announce?

Predictive Discovery reported promising gold results from 4 diamond drill holes at its Bankan Project in Guinea.

Drilling at NE Bankan intersected broad zones of high grade gold at depth, returning 44 metres at 8.0 grams of gold per tonne (g/t) Au from 265 metres, which the company said included a “very high-grade intersection” of 17 metres at 18.1 g/t Au from 274 metres.

Predictive Discovery also announced that 2 shallow drill holes at Bankan Creek intersected high-grade gold mineralisation.

The explorer said this supports the continuity of the mineralised zones and additional ounces to its Maiden Resource Estimate. It expects that estimate in the September quarter.

Commenting on the results, Predictive Discovery’s managing director, Paul Roberts said:

These outstanding new results are further confirmation of the continuity and grade of the NE Bankan and Bankan Creek gold deposits. The intersection of 44m at 8.0g/t Au from around 240m vertical depth is an absolute standout, better than any intercept we have obtained so far in the deposit.

Roberts said the company has 4 more deep diamond drill holes with results yet to be reported at NE Bankan. They also said infill diamond drilling at Bankan Creek is ongoing. The last holes are expected to be completed by mid-July.

“Following receipt and interpretation of the last results, the company will move onto the Maiden Resource estimation, in keeping with our September quarter timetable,” Roberts said.

Predictive Discovery share price snapshot

The Predictive Discovery share price is back in the green for the 12 month period to date, up 2.22%. That trails the 25.26% gains posted by the All Ordinaries Index (ASX: XAO).

In 2021, the Predictive Discovery share price has been on a tear, up 51.67% so far.

The post Why the Predictive Discovery (ASX:PDI) share price is rocketing 20% today appeared first on The Motley Fool Australia.

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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 Knosys Ltd (ASX: KNO) share price is flying more than 22% higher today.

Shares in the tech company are surging after announcing an acquisition earlier today.

Lets take a look at what Knosys is set to acquire and why shares in the company are flying.

Knosys shares jump on acquisition news

Knosys announced earlier today that the company will be acquiring library management software (LMS) business LIBERO.

According to the announcement, Knosys will acquire the LIBERO business through a share-sale agreement via a special purpose subsidiary.

The transaction will include $4 million in cash in addition to $1 million worth of fully paid ordinary shares in Knosys. The company noted that the acquisition will be funded from its existing cash resources.

Knosys noted that the acquisition is subject to the satisfaction of certain agreed conditions. Completion is expected to be no later than 31 August 2021.

Why is Knosys acquiring LIBERO?

In its investor presentation, Knosys noted that the strategic acquisition is in line with the company’s growth strategy to deliver multiple software-as-a-service (SaaS) product offerings.

Knosys highlighted LIBERO’s global revenue footprint, with 116 clients located across 8 countries. In addition, the company noted that the global market for LMS is expected to reach US$2.4 billion by 2024. Knosys also expects that over the next 5 years, there will be increased demand for newer library system technologies capable of integrating mobile end-user applications.

According to Knosys, the acquisition will result in an annualised recurring revenue (ARR) multiple of around 2.3 times.

More on Knosys

Knosys is a SaaS provider based in Australia that specialises in information technology. The company offers a range of software solutions designed to boost productivity, collaboration and connectivity. Knosys’ Knowledge IQ solutions and the GreenOrbit Intelligent Intranet solutions are 2 of its flagship products.

The company’s growth strategy is focused on enabling Knosys to scale its global operations, acquire new development capabilities. In addition to the expansion, the company also aims to maintain a cost-effective shared services model.

At the time of writing, shares in Knosys are trading more than 11% higher for the day at 15 cents. Shares in the company were up more than 22% earlier, hitting an intraday high of 16.5 cents.

The post Here’s why the Knosys (ASX:KNO) share price is flying today appeared first on The Motley Fool Australia.

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

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the new financial year in the red. At the time of writing, the benchmark index is down 0.4% to 7,282.8 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are storming higher:

Cettire Ltd (ASX: CTT)

The Cettire share price has risen 5% to $2.78. This follows an announcement which reveals that the online luxury goods retailer is expanding into the children’s wear segment. The launch includes a new website vertical where the company plans to host 6,000 children’s wear products. It will also seek to expand its range over time.

Damstra Holdings Ltd (ASX: DTC)

The Damstra share price has jumped 5.5% to 87.5 cents. This morning the workplace management solutions provider announced a new $20 million debt facility. Damstra notes that this will improve its operating cashflow and provide extra capital to support its global growth ambitions. The new facility is with San Francisco-based Partners for Growth, which specialises in funding growing technology companies.

IGO Ltd (ASX: IGO)

The IGO share price is up 4.5% to $7.99. Investors have been buying the clean energy-focused mining company’s shares after it completed its transformational transaction to form a new lithium joint venture with Tianqi Lithium. The $1.9 billion transaction sees the company acquire a 49% non-controlling interest in Tianqi Lithium Energy Australia. This gives it a 24.99% indirect interest in world-class Greenbushes Lithium Operation and a 49% interest in the Kwinana Lithium Hydroxide Plant.

Rhipe Ltd (ASX: RHP)

The Rhipe share price has surged 18% higher to $2.47. The catalyst for this was news that the leading cloud and technology solutions provider has received a takeover approach. According to the release, it has received a confidential, non-binding, conditional proposal from Norway-based Crayon Group valued at $2.50 per share. This represents a 19.6% premium to its last close price. Management will allow Crayon Group to undertake limited confirmatory due diligence on a non-exclusive basis.

The post Why Cettire, Damstra, IGO, & Rhipe shares are storming higher appeared first on The Motley Fool Australia.

More reading

• Cettire (ASX:CTT) share price lifts 7% on expansion news
• ASX 200 down 0.3%: SEEK record high, IGO jumps, Lendlease downgrade
• The Damstra (ASX:DTC) share price is soaring today. Here’s why
• Why the Rhipe (ASX:RHP) share price is surging 21% higher today
• IGO (ASX:IGO) share price higher after completing $1.9bn transformational transaction

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 Cettire Limited and Damstra Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Damstra Holdings Ltd. The Motley Fool Australia has recommended 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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