The Commonwealth Bank of Australia (ASX: CBA) has found the average Australian’s financial wellbeing is 7.8% higher this year, despite us having endured both a pandemic and a recession. Notwithstanding the upbeat news, Commonwealth shares, along with the wider share market, are seeing significant falls today. 

At the time of writing, the Commonwealth share price is down 2.29% to $95.52. Similarly, the S&P/ASX 200 Index (ASX: XJO) is trading 2.03% lower for the day so far.

Let’s take a look at what CBA’s latest Consumer Financial Wellbeing Report has found.

Aussies boost their financial fitness

CommBank’s Australian Consumer Financial Wellbeing report for the quarter ending 31 March has found the largest year-on-year increase to Australians’ financial wellbeing since the bank began compiling the quarterly report in 2017. This has left Australians with record-high levels of financial wellbeing.

The report is based on the Melbourne Institute’s Observed Financial Wellbeing Scale. It looks at the extent to which Australians have freedom, control, and security over their finances, as well as whether they can meet their current and future financial obligations.

In addition to our financial wellbeing levels notching up their best improvement, the Commonwealth Bank’s report found the median Australian income has increased by $6,936 over the last 12 months. Australians’ median outflows only increased by $4,611 over the same time frame.

Further, 16% fewer Aussies are living paycheque to paycheque than this time last year.

It also found 17% fewer Australians are spending at high levels, while 10% more now have what’s deemed a sufficient financial safety net.

Professor John de New, from the University of Melbourne’s Melbourne Institute: Applied Economic & Social Research, commented on the findings. New said:

This unexpected improvement in financial wellbeing could be explained by a number of factors including: the targeted and swift Australian Government fiscal policy intervention (including the introduction of JobKeeper and JobSeeker); expansionary monetary policy through historically low interest rates; widespread loan deferrals; emergency access to superannuation; and changes to consumer spending patterns amid lockdowns and economic uncertainty…

With total employment and other macro-economic indicators almost back to their pre-pandemic levels, this increase in savings buffer, prudent behaviour and associated improvement in financial wellbeing will serve Australians well to deal with future challenges as the economy continues its recovery.

Management commentary

CBA executive manager of financial wellbeing Ben Grauer commented on the findings, saying:

While clearly there are people struggling or worse off from the pandemic, more Australians feel better off, more financially secure and more in control of their finances. Spending less, saving more and paying down debt have been the big stories from this past year.

Our research shows customers’ financial wellbeing is more closely linked to their financial behaviours, rather than how financially knowledgeable they are or how much they earn.

Commonwealth Bank share price snapshot

Despite today’s falls, CBA shares are having a great year on the ASX.

Currently, the Commonwealth Bank share price is up by around 16% year to date, having reached a new all-time high of $98.85 yesterday. It’s also gained around 60% since this time last year. 

More reading

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• Here are the US shares ASX investors were buying last week
• Australians are opening their wallets, says CBA report
• Exec jailed for ASX share market manipulation

Motley Fool contributor Brooke Cooper 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 Odyssey Gold Ltd (ASX: ODY) share price is deep in the red on the ASX today. This follows the company’s announced assay results from its maiden diamond drill hole at its Bottle Dump section.

Forming part of the Tuckanarra project, Odyssey Gold controls an 80% interest in the Western Australian gold mine. The 52 square kilometre site comprises four main pits – – Bottle Dump, Maybelle, Cable and Bollard.

At the time of writing, the gold miner’s shares are fetching for 15.5 cents, down a sizeable 20.5%.

What were the results?

Investors are driving Odyssey Gold shares down despite the company providing exciting gold results.

According to the release, Odyssey Gold advised significant visible gold from its first intercept at Bottle Dump. The diamond drill hole intersected gold at around 249 meters, along with sheared quartz vein contacts and interpreted magnetite alteration.

A core of 28 centimetres long comprising of the gold veinlet and nearby disseminated visible gold was sent to Perth laboratory for analysis. To preserve the gold vein and core, Odyssey Gold selected the PhotonAssay technique.

This non-destructive method uses high powered x-rays to bombard rock samples and activate atoms of gold and other metals. A highly sensitive detector then picks up the unique atomic signatures from these elements to identify their concentrations.

The core had to be split into three parts as the central subsample exceeded an upper detection limit of 12,000g/t gold. Because of the strong results, a second calibration method is underway to determine the value of the sample. The new technique will have an upper detection limit of 35,000g/t gold.

The company is expected to provide the results when available.

Odyssey Gold share price review

Since listing on the ASX board in January, Odyssey Gold shares have accelerated close to 250%. The company’s share price reached an all-time high of 22.5 cents last week before dropping lower from profit-taking.

On valuation metrics, Odyssey Gold presides a market capitalisation of roughly $67 million, with 452 million shares outstanding.

More reading

• Why the Odyssey Gold (ASX:ODY) share price is rocketing 118% higher today

Motley Fool contributor Aaron Teboneras 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 Carsales.Com Ltd (ASX: CAR) share price is defying the market selloff and pushing higher on Wednesday.

In afternoon trade, the auto listings company’s shares are up 1% to $17.26.

Why is the Carsales share price pushing higher?

Today’s gain appears to be a delayed response to a bullish broker note out of Morgans on Tuesday.

According to the note, the broker has upgraded the company’s shares to an add rating with an improved price target of $20.82.

Based on the current Carsales share price, this implies potential upside of ~20% over the next 12 months excluding dividends.

And if you include the 56 cents per share fully franked dividend it expects in FY 2021, this potential return stretches to almost 24%.

What did Morgans say?

Morgans has been looking into Carsales’ US$624 million acquisition of US-based Trader Interactive and likes what it sees.

This is even after accounting for the “full” price the company is paying for the digital marketing solutions and services provider to the commercial truck, recreational vehicle, powersports, and equipment industries.

Morgans said: “In one of the better deals for PE [private equity], CAR’s acquisition of a 49% stake in Trader Interactive (TI) for US$624m at a trailing EV/EBITDA multiple of 26.5x (a 28% premium to their comparative multiple) appears quite full (PE having paid US$680m for the whole asset in 2017, with some acquisitions added since).”

“Having gotten our head around the above, we are supportive of the deal and see the strategic merit. TI appears to have strong market positions in a number of verticals, in a large addressable market (4x domestic auto, 16x domestic non-auto) with upside from increased dealer penetration and improved monetisation of existing dealers.”

“We back CAR’s expertise to deliver product and user experience improvements in TI to drive topline growth ahead of historic rates. Additionally, the multiple paid is only slightly above the most recent large comparative transaction (the 26.1x trailing multiple paid for AutoScout24 in early 2020).”

The broker concluded: “With robust earnings growth forecast (15% EPS CAGR FY21-23) and CAR trading at a much lower premium to its 10yr historic trading averages than the other larger classifieds players, we see both relative and absolute value in CAR, moving to an Add rating.”

Overall, this could make the Carsales share price worth considering at the current level.

More reading

• ASX 200 rises, Nuix drops, Elders falls
• Why Carsales, Incitec Pivot, Infinity Lithium, & Nuix shares are sinking
• ASX 200 up 0.45%: Carsales sinks 10%, Aristocrat Leisure jumps
• Carsales (ASX:CAR) share price down 7% after raising $428 million
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended carsales.com Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Scott talks about the volatility facing investors this week, a company he owns and thinks you can put in the bottom drawer — Washington H. Soul Pattinson and Co Ltd (ASX: SOL), jobs and wages, unemployment, and retail trade figures.

https://fast.wistia.com/embed/medias/kjr0b972pt.jsonphttps://fast.wistia.com/assets/external/E-v1.js

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• Why Soul Patts (ASX:SOL) is such a strong ASX dividend share

Motley Fool contributor Scott Phillips owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company 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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Some S&P/ASX 200 Index (ASX: XJO) shares are expected to pay a high dividend yield to investors in 2021.

A few ASX 200 dividend shares are still struggling in this COVID-19 environment such as Sydney Airport Holdings Pty Ltd (ASX: SYD).

But there are others that are paying solid payments that equate to a pretty high yield such as:

Waypoint REIT Ltd (ASX: WPR)

As the name suggests, Waypoint is a real estate investment trust (REIT) that owns a portfolio of service stations across Australia. The vast majority of them are leased as Coles Group Ltd (ASX: COL) Express convenience stores.

It has 470 properties with a weighted average lease expiry (WALE) of 10.8 years, with 72% of them in metro locations and the other 28% in regional locations.

The aim of the ASX 200 share is to steadily increase its distributable earnings per security (EPS). It has successfully done this in each of the year’s since it listed on the ASX. In FY20 its distributable EPS grew another 4.25% with minimal impact from COVID-19 (99.9% of rent was collected).

It has an annual management expense ratio of 0.30%, which is one of the lowest in the REIT sector.

Waypoint is expecting to grow its distributable EPS by another 3.75% in FY21 to 15.72 cents. That would equate to a distribution yield of 6.3%.

The business is looking to offload non-core assets at a premium. It has sold three metro assets through public auction for a combined price of $8.1 million, which was a 22.1% premium to the prevailing book value.

Waypoint is rated as a buy by the broker Morgans, with a price target of $2.92. The broker points out that almost all of the leases have a fixed 3% or higher annual rental increase which helps distributable profit growth. 

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi is one of the ASX 200 shares that is seeing elevated levels of demand after the onset of the COVID-19 pandemic.

Earlier on during COVID-19, there was strong demand for products that enabled customers to work, learn and be entertained at home.

But the strong retail environment has continued for many months beyond the initial lockdowns with government stimulus, low interest rates and redirected household expenditure.

Credit Suisse rates the JB Hi-Fi share price as a buy, with a price target of $57.39. The broker was impressed by the high level of sales in the third quarter of FY21. Credit Suisse believes there’s a lot of demand still in the economy.

The broker is expecting the ASX 200 share to pay a FY21 dividend yield of 8% thanks to the strong earnings growth.

JB Hi-Fi said that in the third quarter of FY21, it saw total sales growth of 10.4% for JB Hi-fi Australia, 16% total sales growth for JB-Hi New Zealand and 5.8% sales growth for The Good Guys.

It said trading in April was also pleasing. However, it did acknowledge that it’s now cycling against elevated sales growth from last year, though it’s continuing to see elevated customer demand and strong sales growth rates over a two-year period.

More reading

• AGL share price hits lowest level since 2004 as dividend tops 10%
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• ASX 200 rises, Nuix jumps, James Hardie drops

Motley Fool contributor Tristan Harrison 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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With the market sinking on Wednesday, a good number of shares are tumbling lower. However, few are performing as poorly as the EML Payments Ltd (ASX: EML) share price.

In afternoon trade, the payments company’s shares are down 42% to $2.99.

It may be hard to believe, but this is actually a big improvement from earlier in the day. Shortly after the market open, the EML Payments share price crashed 52% lower to $2.47.

Why is the EML Payments share price under pressure?

Investors have been heading to the exits in their droves on Wednesday after EML Payments provided the market with an update on its European operations.

According to the release, the Central Bank of Ireland has concerns over the company’s PFS Card Services (Ireland) business in relation to Anti-Money Laundering/Counter Terrorism Financing compliance.

This is a particularly big deal as EML Payments’ Prepaid Financial Services subsidiary has been running its European operations through this business since December after moving them from the UK following Brexit. In light of this, its ability to operate throughout the European Union is thanks entirely to authorisation by the Central Bank of Ireland.

And this certainly is a major part of the overall EML Payments business. For example, during the third quarter of FY 2021, the company estimates that 27% of its total revenue was generated through the PFS Card Services (Ireland) business.

What’s next?

Today’s release has arguably generated more questions than answers, which is potentially why the EML Payments share price has fallen so heavily.

But what we do know, is that the Central Bank of Ireland is inclined to issue directions pursuant to section 45 of the Central Bank (Supervision and Enforcement) Act 2013.

Management has warned that the direction could materially impact the European operations of the Prepaid Financial Services business should they be made. This includes potentially restricting activities under the Irish authorisation. It also warned that it is unclear what impact this will have on costs and its results.

EML said: “Given the timing and early stages of discussion with the CBI, EML is presently unable to estimate the potential direct and consequential costs (including but not limited to legal costs) and impacts of the Correspondence on the Group’s consolidated FY21 results.”

Anything else?

This is particularly bad timing for EML Payments as it has recently entered into a binding agreement to acquire Sentenial Limited and its open banking product, Nuapay. This is for an upfront enterprise value of 70 million euros (A$108.6 million) and an earn-out component of up to 40 million euros (A$62.1 million).

Sentenial is a leading European Open Banking and Account-to- Account (A2A) payments provider, utilising a cloud-native, API-first, full stack enterprise grade payment platform.

This acquisition remains subject to regulatory approval. And given what has occurred today, the market may be concerned that this development could impact its approval.

More reading

• AGL share price hits lowest level since 2004 as dividend tops 10%
• Why BHP, EML Payments, Laybuy, & St Barbara are sinking today
• ASX 200 down 1.7%: Appen jumps 12%, EML Payments crashed 37%
• Why the EML Payments (ASX:EML) share price is crashing 52% lower
• 5 things to watch on the ASX 200 on Wednesday

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 recommends EML Payments. The Motley Fool Australia has recommended EML Payments. 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 Tesla Inc (NASDAQ: TSLA) share price is “ridiculous”, and its lithium batteries are “inferior“.

That’s what Michael Burry – the investor who’s profited millions from betting against overhyped companies and market speculation – has been saying about the world’s most valuable car manufacturer.

He’s put his money where his mouth is: betting US$534 million against Tesla’s share price through ‘put options’.

Since it was founded 17 years ago, Tesla has become one of the most famous brands on earth and made its CEO, Elon Musk, the world’s richest man. He’s since dropped back to third as Tesla shares have faltered lately and fallen in value.

The rapid rise of the lithium battery-powered electric vehicle pioneer is largely based on the global race towards renewable energy sources. But it’s also involved an incredible amount of market fervour, as investors and consumers alike scramble towards “future tech”.

Burry’s runs on the board

Burry, the former Scion Capital hedge fund manager, has always been sceptical of market fervour.

The 49-year-old became one of the world’s most famous investors when he and his fund profited nearly $800 million by shorting subprime mortgages before the 2006 US house market crash.

He later drew mainstream attention after Christian Bale portrayed him in 2015’s smash-hit film The Big Short.

But Burry had successfully doubted periods of inflated market speculation since pre-1999 when he made a fortune shorting tech stocks before the dot-com bubble. More recently, he helped kick-start the GameStop frenzy by taking a stake in the video game retailer.

The investor and physician held put options on more than 800,000 Tesla shares at the end of last month, worth around $534 million. The strike price that Burry is shorting the Tesla shares for is unclear. But if the clean-energy car maker’s price does fall below Burry’s valuation, he’ll make an immense profit off potentially thousands of Tesla shareholders.

The longest put options tend to expire within three years, so Burry may be banking on some time before he sees his short positions come to fruition. But he’s clearly drawing parallels between Tesla, the ’90s tech market crash, and the 2000s global financial crisis.

Burry deleted his Twitter account after US federal regulators visited him about his tweets – the source of these claims. Still, in a tweet that’s since been deleted, he called the current Tesla share price and valuation “remarkably similar to 1999 and 2006”.

“I live in the land of $TSLA,” Burry continued. “I know what a Tesla car is. I talk to the mechanics and dealers. But being short is so much more than that.”

What’s wrong with Tesla?

Burry isn’t the first to doubt Tesla’s valuation. Elon Musk himself wrote that the “Tesla stock price is too high” back in May last year when the price was only $150 per share.

It’s now worth $576 per share, but that’s already accounting for a 20% wipeout so far in 2021. In January, it rose as far as $880.

Critics have pointed out that despite Tesla’s valuation dwarfing other car makers – Tesla’s market cap is roughly 5 times that of the world’s largest auto manufacturer, Volkswagen – the company relies on regulatory credits for profitability. 

During Tesla’s share price highs in January this year, the company boasted a fully diluted market cap of nearly $1 trillion. Many analysts noted the company’s earnings could have risen tenfold and still could not justify that valuation. 

Tesla aims to sell more than 20 million electric vehicles (EVs) per year, and its revenue has been rapidly rising in recent years. But its car sales remain minuscule compared to the world’s largest automotive companies, with total sales figures in the hundreds of thousands and production capacities as low as 4% of Toyota’s.

The world’s largest automotive manufacturers, such as Volkswagen and Toyota, are now storming into an increasingly competitive electric vehicle market, many with much cheaper offerings to match their global factory output.

It’s in the mass market that Tesla may struggle most. The company’s cheapest offering, the Model 3, retails for around $60,000 in Australia, significantly more expensive than its rival cut-price EV offerings from MG, Nissan, Renault and Hyundai.

It’s also double the price of comparable hybrids on the market from the likes of Toyota and Subaru, which benefit from entering the market years earlier.

Tesla has long been promising a budget-priced Model 3 that would retail around the $45,000 mark, but it’s never eventuated. This is becoming a habit of sorts, just one of the many public timeframes that Musk has failed to reach.

Tesla’s major strength is its up-market offerings, and the company has a stranglehold on the US EV market, where it accounts for around 80% of electric vehicle sales in the country.

This is partly thanks to a generous tax credit system the US government handed Tesla buyers, which has now ended, making foreign EV manufacturers much more competitive.

In Europe and Asia, the EV market is a very different story, with Tesla market share around the 20% mark and rapidly declining.

Tesla’s tech battle

Tesla’s major advantage in expansive nations like the US and Australia has been the traditionally unparalleled range that its EVs offer. But now it seems its pioneering electric batteries may also be losing ground.

Toyota is scheduled to release its new solid-state electric battery this year, which could charge in as quick as 10 minutes due to the high density of its electrolyte cells. Tesla is reportedly yet to develop the technology.

Meanwhile, at the upper end of the market, Tesla’s flagship Model S’s 600-kilometre range is reportedly set to be outgunned by a new EV disruptor: the energy-dense battery manufacturing start-up Lucid Motors.

The Lucid Air range of luxury EVs, which boasts battery ranges exceeding 800 kilometres and batteries that charge “in minutes”, retail for a similar price to the Model S. Lucid began accepting Australian orders in November last year.

Analysts fear that new challenges directly to the heart of Tesla’s market may come thick and fast over the coming years.

There have also been question marks over the safety of Tesla vehicles. The company has drawn significant criticism over electric door handles that fail to extend during fires (a susceptibility of all-electric vehicles), which have previously resulted in gruesome road fatalities.

There are also doubts from some quarters about the long-term future of lithium batteries.

Proponents of hydrogen fuel cells believe the renewable energy source will one day replace lithium batteries entirely due to hydrogen’s superior potential power delivery, portability and manufactural simplicity.

Musk, however, has been famously derisive of hydrogen, calling it “fool cells”. 

Tesla speculation

Many of the justifications around Tesla’s share price rely on intense speculation, both from outside investors and company figures like Musk himself.

Musk recently proposed to shareholders that the company could earn “$50 billion of incremental profit annually” from unleashing self-driving Teslas onto the streets, which would herald a shift towards greater gross profit margins for the company as a potential software manufacturer.

However, analysts have again disputed the claims, saying Tesla’s bullish expectations have the potential to be vastly undercut by increasing competition, not to mention a regulatory market that doesn’t yet exist. 

It’s all far from doom and gloom. Tesla expects to increase its vehicle sales by an average of 50% annually over the next few years, while diversification opportunities in solar and its home battery business present significant room for growth.

The real question mark on Tesla’s future might be whether Musk’s pioneers can keep pace with the electric car industry behemoth they helped create.

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Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends 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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The Strike Energy Ltd (ASX: STX) share price has been a poor performer today. This follows the energy company’s update on the West Erregulla Appraisal Campaign on behalf of its EP469 Joint Venture.

Strike Energy and Warrego Energy Ltd (ASX: WGO) both hold a 50% joint venture interest in EP469. The gas project is located about 230 kilometres north-east of Perth in the North Perth Basin in Western Australia.

At the time of writing, Strike Energy shares are selling for 35 cents a pop, down 7.8%.

What did Strike Energy announce?

Investors are heading for the hills, dumping Strike Energy shares after digesting the company’s latest release.

In a statement to the ASX, Strike Energy advised its WE5 drilling is continuing to perform to expectations. So far, a depth of approximately 3,356 metres measured depth (MD) has been drilled and is currently in the Woodada formation.

Strike Energy is aiming to drill the intermediate hole section down to a nominal depth of 3,750 metres MD. At that point, the company will have received wireline logs for WE5. Running of the casing and cementing in place is expected to follow afterwards.

In regards to WE4, the clean-up of the well has been paused due to sand being found in the production stream. Strike Energy noted that the source of the sand was identified as the Kingia Sandstone, but was unsure of what caused its presence.

The company said that while some reservoirs produce sand initially on test, the test surface equipment for WE4 is not suited to high-velocity sand. As a result, Strike Energy has put on order additional equipment to support the remaining clean-up and production test.

It is expected that the equipment will take an estimated 2 weeks to procure. In the meantime, the company will assess if it’s viable to combine the flow testing of WE4 and WE5.

Strike Energy share price review

Over the past 12 months, Strike Energy shares have jumped close to 90%, and are up over 20% year-to-date. The company’s shares reached an all-time high of 41 cents on Monday before being hit hard today.

Based on valuation grounds, Strike Energy commands a market capitalisation of roughly $703 million, with 2 billion shares on issue.

More reading

• Why the Strike Energy (ASX:STX) share price is charging higher
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Motley Fool contributor Aaron Teboneras 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 AGL Energy Limited (ASX: AGL) share price is not having a great day today, to put it mildly. AGL shares are currently the second-worst performer of the S&P/ASX 200 Index (ASX: XJO) today, down a hefty 4.5% at the time of writing to $7.99 a share. That’s not quite as disappointing as the EML Payments Ltd (ASX: EML) share price today, which is topping the ASX 200 losses with a ~40% loss today. But it’s probably still not something AGL shareholders would like to see.

AGL shares have gone as low as $7.96 a share during trading so far today. That puts AGL at the lowest levels the company has traded at since July 2004, a 17-year low. Ouch. For some context, back then, John Howard was about to face off against Mark Latham for Prime Minister. At the same time, George W. Bush was about to seek re-election as US President. Also, Mean Girls, Shrek 2 and Harry Potter and the Prisoner of Azkaban had just come out in cinemas.

AGL shares are now more than 71% off of their all-time high of ~$27.70 that the company hit back in 2017. As a result, AGL’s trailing dividend yield has hit a whopping 10.21%, which the market is clearly not viewing as sustainable. So what on earth has happened to what used to be the largest energy generator and retailer in the country?

Multi-decade lows

Well, AGL has been suffering for a while now due to conditions in the national electricity market. Low and unstable electricity prices and the looming closure of the Liddell coal-fired power plant are doing the company no favours. Investors also didn’t respond well to the AGL CEO’s sudden exit last month.

Also seemingly working against the company is AGL’s planned restructuring, which it announced back in March. AGL told the markets it plans on splitting into two companies. One, the ‘New AGL’, will house its electricity retailing business. The other, ‘PrimeCo’, will hold AGL’s electricity generation business. After an initial positive share price reaction, investors have seemed to decide that this new look for AGL won’t live up to its promise. That’s going off how AGL shares have slid another ~20% since the announcement.

Are AGL shares a bargain-basement buy?

Given the extent of AGL’s slide, I’m sure many value-tilting investors out there are wondering if these multi-year lows we are seeing are a buying opportunity. Well, one broker who does see some value in the AGL share price at these levels is the investment bank, Goldman Sachs. According to CommSec, Goldman maintained a 12-month price target of $10.45 for the AGL share price following its restructuring announcement. although Goldman remains ‘neutral’ on AGL, it sees the company’s Portland smelter agreement, the near-term outlook for its existing business structure, and higher oil prices as reasons to justify a $10.45 per share valuation.

I’m sure AGL investors will be hoping Goldman’s predictions prove accurate.

More reading

• Why BHP, EML Payments, Laybuy, & St Barbara are sinking today
• ASX 200 down 1.7%: Appen jumps 12%, EML Payments crashed 37%
• Why the EML Payments (ASX:EML) share price is crashing 52% lower
• Data shows millennials love investing in ASX ETFs
• 5 things to watch on the ASX 200 on Wednesday

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 recommends EML Payments. The Motley Fool Australia has recommended EML Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post AGL share price hits lowest level since 2004 as dividend tops 10% appeared first on The Motley Fool Australia.

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The Island Pharmaceuticals Ltd (ASX: ILA) share price opened 14% higher at 39 cents this morning after the company was granted a key patent for its lead asset, ILA-101.

Its shares have retreated since that high and are trading at 35 cents at the time of writing, up 3%. 

Island Pharma is a drug research company that develops preventative or therapeutic drugs for viral infections. The company is currently advancing its lead drug candidate “ISLA-101” towards a Phase 2 clinical trial in dengue infected subjects. ISLA-101 has the potential to be used to prevent or treat a number of viruses including dengue, Zika and chikungunya, and other diseases rife in tropical climates. 

Grant of US patent drives the Island Pharma share price 

In today’s release, Island Pharma advised that a key patent for its lead asset, ISLA-101 was granted by the United States Patent & Trademark Office. The patent will underpin Island Pharma’s drug repurposing strategy to rapidly and efficiently develop antiviral therapies with a focus on mosquito-borne viral diseases. 

Pharma Island executive chair Dr Paul MacLeman welcomed the progress, saying: 

The grant of the US patent is a significant development for Island Pharmaceuticals. Mosquito borne viruses, such as dengue, Zika and others represent major unmet medical needs throughout the world and about 3 billion people – or 40% of the world’s population – live in areas with a risk of dengue.

Having an allowed patent that protects Island’s lead program in this large market provides protection for the development of ISLA-101 and further underpins our ability to advance the program in the US – a key target market.

The Island Pharma share price so far 

It is becoming increasingly common for initial public offerings on the ASX to surge on the first day of listing before grinding lower in the coming weeks and months. Some notable recent examples include 4DMedical Ltd (ASX: 4DX), Credit Clear Ltd (ASX: CCR) and DC Two Ltd (ASX: DC2). 

The Island Pharma share price has met with a similar fate, at a listing price of 25 cents, its shares surged as high as 67 cents on its first day of listing on April 13. A neat return 268% return for those that managed to participate in the IPO and sell at highs. Despite the intraday surge, its shares closed at 50 cents on the first day.

Its shares have steadily pushed lower, closing at a record low of 34 cents on Tuesday.

What’s next for Island Pharma 

The key milestones for the company to achieve revenues and profitability as stated in its prospectus are obtaining FDA approval and commencing sales for ISLA-101. 

Its prospectus advises that the timeframe to meet the approval and sales milestones are contingent on a number of factors. These include the timeframe to enrol and conduct clinical trials, preparation and submission of regulatory documents, regulatory review and launch of sales efforts.

The company is currently advancing ISLA-101 towards a Phase 2 clinical trial which will then require a Phase 3 clinical trial and drug registration.

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Motley Fool contributor Kerry Sun 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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