In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a very disappointing decline. At the time of writing, the benchmark index is down 1.05% to 7,097.9 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are sinking:

A2 Milk Company Ltd (ASX: A2M)

The A2 Milk share price is down a 5.5% to $5.75. Investors have been selling the infant formula company’s shares after it downgraded its FY 2021 guidance for the fourth time on Monday. Adding to the selling pressure were a number of bearish broker notes this morning. One of those came from Credit Suisse, which has retained its underperform rating and slashed its price target on the company’s shares to just $5.00.

Afterpay Ltd (ASX: APT)

The Afterpay share price is down a disappointing 9% to $88.92. Investors have been selling Afterpay and other tech shares on Tuesday after the tech-focused Nasdaq index sank lower during overnight trade. The Nasdaq index ended the session with a 2.55% decline. At the time of writing, the S&P/ASX All Technology Index (ASX: XTX) is down 3.8%.

Nearmap Ltd (ASX: NEA)

The Nearmap share price has fallen 7.5% to $1.69. As well as coming under pressure by the tech selloff, legal issues are weighing on the aerial imagery technology and location data company’s shares. Nearmap was hit with legal proceedings from rival Eagle View last week. It alleges patent infringement in relation to its roof estimation technology.

REA Group Limited (ASX: REA)

The REA Group share price is down 4% to $153.93. Profit taking appears to be weighing on this property listings company’s shares this morning. Not even a bullish broker note out of Macquarie has been able to stop the decline. Its analysts have retained their outperform rating and lifted their price target to $179.10.

More reading

• Leading brokers name 3 ASX shares to sell today
• Flight Centre and Zip were among the most traded ASX shares last week
• ASX 200 shares hit all-time high! How did we get here?
• Afterpay (ASX:APT) share price dives 7% despite US-listed rival surging on results
• ASX 200 down 0.9%: Boral rejects takeover offer, Afterpay & PointsBet sink

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 Nearmap Ltd. The Motley Fool Australia has recommended Afterpay, Nearmap Ltd., and REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why a2 Milk, Afterpay, Nearmap, & REA Group shares are sinking appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3vW36bF

We are fast approaching the time when the market indices get rejigged and new ASX share entrants could outperform.

History has shown that the share prices of ASX companies that are put on the benchmarks tend to beat the market in the weeks prior to their inclusion.

This means there could be a buying opportunity for nimble-footed ASX investors.

S&P rebalancing of the ASX indices

Standard and Poor’s (S&P) rebalances the key indices every quarter. This includes the S&P/ASX 200 Index (Index:^AXJO), along with its sister indices like the S&P/ASX 100.

ASX shares that have lagged are usually dropped and replaced by those that have performed well.

This isn’t the only criteria for inclusion or exclusion. But you can see why the market tends to watch this event closely.

ASX shares outperform ahead of inclusion

“Our analysis shows that companies that are included in the ASX 200 can generate alpha prior to their inclusion,” said Morgan Stanley.

“Since March 2007, inclusions outperformed the market by +7.5% for the period from 20 days prior to announcement up to implementation.”

High probability outcomes from ASX index changes

If you also shorted the ASX shares that are booted from the top 200 benchmark, the returns jump to 13.7% on average.

What’s more, the chance of success appears high if history repeats. The success rate for outperforming the market is 81% over the 53 rebalance periods that Morgan Stanley measured.

ASX shares to watch ahead of the rebalance

The question is which ASX shares are the likely new members to the club. The broker reckons the Orocobre Limited (ASX: ORE) share price has a good chance.

This isn’t necessarily because of its proposed merger with the Galaxy Resources Limited (ASX: GXY) share price.

No doubt the transaction will create a much larger lithium mining group. But even without the merger, both ASX shares (particularly Orocobre) would qualify to be added to the ASX 200, according to Morgan Stanley.

Just as well given the marriage isn’t expected to be consummated before August.

“We think that ORE will be added to the 200, as it will have less impact than if GXY were to go in and subsequently be removed post merger,” said the broker.

Other potential ASX winners and losers

Other ASX shares that it believes are likely to be added to the index include the Chalice Mining Ltd (ASX: CHN) share price and Uniti Group Ltd (ASX: UWL) share price.

On the flipside, the Appen Ltd (ASX: APX) share price could be the first in the coveted WAAAX group of tech darlings to be unceremoniously dumped.

“APX was the largest to join its affiliated members within the 100 and could be the first to drop out,” explained Morgan Stanley.

“APX float-adjusted market cap has fallen to A$1,398mn, well below its 6-month average of A$2,544mn – the value on which its rank is based.”

The good news for Appen shareholders is that the broker doesn’t rate this as a high probability event.

More reading

• ASX 200 shares hit all-time high! How did we get here?
• This little ASX telco’s picking customers off the big boys: fundie
• ASX 200 down 0.9%: Boral rejects takeover offer, Afterpay & PointsBet sink
• Boral (ASX:BLD) share price in focus as it rejects Seven Group (ASX:SVW) takeover bid
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Brendon Lau owns shares of Galaxy Resources Limited, and Orocobre Limited. Connect with me on Twitter @brenlau.

The post ASX shares that will benefit from the upcoming index changes appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3hlYGXx

The Magnum Mining and Exploration Ltd. (ASX: MGU) share price is in reverse during late afternoon trade. This comes despite the company providing a positive update to the market on its operations.

At the time of writing, the mineral miner’s shares are fetching 15 cents, down 9.09%.

Magnum operations fast-tracked

Investors are hitting the sell button on Magnum shares following the company’s update and amid a broader sell-off on the ASX today.

In its announcement, Magnum provided a number of updates regarding the progress of its “shovel ready” magnetite project in Nevada, United States.

The first piece of news related to the relocation of the company’s managing director, Mr Dano Chan, to Nevada from this week. The move will allow Mr Chan to oversee the project’s development and aligns with Magnum’s efforts to speed up works onsite.

Magnum also stated that it’s currently in talks with port authorities in the United States. It is working with contractors and logistics firms to fast-track its first iron ore shipments to international markets.

In addition, the company plans to open an office in Salt Lake City at the end of this month. Discussions with several tier-1 steel mills are taking place along with commodity buyers for the purchase of its iron ore.

Lastly, Magnum noted it is sending a second set of iron ore samples for lab testing. It hopes that it will be able to finalise a design and determine costings for producing hot briquetted iron (HBI) and pig iron.

Judging by today’s Magnum share price action, investors are not overly excited by the company’s updates.

Magnum managing director Dano Chan commented:

We are initially focusing on mining the high-grade pods which allow Magnum to start generating cash flow quickly and accelerate the development, size and scale of the mine to take advantage of the record iron ore prices.

We expect this fast-track DSO strategy to bring value to our shareholders, limit shareholder dilution and also help fund the expansion of the mine and growth plans for future HBI Green Steel product.

Magnum share price review

A strong 12 months hyped up by positive investor sentiment has led the Magnum share price to jump by over 260%. Year to date performance is just as impressive, with Magnum shares posting gains of more than 170%.

Based on valuation metrics, Magnum commands a market capitalisation of around $76 million, with approximately 465 million shares outstanding.

More reading

• Why the Magnum (ASX:MGU) share price is soaring 12% today
• Here’s why the Magnum (ASX:MGU) share price is rising 6% today
• Why the Magnum (ASX:MGU) share price soared 16% 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.

The post Magnum (ASX:MGU) share price plummets 9% despite business update appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2RGnFu3

On Monday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below. Here’s why these brokers are bearish on these ASX shares:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of Credit Suisse, its analysts have retained their underperform rating and slashed the price target on this infant formula company’s shares to $5.00. The broker made the move in response to a2 Milk’s fourth guidance downgrade of FY 2021 on Monday. Credit Suisse isn’t counting on a swift recovery. It believes that China’s declining birth rate, a shift towards domestic Chinese brands, and fundamental changes in the daigou channel could impede its sales recovery. The A2 Milk share price is fetching $5.75 today.

Goodman Group (ASX: GMG)

A note out of Goldman Sachs reveals that its analysts have retained their sell rating but increased their price target on this commercial property company’s shares to $13.16. This follows the release of Goodman’s third quarter update last week. Goldman notes that Goodman has held firm with its guidance for FY 2021. It is also forecasting development work in progress above $10 billion by the end of June. This compares to the broker’s forecast of $9.2 billion. And while Goldman has upgraded its earnings estimates, it still feels its shares are expensive at the current level and has held firm with its sell rating. The Goodman share price is trading at $19.17 today.    

Macquarie Group Ltd (ASX: MQG)

Analysts at Citi have retained their sell rating but lifted their price target on this investment bank’s shares to $140.00. According to the note, the broker was pleased with its strong performance during the second half. However, it has concerns over its valuation and fears the market is expecting too much from Macquarie in the near term. Particularly given the prospect of higher US taxes and interest rates. The Macquarie share price is fetching $155.41 today.

More reading

• ASX 200 down 0.9%: Boral rejects takeover offer, Afterpay & PointsBet sink
• Is the A2 Milk (ASX:A2M) share price cheap? Here’s what brokers think
• 2 impressive ASX shares to buy in May 2021
• 2 excellent ASX 200 shares rated as buys
• ASX 200 jumps, A2 Milk sinks, Crown rises

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk and Macquarie. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Leading brokers name 3 ASX shares to sell today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3w1gewn

Most weeks, Commonwealth Bank of Australia (ASX: CBA)’s CommSec brokerage platform tells us the international shares (which are almost always US shares) that its Australian customer base was buying the previous week.

CommSec is one of the most popular brokers in Australia. As such, this information gives us a nice idea of what the average Aussie investor is looking at beyond our shores.

My Fool colleague James has already covered some of the ASX’s most popular shares today. So here are the top 10 international shares that CommSec-ers were buying and selling last week. This week’s data covers 3-7 May. 

Tesla dominates most traded US shares on the ASX

1. Tesla Inc (NASDAQ: TSLA) – representing 4.4% of total trades with a 70%/30% buy-to-sell ratio.
2. GameStop Corp. (NYSE: GME) – representing 2.9% of total trades with a 90%/10% buy-to-sell ratio.
3. Apple Inc (NASDAQ: AAPL) – representing 2.5% of total trades with a 73%/27% buy-to-sell ratio.
4. Palantir Technologies Inc (NYSE: PLTR) – representing 1.8% of total trades with a 76%/24% buy-to-sell ratio.
5. Coinbase Global Inc (NASDAQ: COIN) – representing 1.3% of total trades with a 73%/27% buy-to-sell ratio.
6. Microsoft Corporation (NASDAQ: MSFT)
7. Nio Inc – ADR (NYSE: NIO)
8. Amazon.com Inc. (NASDAQ: AMZN)
9. AMC Entertainment Holdings Inc (NYSE: AMC)
10. ARK Innovation ETF (NYSE: ARKK)

What can we learn from these trades?

Well, electric vehicle and battery manufacturer Tesla continues to dominate this list, as it has for most of the past year now. And investors are still buying overall, despite Tesla shares now sliding more than 10% over the past month. Good to see some bargain hunting going on.

Perhaps more striking is the enduring popularity of GameStop though, with a 90/10 buy/sell ratio. Since the infamous (or famous, depending on your gains) Reddit-fuelled ‘pop’ back in January, this company has continued to slide.

In saying that, GameStop shares remain volatile, and were up 26% at one point in the past month. Clearly, there are a lot of ASX investors who are looking for another bump.

Palantir, Coinbase and ARK Innovation ETF are back on ASX investors’ radars as well after sliding down the totem pole of investor interest in recent weeks. These smaller ‘tech growth’ companies (plus the ARKK ETF) have been brutally sold off over the past month or so. As such, it would seem there is some bargain hunting going on here as well.

But appetites for the blue-chip tech companies in Apple, Amazon and Microsoft remain strong as well. As always, a healthy and interesting mix to peruse today!

More reading

• ASX 200 shares hit all-time high! How did we get here?
• Nasdaq slump: will ASX tech shares face selling pressure today?
• Commonwealth Bank (ASX:CBA) unveils yet another partnership
• Commonwealth Bank (ASX:CBA) share price hits record high. Here’s why
• 3 unstoppable growth trends to invest in today

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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. Sebastian Bowen owns shares of Coinbase Global, Inc. and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Apple, Microsoft, NIO Inc., and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Palantir Technologies Inc and recommends the following options: long January 2022 $1920 calls on Amazon, short March 2023 $130 calls on Apple, short January 2022 $1940 calls on Amazon, and long March 2023 $120 calls on Apple. The Motley Fool Australia has recommended Amazon, and Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Here are the US shares ASX investors were buying last week appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3bhVSXs

The Starpharma Holdings Limited (ASX: SPL) share price is heading downwards today. At the time of writing, shares in the pharmaceutical company are swapping hands for $1.71 – down 2.56%. By comparison, the S&P/ASX 200 Index (ASX: XJO) is currently 1.04% lower.

The falls come despite the company’s announcement today it has signed a deal with an English Premiership rugby club to supply its anti-coronavirus nasal spray, Viraleze.

Let’s take a closer look at today’s news.

Harlequins deal

The Starpharma share price is in the red today despite the company reporting it will now supply its Viraleze nasal spray to the Harlequins Football Club. In a statement to the ASX, Starpharma and Harlequins FC said they have partnered up to “protect [Harlequins] players and coaching staff.”

Studies have shown Viraleze to be 99.9% effective against the virus that causes COVID-19. According to Starpharma, it also works against other viral diseases, including common colds, seasonal flu, and other respiratory illnesses. Furthermore, today’s statement advised that the spray works against many of the coronavirus variants currently seen across the world.

According to the website Worldometer, the United Kingdom’s daily COVID infection rate and death rate are both trending down since early this year. The most recent daily count for the island nation is just under 2,400 cases and 4 deaths.

The Starpharma share price surged when Viraleze was launched across Europe, earlier this month. The product was launched in the UK at the end of March.

Stakeholder comments

Starpharma CEO Dr Jackie Fairley said:

We are delighted to partner VIRALEZE™ with Harlequins, an iconic club with such a long and proud history.

VIRALEZE™ is an ideal product for a team like the Quins, especially when the Club is playing away requiring team travel, as well as the close contact that is unavoidable in playing and training.

We hope VIRALEZE™ brings the Club and its supporters’ greater confidence and peace of mind as they embark on the final matches of this season.

Harlequins head of medical services Mike Lancaster added:

Player health is paramount in professional sport and now more than ever, we look to maximise the level of protection we can offer our players. The VIRALEZE™ partnership is an important additional level of protection for our Men’s and Women’s players against viruses such as flu and coronavirus/SARS-CoV-2.

Starpharma share price snapshot

Over the past 12 months, the Starpharma share price has increased by 82.35%. It has, however, fallen by around 32% since reaching its all-time high in February this year.

Starpharma has a market capitalisation of $690.4 million.

More reading

• Why Eclipx, Emeco, SeaLink, & Starpharma shares are storming higher today
• Starpharma (ASX:SPL) share price surges higher on COVID product update
• Why Dubber, PointsBet, Starpharma, & Westpac shares are storming higher
• Starpharma (ASX:SPL) share price edges higher on update
• Why the Starpharma (ASX:SPL) share price is up 27% in 2021

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

The post Starpharma (ASX:SPL) share price slides despite COVID spray rugby deal appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/33LsQvz

One of the S&P/ASX 200 Index‘s (ASX: XJO) most gender imbalanced boards is taking a huge step towards gender diversity. Perseus Mining Limited (ASX: PRU) today announced it will welcome Amber Banfield to the role of non-executive director, starting tomorrow.

Banfield’s appointment means 28.5% of those on the gold mining company’s board will now be women.

While that’s still a way off the leaders of gender equality among ASX 200 companies – 110 have more than 30% female board memberships – it’s a positive step for the company.

According to Bloomberg, earlier this year Perseus was in the bottom 5% of ASX 200 companies in terms of female representation on its board. Before today, only 17%, or one in six, of its board members were women.

Let’s take a closer look at the new appointment.

New non-executive director 

Banfield will be taking on the newly created role of chair of the board’s audit and risk committee. She will be responsible for overseeing Perseus’ ESG functions.

She is currently global manager of mergers and acquisitions at Worley Ltd (ASX: WOR), the world’s largest energy and resources engineering services provider.

Banfield has worked with Worley for 20 years, having previously held the role of global strategy director. Her responsibilities have included developing and implementing an energy transition strategy to grow the decarbonisation of businesses, using measures such as hydrogen and renewable energy.

Banfield has a Bachelor of Engineering (Environmental and Civil) and a Master of Business Administration.

Following her appointment, the board Perseus now comprises seven people, two of whom are women.

Commentary from management

Perseus managing director and CEO Jeff Quartermaine commented on Banfield’s appointment, saying:  

Speaking on behalf of our [chair] Sean Harvey and the entire board of Perseus, it is a pleasure to welcome non-executive director, Amber Banfield, to the board of Perseus… As a board and management team, we look forward very much to working with Amber as we collectively strive to firmly establish Perseus as a profitable, reliable and sustainable mid-tier gold mining company.

Perseus share price snapshot

Unfortunately, news of the company’s appointment has not been sufficient to lift the Perseus share price today. At the time of writing, Perseus shares are trading 4.25% lower at $1.24.

The Perseus share price has fallen by around 8% year to date. It has, however, gained 16% over the last 12 months.

The company has a market capitalisation of around $1.6 billion, with approximately 1.2 billion shares outstanding.

More reading

• Why the Perseus Mining (ASX:PRU) share price is on watch
• Is it time for ASX gold shares to make a comeback?

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.

The post Perseus (ASX:PRU) the latest ASX 200 company to boost gender diversity appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3vXNTag

Australia’s leading investment platform provider CommSec has released data on the most traded ASX shares on its platform from last week.

Here’s the data:

Zip Co Ltd (ASX: Z1P)

Zip’s shares were the most popular shares among CommSec investors yet again last week. The buy now pay later (BNPL) provider’s shares accounted for 2.5% of trades on the platform, with 64% coming from buyers. Unfortunately, this buying wasn’t enough to stop the Zip share price from losing 9.1% of its value during the five days. Weakness in the tech sector weighed on its shares.

Afterpay Ltd (ASX: APT)

It was a similar story for its BNPL rival Afterpay. It was attributable for 2.1% of trades on the platform, with two-thirds of the volume coming from the buy side. Sadly, this wasn’t enough to stop the Afterpay share price from sinking 18.9% during the period. Valuation concerns appear to be weighing on the company’s shares.

Flight Centre Travel Group Ltd (ASX: FLT)

Flight Centre shares were popular with investors last week. The travel agent’s shares accounted for 2% of volume, with 69% coming from buyers. However, once again, this wasn’t enough to stop the Flight Centre share price from tumbling 7.4% over the five days. News that Flight Centre expects to record a second half loss in line with the one it reported in the first half (~$250 million) was weighing on its shares.

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

This banking giant’s shares were responsible for 1.8% of trades on CommSec last week. And although a massive 82% came from buyers, the ANZ share price still fell 3.4% over the week. Last week ANZ released a very positive half year update. However, it was largely in line with the market’s lofty expectations.

Betashares Nasdaq 100 ETF (ASX: NDQ)

The Betashares Nasdaq 100 ETF was popular with investors and was part of 1.7% of trades on CommSec. The majority of the volume (82%) came from buyers. However, weakness in the tech sector led to the ETF losing 1.9% of its value over the five days.

More reading

• ASX 200 shares hit all-time high! How did we get here?
• Afterpay (ASX:APT) share price dives 7% despite US-listed rival surging on results
• ASX 200 down 0.9%: Boral rejects takeover offer, Afterpay & PointsBet sink
• Nasdaq slump: will ASX tech shares face selling pressure today?
• How will the Afterpay (ASX:APT) share price react when US rival delivers trading results overnight?

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 BETANASDAQ ETF UNITS and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS and Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Flight Centre and Zip were among the most traded ASX shares last week appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3eCwkGY

Last month, we discussed the (then scant) details of Wilson Asset Management (WAM)’s newest listed investment company (LIC) which is soon to join the ASX share market. Well, one month later, and the picture is getting clearer.

WAM has just released the prospectus for the new LIC, and it makes for some interesting reading. WAM’s new Strategic Value LIC (ticker symbol to be WAR) will hit the ASX boards on 25 June. The listing price will be $1.25 a share. This listing price reflects a net asset value backing of $1.25 a share.

According to the prospectus, the company plans to issue between 13.2 million shares and 180 million shares, depending on demand. This will give the new LIC a market capitalisation of $16.5-225 million if all goes to plan.

Not a penny over either – WAM will not accept oversubscriptions. $115 million worth of shares will be earmarked for existing shareholders of WAM’s other LICs through a ‘priority offer’. Another $10 million worth of shares will be available for past shareholders, WAM subscribers and friends and family of current shareholders.

Prospective shareholders in the initial public offering (IPO) process will have to apply for a minimum parcel of 1,800 shares, worth $2,250.

What will WAM Strategic Value (WAR) invest in?

WAM Strategic Value will be the eighth LIC in the WAM stable. But this new LIC looks to be a rather unique offering. It intends to invest only in other LICs or Listed Investment Trusts (LITs). Specifically those trading at discounts to their net tangible assets. WAM founder Geoff Wilson says that “essentially, we are focused on identifying and investing in $1 of assets for 80c”.

The prospectus notes that this has the potential to be a lucrative hunting ground, stating that “the average discount to NTA of the LIC and LIT sector on the ASX was 10.4% as at 31 March 2021. There are currently 80 entities trading at a security price discount to their underlying NTA within the sector”.

The new LIC also plans to offer significant diversification benefits. Here are some more details on this matter from the prospectus:

The investment manager will diversify investments within the portfolio so to reduce the company’s exposure to abnormal falls in the market price of any single investment.

In addition, the portfolio is expected to provide diversification benefits by virtue of the underlying assets held in LICs and LITs in which the company invests. For example, through an investment in LICs and LITs, the company may have exposure to a portfolio of listed equities, credit, fixed income, infrastructure, private equity, real estate and cash.

Foolish takeaway

WAM has developed a pretty stellar track record when it comes to its LICs. Its oldest company, WAM Capital Ltd (ASX: WAM), has delivered an average return of 16.4% per annum (before fees) since its inception in 1999.

WAM’s last IPO of WAM Global Ltd (ASX: WGB) back in 2018 was fully subscribed. So it’s likely that we will see significant interest in this latest offering. Let’s see how it goes on 25 June.

More reading

• The ASX share to go gangbusters as COVID vaccines roll out
• Top fund manager names these 2 ASX shares as buys
• Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy
• Wilson Asset Management to launch new LIC

Motley Fool contributor Sebastian Bowen owns shares of WAM Research Limited and WAMGLOBAL FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Its WAR! More details of WAM’s new listed investment company emerge appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3o6lLyH

Just as the PointsBet Holdings Ltd (ASX: PBH) share price flashes a glimmer of hope, it comes crashing down in today’s session, down 8.8% to $12.39. 

The PointsBet share price was able to edge higher in the last two weeks, driven by a strong third-quarter update, the launch of its iGaming platform in Michigan and a small US$2.9 million acquisition.

What’s driving the PointsBet share price lower? 

The PointsBet share price is swimming against the tide today with the S&P/ASX 200 Index (ASX: XJO) falling 1.30% and the S&P/ASX 200 Info Tech (INDEXASX: XIJ) falling 3.80%. 

Another contributing factor to the weakness in PointsBet shares could be the weakness in its key US-listed rival, Draftkings Inc (NASDAQ: DKNG). 

Could Draftkings influence the PointsBet share price? 

PointsBet competes with Draftkings for market share in the significant US sports betting and iGaming market. 

The Draftkings share price has taken an almost 20% dive in the last three trading sessions. Despite the company’s upbeat first-quarter results and guidance upgrade on 7 May, its shares were met with the increasing occurrence of good news into a sharp share price sell off.  

DraftKings delivered a 253% increase in revenues to US$312 compared to a year ago, beating analyst estimates of US$236 million. The company also reported a 114% increase in monthly unique payers of 1.54 million. This strong result was driven by factors including increased engagement, customer retention, successful product cross-selling and major sporting events such as the Super Bowl.

A key positive that PointsBet could take away from the DraftKings result was its guidance upgrade. DraftKings raised its full-year guidance from US$0.9  billion to US$1.0 billion to $1.15 billion to $1.05 billion. 

Foolish takeaway

The US sports betting scene continues to develop in favour of betting companies. Currently, there are 21 states and the District of Columbia that allow online sports betting, up from 20 in the last quarter. There are also an additional six states that have legalised sports betting but not yet operational and 13 states working towards legalisation. 

Despite the growth opportunity at hand, the significant 9% selloff in the PointsBet share price today looks largely outside of its control. The whipsaw like action for the PointsBet share price is a more likely reflection of today’s challenging market environment for growth and tech shares. 

More reading

• ASX 200 down 0.9%: Boral rejects takeover offer, Afterpay & PointsBet sink
• PointsBet (ASX:PBH) share price lifts on acquisition news
• Top brokers name 3 ASX shares to buy next week
• 2 fantastic ASX growth shares that this leading broker loves
• PointsBet (ASX:PBH) share price slumps despite US iGaming launch

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

The post Down 9%, the PointsBet (ASX:PBH) share price is struggling today. Here’s why. appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3f874Hr