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  • Why Fisher & Paykel Healthcare, Mesoblast, Northern Star, & TechnologyOne are tumbling lower

    Downward trend

    In late morning trade positive COVID19 vaccine news has given the S&P/ASX 200 Index (ASX: XJO) a major lift. At the time of writing the benchmark index is up a sizeable 2% to 5,572.6 points.

    Four shares that have failed to follow the market higher today are listed below. Here’s why they are tumbling lower:

    The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price has fallen 2% to $27.82. Investors may believe that the prospect of a COVID19 vaccine being released in the near future will lead to a reduction in demand for this medical device company’s ventilators.

    The Mesoblast limited (ASX: MSB) share price has crashed 8% lower to $3.82. This decline also appears to have been driven by the vaccine news. Mesoblast has been busy trialling its own treatment for COVID19, with promising results. If a vaccine is successful then there would arguably be little need for a treatment.

    The Northern Star Resources Ltd (ASX: NST) share price is down over 3% to $14.14. Investors have been selling Northern Star and other gold miners today after a sharp pullback in the price of the precious metal. The prospect of a vaccine has given risk on assets a major boost and led to a fall in demand for safe haven assets.

    The TechnologyOne Ltd (ASX: TNE) share price is down over 1.5% to $9.66. This enterprise software company’s shares were down as much as 5% following the release of its half year update. Investors appear underwhelmed by its 6% lift in sales and profits during the six months ending March 31. Especially given the significant premium of 52x trailing earnings that its shares trade at. TechnologyOne provided guidance for the full year and expects net profit before tax to increase 8% to 12% year on year.

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Why Fisher & Paykel Healthcare, Mesoblast, Northern Star, & TechnologyOne are tumbling lower appeared first on Motley Fool Australia.

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  • Oil Keeps Rising With Vaccine Test Adding to Demand Optimism

    Oil Keeps Rising With Vaccine Test Adding to Demand Optimism(Bloomberg) — Oil’s rally extended to a fourth day as a combination of recovering demand, production cuts and promising test results for a coronavirus vaccine brightened the outlook for energy prices.Futures in New York rose around 4% to past $33 a barrel after closing at the highest level in almost 10 weeks on Monday. The June contract expires Tuesday but a repeat of last month’s plunge below zero is highly unlikely. There were far higher trading volumes in the July contract, which advanced around 3%.Crude got an extra boost on Monday after American biotechnology company Moderna Inc. said its vaccine showed signs it can create an immune-system response to the virus, helping to spur broad financial market gains. Meanwhile, West Texas Intermediate’s front-month contract settled above the July contract for the first time since January, moving into a market structure known as backwardation that signals concerns over storage capacity have eased.Chinese oil use is almost back to pre-virus levels, while a jump in Indian fuel sales shows the worst may be over there as lockdown restrictions are eased. Italians were allowed to go back to restaurants and New York is set to open a sixth region as some of the hardest-hit areas in Europe and North America move ahead with restarting their economies.On the supply side, shale oil output from the U.S., the world’s biggest producer, is forecast to fall to the lowest since late 2018 next month, according to the Energy Information Administration. There’s also been a “stunning reversal” in OPEC+ shipments so far in May, data intelligence firm Kpler said, after the alliance’s deal to curb production kicked in at the beginning of the month.WTI for June delivery rose 4.1% to $33.12 a barrel on the New York Mercantile Exchange as of 8:27 a.m. in Singapore after closing up 8.1% on Monday. The more active July contract climbed 3.1% to $32.63. Brent for July settlement advanced 2.4% to $35.65 on the ICE Futures Europe exchange.Chinese oil demand has recovered to about 13 million barrels a day, according to executives and traders who monitor the country’s consumption. That’s just shy of the 13.4 million barrels a day in May 2019 and 13.7 million barrels a day in December. The overall number would be higher were it not for jet-fuel demand, which is still running well below a year’s ago level, they said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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  • This ASX 200 tech share is sinking 5% lower after its half year update

    red arrow pointing down, falling share price

    The TechnologyOne Ltd (ASX: TNE) share price has come under pressure today following the release of its half year update.

    At the time of writing the enterprise software company’s shares are down 5% to $9.34.

    This compares to a strong 2% gain by the S&P/ASX 200 Index (ASX: XJO) this morning.

    How did TechnologyOne perform in the first half?

    For the six months ended March 31, TechnologyOne reported a 6% increase in revenue to $138.4 million and a 6% lift in profit after tax to $19.1 million. This result was underpinned by continuing strong demand for its SaaS ERP Solution.

    Speaking of which. At the end of March the company’s SaaS Annual Recurring Revenue (ARR) stood at $110.2 million, up 33% on the prior corresponding period.

    This ARR growth was driven largely by an increase in the number of large-scale enterprise SaaS customers. They have increased 22% over the last 12 months to 475. Pleasingly, management advised that the SaaS business continues to grow during the current pandemic.

    Growing at an even quicker rate was its cash flow generation. TechnologyOne more than doubled its cash flow to $9.9 million during the half. This led to its cash and cash equivalents lifting 23% to $84 million.

    In light of this and its confidence in its near term outlook, the company’s board has declared an interim dividend of 3.47 cents per share. This represents a 10% increase on last year’s interim dividend.

    Outlook.

    Unlike countless other companies, TechnologyOne has been able to provide guidance for the full year.

    TechnologyOne’s CEO, Edward Chung, revealed that it has a strong pipeline and a high proportion of locked in recurring revenues. As a result, he is confident the company is well positioned to deliver continuing strong growth over the full year.

    He commented: “TechnologyOne is well positioned, as the markets we serve are generally resilient. Our global SaaS ERP solution is mission critical to the markets we serve, and also enables any device, any time access from anywhere around the world.”

    In light of this, the chief executive expects the company’s FY 2020 net profit before tax to increase 8% to 12% year on year.

    Foolish Takeaway.

    While growth in the current environment is clearly a big positive, I suspect the market was looking for stronger guidance given the premium its shares trade at. Based on its last close price, its shares were trading at 52x trailing earnings this morning.

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post This ASX 200 tech share is sinking 5% lower after its half year update appeared first on Motley Fool Australia.

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