The Kangaroo Island Plantation Timbers Ltd (ASX: KPT) share price has risen today after the company’s board rejected a $20 million offer to buy its land on Kangaroo Island.

The Kangaroo Island Plantation share price has risen 4.9% to $1.07 at the time of writing. 

Kangaroo Island Plantation is a forestry company and timber producer on Kangaroo Island, off the coast of South Australia. It manages a wholly-owned portfolio of hardwood and softwood forestry plantations, growing on former agricultural land. 

The land it owns is strategically located in high rainfall areas that are highly suitable for growing, allowing the company to potentially capitalise on increasing land values. 

Kangaroo Island Plantation refuses low-ball offer

The $20 million offer from KI Phoenix was for all of Kangaroo Island Plantation’s land assets on Kangaroo Island. This has sparked uncertainty in the Kangaroo Island Plantation share price recently.

Kangaroo Island was decimated by bushfires in January last year that wiped out up to 95% of its animal habitats. According to the company, this has led to “an increase in interest by those seeking to opportunistically acquire land at distressed prices”. 

Kangaroo Island Plantation lost a huge portion of its logging plantations in the bushfire and has since received more than $62 million in insurance payouts.

What management said

The company’s managing director Keith Lamb said land values on the island far exceeded the offers the board was receiving:

While the company is open-minded to approaches it receives, the board is squarely focussed on maximising shareholder wealth and with this in mind, offers are considered on merit. This resolve has not altered since the tragic fires of 2019-20.

The land value recorded on KPT’s balance sheet is $59.28 million, based on independent expert advice provided by leading rural valuers. The latest valuation was set at June 2020, following the fires of 2019-20 and is benchmarked below equivalent land value on mainland South Australia. Since June 2020 land values around the country have risen.

Kangaroo Island Plantation share price snapshot

The Kangaroo Island Plantation share price is today recovering after falling 1% yesterday and 4.9% on Tuesday. Overall, it’s now up more than 7% this week and 9.18% higher over the past 12 months. However, shares in the forestry company have fallen 14% since the start of 2021.

More reading

• Why the JB Hi-Fi (ASX:JBH) share price surged 19% in April
• Here’s why the ANZ (ASX:ANZ) share price jumped 8% in March
• The Airtasker (ASX:ART) share price finished 77% higher in March
• Why the Acrow (ASX:ACF) share price is running higher today
• Universal Biosensors (ASX:UBI) share price is lifting today. Here’s why

Motley Fool contributor Lucas Radbourne-Pugh 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 Airtasker Ltd (ASX: ART) share price finished March 77% higher than its listing price of 65 cents per share. But there’s more to this than meets the eye. 

Let’s take a closer look at what is going on with the Airtasker share price. 

Short-lived hype for the Airtasker share price? 

Airtasker made its ASX debut last Thursday where its shares opened 55% higher at $1.01.

Its shares would surge as high as $1.965 the next day, before a $1.750 close. It took just two days for its shares to rally almost 170% higher than its listing price. 

However, it took just two days for the Airtasker share price to lose momentum and come crashing back to earth.

From its Friday close of $1.750, its shares would slump 36% to finish March at $1.170, or just 15% higher than its opening price. 

While a 77% increase from its listing price is impressive, the main winners are those that managed to participate in the heavily oversubscribed initial public offering (IPO) or those that managed to get in early. 

This isn’t the first time 

This isn’t the first time an IPO has gone from boom to bust. As a matter of fact, there’s a long list of recent IPOs that slumped days or weeks after listing. And, similar to Airtasker, the main winners were those that managed to participate in the IPO or got in early. 

Respiratory protection equipment manufacturer, CleanSpace Ltd (ASX: CSX) had a listing price of $4.41 per share. On 23 October, its shares would close 80% higher on its first day at $7.415. After a number of attempts at breaking above its debut high, a weak half-year results announcement in February and a poor sales update this week has crashed the CleanSpace share price to just $1.920. 

Perhaps a better example is Douugh Ltd (ASX: DOU), a financial wellness platform with various budgeting, banking, and investment features. Its shares had a listing price of 3 cents and surged as much as 1,500% to 49 cents in just two weeks. In the following months,  its shares would halve. Currently, they are trading around the 20 cent mark. 

Other notable examples include 4DMedical Ltd (ASX: 4DX), Credit Clear Ltd (ASX: CCR), DC Two Ltd (ASX: DC2) and Doctor Care Anywhere Group PLC (ASX: DOC).

Should investors be worried?

Airtasker is one of Australia’s leading marketplaces for local services. In 2020, Airtasker established marketplaces in New Zealand, Singapore, and Ireland. As well as existing operations in the United Kingdom and a planned launch in the United States in 2021.

While approximately 99% of its revenues are derived from Australia, the company intends to implement growth marketing initiatives to scale internationally. 

The company clearly has a runway for growth, but at the same time, its shares are already very richly valued. 

In FY20, Airtasker generated a pro forma revenue of $19.3 million and a net loss of $5.2 million. At its current market capitalisation of approximately $500 million, its shares are trading at approximately 26 times FY20 revenue. 

More reading

• Why it’s turning into a bad week for Airtasker (ASX:ART) shares
• Airtasker and Zip were among the most traded ASX shares last week
• A review on the meteoric rise of the Airtasker (ASX:ART) share price
• Airtasker (ASX:ART) share price insanity: Is this the ASX’s GameStop?
• Airtasker (ASX:ART) share price sinks 17% after explosive IPO

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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The Acrow Formwork and Construction Srvc Ltd (ASX: ACF) share price is running higher on the back of a new record of secured hire contract wins. At the time of writing, the construction services company’s shares are up 2.74% to 38 cents.

Record contract wins

Investors are scrambling to pick up Acrow shares after the company updated the ASX with its latest performance report.

According to its release, Acrow advised it has achieved a record month of secured hire contract wins. During March, the company also attained $5.9 million in new hire contracts. Furthermore, this figure represents a 92% increase on the prior corresponding period. In addition, this was an 18% improvement on its previous best month record accomplished in November 2020.

Acrow highlighted that the 3 largest months in terms of new hire contracts have occurred within the past 5 months.

For the March quarter, the company reported $11.2 million in new contract win, reflecting a 50% jump on Q3 FY20. Underpinning the strong result, Queensland saw strong growth across all sectors.

Acrow stated that the robust March quarter performance has indeed set itself up for a strong start to the financial year. June hire revenue is set to come in around $4.5 million which is likely to lead to another exceptional result. The company however decided to maintain its earnings before interest, tax, depreciation and amortisation (EBITDA) guidance for FY21. It is forecasting EBITDA to come between $23.5 million to $24.5 million.

What did the CEO say?

Acrow CEO, Steven Boland hailed the robust performance, saying:

I expect 1Q22 will see this momentum continue as we reap the benefit of the great successes, we are achieving in securing new contracts. The results we are seeing are a testament to the innovative, customer solutions focus of our market-leading engineering team as well as the strong ability of our sales teams to convert opportunities into revenue.

Acrow remains very well positioned to benefit from the substantial infrastructure development program earmarked over the next 3-5 years in Australia and most likely beyond.

About the Acrow share price

The Acrow share price has gained over 50% in the past 12 months but is relatively flat year-to-date. The company’s shares are within sights of its 52-week high of 41 cents reached in early December.

Based on the current share price, Acrow presides a market capitalisation of roughly $83.9 million, with 222.8 million shares outstanding.

More reading

• Universal Biosensors (ASX:UBI) share price is lifting today. Here’s why
• Exopharm (ASX:EX1) share price plunges 17% after animal testing results
• Why the Xero (ASX:XRO) share price outperformed in March
• Creso (ASX:CPH) share price edges higher on product launch
• Here’s why ASX cannabis shares are lighting up 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 Universal Biosensors, Inc (ASX: UBI) share price is rising today after the company signed a Canadian distribution agreement for its wine testing platform.

At the time of writing, the Universal Biosensors share price is up 1.96% trading at 52 cents.

The deal represents an interesting step towards diversified commercialisation for Universal Biosensors. The company is primarily a medical diagnostics company, focused on the research, development, and manufacture of in-vitro diagnostic test devices for consumer and professional point-of-care use.

The company produces technology that tests blood glucose levels, which has enabled it to expand into the viticulture market through its new wine testing platform, Sentia.

Sentia can accurately test the levels of glucose, fructose, malic acid and other monosaccharide carbohydrates in wine, which is already proving appealing for international winemakers.

Universal Biosensors meets Vine to Vintages

Universal Biosensors announced today it has entered into a nonexclusive distribution agreement with Canadian company Vines to Vintages Inc for the distribution of its wine testing platform device.

The agreement is for a three-year term and contains standard renewal and termination options available to both parties. The Canadian distribution agreement arrives two months after Universal Biosensors signed a US distribution deal with Enartis, with more than 7,000 potential customers.

The company outlined to shareholders in its ‘Future of UBI’ report in February that it planned to “move away from defining ourselves as an R&D company with long lead times and expensive research programs”. Since then, the Universal Biosensors share price has risen by more than 10 cents.

What did management say?

Universal Biosensors CEO John Sharman welcomed the deal, saying:

The launch of Sentia into Canada is another positive step in the commercialisation of Sentia globally. Vines to Vintages is well represented in all of Canada’s wine regions and has access to 700 wineries.

The deal includes an initial commitment to purchase Sentia devices and strips which will be delivered over the course of the next few weeks.

Mr Sharman said the possibility of Sentia’s future testing capability for glucose, fructose, malic acid and others would add “significant value” to the winemaking industry.

We are negotiating terms with a number of key industry players around the world and look forward to reporting additional distribution partnerships in due course.

Universal Biosensors share price snapshot

The Universal Biosensors share price has increased more than 245% in the past year. It’s up 28% this month, 19% this calendar year and 250% against the broader healthcare sector, although healthcare is hardly a sector Universal Biosensors is limited to anymore.

More reading

• Exopharm (ASX:EX1) share price plunges 17% after animal testing results
• Why the Xero (ASX:XRO) share price outperformed in March
• Creso (ASX:CPH) share price edges higher on product launch
• Here’s why ASX cannabis shares are lighting up today
• Why Computershare, Macquarie, Race Oncology, & Webjet are tumbling lower

Motley Fool contributor Lucas Radbourne-Pugh 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 Exopharm Ltd (ASX: EX1) share price is tumbling today after the company released its preclinical data from its osteoarthritis animal study, showing its two regenerative medical products had no effect on the rats studied.

At the time of writing, the Exopharm share price is down 15.7%, trading at 59 cents after hitting an intraday low of 55 cents.

Exopharm is a biopharmaceutical company focused on developing regenerative medicine. It’s currently investigating the therapeutic potential of two products, Plexaris and Cevaris, in treating osteoarthritis.

The company also aims to commercialise exosomes as therapeutic agents. Exosomes are membraneous structures that allow cells to communicate and have the potential to restore dying cells.

Exopharm develops its products using mainly the LEAP (linked engineering and production) process, which involves total control over each step from engineering to manufacturing. 

Exopharm plunges on less-than-exciting results

In today’s release, Exopharm advised its study on rodents found 3 key results. Firstly, if a knee joint is too damaged by osteoarthritis and there isn’t enough cell tissue remaining to begin restoration, neither Plexaris nor Cevaris have any noticeable effect.

This appears to be the driving force behind the Exopharm share price decline today.

However, the company release also showed that the exosome treatments were “safe and well-tolerated following multiple (4 x weekly) dosing in rodents”. 

Exopharm’s report outlined that, in conjunction with prior preclinical work, results from this study directed product development to target “mild-to-moderate stage osteoarthritis”. 

What Exopharm management said

Exopharm product evaluation head, Dr Angus Tester, said the study results were largely meaningless due to the rats studied.

Initially, we were surprised to see no beneficial effect of either Plexaris or Cevaris over control until we looked at the knee scans. We realised that in this testing, the knee joints were damaged beyond repair, with no obvious cartilage cells available to respond to the exosome treatment.

To accurately evaluate the exosome efficacy, we will need to have a model that has a less severe joint damage as the baseline to gather meaningful efficacy data.

Exopharm share price snapshot

Exopharm insists that the damage it inflicted to the rats’ knee joints for the study would, in a human, require a knee reconstruction and therefore surpasses the viability of medical treatment. However, shareholders are clearly concerned that these results may limit the potential efficacy of its treatments.

The Exopharm share price has now fallen 26% this week and 24% this month, after huge gains, saw the Exopharm share price rise from 33 cents in December 2020 to 94 cents in February this year.

Overall, the Exopharm share price is up 271% this past year.

More reading

• Why the Xero (ASX:XRO) share price outperformed in March
• Creso (ASX:CPH) share price edges higher on product launch
• Here’s why ASX cannabis shares are lighting up today
• Why Computershare, Macquarie, Race Oncology, & Webjet are tumbling lower
• Are ASX 200 value shares still good value? Why these experts are at loggerheads

Motley Fool contributor Lucas Radbourne-Pugh 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 tech sector may have underperformed last month, but that couldn’t stop the Xero Limited (ASX: XRO) share price from surging higher.

The cloud-based business and accounting platform provider’s shares climbed a solid 7% over the period.

This compares favourably to a 1.8% gain by the S&P/ASX 200 Index (ASX: XJO).

Why did the Xero share price charge higher last month?

Investors were fighting to get hold of Xero shares last month after it announced two major acquisitions.

The first was the acquisition of Planday on 4 March for up to 183.5 million euros (A$284.2 million).

Planday is a leading workforce management platform provider with more than 350,000 users across Europe and the UK. Its platform simplifies employee scheduling, allowing businesses to forecast and manage their labour costs.

Commenting on the acquisition, Xero’s CEO, Steve Vamos, said: “The acquisition of Planday aligns with our purpose to make life better for people in small businesses and their advisors. Planday’s workforce management platform helps small businesses to respond to the rapidly changing nature of work. Planday also addresses the growing need for flexibility and rising compliance demands within the workplace.”

Second acquisition

On 24 March, Xero announced the acquisition of Tickstar for up to 90 million Swedish kronor (A$13.6 million).

Tickstar is a Sweden-based e-invoicing infrastructure business that allows organisations such as Xero and its customers to connect to a global e-invoicing network. This enables faster and more secure transactions.

Xero’s Chief Product Officer, Anna Curzon, commented: “The acquisition of Tickstar is an important step in our strategy to help small businesses digitise more of their workflows and get paid faster using cloud-based technologies. As more governments around the world adopt e-invoicing, Tickstar’s technology will help our customers comply with existing and future legislation and realise the many benefits that e-invoicing brings.”

The response

These acquisitions appear to have gone down well with analysts at Morgan Stanley.

Last week, the broker retained its overweight rating and lifted its target on the Xero share price to $140.00.

In addition, analysts at Goldman Sachs responded to the Planday acquisition by reaffirming their buy rating and $157.00.

Goldman said: “We see the transaction as a potential meaningful step for XRO in (1) providing a beachhead for core accounting expansion in Scandinavia and Continental Europe where Planday currently operates (we previously estimated Denmark/ Norway/ Sweden / Germany and France have a combined subscriber/revenue TAM of 6.2mn/NZ$1.5bn), (2) building out its App ecosystem (post Waddle, Hubdoc etc.); and (3) driving Planday penetration through Aus/NZ/Other subscribers.”

Where next for the Xero share price?

The Xero share price may have outperformed in March, but based on Goldman Sachs’ price target, it could still go meaningfully higher from here in the future.

Xero is currently trading at $130.93, which means potential upside of 20% over the next 12 months.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Is the ASX tech sector in for more pain?
• ASX 200 down 0.15%: AGL to split into two, NAB’s 86 400 acquisition receives ACCC approval
• Why AGL, Digital Wine, REA Group, & Xero shares are charging higher
• Leading brokers name 3 ASX shares to buy today

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 Xero. 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 Creso Pharma Ltd (ASX: CPH) share price is edging higher in mid-afternoon trade following its new CBD product launch. At the time of writing, the cannabis company’s shares are trading at 21 cents, up 2.5%.

Product launch

Investors appear pleased with the company’s plans to strategically launch its new products, sending Creso shares higher.

According to its release, Creso advised it has launched three new CBD-based tea products in Switzerland, and potentially Germany.

Recognised under the established cannaQIX brand, the new products include cannaQIX tea, cannaQIX NITE tea, and cannaQIX Immunity tea. The three new products were developed based on the company’s second-generation innovation technology. These products are focused on improving content and also taste. In addition, Creso is seeking to expand its target customer base into the mainstream convenience food and beverage market.

Following the successful completion of its legal and regulatory requirements, the company’s tea products will be sold throughout Switzerland. Creso will utilise its extensive distribution network of over 2,100 points of sales to target the adult beverage market. This will consist of pharmacies, drugstores, health nutrition shops, and large retail groups including leading department store chain Manor. In addition, Creso will also supply major wholesalers such as Galexis, Amedis, and Voigt with CBD-based tea products.

Since the German Federal Court of Justice ruled to annul previous charges against hemp tea sellers, Creso will look to launch its new CBD-based teas within the country. It hopes to actively market and sell its products without further regulatory approvals or hurdles, opening up the German market.

Once both countries have successfully rollout the cannaQIX products, Creso noted it will look to expand into other European markets.

Management commentary

Creso commercial and development director Dr. Gian Trepp commented:

We are proud to have completed the finalisation of this ground breaking technology for our new CBD tea products, which opens a number of new and globally applicable opportunities for Creso Pharma. The new products and formulation provide a very tasty CBD tea that will become a key component in the future production of the cannaQIX lozenges.

About the Creso share price

Over the past 12 months, the Creso share price has rocketed to almost 250%, reflecting positive investor sentiment. The company’s shares reached a 52-week high of 47 cents in early December after the United States passed a bill to decriminalise cannabis on a national level.

On valuation grounds, Creso commands a market capitalisation of roughly $205 million, with 1 billion shares on issue.

More reading

• Here’s why ASX cannabis shares are lighting up today
• How New Yorkers could send ASX cannabis shares higher
• Here’s why the Creso Pharma (ASX:CPH) share price is falling 7%
• Japan’s $103 million pot stock hypocrisy unmasked
• Creso Pharma (ASX:CPH) share price lower despite cannabis sales update

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 S&P/ASX 200 Index (ASX: JXO) is having a pretty decent day today. A the time of writing, the ASX 200 is up a healthy pre-Easter 0.21%. But one group that is doing a quarter-ounce better are ASX cannabis shares.

Take Creso Pharma Ltd (ASX: CPH). It’s up 1% to 20 cents a share. Or Cann Group Ltd (ASX: CAN), up 0.54% to 54 cents a share. Elixinol Global Ltd (ASX: EXL)? It’s up 5.56% to 19 cents a share. Althea Group Holdings Ltd (ASX: AGH) is up 1% at 50 cents.

What gives?

Well, there’s a piece of news out today that might be getting investors keen to light up on cannabis shares.

According to the Governor of the US state of New York’s office, Governor Andrew Cuomo has just signed a bill into law that has legalised recreational use of cannabis in the state of New York.

As we flagged a few days ago, New York now joins 14 other US states that have already legalised recreational use. The new New York law will allow the state to issue licenses for dispensary businesses to sell marijuana to adults aged 21 and over legally.

Further, outside-of-home possession of marijuana is now legal to a limit of 3 ounces. It will also allow adults aged over 21 to grow 3 mature and 3 immature plants each (with a limit of 6 mature and 6 immature plants per household).

The governor expects that the new law will raise approximately US$350 million in new taxes annually, as well as create between 30,000 and 60,000 new jobs across the state.

How will this affect ASX cannabis shares?

Well, this is something of a hollow victory for the ASX cannabis sector. What happens in the United States, of course, has no direct implications for Australia’s cannabis industry. Recreational cannabis remains illegal in every Australian state and territory, although laws differ when it comes to decriminalisation. Medicinal use is more prevalent, but again, it’s still early stages.

Even so, proponents of wider cannabis legality would no doubt still be heartened. Over in the US, we have seen a ‘domino effect’ with legalised cannabis. 15 states now allow recreational marijuana, but it was only back in 2012 that the first two US states (Colorado and Washington) legalised recreational use. A further 36 US states allow medicinal use as of today.

Arguably the more states and countries follow in New York’s path, the better the prospects here for ASX cannabis shares.

More reading

• Are ASX 200 value shares still good value? Why these experts are at loggerheads
• Why the Telstra (ASX:TLS) share price rose 11% in March
• ASX 200 boom as Joe Biden unveils massive infrastructure, tax package?
• ASX 200 up 0.25%: AMP names new CEO, Boral’s buyback, Webjet sinks
• Why the South32 (ASX:S32) share price is climbing

Motley Fool contributor Sebastian Bowen 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 end the shortened week with a small gain. At the time of writing, the benchmark index is up 0.2% to 6,805.7 points.

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

Computershare Ltd (ASX: CPU)

The Computershare share price is down 3% to $14.59. This is despite there being no news out of the share registry company. However, with its shares rising 14% in March, this decline could have been driven by profit taking by investors. The catalyst for the strong gain last month was the announcement of a major acquisition.

Macquarie Group Ltd (ASX: MQG)

The Macquarie share price is down 1% to $151.28. This morning the Australian Prudential Regulatory Authority (APRA) revealed that it has increased the bank’s liquidity and operational risk capital requirements. The regulator made the move in response to multiple material breaches of APRA’s prudential and reporting standards.

Race Oncology Ltd (ASX: RAC)

The Race Oncology share price has sunk 10% to $3.32. Once again, this appears to have been driven by profit taking after some stellar gains in 2021. For example, prior to today, the specialty pharmaceutical company’s shares were up a remarkable 90% since the start of the year. A number of promising updates have caught the eye of investors this year.

Webjet Ltd (ASX: WEB)

The Webjet share price has fallen 5.5% to $5.27. Investors have been selling the online travel agent’s shares following the announcement of a convertible note offering to raise $250 million. The net proceeds from the offering are expected to be used to repay $43 million of Webjet’s existing term debt, fund potential acquisitions, and for capital management or general corporate purposes. Investors appear disappointed that the company is raising funds again.

More reading

• Why the CSL (ASX:CSL) share price is going around in circles
• ASX 200 up 0.25%: AMP names new CEO, Boral’s buyback, Webjet sinks
• Macquarie (ASX:MQG) share price lower after APRA crackdown
• Webjet (ASX:WEB) share price falls on $250m recovery-readying offer
• Qantas (ASX:QAN) share price takes off after latest COVID updates

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Webjet 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 comeback of the S&P/ASX 200 Index (ASX: XJO) from the record breaking COVID-19 market meltdown last February and March has been nothing short of stellar.

Since the March 2020 lows, the ASX 200 has soared 42%. If you’ve never witnessed anything like it, don’t worry. No one has.

ASX 200 shares sprinted to record gains

While most shares gained strongly during the rebound, it was the ASX 200 growth shares that led the charge. Think of companies like ASX buy now, pay later (BNPL) darling, and Afterpay Ltd (ASX: APT).

Although down 34% since its 10 February 2021 highs, the Afterpay share price is still up 740% since 20 March 2020.

Other ASX 200 shares have underperformed the index and far underperformed growth shares like Afterpay.

With international and even most domestic air travel locked down for much of the past 12 months, the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price has only gained 28% since 20 March 2020. While that may not sound like a small gain (and it’s not), the Sydney Airport share price is still down 32% since 27 December 2019.

With these kinds of figures in mind, investors are increasingly wondering about the outlook for value shares.

For that answer, we turn to the experts.

Why these investment experts disagree on the outlook for value shares

If you were hoping for a unified answer, those months appear behind us.

As Bloomberg reports:

Societe Generale SA and JPMorgan Chase & Co. say value shares will keep outperforming at this stage of the market cycle. Prudential Financial Inc. and AlphaOmega Advisors LLC say the sector is due for a pullback.

Solomon Tadesse is Societe Generale’s head of North American equity quant research in New York. According to Tadesse:

Value (and more generally cyclicals) still command significant valuation advantage to the rest of the market. Distressed out-of-favour assets tend to gain from potential multiple expansion at this point of the market cycle.

And JPMorgan Chase strategists led by Dubravko Lakos-Bujas write that:

Value remains an outsized beneficiary of reopening, which is still in its early stages… [W]hile we believe value and reopening trade still has room for upside, we would emphasize focusing on higher quality companies with greater staying power, for example retail and energy.

On the other side of the value share debate is Peter Cecchini, founder and chief strategist of AlphaOmega Advisors. According to Cecchini:

It’s time to take money off the table now. Perhaps the latest round of stimulus will keep the cyclicals trade alive a bit longer, but I just don’t see the cycle turning for good as we might expect after a normal recession. Staying tactical and nimble seems prudent.

As for Prudential Financial, as Bloomberg reports, Quincy Krosby, chief market strategist says, “The reflation trade is ‘frothy’ and ‘waiting for a pullback is prudent’.”

Krosby believes investors have been too optimistic about the massive new infrastructure cash splash proposed by United States President Joe Biden. She said that if investors sense issues within Congress that could delay or derail the package, shares could sell-off. Which, she says, could be the right time to buy the dip.

Foolish takeaway

So what’s an ASX 200 investor to do?

I believe Peter Cecchini, quoted above, has it right. “Staying tactical and nimble seems prudent.”

Happy investing.

More reading

• Why the Telstra (ASX:TLS) share price rose 11% in March
• ASX 200 boom as Joe Biden unveils massive infrastructure, tax package?
• Why the Afterpay (ASX:APT) share price fell 20% in March
• ASX 200 up 0.25%: AMP names new CEO, Boral’s buyback, Webjet sinks
• Why the South32 (ASX:S32) share price is climbing

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Are ASX 200 value shares still good value? Why these experts are at loggerheads appeared first on The Motley Fool Australia.

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