At lunch on Monday, the S&P/ASX 200 Index (ASX: XJO) has given back its morning gains and dropped lower. The benchmark index is currently down 0.15% to 7,168.4 points.

Here’s what’s been happening on the market today:

A2 Milk class action news

The A2 Milk Company Ltd (ASX: A2M) share price is trading lower today after Slater & Gordon Limited (ASX: SGH) advised that it was looking into a potential class action. The law firm is alleging that the infant formula company may have engaged in misleading or deceptive conduct in breach of the Corporations Act. It may also have possibly breached continuous disclosure rules. This follows four downgrades to its guidance so far in FY 2021.

Nuix share price crashes again

The Nuix Ltd (ASX: NXL) share price has crashed lower again on Monday. This morning the investigative analytics company downgraded its guidance just a little over a month after issuing it. Nuix is now expecting pro forma revenue of $173 million to $182 million in FY 2021. This compares to its 21 April guidance of $180 million to $185 million. Management advised that this is due largely to the expected timing of closure of some upsell opportunities and new potential customers.  

Link shares tumble on PEXA IPO news

The Link Administration Holdings Ltd (ASX: LNK) share price is sinking lower today after confirming that its PEXA business will be undertaking an initial public offering (IPO). The underwritten price of the IPO implies an enterprise value for PEXA of $3.3 billion. Link advised that it expects to receive a minimum of $50 million in cash as a result of the IPO process, plus any proceeds received through a scale back.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Monday has been the Domino’s Pizza Enterprises Ltd (ASX: DMP) share price with a 4% gain on no news. The worst performer has been the Nuix share price with a disappointing 17% decline following its guidance downgrade.

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• ASX 200 Weekly Wrap: ASX record highs tumble like… Costa shares

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There are some ASX shares that have seen elevated levels of growth during this period of time where COVID-19 is affecting many areas of the economy and life.

The two businesses below are seeing very strong levels of growth, but they have plans to keep things going beyond COVID-19:

Ansell Limited (ASX: ANN)

Ansell is one of the largest global suppliers of safety gloves and other protective gear for industrial and healthcare settings.

Around a month ago, the business gave a trading update that said it’s continuing to support elevated levels of demand for personal protective equipment (PPE) around the world. Its important capacity expansions remain on track to meet increased demand.

In-fact, the demand has been so strong that the financial performance since January 2021 has been stronger than expected.

COVID-19 has caused global disruption to manufacturing, but Ansell said it has seen limited downtime or employee disruption.

There has been raw material cost increases for the ASX share, but it has managed to pass on price increases to customers. It has also managed to keep supplying customers despite tight raw material supply and an increase in transportation transit times.  

Ansell said that the COVID-affected parts of its business have bounced back quicker than expected.

In the first half of FY21, Ansell said it started five new production lines and expect another eight production lines to go live during the second half.

By FY22 to FY23, it expects to have more than doubled its in-house capacity of single-use gloves and suits and will also have expanded capacity in surgical, multi-purpose, chemical and electrical gloves to be able to meet the stronger demand from customers.

Ansell expects that COVID-19 will impact the world for some time and once the pandemic is under control, elevated demand for its products is likely to persist because of enhanced safety practices at plants and hospitals, better protection awareness in emerging markets, more research and testing activities worldwide.

Nick Scali Limited (ASX: NCK)

Nick Scali is a leading furniture ASX share in Australia. It has a national store network of stores, it imports its quality pieces from overseas.

It’s currently rated as a buy by Citi with a price target of $12.05. The broker pointed out that strong order book and seemingly improving freight situation.

The business has been growing increasingly profitable over the last several years. In the FY21 half-year result, its gross profit margin increased by another 180 basis points to 64% due to reduced discounting.

Operating leverage helped Nick Scali double profit in the first six months of FY21. This is translating into much larger cashflow and dividends for shareholders.

In the third quarter of FY21, it saw written sales growth of 50%. Sales growth to the end of April 2021 was approximately 44%.

Nick Scali said that the order bank at the end of April continues to remain at elevated levels, providing a foundation for revenue growth into FY22.

The ASX share has further growth plans by expanding its store network, launching adjacent product categories, growing its online offering, potential acquisitions and increasing the property portfolio. It has opened three new stores in FY21. Nick Scali currently has 61 stores across Australia and New Zealand, it’s targeting at least 86.

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Former market darling Altium Limited (ASX: ALU) has had a rough time of it lately.

The software firm’s shares have come off about 30% from their 52-week high to trade at $28.67 at the time of writing. The Altium share price peaked at $41.82 in February 2020, just before the COVID-19 market crash.

So is this a buying opportunity, or has the business fundamentally changed in recent times?

Shaw and Partners senior analyst Jules Cooper admitted the coronavirus downturn “hit the business hard”, but maintains its potential hasn’t altered.

“I don’t think they were having broader issues [when the pandemic hit],” he told the Direct From The Desk podcast.

“The business entered COVID with quite a lot of momentum — they were releasing new products and all was going swimmingly well.”

We’ve just turned bullish on Altium

According to Shaw and Partners portfolio manager James Gerrish, his team had only recently “turned bullish” on Altium shares, now well down from their highs.

Shaw and Partners now rates the Altium share price as a ‘buy’ with a price target of $34.

“We’ve always loved the company, the product and the management team — [but] it’s just always been priced to perfection.” said Cooper.

“Now I feel we have an opportunity to buy a very high-quality business run by a high-quality team in a big global market. And we don’t feel like we have to wince when we put the recommendation on our research.”

Cooper’s team uses cash EBITDA to work out the price-to-earnings (P/E) ratio for a company like Altium.

On that metric, it is currently selling for a multiple of around 33 times. Achieving the $34 price target would take it up to 43, which is still well down on its all-time peak.

“If you look back to December 2020… it was trading almost 50 times cash EBITDA,” said Cooper.

Arguably, purchasing Altium shares now could allow for the earnings to recover in the coming years as discretionary corporate spend picks up among potential clients.

Why COVID was so tough on Altium

Altium provides software that designs printed circuit boards, which are one of the building blocks for computers.

Cooper explained that when COVID-19 struck last year, Altium was in the midst of transitioning from an upfront licensing model to recurring subscriptions.

Such a change stings the bottom line for software vendors in the short term, but is more lucrative in the long run.

“It’s unfortunate that they made this transition at a time when it was difficult for the business,” said Cooper.

“But I find it quite amusing that people will not give the company and the management team the premium they deserve, that they’ve built up over a very long period.”

Cooper predicts Altium will accelerate its shift to recurring revenue by funneling the clientele returning to the company post-COVID onto that model.

Altium has previously earmarked a revenue target of $500 million by the 2025 financial year. It last reported $268.4 million for the 2020 financial year.

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The Odyssey Gold Ltd (ASX: ODY) share price is storming higher during mid-morning trade following an update on its capital raise efforts.

At the time of writing, the gold miner’s shares are up 7.4% to 14.5 cents.

Odyssey Gold completes placement, initiates SPP

According to its release, Odyssey Gold advised it has successfully secured a commitment to raise $10 million (before costs) through a placement. The offer received strong support from both domestic and international institutional and sophisticated investors.

The placement will see 79.8 million new ordinary shares issued at a price of 12.5 cents apiece.

In addition, Odyssey Gold will launch a Share Purchase Plan (SPP) for eligible shareholders, under the same terms of the placement. The company is hoping to raise a further $5 million by the issuance of another 40 million ordinary shares. The SPP offer closes on 24 June 2021, with issue and quotation of the shares on 1 July 2021.

Odyssey Gold will use its existing placement capacity to create the new shares. Under listing rule 7.1, this allows up to an additional 15% of its total shares to be issued without shareholder approval.

The proceeds of the placement and SPP will be used to accelerate the company’s Tuckanarra and Stakewell Gold Projects. This includes expanding its current exploration drilling program, whilst undertaking resource development drilling, and technical and metallurgical studies.

Odyssey Gold executive director, Matt Syme commented:

We are pleased with the strong support received for this Placement from existing and new investors. It reflects the exciting exploration potential of our two outstanding gold projects in the Murchison Goldfields.

Funds raised from the Placement will allow Odyssey to expedite exploration of our recent gold discoveries.

How has the Odyssey Gold share price performed?

Since listing on the ASX board in January, Odyssey Gold shares have jumped by more than 220%. The company’s share price reached an all-time high of 22.5 cents earlier this month before dropping lower from profit-taking.

Odyssey Gold has a market capitalisation of roughly $63 million, with 452 million shares on its registry.

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Shares in Spark Infrastructure Group (ASX: SKI) have slipped today with news its subsidiary has given the go-ahead for a key energy project. At the time of writing, the Spark share price is trading at $2.17, down 0.67%.

Project EnergyConnect will be built by TransGrid following the company’s final investment decision. The project has all of the required regulatory approvals.

Spark Infrastructure, an energy-focused investment company, holds a 15% stake in TransGrid.

Let’s take a closer look at the news that could drive the Spark Infrastructure share price today.

Project EnergyConnect

Project EnergyConnect’s 900 kilometre electricity interconnector will connect power grids in Robertstown, South Australia, and Wagga Wagga, New South Wales. It will also divert to Buronga in New South Wales and Red Cliffs in Victoria.

TransGrid will spend $1.834 billion to build the section of EnergyConnect between Wagga Wagga and the South Australian border.  

The project is in partnership with ElectraNet, which will build the South Australian and Victorian sections.

According to TransGrid, Project EnergyConnect will save New South Wales residents $180 million each year – around $60 per household – by driving competition in the wholesale electricity market. The project will also inject $4 billion of economic activity into the state.

EnergyConnect could decrease Australia’s carbon emissions by one million tonnes annually.  

To fund EnergyConnect, TransGrid will receive $295 million in capital from the Australian Government’s Clean Energy Finance Corporation (CEFC) in the form of an innovative subordinated note instrument. The funding is the CEFC’s largest single investment yet.

Spark Infrastructure says its funding of Project EnergyConnect will come from the company’s distribution reinvestment plan.

Construction is expected to begin late this year and finish in 2023.

Commentary from management

Spark Infrastructure’s managing director Rick Francis commented on Project EnergyConnect, saying:

[EnergyConnect’s] construction is a critical step towards unlocking the transfer capacity we need to support more renewables coming into our energy supply…

We are delighted with the support received from the Australian Government’s CEFC to get this important project across the line…

The approval for EnergyConnect is not only a significant step in delivering on Spark’s ‘growth plus yield’ value proposition to our investors, but is also a critical project to deliver lower electricity prices and reduce Australia’s carbon footprint.

Spark Infrastructure share price snapshot

The Spark Infrastructure share price is having a sound year on the ASX.

The Spark Infrastructure share price is currently 1.87% higher than it was at the beginning of 2021. It has also gained 4.31% since this time last year.

Spark Infrastructure has a market capitalisation of around $3.8 billion, with 1.75 billion shares outstanding.

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

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

Is the investing world ready for yet another next-generation fintech going public? Acorns, an investing app that offers a suite of investment, banking, and financial education services for low monthly fees, revealed it’s going public by combining with an existing company, Pioneer Merger Corp. (NASDAQ: PACX). The company said this places the equity value of its business at roughly $2.2 billion.

Pioneer Merger is a special purpose acquisition company (SPAC), which is an entity created and listed with the sole purpose of bringing an existing business to the stock market quickly.

After Acorns fuses together with Pioneer Merger, the new entity will operate as Acorns Holdings. Its stock should trade on the Nasdaq under the ticker symbol OAKS. Current Acorns CEO Noah Kerner will also be at the helm of the new company. 

Acorns said that Kerner and Pioneer Merger’s sponsor aim to pass along 10% of their respective positions in the new company to eligible customers through a share-ownership program. It didn’t provide details of this initiative.

In its press release trumpeting the move, Acorns quoted Kerner as saying that, “Going public will help elevate our story, introduce many more people to the power of compounding and financial wellness, and bring financial literacy to the mainstream.”

Acorns said that both its and Pioneer Merger’s board of directors have unanimously approved their business combination. It remains subject to approval by the latter company’s shareholders. Acorns said the deal should close in the second half of this year.

While the publicly traded, cutting-edge fintech space is getting quite crowded, Acorns has a novel business profile and operates a popular app. This should attract plenty of attention from investors looking to profit on the future of the financial services industry.

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

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The post Acorns investing app going public in $2.2 billion SPAC merger appeared first on The Motley Fool Australia.

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

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The Vital Metals Limited (ASX: VML) share price is gaining in late morning trade, up 4%.

Below we look at the latest announcement from the ASX resource share and rare earths explorer.

What did the company report?

Vital Metals’ share price is moving higher after the company reported it received formal acceptance from its offtake partner, REEtec AS, for its rare earth carbonate sample.

The 12-kilogram rare earth carbonate sample was produced at Vital Metal’s Nechalacho project in Canada in March this year.

Commenting on the development, Vital Metals’ Managing Director Geoff Atkins said:

Customer acceptance from REEtec is a key milestone for the development of the Nechalacho rare earth project and the construction of our Extraction Plant in Saskatoon. This achievement demonstrates that we have our processes at Nechalacho working correctly and we can proceed in line with our plans.

With the satisfaction of this milestone, the procurement of equipment for our Rare Earth Extraction Plant in Saskatoon will proceed.

Vital Metals executed a definitive Offtake Agreement with REEtec on 2 February. That stipulated that Vital Metals will provide REEtec with 1,000 tonnes of rare earth oxides (REO) per year over five years. Both REEtec and Vital Metals have the option to increase the offtake volume by as much as 5,000 tonnes REO annually over 10 years.

The company said it will commence production via ore sorting in June. It is on track to become only the second rare earth producer in North America and the first in Canada.

Vital Metals share price snap shot

Vital Metals’ shareholders have enjoyed a very strong year. Demand for rare earths, critical to most modern tech devices, sourced outside of China is growing rapidly. This has helped drive its shares up 480% over the past 12 months. Over that same time, the All Ordinaries Index (ASX: XAO) gained 25%.

Year-to-date, the Vital Metals share price has continued to outperform, up 93% so far in 2021.

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The post Up 480% in 1 year, here’s why the Vital Metals (ASX:VML) share price is charging higher again appeared first on The Motley Fool Australia.

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The Jumbo Interactive Ltd (ASX: JIN) share price has been a poor performer on Monday.

In morning trade, the lottery ticket seller’s shares are down 4% to $14.45.

Why is the Jumbo share price sinking?

The Jumbo share price has come under pressure today after it was the subject of a broker note.

According to a note out of Goldman Sachs, its analysts have downgraded the company’s shares to a neutral rating from buy. The broker has, however, held firm with its $15.00 price target.

While this is higher than the current Jumbo share price, it was a touch lower than where its shares were trading prior to the market open.

Why did Goldman Sachs downgrade its shares?

Goldman made the move largely on valuation grounds following a solid rise in the Jumbo share price since it initiated coverage on the company in November.

It explained: “Since we initiated on JIN with a Buy on 8 Nov 2020, the shares are +31% vs. ASX200 +15%, implying c.16% outperformance (including dividends). In particular the stock has significantly outperformed over the past week by 13%, which in our view is likely a function of i) the market capitalising the robust lottery jackpot trends thus far this half and ii) undemanding valuation on JIN leading up to the strong recent rally.”

What else did it say?

Goldman revealed that it remains positive on Jumbo’s outlook and expects the company to outperform consensus expectations. However, it feels this is now priced into the Jumbo share price.

The broker commented: “We have made no changes to our FY21-23E earnings, which remain above Bloomberg consensus, and our 12mo TP (15.8x FY22E EV/EBITDA) remains unchanged at A$15.00. However, with an implied TSR of 1%, we downgrade the stock to Neutral.”

“That said, we remain positive about the medium-term prospects for JIN, as evident by our above-consensus forecasts, and highlight i) its capital light business model, ii) its balance sheet strength (net cash) providing growth optionality, iii) upside and leverage from large jackpots and benefit from potential OzLotto game changes in FY23E, and iv) potential upside from SaaS business. To this end, we await further clarity around the ramp up and progress of its SaaS business and momentum across its offshore business, which are areas we will monitor closely,” it concluded.

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The HomeCo Daily Needs REIT (ASX: HDN) share price is gaining in morning trade, up 1%.

The real estate investment trust (REIT) invests in convenience-based assets such as retail and health & services.

Below we look at the company’s latest projects and valuation updates.

What did HomeCo report this morning?

HomeCo’s share price is moving higher after the REIT reported a 6.5% increase in its preliminary June 2021 valuation to $84.7 million. Net of capex, the unaudited valuations increased 4.7% to $61.1 million.

Of the REIT’s 27 properties, 23 were completed by independent valuation, while the remaining 4 properties were completed by internal valuation.

Commenting on the valuation increase HomeCo fund portfolio manager Paul Doherty said:

The draft valuation result provides strong validation for HDN’s high quality and well-located portfolio which is benefitting from robust investment and tenant demand. Incorporating the preliminary unaudited valuations and capital raising announced in April 2021, HDN’s gearing will reduce to the bottom end of the target 30-40% range, providing significant capacity for future investment in growth initiatives.

HomeCo also reported that both its major development projects are now largely complete. Richlands, in Queensland, commenced trading in March and has an occupancy of 95%. Ellenbrook, in Western Australia, has a current occupancy rate of 93%.

The REIT said its 5 brownfield developments have made substantial progress and it forecasts an average cash yield of at least 10% once the assets are fully stabilised. The company is continuing to look for further potential acquisitions in the market.

Looking ahead, HomeCo reaffirmed its 2021 financial year guidance of 3.9 cents per share, with a fourth quarter distribution of 1.8 cents per share. The REIT’s 2022 financial year guidance was reaffirmed to be at least 8.3 cents per share, up 24% from FY21.

HomeCo share price snapshot

Over the past 12 months, the HomeCo share price is up 3%. By comparison, the All Ordinaries Index (ASX: XAO) is up 25% in that same time.

Year-to-date the HomeCo share price has been gaining momentum, up 9% so far in 2021.

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The GR Engineering Services Ltd (ASX: GNG) share price is on the move today. This comes after the engineering company announced an update on its full-year revenue guidance for 2021.

During morning trade, GR Engineering shares are swapping hands for $1.38, up 3.76%. In earlier trade, the company’s shares had lifted by almost 7% before retreating to their current level.

Projecting a record year

Investors are driving up GR Engineering shares following the release of upgraded earnings guidance.

In a statement to the ASX, GR Engineering advised revenue and margins have continued to improve in the second half. The constriction of the labour market in Australia has surprisingly not impacted the company. The business has managed to navigate its way through COVID-19, increasing its workforce to meet demand and deliver on projects.

As a result, FY21 revenue for the year ending 30 June, is expected to come in at between $370 million and $390 million. This represents more than an 8% lift from the previous revenue guidance of $340 million to $360 million.

GR Engineering noted it is focused on managing equipment deliveries in a timely manner despite international shipping delays.

Geoff Jones, GR Engineering managing director, touched on the company’s performance, saying:

GR Engineering is projecting record FY21 revenue and EBITDA based on the year-to-date results and our current ongoing work. Given our project pipeline and near-term prospective work and continued strong cash generation, GR Engineering remains well placed to deliver returns to its shareholders through FY22 and FY23.

The company is scheduled to release its full-year results for the 2021 financial year on or around 24 August.

GR Engineering share price snapshot

During the past year, GR Engineering shares have moved on an upwards trajectory, slowly climbing to within reach of 2017 levels. The company’s share price has delivered gains of almost 100% over the past 12 months and is up by around 13% year to date.

On today’s price, GR Engineering commands a market capitalisation of roughly $222 million, with around 160 million shares outstanding.

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