The Australian Primary Hemp Ltd (ASX: APH) share price is on the rise following the announcement of a new distribution deal.

At the time of writing, the company’s shares are swapping hands for 39 cents, up 5.41%.

What did Australian Primary Hemp announce?

Investors are sending Australian Primary Hemp shares higher after digesting the company’s latest positive update.

According to this morning’s release, Australian Primary Hemp secured its largest retail distribution agreement with Coles Group Ltd (ASX: COL).

Under the deal, the supermarket giant will range 5 additional Mt. Elephant products from Australian Primary Hemp. It is expected that the new inclusions will be available for purchase in stores from July 2021.

Australian Primary Hemp estimates that the agreement will generate roughly $3 million in revenue per year.

The latest news follows the successful relationship between both parties. In early March, Australian Primary Hemp signed its first retail distribution agreement with Coles to stock its Mt. Elephant ‘mylk’ hemp and oat milk range.

Australian Primary Hemp managing director and CEO Neal Joseph commented:

APH’s Mt. Elephant brand was developed to focus on capturing the demand for high-quality, plant-based ‘superfood’ products – with Australian-farmed hemp used in all our products.

This latest agreement with Coles represents APH’s largest retail distribution agreement with any retail partner, and we are proud to see Coles recognise the Mt. Elephant product range. We look forward to further potential agreements in the future as we further our Company’s development in becoming a producer, manufacturer, and distributor of premium hemp-based products.

Australian Primary Hemp share price snapshot

Over the last 12 months, the Australian Primary Hemp share price has gained around 190%, with year-to-date up 17%. The company’s shares reached a multi-year high of 62 cents earlier this year, before treading lower.

On valuation grounds, Australian Primary Hemp commands a market capitalisation of approximately $27 million, with 75 million shares outstanding.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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 market tumbled into the red this morning, but that didn’t stop these brokers from putting these ASX shares on their “buy” list.

The S&P/ASX 200 Index (Index:^AXJO) fell 0.5% in early trade no thanks to a weak lead from Wall Street overnight.

But many experts are still expecting ASX shares to deliver decent gains this year. If they are right, any pullback will be a buying opportunity.

Broker picks this ASX share to buy after its battering

If you are hunting for bargains, Morgans reckons you should put the Origin Energy Ltd (ASX: ORG) share price on your list.

This is even after Origin share price crashed on the back of a profit downgrade late last week.

The energy company cut its FY21 Energy Markets earnings before interest, tax, depreciation and amortisation (EBITDA) to between $940 million and $1.02 billion. That’s down from its earlier forecast of $1 billion to $1.04 billion.

Overlooking the short-term pain

“There is no doubt that the next 12 – 18 months will be challenging for ORG,” said Morgans.

“However, the company is expecting to offset weaker revenue with cost reductions and its LNG business will reap more of the benefits of higher oil prices in FY22.

“While we expect near term challenges, we see upside potential in the medium term and maintain our ADD rating with a $5.79 price target.”

Opportunity to add during the cap raise

Another tumbling ASX share to watch is the Seven Group Holdings Ltd (ASX: SVW) share price. Shares in the mining equipment conglomerate fell 4% to $22.50 after it emerged from its trading halt.

The group is undertaking a $550 million capital raising and the Seven Group share price is right bang on the new share offer price.

UBS reckons investors should buy the dip even as the dilution from the cap raise prompted it to lower its 12-month price target to $27.35 from $27.50 a share.

The broker has a bullish outlook on two of Seven Group’s main businesses, Coats Hire and WesTrac. These businesses are leveraged to the booming mining sector and the large pipeline of infrastructure construction projects.

ASX share to buy ahead of its results

Meanwhile, Citigroup reiterated its “buy” recommendation on the Resmed CDI (ASX: RMD) share price ahead of its results.

The sleep disorder treatment company will release its quarterly earnings on 30 April. Citi expects it to post an earnings per share of US$1.34, which is ahead of consensus expectations of US$1.31.

Don’t need an another COVID booster shot

While ResMed’s results won’t be bolstered by extra demand for its equipment from COVID-19, Citi believes its organic business is tipped to grow by 9%.

“At constant currency, we forecast revenue growth of 5% and an FX benefit of ~4% due to the lower USD,” explained Citi.

“We believe that the company has performed very well operationally throughout the pandemic, growing market share.”

The broker’s 12-month price target on the ResMed share price is $29 a share.

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Motley Fool contributor Brendon Lau owns shares of Seven Group Holdings Limited. The Motley Fool Australia has recommended ResMed Inc. 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 Woolworths Group Ltd (ASX: WOW) share price is trading lower on Tuesday despite the release of an announcement.

At the time of writing, the retail conglomerate’s shares are down 0.5% to $41.81.

What did Woolworths announce?

This morning Woolworths announced that it is investing $223 million to increase its stake in Quantium from 47% to 75%.

Woolworths describes Quantium as a world-class data science and advanced analytics business.

Woolworths originally acquired 50% of Quantium in 2013 for a lowly $20 million. That acquisition led to the two parties entering into a long-term partnership that has enabled Woolworths and its supplier partners to make customer-first decisions across pricing, ranging, and promotions.

Since then, Quantium has experienced exponential growth both in Australia and internationally. This led to a significant increase in its valuation since its orginal investment.

Woolworths’ Chairman, Gordon Cairns said: “We have long admired the Quantium business. We have enjoyed a successful partnership with them over the last eight years by jointly developing products and services that provide critical insights to both Woolworths Group and our suppliers, helping us put our customers first in our decision making.”

This sentiment was echoed by Woolworths’ CEO, Brad Banducci.

He commented: “Advanced analytics is key to improving the experiences, ranges and services we provide to our customers and the support we provide to our teams and suppliers. The way we gather data, interpret it, and protect it, is becoming ever more important.”

“Through this transaction, we aspire to bring together Quantium’s advanced analytics capability and Woolworths Group’s retail capabilities to unlock value across our entire retail ecosystem. By working better together, we aim to transform the rapidly evolving retail sector, helping us better service our customers and support our team and supplier partners,” Mr Banducci added.

What now?

Following the completion of the transaction, Quantium will form part of Woolworths Group, and a new business unit called Q-Retail will be established.

Q-Retail will bring together Quantium and Woolworths Group’s collective data science and advanced analytics capabilities with a focus on delivering against the company’s advanced analytics aspirations.

Leading Q-Retail will be Amitabh Mall as Managing Director. He will also serve as Woolworths Group’s Chief Analytics Officer. Mr Mall joins the company after 20 years at the Boston Consulting Group where he most recently led their Consumer and Retail practice in Asia-Pacific.

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

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The Volpara Health Technologies Ltd (ASX: VHT) share price is rising this morning following the release of a trading update. The healthcare technology company has been making tailwinds recently, reflecting a surge in its shares from March onwards. 

At the time of writing, the Volpara share price is trading at $1.44, up 0.015%.

How did Volpara perform?

Volpara shares are on the move today after the company provided investors with a business update for Q4 FY21.

For the period ending 31 March, Volpara experienced its largest ever quarterly sales performance. Annual Recurring Revenue (ARR) soared US$1.1 million in the period, bringing total ARR to US$18.6 million for the full year. This represents organic growth of 20% in ARR when compared to FY20. That’s not including the recently acquired CRA Health business. Management highlighted that strong result attained is despite increased churn related COVID-19 costs and customer-related COVID-19 IT delays.

Underpinning the performance, Volpara noted that it won its biggest sales contract to date for its Volpara live image positioning software. In addition, multiple customers expanded their existing deals, along with new major contracts from well-recognised academic centres. The company estimates that at least one of its software products is used by 32% of women in the United States.

Average revenue per user (ARPU) lifted to US$1.40 at the end of Q4. This compares to the ARPU of US$1.22 achieved at the end of the prior quarter. The company stated ARPU’s in Q4 ranged from US$1.00 to US$5.65.

Outlook

Looking ahead, Volpara is also focusing its efforts towards its risk and genetics growth strategy for FY22. Educational patient letters are set to be launched in October 2021 to engage directly with women needing breast cancer screening.

As part of the company’s realignment, CEO of Volpara Health, Katherine Singson, and director of United States sales, Debra Saunders, will depart. Current group CEO, Dr. Ralph Highnam, will assume the extra responsibilities from Ms. Singson. In addition, experienced industry executive Jill Spear will take over the reins from Ms. Saunders.

Words from the CEO

Dr. Ralph Highnam touched on the company’s results, saying:

The contracts that Volpara secured in Q4, despite the continuing challenges of the COVID-19 pandemic, show the clear clinical need for our products, the strength of our sales and marketing teams globally, and the successful pivot to a greater focus on risk and genetics.

We are very pleased with how the financial year has ended, and we look forward to accelerating out of COVID-19 in FY22 and to working ever closer with our new colleagues at CRA Health in Boston following its acquisition in early February.

Volpara share price summary

The Volpara share price is relatively flat when looking at its performance over the course of the last 12 months. The company’s shares reached a high of $1.715 in early February, before falling to a low of $1.19 in March.

The company’s shares finished yesterday at a price of $1.425.

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Aaron Teboneras 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 VOLPARA FPO NZ. The Motley Fool Australia has recommended VOLPARA FPO NZ. 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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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.

In the unlikely event that you haven’t heard much about it lately, Johnson & Johnson (NYSE: JNJ) will report its first-quarter earnings before the market opens tomorrow. Investors are bound to be overflowing with questions about the healthcare giant’s performance. 

Two days after the earnings report, the company will have its annual meeting of shareholders. Whether you’re a shareholder or a potential buyer, tuning in will shed light on the future of the company, not just the most recent quarter. In particular, there are a few items that investors should pay close attention to, starting with the company’s latest coronavirus vaccine troubles.

1. When and how will the coronavirus vaccine issues be resolved?

The biggest thing to look for in the earnings report will be any clues about how management is going to handle the latest hitches with the company’s vaccine. In late March, manufacturing issues were slated to cause vaccine shipments to drop by 80%. These problems had their origin in a factory run by Emergent BioSolutions, where an accident led to the loss of up to 15 million doses. It’s unlikely that such a costly mistake will happen twice, but more clarity on how J&J plans to improve quality control will doubtlessly be on investors’ minds.

Then there’s the even more recent (and more pressing) problem. After eight recently vaccinated people developed severe blood clotting and one person died, the vaccine’s rollout in the U.S. is slamming to a halt at the behest of regulators. Across the Atlantic, the European Commission seems equally displeased at J&J’s abrupt announcement that its vaccine deliveries to the E.U. would be delayed until it knew more about the blood clotting issue. So far, the company’s response to the problem seems somewhat disorganized, which is very much out of character.

In all likelihood, the one-dose vaccine will return to deployment as soon as regulators understand the scope of the newly revealed risk. According to Janet Woodcock at the Food and Drug Administration, the process could be as quick as “a matter of days.” But, investors need to watch the issue carefully, especially with regard to management’s plans for a contingency in which the vaccine can’t be administered to certain populations due to the clotting hazard. Even a small reduction in its total addressable market could have a significant and negative impact on its expected revenue over the course of a year.

2. Are earnings still shrinking?

Vaccine woes aside, the company’s efficiency will be in focus with the release of its earnings report. While it isn’t a cause for alarm, J&J’s earnings shrunk by 2.7% in 2020 compared to 2019 even as sales grew by 0.6%. More recently, in the fourth quarter of 2020, earnings plummeted by 56.7% year over year, which might raise a few eyebrows if similarly sized contractions continue into 2021. Some of this drop is attributable to the negative economic impact of the pandemic, but there could be other factors at play. Management is unlikely to address the topic directly, but shareholders may find a few hints nonetheless.

Data by YCharts.

Specifically, investors should keep an eye on the company’s cost of goods sold (COGS) as well as its selling, general, and administrative (SG&A) expenses. Both have risen by upwards of 12% over the last three years, but it hasn’t stopped J&J’s free cash flow from steadily growing in the same period.

In closing, investors and potential buyers should keep in mind that the earnings update is just one bundle of new information. For a multinational corporation of its size, the results of one quarter aren’t going to define whether the stock is a good long-term investment. Still, worse-than-expected data could be an excellent opportunity to buy it at a rare discount.

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

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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Johnson & Johnson. 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 Temple & Webster Group Ltd (ASX: TPW) share price is under pressure on Tuesday morning.

At the time of writing, the furniture and homewares focused ecommerce company’s shares are down 5% to $10.18.

Why is the Temple & Webster share price under pressure?

Investors have been selling the company’s shares this morning following the release of its third quarter update.

According to the release, for the three months ended 31 March, Temple & Webster delivered a 112% increase in revenue over the prior corresponding period.

At the end of the period the company had ~750,000 active customers. This is up 10.6% from 678,000 at the end of the first half.

What about the fourth quarter?

Positively, while the company’s growth has moderated so far in the fourth quarter, its revenue is still higher than the prior corresponding period.

During the month of April, Temple & Webster achieved a 20% increase in revenue over the prior corresponding period. This is particularly impressive given that April 2020 was the fastest growing month last year due to the nationwide lockdowns.

Pleasingly, the company also reported that COVID-19 cohorts continue to perform better than historical cohorts.

Why are its shares trading lower?

Possibly weighing on Temple & Webster’s share price was management’s commentary relating to the future and its focus on revenue growth rather than earnings.

The company believes that COVID-19 has permanently accelerated online adoption in the Australian furniture and homewares market.

It explained: “… we estimate more than 20% of furniture & homewares was bought online in the US during 2020, and we believe Australia is following the same trajectory. We estimate that in 2020, ~9% of Australian furniture & homewares were bought online, an almost doubling of the ~5% bought in 2019. Online penetration in both markets is expected to continue to increase significantly.”

In light of the above and its online market leadership position, the company has reaffirmed its growth strategy.

This will see it building strong brand awareness to achieve a national brand status, using “tactical” pricing and promotions to increase conversion, investing in 3D and artificial intelligence capabilities, differentiating its range through new category additions and private label expansion, and growing its B2B sales teams.

This will of course come at a cost. As a result, management intends to focus on delivering strong double digit revenue growth with EBITDA margins in the 2% to 4% range.

Temple & Webster CEO & Co-Founder, Mark Coulter, said “You only need to look at the US to see how the e-commerce market is playing out, and why we remain bullish about the shift from offline to online. We are at the start of this once in a generation shift, and now is the time to put our foot down to secure market leadership and ensure we are the brand for the next generation of furniture shopper.”

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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 Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group 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 Eroad Ltd (ASX: ERD) share price has been a solid performer on Tuesday morning.

At the time of writing, the transportation technology services company’s shares are 1% to $4.77.

Why is the Eroad share price charging higher?

Investors have been buying Eroad shares this morning following the release of an update on its performance during the fourth quarter of FY 2021.

According to the release, the company sold 2,726 contracted units during the quarter. This includes 1,054 MYEROAD Clarity Dashcam units in March. Management notes that this reflects continued growth across its markets.

The majority of the company’s new units were in the New Zealand market. Eroad added 2,295 units during the quarter in its home market after it secured a large New Zealand Enterprise customer, Toll New Zealand. This was supported by a 182 unit increase in North America and a 249 unit increase in Australia.

This left Eroad with a total of 126,203 contracted units at the end of the period.

Eroad guidance

Management also provided an update on its guidance for FY 2021 and FY 2022.

In respect to the former, Eroad continues to expect a small increase in second half revenue compared to the first half. Whereas EBITDA is anticipated to be similar to the first half’s figure. This reflects the acceleration of product development and increased sales and marketing costs associated with the launches of key products.

Looking to FY 2022, Eroad anticipates that revenue growth will strengthen, but not be at the level experienced in FY 2020.

It commented: “In New Zealand, EROAD expects similar growth to the last four years. In North America, targeting an increased addressable market through improved product market fit, to deliver increased unit growth. In Australia, growth during the next 2 years will come predominantly from an Enterprise pipeline of 15-20,000 vehicles.”

“As EROAD continues to accelerate new product delivery for future growth in FY23 and FY24, it anticipates spending 24-27% of revenue on R&D during FY22. However, the company anticipates EBITDA margin to be maintained but improving at the end of FY22, to provide further increased EBITDA margin.”

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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 EROAD Limited. 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 Rio Tinto Limited (ASX: RIO) share price is edging higher following the release of its first quarter update.

At the time of writing, the mining giant’s shares are up 0.5% to $121.45.

How did Rio Tinto perform in the first quarter?

Rio Tinto was a relatively positive performer during the first quarter of FY 2021.

For the three months ended 31 March, the company achieved Pilbara iron ore shipments of 77.8 million tonnes. This was 7% higher than the first quarter of 2020.

However, production was down 2% on the prior corresponding period to 76.4 million tonnes. This was driven by above average wet weather in the mines through February and fixed plant reliability. Labour resource availability and weather challenges also disrupted maintenance.

And while tropical Cyclone Seroja has impacted mine and port operations in April, Rio Tinto’s full year iron ore guidance remains unchanged. As does its Pilbara iron ore 2021 unit cost guidance of $16.7-$17.7 per tonne.

Rio Tinto’s mined copper production came in at 120.5 thousand tonnes, which was 9% lower than the same period last year. This was due to lower recoveries and throughput at Escondida and Kennecott, which was partly offset by higher grades from the Oyu Tolgoi open pit.

The company also advised that its Oyu Tolgoi shipments have been affected by Chinese border restrictions due to increased cases of COVID-19 in Mongolia. It continues to work closely with authorities and its customers to manage the risk of supply chain disruptions.

Elsewhere, bauxite production was down 2%, aluminium production was up 3%, and titanium dioxide slag production was down 5%.

Management commentary

Rio Tinto’s new Chief Executive, Jakob Stausholm, was pleased with the quarter.

He said: “We achieved an overall solid operating performance in the first quarter. We have maintained guidance ranges in all our products, with site teams successfully managing the effects of significant rainfall, in particular at our Australian iron ore assets.”

Mr Stausholm also spoke about the controversies that ultimately led to the exit of former Chief Executive JS Jacques.

He commented: “It has been a period of deep reflection for the company, and I have personally spent a significant amount of time listening, learning and taking actions, in particular to better manage Traditional Owner partnerships and cultural heritage. I have appointed a new leadership team and the transition is progressing well. We have set out clear priorities to develop a stronger Rio Tinto.”

“Our focus is to become the best operator, strive for impeccable ESG credentials, excel in development and secure a strong social licence. This ambition will enable us to continue to deliver superior returns to shareholders, invest in sustaining and growing our portfolio, and make a broader contribution to society,” he concluded.

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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. 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 Challenger Ltd (ASX: CGF) share price has come under pressure following the release of its third quarter update.

In morning trade, the annuities company’s shares are down 10% to $5.90.

How did Challenger perform in the third quarter?

Challenger was on form again during the third quarter and delivered further growth across the business.

According to the release, group assets under management rose 8% for the quarter and now exceed $100 billion. This means Challenger is now Australia’s third largest active asset manager.

Supporting this growth was a 6% increase in Life investment assets. Management notes that this was driven by record quarterly annuity sales of $1.6 billion and record quarterly Life book growth of 9.2% for the quarter.

Also growing during the third quarter was its funds under management (FUM) for the Funds Management business. Challenger recorded a 9% increase in FUM, including $7 billion of net flows.

Challenger’s Managing Director and Chief Executive Officer, Richard Howes, was pleased with the quarter and notes that its strategy is paying off.

He said: “Challenger’s performance in the third quarter demonstrates our strategy to diversify revenue is working. We have been investing in our distribution, product and marketing capability over recent years which is extending our customer reach and diversifying our product offering and distribution channels.”

What does this mean for FY 2021?

Based on its performance in the third quarter, management appears confident the company will achieve its normalised net profit before tax guidance for FY 2021.

However, this is only expected to be at the bottom end of the $390 million to $440 million guidance range. This may be what is weighing on the Challenger share price today.

Management notes that its guidance reflects the sharp decline in credit spreads over the year, which were not fully reflected in customer pricing.

Positively, Challenger is responding to the investment conditions by significantly adjusting annuity pricing. However, this won’t be in time to impact its FY 2021 earnings.

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

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The Seven Group Holdings (ASX: SVW) share price is on watch today after an update on its institutional equity capital raise.

Why is the Seven share price on watch?

This morning, Seven reported that it has successfully completed a $500 million fully underwritten institutional placement. That has resulted in 22.2 million new, fully paid, ordinary shares for those investors taking up the offer.

The “significantly oversubscribed” placement is a step forward for Seven and its capital management goals. Seven received strong support from new and existing domestic and international institutional investors.

The new shares from the placement come at an issuance price of $22.50 per share. That represents a 4% discount to the 16 April 2021 closing Seven share price of $23.43.

Proceeds from the placement, alongside the $50 million Share Purchase Plan (SPP), will be used for a variety of purposes. These include reducing overall net debt, restoring balance sheet flexibility, and improving liquidity. Seven has also flagged strategic investments, opportunistic acquisitions, and growing dividend payments as key focus areas going forward.

Managing director and CEO Ryan Stokes said:

We have a strong track record of disciplined capital allocation and remain committed to working to generate superior returns from our existing businesses and new opportunities to deliver value to all shareholders.

The $50 million SPP is non-underwritten with the potential to scale at Seven’s discretion. The SPP will be open to eligible retail shareholders at the lower of $22.50 per share or a 2.5% discount to volume-weighted average price (VWAP) in the last 5 days of the SPP offer period.

The issue date for the institutional New Shares is 22 April 2021, with the retail SPP shares to be issued on 18 May 2021.

The Seven share price is one to watch when it returns to trade following the institutional placement. Shares in the conglomerate are up 77.4% in the last 12 months despite a slow start to 2021.

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Motley Fool contributor Ken Hall 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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