Novonix Ltd (ASX: NVX) shares were flying this morning after the company announced it will extend its research sponsorship agreement with Dalhousie University. At one stage during morning trade, the Novonix share price was up nearly 11% to $2.99.

However, at the time of writing, Novonix shares have retreated to $2.73, up 1.11% for the day so far. 

What moved the Novonix share price?

The Novonix share price is climbing today after the company reported extending its sponsorship of Professor Mark Obravac’s Research Group for a further five years.

The research agreement was signed by the company’s wholly-owned, Canadian based subsidiary Novonix Battery Technology. The research agreement comes under the Natural Sciences and Engineering Research Council (NSERC) of Canada’s Alliance Grants Program.

Under the new agreement, Novonix will contribute C$1.11 million over a 5-year period. This funding will be used by the research group to purchase equipment and research materials to support students and researchers.

In exchange, Novonix will have first rights to the intellectual property developed from the agreement.

In the company’s announcement, Novonix acknowledged the importance of the new agreement. The company’s chief executive, Dr Chirs Burns, noted that “It has been extremely valuable to have a team focused on new materials projects across a range of battery materials”.

The company’s management highlighted that multiple patent application filings have come from the research agreement, including patents related to dry particle micro granulation.

How has Novonix been performing?

Novonix develops and commercialises high-performance materials, equipment, and services for the lithium-ion battery industry. The company is focused on electric vehicle and energy storage applications that require long life and high performance.

Late last month, Novonix made headlines after its US-based subsidiary, PUREgraphite, was selected to receive a US$5.6 million grant from the US Department of Energy (DOE) for new technology development.

Under the grant, PUREgraphite will partner with Harper International and Phillips 66, with the funding used to support the development of a new, high-efficiency furnace technology for lithium-ion battery synthetic graphite material.

Foolish takeaway

The Novonix share price has surged more than 120% since the start of the year, hitting an all-time high of $4.23 late last month. Since then, Novonix shares have been sold down to their current level. 

Based on the current Novonix share price, the company has a market capitalisation of around $946 million.  

More reading

• Why Novonix, Recce, Singular Health, & Starpharma shares are storming higher
• BHP Energy and Zip were among the most traded ASX shares last week
• Why the Novonix (ASX:NVX) share price is down 10% today
• The Novonix (ASX:NVX) share price is on a rollercoaster ride today
• The Syrah (ASX:SYR) share price is up 8% today. Here’s why

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

The post Why the Novonix (ASX:NVX) share price jumped 11% this morning appeared first on The Motley Fool Australia.

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The OC Micro-Cap Fund has released its update for the month of January and revealed that it has extended its 12-month total return to an impressive 41.5%.

This means the small-cap focused fund is outperforming the S&P/ASX Emerging Companies Accumulation Index by 14% over the period.

Which ASX shares are performing for OC Micro-Cap? Here’s what you need to know:

Sezzle Inc (ASX: SZL)

One of the key contributors to its gains in January was buy now pay later provider Sezzle.

It recorded a gain of 30.6% during the month thanks to positive industry developments and its strong performance during the fourth quarter.

OC’s analysts commented:

“The +98% day one rise in the Affirm share price made the other listed BNPL providers look cheap in comparison, despite the strong share price run many of these peers had already experienced in 2020. Beyond the relative valuation argument, however, SZL’s core US business continues to grow strongly with the December quarter showing growth in underlying merchant sales of +205%.”

Pleasingly, OC doesn’t believe its growth is finished and suspects it could outpace rival Afterpay Ltd (ASX: APT) this year. And looking further ahead, the fund believes Sezzle has large opportunities internationally.

It explained:

“SZL have launched pilots for potential operations in India and Germany, both of which have the potential to become significant markets in their own right. We continue to own our stake in the business and look forward to catching up with management for their result roadshow in February.”

Silk Laser Australia Ltd (ASX: SLA)

Another strong performer for the company was the Silk Laser share price. The laser hair removal, skin treatments and cosmetic injections provider’s shares rose 11.8% in January.

OC commented:

“Silk Laser Australia was added to the portfolio in mid-December when the company listed on the ASX and was a strong contributor to Fund performance in January.”

The fund manager remains positive on its future thanks to the industry tailwinds it is experiencing.

“It has strong industry tailwinds, particularly in the injectables space (anti-wrinkle injections, derma fillers, lip fillers) which is growing at 25% per annum, and underpinned by the increasing desire for consumers to retain a youthful appearance and increased aesthetic awareness overall.”

And while it notes that private equity was selling part of its stake, it is pleased to see management with plenty of skin in the game.

“Whilst the IPO facilitated a partial private equity sell-down, key management retain a material stake and are highly energised to grow shareholder value.”

Sezzle and Silk’s strong performance managed to offset weak performances from other shares in the portfolio.

These include AMA Group Ltd (ASX: AMA) and Harmoney Corp Ltd (ASX: HMY). They fell a disappointing 19.4% and 17%, respectively, during the month.

More reading

• Add these exciting small cap ASX shares to your watchlist right now
• Another day, another Zip (ASX: Z1P) share price record
• Why Mesoblast, Newcrest, Sezzle & Telstra shares are racing higher
• Here’s why the Sezzle (ASX:SZL) share price is surging 6% higher today
• 4 steps to pick winning ASX shares

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post These ASX shares are helping this fund manager smash the market appeared first on The Motley Fool Australia.

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The Macmahon Holdings Limited (ASX: MAH) share price is climbing higher in early afternoon trade. This comes after the company announced it has won an underground mining contract.

The Macmahon share price rose to an intraday high of 27.5 cents in early trade. However, its shares have pulled back this afternoon to 25.5 cents at the time of writing, up 4.9%.

A closer look at the contract award

The Macmahon share price is on move today after reporting a positive update that has investors upbeat.

According to its release, Macmahon advised its subsidiary, GBF has secured a contract from Silver Lake Resources Limited (ASX: SLR) for mining works at the Deflector gold and copper mine in Western Australia.

Macmahon fully acquired underground mining company GBF in mid-2019 to expand its presence in the underground mining services market. It’s worth noting that GBF has been performing works at the Deflector mine since mining operations began there in 2016.

Under the agreement, GBF will deliver all necessary underground development, ground support and production activities. This will include the supply of a workforce and mobile mining equipment.

The 4-year deal with Silver Lake is expected to generate around $220 million for Macmahon. Should there be no contract extensions, the award will expire in April, 2025.

Words from management

Macmahon CEO and managing director Michael Finnegan hailed the new agreement, saying:

We are very pleased to have won this tender and to be working with Silver Lake Resources at Deflector. This new contract is an important milestone in our strategy to expand our underground business, and is a clear demonstration of the benefits we are now realising from the GBF acquisition.

Importantly, the Deflector mine is a high-grade gold and copper asset in Western Australia, so is an attractive project in the current macro environment. We look forward to continuing to support the development of Deflector, and to achieving further scale in the underground market.

About the Macmahon share price

Over the past 12 months, the Macmahon share price has fallen just over 10%. After dropping severely during March last year, the company’s share price somewhat rebounded to the mid-20 cent range. Since then, its shares have stabilised moving in small peaks and troughs.

Macmahon commands a market capitalisation of $553 million.

More reading

• Why the Mitchell Services (ASX:MSV) share price is plunging 19% today
• Why AVITA, Baby Bunting, Kathmandu, & Webjet shares are sinking
• The Cimic (ASX:CIM) share price is dipping today despite contract win
• What’s with the Hub24 (ASX:HUB) share price today?
• Why is the Ecograf (ASX:EGR) share price on a wild ride today?

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

The post Macmahon (ASX:MAH) share price climbs higher on positive update appeared first on The Motley Fool Australia.

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Mitchell Services Ltd (ASX: MSV) shares are in freefall today after the company released its quarterly investor update around an hour after market open. At the time of writing, the Mitchell Services share price has plummeted 19.3% to 46 cents.

At one point during morning trade, shares in the drilling services company were down more than 22% before recovering slightly.

What was announced?

The Mitchell Services share price has hit the skids today despite the company reporting strong underlying operating performance for the second quarter of the 2021 financial year (FY21 Q2).

However, earnings before interest, tax, depreciation and amortisation (EBITDA) was hit hard by the recognition of a $7.3 million impairment of trade receivables.

On 15 July 2019, Mitchell Services released an ASX announcement confirming it had been awarded a major 5-year contract with a new client. Today, the company revealed it has terminated that contract due to the client not having paid its invoices.

Andrew Elf, CEO of Mitchell Services, wrote that “In the absence of other contract wins, the termination will result in a monthly revenue reduction of approximately $1.2 million in the short term. Alternatively, the company may determine to sell the relevant rigs.”

Mitchell Services is owed around $8.5 million in outstanding receivables. Elf noted that despite the take up of the provision for impairment, the company still aims to recover the full amount it is owed.

Looking at the figures, the company reported a 19.5% increase in its average number of operating rigs over the previous corresponding period. Revenue of $46.8 million was up 18.4% from FY20 Q2. But EBITDA of $2.06 million was down 73.9% while operating cash flow of $6.27 million fell 24.8%.

The company said it would release its FY21 revenue and EBITDA guidance along with a capital management update following the release of its half-year financial statement later this month.

Mitchell Services share price snapshot

Incorporating today’s intraday losses, the Mitchell Services share price is down nearly 18% in 2021. By comparison, the All Ordinaries Index (ASX: XAO) is up just over 2% in that same time.

Over the pasts 12 months, Mitchell Services shares are down around 24% but have gained 66% from their March 2020 lows.

More reading

• Why AVITA, Baby Bunting, Kathmandu, & Webjet shares are sinking
• The Cimic (ASX:CIM) share price is dipping today despite contract win
• What’s with the Hub24 (ASX:HUB) share price today?
• Why is the Ecograf (ASX:EGR) share price on a wild ride today?
• Why brokers rate these 4 ASX shares a buy this month

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

The post Why the Mitchell Services (ASX:MSV) share price is plunging 19% today appeared first on The Motley Fool Australia.

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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a subdued note. At the time of writing, the benchmark index is down 0.3% to 6,828.7 points.

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

AVITA Medical Inc (ASX: AVH)

The AVITA share price is down 10% to $6.28 following the release of its second quarter update. The regenerative medicine company reported a 57% increase in revenue to $5.1 million and an almost 90% improvement in its net loss to $5.6 million. While this was positive, management’s commentary appears to have spooked investors. It noted that almost 50% of its revenue comes from 20 accounts with physicians and hospitals. And as these accounts are susceptible to the effects of COVID-19, it was not in a position to provide guidance.

Baby Bunting Group Ltd (ASX: BBN)

The Baby Bunting share price is down 4% to $5.40 following the release of its half year results. Thanks to a 15% increase in comparable store sales and a 95.9% increase in online sales, the baby products retailer delivered a 16.6% increase in total sales to $217.3 million. And following a 41-basis points expansion in its gross margin, the company recorded a 43.5% increase in pro forma net profit after tax to $10.8 million. While this was undoubtedly strong, the market was expecting even stronger growth.

Kathmandu Holdings Ltd (ASX: KMD)

The Kathmandu share price is down 2.5% to $1.21. The retail company’s shares have come under pressure today following the release of an update on its first half performance. For the six months ended 31 January, the company achieved a 12% increase in half year group sales. However, the prior corresponding period only included a three-month contribution from its Rip Curl business. Sales from the Kathmandu business were down 30% on a same store basis.

Webjet Limited (ASX: WEB)

The Webjet share price is down 3.5% to $4.67. Webjet and a number of travel shares are trading lower today amid speculation that Melbourne is going to go into a five-day lockdown to stop the spread of COVID-19. This would be another blow for the recovering travel market.

More reading

• The AVITA Medical (ASX: AVH) share price plummets almost 6% in early trade
• Why the Baby Bunting (ASX:BBN) share price is tumbling 10% lower
• Why the Kathmandu (ASX:KMD) share price is in focus
• Here are the 10 most shorted shares on the ASX
• To short or not to short? GameStop (NYSE:GME) ripple effect endures

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 Avita Medical Limited. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Avita Medical Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why AVITA, Baby Bunting, Kathmandu, & Webjet shares are sinking appeared first on The Motley Fool Australia.

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The Cimic Group Ltd (ASX: CIM) share price has lost ground after positive morning trading, dipping 0.96% at the time of writing. This comes after the company announced that its subsidiary, UGL, has won a country regional network contract.

The Cimic share price is currently trading lower at $20.65.

Major contract award

In today’s release, Cimic advised that the Transport for New South Wales (TfNSW) selected UGL for its Country Regional Network contract.

UGL will provide an array of operation and maintenance works to tfNSW’s rail infrastructure under the agreement.

This includes building network operations such as establishing a new network control centre in regional NSW. In addition, UGL will deliver rail maintenance services, asset and property management, and implement its new signalling system, Sigview.

The 10-year agreement is expected to generate more than $1.5 billion to UGL, depending on works completed.

Cimic noted that it would begin mobilising its workforce and equipment early this year. Commencement of operations is anticipated to occur in January 2022.

With the latest signing under wraps, investors have been mixed on the Cimic share price.

Words from management

Cimic group executive chair and CEO Juan Santamaria, welcomed the new deal, saying:

The Country Regional Network provides a reliable and sustainable rail network to safely transport passengers and goods across regional NSW. CIMIC and UGL are proud to support TfNSW to keep this essential service running across more than 2,300 kilometres of rail and we’re pleased to do so with a strong commitment to indigenous and regional employment.

UGL managing director Doug Moss added:

This contract win solidifies UGL as the leading rail services company in Australia, by building on our extensive work across the NSW rail network and complementing the rail projects we manage in all other states and territories. We look forward to working with TfNSW on the safe and successful transition of the Country Regional Network contract over the coming months.

Cimic share price review

The Cimic share price has been on a wild rollercoaster ride in the past 12 months, down 25%. The company’s shares took a sharp downturn in March last year due to COVID-19 impacts, and again more recently this week. This latest downturn followed a disappointing FY20 earnings result.

Based on the current share price, Cimic commands a market capitalisation of close to $6.43 billion.

More reading

• Here’s why all eyes will be on the Cimic (ASX:CIM) share price today
• Why CIMIC, Crown, Domino’s, & Praemium shares are tumbling lower today
• ASX 200 up 0.35%: CBA half year update, IAG impresses, Zip shoots higher
• Why the Cimic (ASX:CIM) share price is plunging 16%
• Goldman Sachs says sell Premier Investments (ASX:PMV) shares into today’s big rally

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

The post The Cimic (ASX:CIM) share price is dipping today despite contract win appeared first on The Motley Fool Australia.

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Hub24 Ltd (ASX: HUB) shares won’t be going anywhere today after the company’s request for a trading halt this morning. At yesterday’s market close, the Hub24 share price finished the day 2.79% higher at $26.51?

What did Hub24 announce?

Prior to market open this morning, Hub24 requested its shares be placed in a trading halt.

According to its press release, Hub24 requested the trading halt pending a further announcement relating to its proposed acquisition of Xplore Wealth Ltd (ASX: XPL).

Hub24 advised that Xplore will release an announcement concerning the outcome of its share scheme meeting scheduled to occur later today. 

Hub24 shares will remain in a trading halt until Xplore’s announcement or until the commencement of trading on Monday 15 February. Xplore shares are also in a trading halt today.

Hub24 potential acquisition of Xplore

Late last year, Hub24 initiated a takeover bid for its ASX-listed rival Xplore Wealth.

Under the initial offer, Hub24 offered Xplore shareholders 20 cents per share, comprised of 50% cash and 50% Hub24 shares. The proposal also included an option to receive all cash or all shares, subject to certain limits.

As a result, the initial offer was estimated to be worth around $60 million.

According to Hub24, the strategic acquisition would ensure it remains a leading provider of integrated platforms, data, and technology services.

How has the Hub24 share price been performing?

Prior to the trading halt, the Hub24 share price was trading near all-time highs, after surging more than 140% over the last 12 months.

Late last month, Hub24 shares received a boost after the company reported a promising FY21 second quarter and half-year update.

The wealth management technology company reported record inflows to its investment platform. For the period October to December 2020, investors ploughed $1.7 billion into the company’s flagship wealth platform, a 37% improvement year on year.

As a result, Hub24 currently has a pool of funds under administration (FUA) of around $31 billion. In addition, the company saw average monthly flows of $514 million, up from $412 million in the year ended 30 June 2020.

According to Hub24’s management, the company has been benefitting from the negative narrative surrounding big banks.

Based on the current Hub24 share price, the company commands a market capitalisation of nearly $1.8 billion.

More reading

• Why BHP, Estia Health, HUB24, & South32 shares are dropping lower
• 5 things to watch on the ASX 200 on Friday
• The latest ASX stocks to be upgraded by brokers to “buy” today
• 5 things to watch on the ASX 200 on Wednesday
• Why the HUB24 (ASX:HUB) share price is pushing higher today

Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd. The Motley Fool Australia has recommended Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post What’s with the Hub24 (ASX:HUB) share price today? appeared first on The Motley Fool Australia.

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The Ecograf Ltd (ASX: EGR) share price is on a wild ride this morning. Initially down more than 6%, the share price then went up 3%. At the time of writing, the Ecograf share price is back down 3% at 97 cents.

The share price movement comes after the graphite producer and supplier reported on the completion of its capital raising.

What did Ecograf report on its capital raising?

In an announcement to the ASX this morning, Ecograf reported it has firm commitments from institutional, sophisticated and professional investors to raise $54.6 million (excluding costs).

Ecograf will issue around 91 million new fully-paid ordinary shares for 60 cents per share. That’s a significant discount to the current 97 cents per share. Ecograf said that “a share purchase plan for all retail shareholders was not possible at this time”.

The company plans to use the new capital to advance its battery anode material recycling programs as well as for the construction and operational commissioning of the first phase of its battery anode material purification facility in Western Australia.

Ecograf also intends to finalise the debt financing arrangements for its Epanko graphite mine.

On Monday, the company announced that GR Engineering Services Ltd (ASX: GNG) would provide the engineering design for its new battery graphite facility in Western Australia. That facility will use the EcoGraf purification technology to provide quality battery anode material products to lithium-ion battery and anode manufacturers.

According to the company, a key advantage of the EcoGra eco-friendly process is “the elimination of the use of toxic hydrofluoric acid (HF), providing customers with ‘HF Free’ battery products that support the increased focus on supply chain environmental, social and governance (ESG) requirements”.

Ecograf share price snapshot

Though up and down for the day in morning trade, the Ecograf share price has been rocketing in 2021.

Shares really began to surge in mid-January, and year-to-date the Ecograf share price is now up an eye-popping 485%. But comparison the All Ordinaries Index (ASX: XAO) is up just over 2% in 2021.

Over the past 12 months, Ecograf shares have gained 1,144%.

More reading

• Mesoblast (ASX:MSB) share price surges on new results
• Why the Optiscan (ASX:OIL) share price is going gangbusters
• ASX 200 Weekly Wrap: RBA unleashes ASX’s inner animal
• Here’s why the Tombador (ASX:TI1) share price is rocketing 35% higher
• Why the GR Engineering (ASX:GNG) share price will be on watch today

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

The post Why is the Ecograf (ASX:EGR) share price on a wild ride today? appeared first on The Motley Fool Australia.

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February may be the shortest month of the year, but it’s also a good time to take a look at your share portfolio.

With the Christmas period fading into the distance and brokers back at work, February is a good time to consider how your portfolio is positioned to perform over the coming year. It may be time to shed ASX shares where the outlook is no longer positive or add promising ASX shares to your portfolio.

To help you do that, we’ve taken a look at 4 ASX shares that brokers have recently rated as buys. 

ALS Limited (ASX: ALQ) 

Goldman Sachs slapped a buy rating on ALS last week thanks to a favourable backdrop for industrial performance. ALS provides testing and inspection services to the mining industry, as well as equipment maintenance and quality assurance to the food and pharmaceutical industries. The ALS share price is currently $11.09, up 14.8% from a year ago.

ALS reported a decline in revenue of 8.9% in 1H FY21, with total revenue of $838.8 million for the half. This was attributed to the COVID-19 pandemic, with significant improvement reported in the second quarter. Nonetheless, the drop in revenue flowed through to profits which dropped by 48.1% to $70.3 million. 

Improved performance is expected in the current half as earnings recovery is driven by a healthy macro and commodity pricing backdrop. ALS says its diversified portfolio of businesses and geographies have proven resilient during the pandemic, with its model leveraged to align cost base with client demand.

The ALS share price has remained largely flat since it delivered its first-half results in November despite healthy commodities pricing. Goldman Sachs views ALS as a clear beneficiary of a tightening mining services market and expects its minerals segment to drive an uplift in consensus estimates. 

Carsales.Com Ltd (ASX: CAR)

Carsales.Com is the company behind the carsales.com.au website, the largest online automotive, motorcycle, and marine classifieds business in Australia. The company is due to release its results for the half-year ended 31 December 2020 next week.

2020 was a challenging year for the company. Immediate cost-saving measures were implemented as the pandemic took hold in line with reduced levels of customer activity. Net profit after tax fell 9% in FY20, but there have been tailwinds as customers embrace online shopping and show a preference for car usage due to concerns about using public transport. The Carsales share price tanked (along with most of the ASX) in March last year but is currently trading almost 12% up from where it was a year ago. 

Goldman Sachs put a buy rating on Carsales earlier this month citing its underperformance since the announcement of vaccine efficiency. The broker acknowledges that the used car market’s sustainability is a key focus, but maintains an optimistic outlook, believing Carsales can deliver growth in earnings per share (EPS) of around 14%.

This will be driven by improving new car sales, the non-repeat of COVID-related dealer concessions, and ongoing cost discipline supporting margins. Exposure to international growth markets, including Korea, is also expected to drive increases in earnings. 

Nearmap Ltd (ASX: NEA)

Nearmap shares took a tumble this week thanks to a report by short-seller J Capital. The Nearmap share price is nonetheless still up 13% from this time last year.

J Capital says Nearmap’s US business is suffering from competitive pressures. The short seller warned Nearmap could be dependent on capital raisings to fund operating losses in the US.

But a fortnight ago, Goldman Sachs upgraded Nearmap to a buy rating, citing the strong economic recovery expected for the US and Nearmap’s “market-leading” technology capabilities. J Capital, however, says Nearmap’s technology is not best in class, with a key competitor in the US having a better camera system. 

Nearmap’s business is based on the capture of aerial images sold as a subscription service to businesses and government. Operating in the US, Australia, and New Zealand, Nearmap’s images are combined with artificial intelligence to deliver insights and location intelligence to users across various industries.

Despite rating Nearmap a buy, Goldman Sachs has downgraded its earnings forecasts due to more modest US growth forecasts and updated foreign exchange forecasts. Nonetheless, the broker says the impact of COVID on sales cycles should ease through 2021 and that Nearmap’s competitive advantages appear undiminished. 

Megaport Limited (ASX: MP1) 

Megaport is another ASX technology share with a recent buy rating. The company is a network-as-a-service provider that provides bandwidth to connect to cloud services and data centres.

Currently sitting above $14, the Megaport share price is up nearly 30% over the past year. In the first half of FY21, Megaport increased its annualised revenue 11% to $75 million, with revenue for the half up 39% from 1H FY20.

The company is benefitting from the acceleration of migration to public cloud infrastructure. Customers are choosing to move to public cloud infrastructure as COVID-19 forces them to confront the difficulties of managing on-premise infrastructure. Incremental revenues are expected to accelerate in 2021 as companies action long-term plans to migrate to the cloud. 

Goldman Sachs rated Megaport a buy in January, noting that the number of services per customer continues to rise. Megaport is continuing to expand its product suite, broadening the services provided to customers. The more services customers use, the less likely they are to churn, resulting in improved customer lifetime value.

Megaport maintains a healthy cash position with $144 million in cash at the end of 2020. The focus in 2H FY21 is on revenue growth and achieving earnings before interest, tax, depreciation and amortisation (EBITDA) breakeven on an exit run-rate basis. 

Foolish takeaway

These 4 ASX shares all have recent buy ratings indicating they may be undervalued. If so, share prices should increase over the long term.

Investors seeking long term capital appreciation often look to undervalued shares, as well as those with long term growth prospects. While you should always do your own research before committing to buy ASX shares, these 4 ASX shares may warrant further exploration. 

More reading

• ASX 200 down 0.3%: Crown CEO hasn’t resigned, Mirvac update, Nearmap remains halted
• Is HyperOne listed on the ASX?
• 2 ASX tech shares to buy for cloud computing exposure
• Nearmap (ASX:NEA) share price sinks 7% on scathing short seller attack
• ASX 200 rises 0.5%, CBA reports, Crown deemed unsuitable for Sydney

Kate O’Brien 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 MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia has recommended carsales.com Limited, MEGAPORT FPO, and Nearmap Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why brokers rate these 4 ASX shares a buy this month appeared first on The Motley Fool Australia.

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Genworth Mortgage Insurance Australia Ltd (ASX: GMA) shares are tumbling lower today after the company released its financial results for the full year ending 31 December 2020 (FY20). At the time of writing, the Genworth share price has fallen 5.65% lower to $2.67.

Why is the Genworth share price sinking?

The Genworth share price is on the slide today after the business reported an underlying net loss after tax of $104.3 million for FY20. This compares to a $97 million net profit after tax during FY19.

The company experienced an underwriting loss of $234 million for the period. The FY19 underwriting result was $42.1 million.

Genworth reported it would not be declaring an interim or final dividend due to the uncertainty surrounding coronavirus and the current economic environment. The board advised that it remains committed to resuming dividend payments when appropriate.

Genworth maintained a cash and investment portfolio worth $3.4 billion as at 31 December 2020.

The company’s net-earned premium was higher for the period, totalling $312 million in FY20 compared to $298.2 million in FY19. Gross written premium jumped 29.7% from $433.2 million in FY19 to $561.7 million in FY20.

CEO comments

Addressing the company’s losses, Genworth Chief Executive Officer and Managing Director Ms Pauline Blight-Johnston said:

Genworth’s FY20 results were materially impacted by the effects of COVID-19 on the economy. While the business achieved strong toppling volume growth in Gross Written Premium (GWP), our Statutory and Underlying net profit after tax (NPAT) losses were affected by an increase in reserving to reflect anticipated future claims outcomes arising from the economic impacts of COVID-19.

Ms Blight-Johnston added:

Importantly, Genworth remains in a strong capital position, able to withstand a wide range of future claims and outcomes.

Genworth share price snapshot

Genworth provides lenders mortgage insurance (LMI) as well as capital and risk management solutions in Australia.

Over the past 12-months, the Genworth share price has fallen by around 30% after being hammered in the March 2020 bear market.

Based on the current Genworth share price, the company commands a market capitalisation of around $1.2 billion.

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Motley Fool contributor Gretchen Kennedy 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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