The 4DS Memory Ltd (ASX: 4DS) share price went through some ups and downs today, rising 4% before closing flat at 12 cents. This follows a company update on its expected shipment of wafers. 

What’s in the wafer delivery?

The memory storage provider advised that Imec – a research and development hub in nanoelectronics and digital technologies – has successfully manufactured second non-platform lot wafers. These are being prepared for shipment, with the delivery expected at 4DS Memory’s Fremont facility around mid-December.

Provided there is no delay in customs clearances, the company will report on the analysis of the wafers between late December and early January.

4DS advised it has identified future refinements to process conditions for the second platform lot wafers. In turn, this is predicted to reduce the risk at the various stages of the fabrication process. As Imec originally had the second platform lot wafers slated to start in the middle of first-quarter FY21, 4DS is seeking to bring the date forward.

The company said that the analysis of second non-platform lot and second platform lot will potentially allow it to fabricate the wafers to read and write selected bits and bytes. In turn, the end process will produce a fully functional megabit memory chip.

Partnership agreement

As the partnership agreement expires on January 1, 2021, 4DS Memory and Imec are currently finalising the terms to extend their collaboration. The company noted that while details such as timetables and costs may take it past the expiry date, Imec remains committed to continuing to work with 4DS.

Furthermore, 4DS advised that it was keeping a close eye on the COVID-19 situation in Belgium and in Silicon Valley, California. As restrictions are being enforced to stop the virus spreading, the company says it will update the market on any significant changes to operations as a result.

About the 4DS Memory share price

The 4DS Memory share price has risen sharply since its lows of 2.5 cents in March, gaining more than 400% and reaching its 52-week high of 17 cents last month.

The company has a market capitalisation of $157 million.

More reading

• Here’s why the 4DS (ASX:4DS) share price is surging today

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

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The Immutep Ltd (ASX: IMM) share price is on fire today, rising close to 60%. Immutep shares closed at 28 cents a share yesterday afternoon but opened at 45 cents this morning before rising to a high of 54 cents. The Immutep share price has since cooled somewhat but is still trading 60.7% higher at 45 cents a share at the time of writing.

Today’s share price moves also mark a new 52-week high for the company, which reached its previous high back in February, before the coronavirus-induced market crash in March saw the shares plummet more than 75%. Even so, today’s moves mean that Immutep shares are up more than 320% from the lows we saw back in late March.

So what is this company? And why is the Immutep share price exploding higher today in such dramatic fashion?

What is this company?

Immutep is a biopharmaceutical company that was founded back in 2001. It’s a dual-listed company, appearing on the ASX under the IMM ticker code, as well as the United States’ Nasdaq exchange, where it is listed as Immutep ADS (NASDAQ: IMMP).

Companies often dual-list in order to attract more investor capital, especially in the US, where stock markets are the most capitalised in the world by far. It’s not the only Australia-US dual-listed stock in the medical/biopharmaceutical space either. Well-known ASX examples include Resmed Inc (ASX: RMD) and Avita Therapeutics Inc (ASX: AVH).

Immutep describes itself as “leading the development of immunotherapy for cancer and autoimmune diseases”. It states that its goal is “to harness and strengthen the power of the body’s own immune systems through therapeutic intervention for the benefit of patients’ health”.

Its field of specialisation is the understanding and development of therapeutics that modulate Lymphocyte Activation Gene-3 or ‘LAG-3’ as the company calls it. LAG-3 is apparently a “cell surface molecule which plays a vital role in regulating T-cells”. T-cells are a type of white blood cell that is an essential part of the body’s immune system. They help the body to identify and eliminate foreign pathogens, diseases and other threats.

Immutep reportedly has 1 pre-clinical and 3 clinical LAG-3 product candidates under development, including two antibodies for modulating immune responses in autoimmunity and cancer. It apparently is in partnership with global pharma giants Novartis and GlaxoSmithKline in this endeavour.

Why is the Immutep share price raising the roof today?

The Immutep share price appears to be responding to a couple of ASX releases the company announced this morning before market open.

Firstly, Immutep reported that it has achieved a “statistically significant” survival benefit for patients in an ongoing trial. The company notes these benefits are the first time an antigen-presenting cell activator has shown an overall survival benefit in a randomised setting in metastatic breast cancer patients known to be insensitive to immune checkpoint inhibitor therapy.

However, the company says data collection is ongoing and it won’t have a final report on the matter until mid-2021. Even so, this data apparently shows that the treatment under trial has resulted in 7.1-month and 9.4-month survival benefits across 2 groups of patients.

Immutep’s second announcement tells us that its partner company in China – EOC Pharma – is starting a new Phase II clinical trial for up to 152 metastatic breast cancer patients in China. This trial is aiming to evaluate the “efficacy and safety of eftilagimod alpha” in conjunction with chemotherapy treatments for these cancer patients. Eftilagimod alpha (efti), also called LAG-3Ig or IMP321, is, according to the company, a “first-in-class antigen-presenting cell (APC) activator”.

EOC Pharma has an agreement with Immutep to “make further milestone payments to the company if efti achieves specific development milestones as well as undisclosed royalties on sales and is also required to fund the Chinese development of efti”.

More reading

• 2 fantastic ASX healthcare shares to buy for 2021
• 3 stellar ASX growth shares to buy
• These are the 10 most shorted shares on the ASX
• 3 ASX growth shares to buy for 2021
• Why the Afterpay (ASX:APT) share price and these ASX stocks could get a boost next week

Sebastian Bowen 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 has recommended Avita Medical Limited and 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 S&P/ASX 200 Index (ASX: XJO) fell by 0.55% today to 6,691 points.

Here are some of the highlights from the ASX:

Appen Ltd (ASX: APX)

The Appen share price fell by around 10% after giving an update today.

The AI machine learning data business said that whilst its FY20 third quarter was lower than expected, its major customers released strong third quarter results and online advertising bounced back. This, and the fact its fourth quarter revenue has historically averaged 30% of its full year results, gave Appen the confidence to maintain its market guidance up until today.

However, Appen’s November results, which have just been finalised, show that while the fourth quarter has improved compared to the third quarter, the usual ramp up it traditionally sees at this point is not occurring. Appen said that COVID-19 has disrupted and reshaped the priorities and activities of its customers, especially in California where its biggest customers are based. It has also impacted its face to face sales and customer engagement practices.

The ASX 200 share is now expecting its FY20 underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to be in the range of $106 million to $109 million at the actual exchange rate of AU$1 to US$0.74 for December. This is equivalent to a guidance range of $108 million to $111 million after applying the originally assumed exchange rate of US$0.70 for the second half.

Regarding the second half, Appen said: “second half underlying EBITDA is expected to grow at 30% plus over the first half”, applying first half exchange rates to second half performance.

Appen commented its major clients are reprioritising resources towards new product areas that enhance their long-term resilience and value which is currently impacting work volumes on some large mature projects. However, management believe this product development trend is positive for the company and it’s seeing a significant increase in the number of new projects amongst it major customers, although some are early in the lifecycle.

It’s also winning new customers in markets less impacted by COVID-19, including in new business areas such as shipping, automotive, education and health care.

Appen also said the long term trends for the business are very positive and spending on artificial intelligence is growing rapidly. It’s expecting a return to strong growth rates in 2021.

Link Administration Holdings Ltd (ASX: LNK)

The Link share price went up 0.9% today after it gave an update about the SS&C Technology bid to acquire Link for $5.65 per share.

Link’s board said it has carefully considered the SS&C proposal, including obtaining advice from its financial, tax and legal advisors. It has decided the offer does not represent compelling value for shareholders on a control basis. However, the board thought it was appropriate to provide SS&C with due diligence information on a non-exclusive basis so that it can develop a proposal that may be capable of being recommended to shareholders.

The board of the ASX 200 company noted that the SS&C proposal is non-binding and indicative in nature and subject to numerous conditions, including due diligence, unanimous Link board approval and securing debt finance.

The due diligence will be provided subject to entry into an appropriate confidentiality agreement containing suitable protections for Link, including a stand-still clause.

However, Link said there can be no certainty a proposal will eventuate and shareholders don’t need to take any action.

More reading

• Brokers just upgraded these two ASX stocks to “buy”
• Why the Appen (ASX:APX) share price is sliding 11% today
• The two ASX stocks most impacted by the dangerous rise of the Aussie dollar
• ASX 200 down 0.4%: Appen downgrades guidance, Fortescue hits a record high
• Why Appen, McPherson’s, Northern Star, & PWR shares are dropping lower

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd and Link Administration Holdings Ltd. The Motley Fool Australia has recommended Link Administration Holdings 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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Thankfully for investors, the Australian share market is home to a good number of high quality blue chip shares to choose from. 

Two blue chips which could be worth considering as additions to your portfolio in 2021 are listed below. Here’s what you need to know about them:

Cochlear Limited (ASX: COH)

Cochlear is one of the world’s leading hearing solutions companies. It has been a very positive performer over the last decade thanks to its consistently strong sales and profit growth.

Pleasingly, the company appears well-positioned to continue this trend over the next decade due to its strong market position, leading technology, and its exposure to the ageing populations tailwind.

In respect to the latter, by 2050 there are forecast to be 1.5 billion people over the aged of 65. This will be almost triple the number of over 65s in 2010. This bodes well for demand for its product portfolio. And with management investing heavily in research and development, it looks well-placed to maintain its leadership position.

Analysts at Macquarie are positive on the company’s prospects and believe Cochlear is winning market share in the United States. They currently have an outperform rating and $241.00 price target on its shares.

REA Group Limited (ASX: REA)

REA Group has been a strong performer in recent years despite battling with a housing market downturn and the COVID-19 pandemic. This demonstrates the resilience of its business model and its exceptionally strong market position.

The good news is the housing market has been tipped to rebound very strongly in 2021, with some banks even forecasting record house prices. This bodes well for REA Group as it could lead to a jump in listing volumes.

Another positive is the potential for price increases, new revenue streams, and its costs remaining low post-pandemic. Combined, these could underpin an acceleration in its earnings growth in the coming years.

That is something analysts at Morgan Stanley are expecting. They recently slapped an overweight rating and $150.00 price target on the company’s shares on the belief that a “super cycle” is coming.

More reading

• The two ASX stocks most impacted by the dangerous rise of the Aussie dollar
• 2 ASX 200 healthcare shares that outperformed in November 
• 10 fantastic ASX shares to buy in December
• 2 ASX blue chip shares tipped as buys
• Is the Cochlear (ASX:COH) share price a long term market beater?

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 Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and REA Group 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 JB Hi-Fi Limited (ASX: JBH) share price gained almost 2% in afternoon trading today after the company received a rating upgrade from broker Bell Porter.

The broker has revised JB Hi-Fi’s rating from a “sell” to “neutral”, despite saying the share price is already trading at fair value at current levels.

At the time of writing, the JB Hi-Fi share price is at $44.77, up by 85 cents.

Reason for the upgrade

Bell Porter believes that JB Hi-Fi will continue its strong results in the second-quarter, following a strong first-quarter update.

The broker expects the 27.6% like-for-like sales surge in the first quarter for the flagship brand, as well as the 30.9% surge in The Good Guys brand, will continue through to the second-quarter.

This, the broker says, is underpinned by the strong Black Friday-Cyber Monday sales in late November, and positive momentum heading into Christmas.

However, the broker says that the JB Hi-Fi share price is trading at roughly fair value right now, and has suggested a target price of $43.65.

Bell Porter analyst Sam Haddad says that it’s unlikely that sales growth will be maintained in 2021-22, and warns that “material negative like-for-like sales will emerge”.

The brokers forecasts 28% first-half sales growth, a 18% contraction in the second-half in 2020-21, followed by a full-year contraction of 6.1% in 2021-22.

JB Hi-Fi’s business model

JB Hi-Fi is one of Australia’s largest discount retailers in home entertainment. Its brand includes The Good Guys franchise, which it purchased in 2016. Its main competitor, Dick Smith Electronics, folded in 2016.

JB Hi-Fi’s competitive advantage is in its low-cost business model, where stores typically break even within one year. The company doesn’t have warehouses, and stocks its inventory on site in each outlet, minimising costs. Its business model thus relies on high volume and turnover.  

JB Hi-Fi has cemented itself as the category killer in electronics similar to Bunnings, which is owned by Wesfarmers Ltd (ASX: WES), in the hardware space. The company has a network of 320 stores across Australia and New Zealand, and an online platform.

About the JB Hi-Fi share price this year

The JB Hi-Fi share price has been a runaway tear this year since March, rising by 92%. It began the year at $38 before dipping to $23.16 in March. It has since surged to today’s level, which represents a gain of 18% on a year-to-date basis.

The company commands a market value of $5 billion.

More reading

• 2 ASX dividend shares with attractive yields to buy
• The Aussie dollar just hit a new 2-year high. Here’s what that means
• Top brokers name 3 ASX shares to sell next week
• After a record November, what’s next for ASX 200 shares?
• ASX 200 Weekly Wrap: ASX 200 on track for a top month

Motley Fool contributor Eddy Sunarto 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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Shares of Resource Development Group Ltd (ASX: RDG) weren’t trading until moments before close today. But the share price slipped 1.96% in that small timeframe in the wake of this afternoon’s acquisition announcement.

Despite falling 50% during the February to March coronavirus-fuelled fire sale earlier this year, the Resource Development share price is up 150% year-to-date, and up 400% from its 25 March lows.

By comparison, the broader All Ordinaries Index (ASX: XAO) is up 2% so far in 2020.

What does the group do?

Resource Development provides contracting, remedial and construction services to the mining and oil and gas sectors within Australia as well as residential building and development. Its construction segment generates a majority of the firm’s revenue.

Resource Development Group’s shares first began trading on the Australian exchange on May 2011.

What’s driving the Resource Development share price?

Resource Development announced it has entered into a binding agreement to acquire 100% of the Balline Garnet Project. The agreement was reached with shareholders of Australian Garnet Pty Ltd.

The company said the tenements in Balline, Western Australia, are contiguous with the world’s largest supplier of alluvial garnet. Alluvial garnet products are used in the blasting and waterjet cutting markets.

Commenting on the acquisition, Resource Development managing director Andrew Ellison said:

Balline is a high-quality shovel ready project that is expected to produce a suite of highly sought after alluvial garnet products. We believe these products are undersupplied in global markets and are in high demand.

This is supported by our initial engagement with potential customers. Balline is one of only a handful of garnet projects globally capable of supplying high-quality garnet products.

The acquisition remains subject to the usual conditions precedent, which includes completing legal and commercial due diligence and AGPL agreeing to settlement terms with its creditors that are satisfactory to Resource Development.

Following on settlement, Resource Development plans to finalise its plans for the project infrastructure. That includes a wet concentration plan, mineral separation plant, and non-process infrastructure. The company reports this work will be funded with its existing cash reserves.

The Resource Development share price is up more than 150% in 2020, and was trading at 51 cents at close of trade yesterday.

More reading

• Brokers just upgraded these two ASX stocks to “buy”
• Why the Adbri (ASX:ABC) share price has dipped in trading today
• 3 top ASX shares rated as buys by fund managers
• Shriro (ASX:SHM) share price hits multi-year high today. Here’s why
• Broker upgrades the IGO (ASX:IGO) share price on game changing acquisition

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.

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The market is in retreat today but there are two ASX stocks bucking the downtrend after getting upgraded by leading brokers.

The S&P/ASX 200 Index (Index:^AXJO) shed 0.5% ahead of the close with most sectors slumping into the red on weak offshore leads.

Upgraded on attractive valuation

However, the Perpetual Limited (ASX: PPT) share price moved in the opposite direction as it surged 5.5% to $35.91. This makes the wealth manager the second top performer on the ASX 200 after the Aurumin (ASX: AUN) share price.

The Perpetual share price got a boost as Credit Suisse upgraded it to “outperform” from “neutral”.

The broker thinks now is the time to buy the stock. It’s trading on a FY22 forecast price-earnings multiple of 13 times.

Why the Perpetual share price is now a buy

That’s attractive given that the risk of clients leaving Perpetuals recently acquired business Barrow Hanley is reduced.

“Outflows likely to moderate and could shift to neutral/positive with the recent rotation into value, improved fund performance and exposure to higher growth ESG markets,” said the broker.

“[It’s] our view that PPT should trade on ~15x 24‐month EPS, offering investors not only earnings growth but also a re‐rating.”

Credit Suisse’s 12-month price target on the stock is $39 a share.

The ASX stock that got upgraded due to M&A

Meanwhile, the GUD Holdings Limited (ASX: GUD) share price jumped 1.1% to $11.31 on Thursday.

Its outperformance coincides with Macquarie Group Ltd’s (ASX: MQG) decision to upgrade it to “outperform” from “neutral”.

The broker is excited about the stock following GUD’s acquisition of Automotive Components and Accessories Division (ACAD) from AMA Group Ltd (ASX: AMA).

“The ACAD acquisition further diversifies GUD’s customers and channels to now include OEMs, fleets, car dealerships and specialist 4WD resellers,” said Macquarie.

“Overlapping GUD/ACAD customers represent only ~7% of revenue.”

Strong outlook for GUD share price

The transaction also gives GUD an entry point into the fast-growing four wheel drive (4WD) accessories market.

Macquarie also pointed out that the GUD share price is trading on undemanding valuations, particularly given the high visibility of GUD’s revenues and strong outlook.

The broker’s 12-month price target on GUD is $12.60 a share.

More reading

• Why Asaleo Care, Fortescue, Perpetual, & Starpharma shares are storming higher
• The two ASX stocks most impacted by the dangerous rise of the Aussie dollar
• ASX 200 down 0.4%: Appen downgrades guidance, Fortescue hits a record high
• Why the Michael Hill (ASX:MHJ) share price is leaping 11% higher
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group 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 Adbri Ltd (ASX: ABC) share price is trading slightly lower today after this morning’s announcement of a major shakeup of the company’s senior management roster.

At the time of writing, the Adbri share price is down 0.62% at $3.20.

Shakeup at the top

The Adelaide-based constructions material manufacturer made quite a few changes to its executive leadership team today as part of the company’s restructuring efforts.

Adbri says the changes consolidate the current 3 operating divisions into 2. The 2 new divisions will be Cement and Lime; and the newly formed Concrete, Aggregates & Masonry, which combines the previous Concrete & Aggregates, and Concrete Products divisions.

As a result of these divisional changes, the company has made a number of executive rotations, including the redundancy of Cement and Lime general manager, Brad Lemmon. 

A major client lost

The restructuring is part of a major strategy to get the company back to strength following this year’s bushfires and the COVID-19 pandemic. In its half-year FY20 results, Adbri reported a 14% drop in profits to $47.6 million. 

The company was also rocked in July when Alcoa Corp (NYSE: AA), one if its biggest American clients, decided not to renew a long-standing supply contract with Adbri-owned Cockburn Cement.

That decision saw more than $515 million stripped from the value of the company, with Adbri’s share price plunging by more than 30% at the news. 

The announcement also saw the termination of a $70-million a year contract, as well as a 50-year relationship between the two companies. 

In September however, Adbri got some of its shine back after announcingit had won a four-year contract extension to supply cement and lime to BHP Group Ltd‘s (ASX: BHP) Olympic Dam mine. That contract is worth $160 million over the full term.

About the Adbri share price

Overall, the Adbri share price has lost about 9% in 2020. As mentioned, the share price dropped to as low as $2.14 following the termination of the Alcoa deal in July. However the Adbri share price has regained momentum after the BHP deal was announced, rising steadily since September to today’s level. 

Adbri commands a market cap of $2.1 billion.

More reading

• ASX mining shares boosted today after broker upgrades
• Iron ore exports unlikely to slow down amid Australia–China trade tension: experts
• The Aussie dollar just hit a new 2-year high. Here’s what that means
• This dividend share has the most franking credits on the ASX
• The BHP (ASX:BHP) share price has just hit a multi-year high

Motley Fool contributor Eddy Sunarto owns shares of BHP Billiton 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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There are some ASX shares that fund managers believe are opportunities to buy.

Here are three of those opportunities:

Reject Shop Ltd (ASX: TRS)

Eley Griffiths Group is a fund manager that likes Reject Shop as an opportunity. The Eley Griffiths fund that invests in ASX shares has outperformed the S&P/ASX Small Ordinaries Accumulation Index by more than 10% per annum in recent years.

The fund manager believes that the global economy is now in a recovery phase, starting in China and spreading outwards.

Regarding Reject Shop, Eley Griffiths said in an ASX release of Future Generation Investment Company Ltd (ASX: FGX): “the ASX share sits at the early stages of a planned multi-year turnaround. New management have a reset balance sheet, strong brand and an operating model awaiting refinement. We have identified several levers where value for shareholders should be unlocked.”

Despite COVID-19, Reject Shop actually reported growth in FY20 with total sales growth of 3.4% and comparable sales growth of 3.5%. Before AASB 16, FY20 earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 30.1% to $23.7 million. It also generated $61.6 million of free cashflow, up from a $1.9 million outflow in the prior corresponding period.

Reject Shop is now focused on earnings before interest and tax (EBIT) growth with business simplification and operational efficiency.

Sonic Healthcare Limited (ASX: SHL)

Sonic Healthcare is a globally pathology business which is one of the main businesses involved in diagnosing COVID-19 cases in the countries that it operates in.

This business is liked by fund manager Clime Capital Ltd (ASX: CAM). Sonic actually reported that it had achieved positive growth in the base laboratory business compared to last year, apart from the US and the UK. The large numbers of COVID-19 tests are extra growth on top of that. Sonic recently announced that in the first quarter of FY21 for the three months to 30 September 2020 it achieved total revenue growth of 29%. By cutting costs Sonic was able to achieve EBITDA growth of 71% for the quarter.

Clime thinks that COVID-19 testing is likely to remain particularly strong during the winter for the US and European countries.

Sonic also has one of the longest consecutive dividend growth streaks on the ASX.

Bapcor Ltd (ASX: BAP)

Bapcor is the largest auto parts business in Australia and New Zealand.

It has its trade division, which includes Burson Auto Parts. The ASX share has a retail division which includes Autobarn. Bapcor has a service business which owns Midas and ABS. The auto parts business owns various specialist wholesale businesses and it also added a commercial truck parts group too. Finally, it has a small but growing Burson network in Thailand.

Bapcor is a favourite share idea of Wilson Asset Management (WAM) at the moment, with it being a holding across more than one of the listed investment companies (LICs).

WAM Research Limited’s (ASX: WAX) investment team pointed out that in the quarter for the three months to 30 September 2020 Bapcor grew revenue by 27% compared to the prior corresponding period, with retail revenue rising 47% and specialist wholesale revenue going up 45%.

Bapcor has benefited from an increase in domestic travel, reduced usage of public transport and increased second-hand car sales according to WAM. The fund manager said that Bapcor has a strong balance sheet and believes it’s well placed to make earnings accretive acquisitions.

In the recent trading update, Bapcor CEO Darryl Abotomey spoke of the company’s defensive qualities: “The automotive market is a resilient industry and historically has performed strongly in difficult economic circumstances. Recent trading is another example of its resilience assisted by the increase in sales on second hand cars, reduction in use of public and shared transport modes as well as government stimulus.”

More reading

• The Aussie dollar just hit a new 2-year high. Here’s what that means
• Why Bapcor, Event, Money3, & Tyro shares are dropping lower
• Got money to invest? Here are 3 ASX dividend shares to buy
• 2 turnaround ASX shares to buy
• 2 fantastic blue chip ASX shares to buy today

Motley Fool contributor Tristan Harrison owns shares of Future Generation Investment Company Ltd. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended Sonic Healthcare 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 Shriro Holdings Ltd (ASX: SHM) share price is rocketing higher today. This comes after the company released a positive trading update and outlook for its full-year results.

During afternoon trade, the Shriro share price hit a multi-year high of $1.02. Although its shares have since retreated somewhat, the Shriro share price is up 15% to 92 cents in today’s session. In comparison, the All Ordinaries Index (ASX: XAO) is 0.6% lower to 6,922 points.

Quick take on Shriro

Shriro is a leading kitchen appliances and consumer products group that markets and distributes throughout Australia and New Zealand. The company operates in an array of consumer goods sectors including electronics, BBQ’s and outdoor products, kitchen appliances, musical instruments, and personal effects.

Shriro’s company-owned brands include Omega and Robinhood kitchen appliances and it also distributes third-party brands such Blanco and Casio in Australia and New Zealand.

Trading update and outlook

Today’s soaring Shriro share price is testament that investors are excited about the company’s progress to date.

According to its release, Shriro is continuing to see strong demand in its household-related goods for the fourth quarter. This follows communication to shareholders in an October trading update that advised revenues had increased 14% on the prior corresponding period.

Based on the current projections, Shriro is forecasting full-year revenue to be in the range of $180 million to $185 million.

Earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be between $29 million to $31 million. And, net profit after tax is forecast within the vicinity of $15 million to $17 million.

Management said the strong result has benefitted from a number of payments and cost-cutting measures due to COVID-19. These included government wage subsidies of $3.7 million, and a head office lease exit benefit of $2.3 million. In addition, decisions were made by the company to reduce spend on marketing activities and decrease staff hours and travel. Furthermore, Shriro delayed the move to its new head office, which won’t be completed until 2021.

In total, Shriro reported that these initiatives saved the business approximately $4 million. This offset the fall in revenue in March and April as a result of the COVID-19 lockdowns.

Shriro moved against providing a forecast of earnings for FY21, given the uncertain economic climate.

About the Shriro share price

The Shriro share price hit a multi-year high today of $1.02, strongly rebounding from its lows of 39 cents reached in March. Although, the company’s shares have retreated slightly from this high, the Shriro share price is still up 33% since the start of 2020.

Shriro has a market capitalisation of $85.5 million and a price-to-earnings (P/E) ratio of 10.2.

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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 Shriro (ASX:SHM) share price hits multi-year high today. Here’s why appeared first on The Motley Fool Australia.

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