Anyone who has an interest in the US share market, and in US growth shares, in particular, is probably familiar with the concept of a SPAC (Special Purpose Acquisition Vehicle) company.

SPACs have been growing in popularity over the past year or two. They have also been singled out as a symptom of what some investors call an overheating market.

So what exactly is a SPAC, and are they coming to the ASX?

A SPACtacular idea?

A SPAC is a way that an unlisted company can join the share market. Think of a SPAC as an alternative to an initial public offering (IPO).

However, unlike an IPO, which involves the unilateral listing of a new company’s shares, SPACs operate a little differently. They involve a shell company, that exists only for the purposes of the SPAC.

If all parties agree, this shell company merges with an unlisted private company in order to form a new company on the share market. Many speculative investors like to hunt for these shell companies before an official announcement is made.

That’s because a SPAC has very little value before an announced merger. And potentially a lot once the merger is announced.

Some famous examples of companies that have listed using a SPAC include Nikola Corporation (NASDAQ: NKLA) and Draftkings Inc (NASDAQ: DKNG).

SPAC that, right on the ASX floor?

At least until now, SPACs have been an American phenomenon. But it might be about to be coming to a whole lot closer to home for Aussie investors. According to reporting in the Australian Financial Review (AFR) today, the ASX is facing a growing chorus of supporters clamouring for SPACs to be allowed on our own ASX.

Especially given that some companies that might have listed on the ASX could instead look to the US for a SPAC merger.

The AFR reports that Ian Taylor, head of equity capital markets at Goldman Sachs in Sydney, is one such voice. He told the AFR that they can be an efficient and useful way for companies to join a share market.

“There are real uncovered gems at very large sizes… the SPAC structure is evolving for the better and I do think that fears of a bubble are overdone,” he told the AFR.

However, the ASX will certainly be wary of the frothiness the whole SPAC space has seen in recent times. The AFR report also states that SPACs raised US$78 billion from investors in 2020, but has already raised another US$72 billion in the 2½ months of 2021 so far.

The US Securities and Exchange Commission (SEC) was reportedly forced to issue an alert to retail investors last week. It warned them that celebrity like Jay-Z backing a SPAC is not a reason to invest. Not exactly a problem the ASX would want, you would think.

The ASX is reportedly considering the idea. The AFR tells us that the ASX has stated that, “we will listen to the market and take a cautious approach”.

That doesn’t sound like a ringing endorsement of the whole process, but this is certainly an interesting space to watch!

More reading

• Could this overnight news lift the PointsBet (ASX:PBH) share price?

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

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It occurred to me this morning that my Monday articles tend to be a little more reflective than those I write during the rest of the week.

Probably influenced by a couple of days off, and a break from the constant flow of news and share prices, my mind has the time and space to turn to the bigger picture.

And that, in a very ‘meta’ way (as the cool kids say these days), is what I wanted to share with you, today.

On Saturday morning, I sent a tweet (if Trump’s election loss makes you unhappy, please avert your eyes):

“I hadn’t thought about the US President all week, until now.

First time in about 4 years…

As it should be.

Great to have an adult in the White House…”

And one reply in particular, from property guru Pete Wargent, caught my eye:

“if only the Fed was the same. feels almost like we get hourly updates sometimes”

The Fed, of course, is the US version of our Reserve Bank, the US Federal Reserve.

And Pete’s right.

If you want it, not only can you get regular updates from the Fed itself, but you could probably have an endless stream of updates, views and opinions from the phalanx of Fed watchers.

All Fed. All the time.

The same is true, of course, of shares.

The market is open 6 hours a day, 5 days a week. If you’re investing in the US, you can double that (and add a little bit for their ‘after hours’ market). 

Then there’s the ASX announcements, press releases, newspaper articles, tweets, TV appearances and the rest.

So much information. So little time.

You know what’s coming next, right?

Yep.

You could probably get rid of 95% (99%?) of it, and still build (and sustain) a wonderful nest egg.

A bit rich, coming from a bloke who spends his entire working life (and much of my recreation time) thinking about stocks?

Not really.

Most of the thinking I (and the team at The Motley Fool) do is not centred around trying to digest the most recent information.

In fact, we disregard most of it.

Rarely is it new. 

Rarely is it impactful.

Rarely is it important to our investment thesis.

And remember… it wasn’t always thus.

It really is remarkable how quickly times change.

When I was doing high school economics, there was (kids, cover your eyes) no internet.

No constant stream of ASX announcements. No constant stream of news and views.

The news we did get was via tomorrow’s newspaper.

(And, get this: I had to call the investor relations departments to get past copies of company annual reports!)

Now, I think, net-net, things have improved. Easy access to information means less of a ‘knowledge gap’ between the big end of town and the rest of us.

That’s undeniably great.

The downside, of course, is that we’ve gone from drought to flood, and sometimes just keeping afloat is a challenge, let alone making progress.

The art has gone from ‘finding information’ to ‘working out what to read, and what to discard’.

It’s not just an internet problem, either.

BHP Group Ltd (ASX: BHP)’s latest annual reporting papers were – get this – 520 A4 pages long!

In a single pdf.

What Challenger Ltd (ASX: CGF) can’t match BHP for in length, it makes up for in the sheer number of dispatches.

In one day in August last year, Challenger released, in different announcements, its Appendix 4E, its Annual Report, its Annual Review, its Market Release, its Investor Presentation and Outlook, its Analyst Pack, its Appendix 4G, its Corporate Governance Report, its Sustainability Report and its Capital Notes Newsletter.

With 10 different documents, spanning more than 350 pages, it’s probably no surprise that before the day was out, it had to release an 11th – a correction to one of the aforementioned!

And those reports from BHP and Challenger (just to pick two) are the important stuff, straight from the company, before all of the analyst reports, news articles, opinion pieces and the rest.

You could truly do nothing else but spend your life trying to trawl through them all, and not even succeeding.

I’m not sure if I’ve written this before, but my boss, Bruce Jackson, is a big fan of ‘focus’ – not being distracted by things we ‘could’ do, instead making sure we prioritise the few things that matter most.

It’s also a great idea for investors.

Using that idea, there’s a line I regularly use which I hope I haven’t stolen from someone else: “Scarcity is a wonderful resource”.

That is, when you have a limit to the amount of resources (time, people, information) you have, you’re forced to prioritise.

Which companies will I dig a little deeper on?

Which source(s) of information will I go to first?

What elements of my experience and education can I use to screen out the poor prospects?

Which people’s opinions should I elevate, or ignore?

Those higher-level questions are, to invoke another analogy, the investors’ example of the small businesswoman’s challenge: working ‘in’ the business versus working ‘on’ the business.

Working ‘in’ the business is doing the stuff that needs doing: buying inventory, running the machinery, serving customers, paying bills and the like.

Working ‘on’ the business is the higher level stuff: what new products should we make/sell? What resourcing will we need for the next leg of growth? How can we better serve our customers? 

The former is ever-urgent. But you can’t grow unless you spend time on the latter.

For the investor, the temptation to spend all of our time surfing the wave of information is strong. There’s always something else to read, to listen to, to incorporate in an investment thesis. That’s the ‘day to day’.

But the ‘working on’ the business version, for investors, is to spend time refining the process. Thinking through the mental models. Working out what information to absorb, and to disregard. What sources to use. How to best filter information.

It’s probably no surprise that we’re most likely to be able to do that over the weekend, on Monday morning, or in the shower – the times our minds are most free of the ‘information wave’.

Yes, information consumption aids learning. Warren Buffett and his lieutenant Charlie Munger are voracious readers. Investing is, to a large extent, a game of incremental accumulation of knowledge.

But, particularly in Munger’s case, he reads so incredibly widely that he’s essentially ‘cross training’ to prepare his mind to make better investment decisions.

No, there is no substitute for the hard work of educating yourself; both formally, and by the regular informal acquisition of knowledge.

But if that’s all you do, you’ll drown in the process, either failing to learn what’s truly most important in making investment decisions, or burning yourself out… or both.

The process of creating art requires a lot of attention to detail. But that can only truly be done by stepping back and making sure you can see the whole canvas from time to time.

It’s no mistake that investing is more art than science.

More reading

• Why the Magellan (ASX:MFG) share price leapt 5% today
• Triple whammy hammers the Fortescue (ASX:FMG) share price today
• Do brokers rate the BHP (ASX:BHP) share price as a buy?
• This fundie refuses to invest in gambling and fossil fuels
• Can ASX BNPL companies like Afterpay (ASX:APT) compete with Paypal?

Motley Fool contributor Scott Phillips 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 Hazer Group Ltd (ASX: HZR) share price closed slightly down today after the company announced the start of new works at its Woodman Point treatment facility.

Shares in the hydrogen producer were trading 0.38% lower at a price of $1.29 when the market closed today.

It comes on the back of a positive year for the company that has seen its share price rise 323%. In comparison, the All Ordinaries Index (ASX: XAO) has gained 38.8% in the same period.

What happened

This morning, the Hazer share price was trading lower despite the announcement of new works at the company’s wastewater treatment facility. The work will involve the mobilisation of equipment, cite clearing and civil earthworks which will start this week.

It’s possible that Hazer’s falling share price is a result of cost revisions for the project. The company advised that the project has seen some price increases, with the expected final cost now estimated at between 5% and 10% above its initial cost estimate of $17 million. 

The company attributed the price blowout to a number of factors, including the increased cost for the reactor and furnace packages. Hazer also chose to revise the design in a more complex manner to enable the company to deal with the required process conditions and engineering costs more safely.

Moreover, increased labour and equipment costs as a result of COVID-19 have also pushed up the pricetag. As such, the company estimates that the plant will now cost between $17.9 and $18.7 million.

Management comments

Commenting on the update, Hazer Group CEO Geoff Ward said:

We continue to make strong progress on the CDP with finalisation of key aspects of the technical design and commencement of earthworks.

As a first-of-kind project, the technical challenges are significant, but I am delighted by the way the Hazer team has worked with industry experts, suppliers and universities to resolve these challenges and deliver a robust design for the Hazer project.

More reading

• 4 ASX hydrogen shares powering forward in 2021

Motley Fool contributor Daniel Ewing 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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It hasn’t been a great day for companies in the buy now, pay later (BNPL) sector. The Afterpay Ltd (ASX: APT) share price fell into the red, as did shares in fellow payment providers Zip Co Ltd (ASX: Z1P) and EML Payments Ltd (ASX: EML).

Comparatively, the S&P/ASX 200 Index (ASX: XJO) closed 0.6% up. So why did the share prices of these 3 BNPL companies drop today?

ASIC continues BNPL probe

The BNPL industry is on the Australian Securities and Investments Commission’s (ASIC) radar.

According to the Australian Financial Review, ASIC is concerned that consumers are not clear on how the BNPL businesses operate. 

ASIC believes that while the payment services that companies like Afterpay, EML Payments and Zip offer are convenient, some consumers are not aware of how the transactions are actually structured. 

Specifically, ASIC is now probing into whether the BNPL companies meet the regulator’s new design and distribution obligations (DDO). The DDO has to do with how a business defines its consumers, how it determines the services required and how the product is delivered.

Afterpay share price sinks 4.5% as BNPLs slide

The Afterpay share price closed down 4.5% today, trading at $108.28 a share. The Zip share price lost 1.1%, and the EML Payments share price dropped 0.97%.

ASIC has voiced its concern that the BNPL industry has grown far too quickly without being regulated. Its new regulations are scheduled to be enforced come October.

The general idea of enforcing the new BNPL rules is consumer protection. The DDO will also apply to other sectors and industries. However, BNPL is the first target set to try the new regulation out on.

Foolish takeaway

All businesses have an obligation to be transparent and not pull the wool over the eyes of consumers. 

The BNPL companies were bound to hit a regulation hurdle sooner or later, and being selected to test drive the DDO framework can potentially send a strong regulatory message from a fairly new space.

Investors will undoubtedly be interested in discovering what the DDO rules will mean for ASX BNPL companies and others once enforced.

More reading

• ASX 200 recovers, Evolution Mining acquisition, Afterpay sinks
• Why Afterpay, Fortescue, GWA, & Jupiter Mines are dropping today
• ASX 200 down 0.1%: Afterpay sinks, Evolution announces acquisition
• Can ASX BNPL companies like Afterpay (ASX:APT) compete with Paypal?
• ASX 200 Weekly Wrap: Calm restored to the ASX 200

Gretchen Kennedy 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 EML Payments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended EML Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why did the Afterpay (ASX:APT) share price and 2 other BNPLs fall today? appeared first on The Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) ended flat, after being down earlier in the day, ending at 6,773 points.

One of the worst performers in the ASX 200 was the Afterpay Ltd (ASX: APT) share price which fell 4.5%.

Here are some of the highlights from the ASX:

Evolution Mining Ltd (ASX: EVN)

The Evolution Mining share price rose today in reaction to a Canadian acquisition. The gold miner said that it’s buying Battle North Gold Corporation for C$343 million, which equates to a price of C$2.65 per share – it’s listed in Canada.

This purchase price is a 46% premium to the closing share price from last week.

Battle North’s CEO, George Ogilvie, explained the benefits of joining the two businesses together to progress the Bateman Gold Project further:

We believe that there are unique and undeniable merits to combining the Red Lake assets of Battle North and Evolution and this transaction reduces development and execution risk. Evolution is a highly regarded mining company with a demonstrated ability to successfully operate internationally.

Jake Klein, the executive Chair of Evolution, said what this would do for the ASX 200 gold miner:

This acquisition provides Evolution with an opportunity to expand our footprint in the region and create value by leveraging the infrastructure of the two operations. The additional processing capacity from the new Bateman mill will also accelerate our ability to achieve our objective of producing in excess of 300,000 ounces of gold per annum from Red Lake.

People Infrastructure Ltd (ASX: PPE) acquisition

People Infrastructure announced that it’s acquiring a leading Melbourne nursing agency.

It has entered into a binding agreement to buy the SwingShift Nurses business. This company is focused on the mental health market and it’s a contracted supplier to most public sector hospitals in Victoria.

The acquisition price is $3.1 million payable in cash and it’s expected to add to earnings per share (EPS) accretive. People Infrastructure expects this business to generate $1 million of earnings before interest, tax, depreciation and amortisation (EBITDA) in the 12 months after completion.

People Infrastructure CEO Mr Declan Sherman said:

The acquisition of SwingShift Nurses is highly complementary to our existing Victorian nursing staffing business. The business is well established in the Victorian market and will facilitate further growth into the mental health market. People Infrastructure is especially attracted to the business due to its strong position in the Victorian specialist nursing on-hire contracting market, and its long term relationships with its customers.

The People Infrastructure share price went up more than 2% in reaction.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price also went up around 2% after it announced that Yibin Tianyi Lithium Industry Co Ltd will provide a US$15 million unsecured prepayment to Pilbara, contributing to the funding of the A$22 million improvement works underway on plant 1 at Pilgangoora.

The prepayment will be provided in support of additional uptake of up to 40,000tpa of spodumene concentrate for Yibin Tianyi.

Site works will commence on the stage 1 improvement works this month, with commissioning expected in the quarter ending 30 September 2020.

Pilbara Minerals managing director and CEO Ken Brinsden said:

Our relationship continues to grow with Yibin Tianyi as we work together in support of both our businesses’ growth ambitions. For Yibin Tianyi, to become one of the biggest lithium chemical suppliers in China with the support of our major shareholders, CATL and for us to become one of the largest, lowest cost lithium raw material suppliers in the world.

More reading

• 2 ASX 200 shares to buy for income
• Why the Hub24 (ASX:HUB) share price is firing up 12% today
• Triple whammy hammers the Fortescue (ASX:FMG) share price today
• ASX lithium shares on watch as lithium prices eye 2-year high
• Here’s why the Pilbara Minerals (ASX:PLS) share price is pushing higher

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 People Infrastructure Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended People Infrastructure 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 News Corporation (ASX: NWS) share price snuck up 0.7% today to reach $31.58 by the market’s close.  

This follows news last night reported by The Australian that News Corp and Facebook Inc (NYSE: FB) are on “the cusp of a commercial agreement”.

The agreement relates to Facebook’s compliance with parliament’s news media bargaining code that came into force last month.

Facebook to pay News Corp for use of its journalism

Many assumed there was bad blood a few weeks ago between Facebook and media outlets after Facebook banned Australian users from posting news content. However, according to The Australian, we can expect to hear something over the coming days about an agreement being reached between News Corp and the social media giant. Facebook has already struck deals with some other Australian news media outlets. 

As a product of parliament’s News Media and Digital Platforms Mandatory Bargaining Code, Facebook and Alphabet Inc’s (NASDAQ: GOOGL) ((NASDAQ: GOOG) Google must pay local news publishers to feature their content.

The news media bargaining code only applies when the government deems there is a major imbalance between the news media organisation and the digital platform.

Was anything else impacting the News Corp share price today?

Outside of the news media bargaining code featuring in the news, there hasn’t been much else of note going on for News Corp lately. The last price-sensitive update provided by the media giant was back on 18 February when it advised the market it had reached an agreement with Google regarding the use of its content. 

Reuters reports that the US is presently addressing the same issue that’s currently being worked out between Facebook and News Corp.

On Friday in Washington, the antitrust subcommittee convened to listen to industry insights regarding the problems facing news organisations. Specifically, how to control the hold that Facebook and Google have on how people consume news content.

It’s hard to tell whether the news media bargaining code impacted the News Corp share price today since it was a rather uneventful day for the S&P/ASX 200 Index (ASX: XJO) overall.

More reading

• Could this be the pin to pop the Bitcoin (CRYPTO:BTC) bubble?
• ASX 200 climbs, Westpac in the clear, Nine reveals a WIN-ning deal
• Why the Southern Cross Media (ASX:SXL) share price is tumbling 14%
• Nine (ASX:NEC) share price edges higher on positive update
• 2 not-so-obvious ASX shares to cash in on the property boom

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Gretchen Kennedy 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 Alphabet (A shares), Alphabet (C shares), and Facebook. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Facebook. 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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If you’re looking for buy and hold options, then you might want to take a look at the shares below.

Here’s why they could be top options for investors over the long term:

Adore Beauty Group Limited (ASX: ABY)

The first ASX share to consider as a buy and hold option is Adore Beauty. It is the country’s leading pureplay online beauty retailer which aims to deliver users an empowering and engaging beauty shopping experience.

The beauty of this is that as well as being a place to buy products, the Adore Beauty website is also a destination for education and entertainment. This means that consumers frequent its website even when they are not seeking to purchase items.

Last month the company released its half year results and revealed an 82% increase in active customers to 777,000. From these, Adore Beauty generated an 85% lift in revenue to $96.2 million over the six months. 

Positively, this is still only a small portion of a growing Australian beauty and personal care market currently worth ~$11 billion a year.

Morgan Stanley is a fan of the company. It currently has an overweight rating and $8.75 price target on its shares.

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The second ASX share to consider is actually an exchange traded fund (ETF). The BetaShares Asia Technology Tigers ETF provides investors with exposure to the rapidly growing Asian tech sector.

Given how the the Asian economy is outpacing the growth of the west, it appears to be a great place to invest over the next decade and beyond. Especially with its younger and tech-savvy population, which is leading to Asia surpassing the West in respect to technological adoption.

Among the fund’s holdings you will find the likes of Alibaba, Baidu, JD.com, Meituan Dianping, Samsung, Tencent, and Pinduoduo.

In respect to Pinduoduo, it is an e-commerce platform that offers a wide range of products from daily groceries to home appliances. Its platform connects distributors with consumers directly through an interactive shopping experience, allowing shoppers to team up to buy items at lower prices. At the end of September, it was serving 731 million active buyers.

Another company included in the fund is Alibaba. It is widely regarded to be the Amazon of China. At the end of September the company had 757 million annual active customers across its Alibaba, Taobao, and Tmall brands. From these brands, the company is estimated to control a sizeable 56% of China’s e-commerce market.

More reading

• 10 of the best ASX shares to buy in March
• ASX fashion and beauty shares shine on half-year results
• 2 buy-rated small cap ASX shares growing rapidly
• 2 ASX shares at 52-week lows: Are they bargain buys?
• 2 ETFs to buy in this tech sell off

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. 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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It seemed too good to be true.

Just days after US President Joe Biden edged out former President Donald Trump in the November US elections, the world was greeted by multiple effective COVID-19 vaccine announcements.

Coupled with ongoing turbocharged quantitative easing (QE) programs from the world’s leading central banks, near-zero official interest rates, and trillions of dollars in government stimulus packages, the global economic recovery from the pandemic knockdown began in earnest.

Leading fund managers expect that recovery to continue apace, and they see more opportunities ahead for ASX recovery shares.

Andrew Clifford is the chief investment officer at Platinum Asset Management. According to Clifford (quoted by the Australian Financial Review), “I think that we will have a very strong 2021, and that will probably flow through to 2022. In the stock market, there are opportunities because I think that the natural state of being for the economic system is for it to grow.”

Hugh Giddy, large-cap portfolio manager at Investors Mutual, shares that optimistic outlook, saying, “If we don’t have lockdowns, that in and of itself creates recovery. It’s a lot of moving parts, but overall I think that the economy will improve both here and elsewhere.”

Why this fund manager highlights these 2 ASX recovery shares

Romano Sala Tenna, portfolio manager at Katana Asset Management, says it’s time for investors to look beyond the big four banks, which have all performed well in 2021.

Instead, as the AFR reports, Sala Tenna prefers ASX financial shares like Kina Securities Ltd (ASX: KSL):

There are some smaller financials, like Kina Securities, we’ve got a position in. As you’re moving down the food curve a bit and up the risk curve, we’re seeing some really compelling value. We are re-allocating some capital there.

Sala Tenna is also keen on select ASX energy shares, one of the sectors he says he sees “pronounced value”.

They haven’t rebounded with the oil price. There’s a lot of scepticism around the oil price.

Sala Tenna has been snapping up shares of Woodside Petroleum Ltd (ASX: WPL).

Kina Securities and Woodside Petroleum share price snapshot

Kina Securities is a small-cap company with a market cap of $286 million. It pays an annual dividend yield of 9.2%, unfranked. Kina’s share price is up 18% over the past 12 months and up 10% so far in 2021.

Woodside Petroleum has a market cap of $24 billion and is listed on the S&P/ASX 200 Index (ASX: XJO). Woodside pays an annual dividend yield of 2.1%, fully franked.

The Woodside Petroleum share price is up 41% over the past 12 months, compared to a gain of 35% on the ASX 200. Year-to-date, the Woodside share price is up 10%, and it’s currently trading at $25.34 per share.

More reading

• ASX 200 Weekly Wrap: Calm restored to the ASX 200
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Tuesday

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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As I’m a big fan of small cap shares, I feel quite fortunate to have a large number to choose from on the Australian share market.

Three small cap ASX shares that stand out from the rest and could have bright futures are listed below. Here’s what you need to know about them:

Booktopia Group Ltd (ASX: BKG)

Booktopia is an online book retailer which has been growing very strongly. It has been a very positive performer so far in FY 2021. This has been driven by both the shift to online shopping and its investment in a new distribution centre.

The latter allowed the company to take advantage of increased demand by shipping more books than ever during December. This led to Booktopia shipping a total of 4.2 million units for the first half, up 40% on the prior corresponding period.

In respect to its financials, this underpinned a 51.1% increase in revenue to $112.6 million and a 502.3% jump in underlying EBITDA to $8 million.

MNF Group Ltd (ASX: MNF)

Another small cap ASX share to look at is MNF Group. It is a leading provider of Voice over Internet Protocol technology (phone calls over the internet) to businesses and consumers.

It has also been performing strongly in FY 2021. Last month the company released its half year results and delivered a 15% increase in recurring revenue to $55.7 million. This was driven by strong growth in new numbers and a Net Revenue Retention of 115%. The latter means the company’s existing customers are not just sticking around, they are spending more.

Pleasingly, management is positive on the future. This is thanks to the structural tailwinds it is experiencing and its expansion into the Asia market.

Universal Store Holdings Limited (ASX: UNI)

A final small cap to watch is Universal Store. It is a fashion retailer which delivers a carefully curated selection of on-trend products to a target 16-35 year old fashion focused customer.

As with the others, Universal has been a positive performer during the pandemic and reported impressive growth during the first half of FY 2021.

For the six months ended 31 December, Universal Store delivered a 23.3% increase in sales to $118 million and a 63.6% increase in underlying net profit after tax to $21.1 million. This was driven by strong online and like for like store growth.

Positively, the second half has started strongly, putting the company in a position to deliver a bumper profit result in August.

More reading

• 2 ASX tech shares rated as buys by brokers
• 4 exciting small cap ASX shares to watch
• 2 exciting small cap ASX shares to watch
• 2 fast-growing small cap ASX shares to watch
• Why Flight Centre, Life360, Nanosonics, & Universal Store are racing higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended MNF 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 Ainsworth Game Technology Limited (ASX: AGI) share price performed exceptionally well today, closing the session up 10.96% to 81 cents. Ainsworth shares had closed at 75 cents each on Friday afternoon, but opened at 80 cents apiece this morning, a level around which they essentially revolved all day.

This latest move in the Ainsworth share price caps off what has been an especially pleasing few months for shareholders. Back in early November 2020, Ainsworth shares were trading for 28 cents each. That means at today’s prices, the shares are up 189% since then. However, they are also still down 25% from the peak of $1.08 per share we saw at the end of last month.

So what is Ainsworth Game Technology? And why were Ainsworth shares shooting higher today?

What does the company do?

Ainsworth Game Technology is a gaming company established in 1995. It was founded by Len Ainsworth. Mr Ainsworth was also the founder of the ASX’s most prominent gaming manufacturer, Aristocrat Leisure Ltd (ASX: ALL).

Like Aristocrat, Ainsworth also manufactures poker machines. It has facilities that enable the design, development and testing of these machines. The company also offers services such as installation, maintenance/servicing and support.

Ainsworth supplies markets as diverse as Europe, North America and Latin America, as well as Australia and Australasia.

Ainsworth has had a rough year due to the coronavirus pandemic effectively shuttering gambling institutions around the world. Last month, the company announced it was expecting to report a net loss before tax of $14 million for the six months ending 31 December 2020.

However, on the same day, the company also announced it had established a new, secured credit facility with the US-based Western Alliance Bancorporation. Investors were evidently pleased with that announcement, given Ainsworth shares rose 15% that day.

What fuelled the Ainsworth Game Technology share price today?

Something very interesting was certainly happening with this company today. On Friday last week, after market close, we had an announcement from S&P Global. S&P Global is the company that administers the S&P/ASX 200 Index (ASX: XJO) and the other major indexes on the ASX. In this announcement, S&P reported that Ainsworth would be removed from the All Ordinaries Index (ASX: XAO).

Normally when a company is removed from an index, it causes a selloff from investors. We covered some of the winners and losers from the ASX 200’s rebalancing this morning in fact. But the opposite has happened today, so this is strange indeed.

Unlike the ASX 200, the All Ordinaries is not an index that is widely covered and tracked by exchange-traded funds (ETFs). So that could be behind this situation.

But we could also just be seeing some price discovery here. Last week, Ainsworth fell by around 10% between Wednesday and Friday to an intra-week low of 74 cents per share. That was before the rebalancing became public knowledge. Perhaps investors have simply decided that price was too low, and have been bidding up the company accordingly.

ASX data does show that trading volumes today were significantly above the company’s 5-day average.

Whatever the reason for today’s Ainsworth share price moves, investors will no doubt be pleased. At the current share price, Ainsworth has a market capitalisation of around $245 million.

More reading

• Why the Ainsworth (ASX:AGI) share price surged 15% today

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

The post ASX stock of the day: Ainsworth Game Technology (ASX:AGI) shares rise 11% appeared first on The Motley Fool Australia.

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