In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is fighting back and is off its lows. The benchmark index is down 0.1% to 6,523.7 points currently.

Four ASX shares that are falling more than most today are listed below. Here’s why these shares are dropping lower:

A2 Milk Company Ltd (ASX: A2M)

The a2 Milk share price has continued its slide and is down 2% to $13.71. Investors have been selling the infant formula and fresh milk company’s shares since the release of an update at its annual general meeting this week. One broker that wasn’t overly impressed with the update was Ord Minnett. This morning it retained its lighten rating and cut its price target down to $13.20. It doesn’t expect a2 Milk to achieve its guidance in FY 2021.

Crown Resorts Ltd (ASX: CWN)

The Crown share price is down almost 2% to $9.47. The catalyst for this decline is news that the New South Wales Independent Liquor and Gaming Authority (ILGA) is blocking the opening of Crown Sydney due to money laundering concerns. The gambling regulator intends to wait until it has seen the final report from an ongoing inquiry, which is due in February. Crown intends to open its hotel facilities as normal.

Immutep Ltd (ASX: IMM)

The Immutep share price has sunk 8% lower to 27.2 cents. This follows the completion of an institutional placement this morning which raised $29.6 million at a discount of 24 cents per new share. The proceeds will be used to finance its LAG-3 related clinical program in immuno-oncology and autoimmune disease. This includes the ongoing clinical development of eftilagimod alpha and the expansion of the Phase II TACTI-002 study.

Suncorp Group Ltd (ASX: SUN)

The Suncorp share price is down almost 4% to $9.36. Investors have been selling Suncorp and other insurance shares after the NSW Court of Appeal ruled in favour of policyholders in relation to business interruption insurance. This means Suncorp will have to pay out businesses for the disruption caused by COVID-19. Suncorp recently advised that it had set aside $195 million for potential claims.

More reading

• ASX 200 down 0.3%: Altium FY 2021 guidance, Crown drops, insurance shares sink
• IAG (ASX:IAG) shares halt trading after court rules COVID-19 claims valid
• Is the A2 Milk (ASX:A2M) share price a buy?
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises again on Wednesday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia has recommended Crown Resorts Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why a2 Milk, Crown, Immutep, & Suncorp shares are dropping lower appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/36NmRHF

The Aventus Group (ASX: AVN) share price has rallied after a quick dip on open today following a business update for the first quarter FY21 period. At the time of writing, the Aventus share price is up 1.96% to $2.60. In comparison, the S&P/ASX 200 Index (ASX: XJO) is slipping 0.1% to 6,522 points.

Aventus is a retail property company which owns and operates 20 large format retail parks across Australia. 

What’s driving the Aventus share price?

For the period ending October 31, Aventus advised that its portfolio remained 100% open for centre trading. Excluding Victoria, foot traffic increased by 9% over the prior corresponding period. Interestingly, half of the centres outside the Victorian state experienced double-digit foot traffic growth.

As coronavirus restrictions ease, Victoria has seen centre traffic lift 13% over the first 2 weeks in November. However, the company noted that the 6-day lockdown in South Australia may impact one of its centres.

In addition, occupancy rates have risen to 98.2% with minimal holdovers of 2.6%. More than 42 leasing deals were negotiated in the period.

Rent collection within the portfolio strengthened with roughly 90% of gross bill rent received. This translates to a 3% gain on the 4 months prior to first quarter FY21.

The development of its super centre in Caringbah, Sydney is complete and now 100% leased. An independent valuation report put the centre’s worth at $139 million, reflecting a 13% increase in book value.

FY21 guidance

Aventus indicated that the improved performance of its portfolio had restored confidence. To reward shareholders, the group said it would re-establish its dividend pay-out ratio approximately 90% of net income for the September quarter.

Provided that there are no unforeseen impacts due to COVID-19, Aventus forecasts guidance for FY21 to be at least 18.5 cents per security. This represents a minimum 2% growth compared to FY20.

What did the CEO say?

Commenting on the group’s performance, Aventus CEO Darren Holland said:

The Aventus portfolio continues to be resilient with cash collection improving to approximately 90% and traffic growing +9% in the last 4 months. Australians continue to spend more time and money at home – working, learning and entertaining – and this has driven strong sales growth to our large format retailers.

In September, we resumed distributions at a 90% pay-out ratio and today I am happy to announce that continued improvement in the operating performance of the portfolio has given Aventus confidence to provide an FY21 FFO guidance of at least 18.5 cents per security, implying at least 2% growth versus FY20.

Aventus share price summary

The Aventus share price has been climbing higher since dropping to its all-time low of $1.36 in March. The company is not far off its 52-week high of $3.06 achieved just before COVID-19 hit the Australian retail sector.

An incentive for shareholders in the current economic climate, Aventus has a dividend yield of 4.58% on today’s price.

More reading

• ASX 200 down 0.3%: Altium FY 2021 guidance, Crown drops, insurance shares sink
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises again on Wednesday
• 2 ASX shares making all-time highs today
• ASX stock of the day: Redbubble (ASX:RBL) shares up 5% today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has recommended AVENTUS RE UNIT. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the Aventus (ASX:AVN) share price is rising today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3pAwUbs

The Pro Medicus Limited (ASX: PME) share price is trading lower today despite the company announcing a major contract renewal with one of the largest private outpatient radiology providers in the United States. At the time of writing, the Pro Medicus share price has fallen 1.87% to $31.53, which is largely in line with the broader fall in healthcare sector shares today. 

What’s in the deal?

Health imaging company, Pro Medicus, today announced that its wholly-owned US subsidiary, Visage Imaging Inc., has signed a 5-year renewal contract with US-based, Zwanger Pesiri. The contract, which is constructed on a transaction-based licensing model, will see the ‘Visage 7’ technology continue to be used across all Zwanger Pesiri locations for the next 5 years.

The contract announced today follows another significant contract win Pro Medicus inked earlier this month, when it announced a 7-year deal worth $10 million with one of the largest university hospitals in Germany, LMU Klinikum. In that deal, the Visage 7 technology was to be deployed throughout LMU Klinikum’s radiology and sub-specialty imaging departments. 

What did management say?

Commenting on the deal today, Pro Medicus Chief Executive, Dr Sam Hupert said:

We are very pleased to have played such a key role in Zwanger Pesiri’s growth over the past 5 years. We believe our solution provides the best return on investment of any system in the market from both financial and clinical perspectives. We think the results we achieved at Zwanger Persiri is validation of that.

Zwanger Pesiri was also pleased with the contract renewal, with chief, Dr Steve Mendelsohn, echoing Hupert’s sentiment:

We have had a great partnership with Visage over the preceding 5 years. The speed and capabilities of their software is unrivalled in the market. Since implementing it 5 years ago, we have experienced significant increases in radiologist productivity and clinical accuracy which has underpinned our substantial growth over that time.

Pro Medicus provides healthcare imaging software and services to hospitals, diagnostic imaging groups and other health related entities in Australia, North America and Europe. The company has more than 30 years’ experience in providing radiology information systems and imaging technology. 

How is the Pro Medicus share price performing in 2020?

After explosive growth in 2019, the Pro Medicus share price has been able to successfully navigate the impacts of COVID-19 in 2020. Pro Medicus shares have increased by more than 41% to $31.53 in 2020. As a comparison, the S&P/ASX 200 Health Care Index (ASX: XHJ) has risen by 12% this year. Pro Medicus commands a market capitalisation of $3.4 billion.

More reading

• This cheap ASX share is supplying US giants: fundie
• 2 ASX growth shares to buy this month
• These were the best performing ASX 200 healthcare shares in October
• Why the Pro Medicus (ASX:PME) share price rocketed 22% higher last month
• I plan to invest heavily in ASX shares next week

Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Pro Medicus (ASX:PME) share price drops despite inking new contract appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/32WNxEt

Respected fund manager Wilson Asset Management (WAM) has recently identified two ASX shares that it owns in its portfolio.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Research Limited (ASX: WAX).

There’s also one called WAM Capital Limited (ASX: WAM) which targets “the most compelling undervalued growth opportunities in the Australian market.”

The WAM Capital portfolio has delivered investment return of 16.1% per annum since inception in August 1999, before fees, expenses and taxes. This gross return outperformed the S&P/ASX All Ordinaries Accumulation Index return of 7.8% per annum.

These are the two ASX shares that WAM Capital outlined in its most recent monthly update:

Nine Entertainment Co Holdings Ltd (ASX: NEC)

WAM Capital described Nine Entertainment as Australia’s largest locally owned media company. The ASX share owns and operates television, video on demand, print, digital and radio assets. Some of its highest-profile assets include streaming service Stan, as well as the news outlets of the Australian Financial Review and the Sydney Morning Herald. It also owns a significant stake of Domain Holdings Australia Ltd (ASX: DHG).

The WAM investment team believes that Nine Entertainment stands to benefit from increased advertising expenditure in the lead up to the Christmas period, as consumer confidence improves following the announcement that lockdown restrictions would be relaxed in Victoria.

By FY24, Nine is focused on achieving a $230 million cost reduction (compared to FY19). The majority of this will come from programming, production and distribution.

It wants 60% of its earnings before interest, tax, depreciation and amortisation (EBITDA) to come from digital businesses, Nine is aiming for more than 35% of its group revenue to come from subscription and around 30% of its revenue to come from video on demand.

The Nine Entertainment share price has risen by 184% since the COVID-19 low on 23 March 2020.

Bapcor Ltd (ASX: BAP)

WAM Capital explained that Bapcor provides vehicle parts, accessories, equipment, service and solutions to the Asia Pacific region. In October, the company announced the September quarter revenue had increased 27% on the prior corresponding period, with retail revenue up 47% and specialist wholesale revenue up 45%.

In that 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.”

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

Bapcor is expecting to deliver a “strong” first half, however the second half remains unclear, and given the current economic uncertainties and any potential restrictions, it wasn’t in a position to provide a forecast of earnings for FY21.

It’s going to keep investing in its various businesses, including through information technology, marketing, process and system upgrades and capital investment in facilities to increase its footprint and to drive improved efficiencies. Bapcor said these investments will grow the cost base, but will assist driving profit growth in the future.

The Bapcor share price has risen 121% since the market low of 23 March 2020.

More reading

• Why REA Group (ASX:REA) share price is trading lower after AGM
• Top fundie, Wilson, names ASX shares to buy
• ASX 200 Weekly Wrap: ASX continues to hit post-COVID highs
• These were the worst performing ASX 200 shares last week
• 3 top ASX dividend shares to buy

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/35H5YPh

At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) is on course to end its winning streak. The benchmark index is currently down 0.3% to 6,509.9 points.

Here’s what is happening on the market today:

Altium AGM update.

The Altium Limited (ASX: ALU) share price has edged lower following the release of its annual general meeting update. At the event, the electronic design software provider revealed that it is continuing to be impacted by COVID-19. However, it has been seeing positive signs in the last two months and is gaining confidence about the strength of its second half performance. FY 2021 guidance has been reaffirmed as revenue of US$200 million to US$212 million and operating earnings of US$76 million to US$89 million.

Crown share price drops lower

The Crown Resorts Ltd (ASX: CWN) share price has dropped lower this morning amid concerns over the opening of its new Crown Sydney operation. Yesterday the New South Wales Independent Liquor and Gaming Authority (ILGA) said it would delay the opening of Crown Sydney due to money laundering revelations. The gambling regulator intends to wait until it has seen the final report into an ongoing inquiry, which is due in February.

Insurance shares hit by COVID ruling.

A number of insurance companies such as QBE Insurance Group Ltd (ASX: QBE) and Suncorp Group Ltd (ASX: SUN) are dropping lower today. This follows news that the NSW Court of Appeal has ruled in favour of policyholders in relation to business interruption (BI) insurance. The Court held that certain policy exclusions referencing the “Quarantine Act and subsequent amendments” cannot be read as references to the Biosecurity Act and cannot be relied on in relation to COVID-19 BI claims.

The best and worst ASX 200 performers.

The best performer on the ASX 200 on Thursday has been the ALS Ltd (ASX: ALQ) share price with a 7.5% gain. This morning Macquarie retained its outperform rating and lifted the price target on the testing services company’s shares to $10.65. The worst performer has been the QBE share price with a 4% decline following the aforementioned court verdict.

More reading

• Why ALS, BlueScope, FlexiGroup, & Perpetual shares are charging higher
• IAG (ASX:IAG) shares halt trading after court rules COVID-19 claims valid
• Altium (ASX:ALU) share price pushes higher following AGM update
• 2 ASX growth shares predicting big growth this decade
• 5 things to watch on the ASX 200 on Thursday

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 and recommends Altium. The Motley Fool Australia has recommended Crown Resorts Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post ASX 200 down 0.3%: Altium FY 2021 guidance, Crown drops, insurance shares sink appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3kGLUAV

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

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

On Wednesday morning, Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) presented new data from a final efficacy analysis on their BNT162b2 vaccine candidate, and the news was very good.

In a joint press release, the 2 partners said the vaccine met all of its primary efficacy endpoints. Better still, it had an efficacy rate of 95% in participants both with and without prior coronavirus infection (mild or severe). Also, the vaccine’s efficacy was consistent across key demographics such as age, gender, and ethnicity. No serious safety concerns were reported.

That rate, meanwhile, is higher than the 90%-plus demonstrated in the interim analysis of trial data published last week by Pfizer and BioNTech.

With this fresh data, the two companies can now submit BNT162b2 to the United States Food and Drug Administration for emergency use authorisation (EUA), which Pfizer said they planned to do “within days”. The vaccine would be cleared for use with an EUA.

“Our objective from the very beginning was to design and develop a vaccine that would generate rapid and potent protection against COVID-19 with a benign tolerability profile across all ages,” BioNTech CEO Ugur Sahin was quoted as saying.

“We believe we have achieved this with our vaccine candidate BNT162b2 in all age groups studied so far, and look forward to sharing further details with the regulatory authorities.”

The 2 companies say they expect to be able to produce up to 50 million doses of their vaccine by the end of this year, and as many as 1.3 billion by the close of 2021.

Both Pfizer and BioNTech’s stocks were on the rise in late-morning US trading Wednesday. Pfizer was up 1.7%, outpacing the S&P 500 Index‘s (INDEXSP: .INX) 0.2% gain, and BioNTech had leaped ahead by 4.5%.

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

More reading

• Here are the US shares that CommSec customers are buying
• Warren Buffett bought 4 pharma giants in Q3
• Dow Jones hits new record highs. Are ASX 200 shares next?
• 3 shares that have strongly outperformed their sectors this month
• ASX 200 Weekly Wrap: ASX continues to hit post-COVID highs

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post New data shows higher efficacy rate for Pfizer and BioNTech coronavirus vaccine candidate appeared first on Motley Fool Australia.

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

from Motley Fool Australia https://ift.tt/3kJRIK2

The IPH Ltd (ASX: IPH) share price has edged higher in morning trading after the intellectual property (IP) services provider advised its earnings have grown in the first four months of FY21, predominantly due to synergies arising from the acquisition of Xenith Group. At the time of writing, the IPH share price has risen by 0.86% to $7.03.

What’s moving the IPH share price?

The IPH share price is inching higher following the company’s annual general meeting (AGM) this morning. In his address to shareholders, IPH Chief Executive, Dr Andrew Blattman, advised that the company delivered a solid result in FY20, despite the COVID-19 pandemic. 

He reported that IPH delivered these impressive metrics in FY20:

• Earnings before interest, tax, depreciation and amortisation (EBITDA) was $126 million compared to $89.7 million for the prior year.
• Underlying revenue for the year increased by 44% to $370 million.
• Underlying net profit after tax (NPAT) lifted by 24% to $78 million.

Blattman also praised his team for the successful integration of Xenith into the IPH group. Xenith was acquired in 2019, in what was the largest acquisition in IPH’s history since its listing in 2014. The company now says that it has successfully delivered net cost synergies of $3.5 million, which is in line with the guidance the company provided at the time of the acquisition.

Update on FY21 trading

In what has been a challenging economic climate for many businesses due to the global pandemic, IPH’s first four months of trading has resulted in ‘like-for-like’ EBITDA growth against the prior corresponding period. IPH says that this growth has been predominately driven by the synergies generated from the acquisition of Xenith.

Having said that, IPH advised it continues to operate in difficult market conditions, as Australian patent filings decreased by 1% in the four months to October. In total, IPH filings (excluding Innovation Patents) declined 8.1% during this period.

Blatmann said:

While we have not had any significant client losses over this period, we are seeing some large clients who are filing less at this time. Additionally, we have the local market’s largest exposure to US clients, which as you would expect, has experienced some short-term disruption due to COVID.

How is the IPH share price performing in 2020?

IPH is a major IP company that provides services including the protection, commercialisation, enforcement, and management of intellectual property. The IPH share price has more than tripled since its initial public offering (IPO) to become the leading IP services firm in the Asia Pacific region.

However, the IPH share price has been volatile this year. It started the year at $8.20, before surging to $10.22 in February. It then dropped to $6.26 at the height of the pandemic in March, before arriving at today’s price of $7.03. All in all, the IPH share price has dropped by around 14% on a year-to-date basis. IPH commands a market capitalisation of $1.5 billion at this price.

More reading

• Why ALS, BlueScope, FlexiGroup, & Perpetual shares are charging higher
• Can Magellan (ASX:MFG) prosper in a market dominated by Macquarie (ASX:MQG)?
• Why the BlueScope (ASX:BSL) share price is surging 6%
• Here’s why the 5G Networks (ASX:5GN) share price is zooming higher
• IAG (ASX:IAG) shares halt trading after court rules COVID-19 claims valid

Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends IPH Ltd. The Motley Fool Australia has recommended IPH Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post The IPH (ASX:IPH) share price is gaining ground. Here’s why appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/35HFI7n

In late morning trade on Thursday the S&P/ASX 200 Index (ASX: XJO) has followed the lead of U.S. markets and looks set to end its winning streak. The benchmark index is currently down 0.4% to 6,505.2 points.

Four shares that are not letting that hold them back are listed below. Here’s why they are charging higher:

ALS Ltd (ASX: ALQ)

The ALS share price is up 8% to $10.23 a day after the release of its half year results. The catalyst for this appears to have been a positive reaction to its results from a number of brokers. One that was particularly positive was Macquarie. In response to the release, the broker has retained its outperform rating and lifted the price target on its shares to $10.65.

BlueScope Steel Limited (ASX: BSL)

The BlueScope share price has stormed 5.5% higher to $17.78. This follows the release of its updated guidance for the first half of FY 2021. According to the release, underlying earnings before interest and tax (EBIT) is expected to be approximately $475 million for the half. This includes the contribution made from the recent industrial warehouse property sale. The new guidance represents a rise of 80% over the second half of FY 2020.

FlexiGroup Limited (ASX: FXL)

The FlexiGroup share price has jumped 9% higher to $1.17. Investors have been buying the financial services company’s shares after it announced a deal with Mastercard for its bundll buy now pay anywhere product. In addition to this, the company revealed that it expects its first half cash net profit after tax to be ahead of the $34.5 million it achieved in the prior corresponding period.

Perpetual Limited (ASX: PPT)

The Perpetual share price is up 4% to $31.41. This appears to have been driven by a broker note out of Morgan Stanley. In response to the completion of its acquisition of Barrow Hanley, the broker has retained its overweight rating but trimmed its price target on the fund manager’s shares to $42.50.

More reading

• Why the BlueScope (ASX:BSL) share price is surging 6%
• FlexiGroup (ASX:FXL) share price surges 10% higher on Mastercard deal and trading update
• Why a2 Milk, ALS, Centuria Industrial, & Serko shares are dropping lower
• Why the Downer (ASX:DOW) share price is outperforming today
• Why the ALS (ASX:ALQ) share price sank 4% lower today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended FlexiGroup Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why ALS, BlueScope, FlexiGroup, & Perpetual shares are charging higher appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3fge3hk

The Magellan Financial Group Ltd (ASX: MFG) share price has been flat after announcing a 40% stake in new investment bank, Barrenjoey. Regardless, the company has managed to secure some top flight talent to run the fledgling investment bank.

This includes outgoing chairman of Australia and New Zealand Banking GrpLtd (ASX: ANZ), David Gonski. He has been appointed as the independent chairman of the new investment bank.

Magellan has also secured many top investment bank deal makers of UBS Group AG (SWX: UBSG) in Australia, and can boast ex-CEO of BHP Group Ltd (ASX: BHP) Ken McKenzie as a strategic advisor.

But despite Magellan’s moving and shaking, the financial news has been filled with the investment banking activity of Macquarie Group Ltd (ASX: MQG). Furthermore, the Macquarie share price has risen steadily by 5% over the past month.

Investment banks act as intermediaries between companies and capital markets. For example, companies could engage an investment banker for assistance with an initial public offering (IPO), a capital raising, or a refinancing strategy. 

What’s fueling the Macquarie share price?

In recent weeks, Macquarie Capital has been named a key player in many major ASX events. For instance, just last week the Australian Financial Review disclosed that Macquarie had secured an IPO funding pipeline for local services marketplace, Air Tasker. Moreover, the investment bank is running the Nuix IPO, likely to be either the largest or second largest IPO this year.

Nuix has developed technology that extracts meaningful information from unstructured data. It finalised IPO details last week, settling on a listing worth $975.3 million. When combined with the shares the company owns, it values the company at $1.8117 billion.

Other companies seeking to float in the near future include legal company HWL Ebsworth, with an estimated value of $917 million; Fantastic Furniture, planning to raise up to $669 million; and Sapura Energy, which is potentially a US$2 billion float.  

The Magellan-backed challenger

Magellan holds a 40% stake, and a 4.99% voting interest, in new investment bank and full-service brokerage, Barrenjoey. The bank plans to provide corporate and strategic advisory services, equity and debt capital market underwritings, cash equites, research, prime brokerage and fixed income trading. However, Magellan’s investment in Barrenjoey has received mixed reviews. In fact, the Magellan share price fell 5% on the day of the announcement.

As a rule of thumb metric, investment banks are often valued at 1 to 1.5 times revenue . Given that Magellan has paid $155 million for 40% of Barrenjoey, the full valuation would be just under $400 million. Meaning, the start-up bank has to be earning $400 to $600 million to justify this price.

Foolish takeaway

Macquarie Capital is regularly among the top three investment banks nationally every year. Something that is reflected in its ASX share price.

With the current pipeline of IPOs under way, it may repeat that again this year. However, despite being a start-up in a competitive sector, Barrenjoey has plenty of talent at the helm.

More reading

• 3 ASX dividend shares with large and growing dividends
• Morgan Stanley updates its share price targets for the big 4 banks
• Analysts name 2 of the best ASX shares to buy now
• Macquarie (ASX:MQG) picks best ASX stocks to buy for 2021 post-COVID recovery
• Aussie companies blast ‘knee-jerk’ COVID-19 border closures

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Can Magellan (ASX:MFG) prosper in a market dominated by Macquarie (ASX:MQG)? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3feAmnt

The BlueScope Steel Limited (ASX: BSL) share price is rocketing higher this morning after the company released a trading update. At the time of writing, the BlueScope share price is up 6.0% to $17.83 after reaching a new, multi-year high of $18.24 during the opening minutes of trade.

Upgraded guidance

According to this morning’s release, BlueScope reported strong demand for its steel products. Although most of the heavy lifting came from its Australian segment, BlueScope upgraded its forecasts for the first half of FY21.

Underlying earnings before interest and tax (EBIT) is projected to be around $475 million. BlueScope noted that this includes the contribution made from the industrial warehouse property sale that was executed recently. The new guidance represents a rise of 80% over the second half of FY20.

What are the key drivers for the BlueScope share price?

The BlueScope share price is on the move today after the company advised its Australian segment is on track to deliver a substantially better result than the prior period. BlueScope reported that demand for domestic construction and distribution remains strong, particularly for coated and painted products. Furthermore, export coke levels are expected to be above what was attained at the end of the last financial year.

In the United States, North Star, owned by BlueScope, continues to ship steel at full capacity. A major scheduled maintenance outage was completed in the backdrop. Since the end of the second half of FY20, there has been a significant increase in Midwest hot rolled coil prices and other raw materials costs. BlueScope acknowledged that, as there is a general lag between market price and sales, underlying EBIT for North Star is predicted to be lower than the second half of FY20.

The building products segment in Asia and North America is anticipated to produce a better performance than the last results recorded. In ASEAN (Association of Southeast Asian Nations) alone, EBIT is predicted to be at least double that of the second half of FY20. The North America business is matching current estimates similar to the prior period.

Moving to the Buildings North America division, the engineering business has been growing consistently. This was supported by the $40 million property sale conducted earlier this month.

New Zealand and Pacific Island’s performance has been gaining traction in the second-half due to operations resuming post COVID-19. The company stated that it is still continuing to implement a restructure of the business. Depreciation and amortisation is expected to be roughly $15 million to $20 million lower compared to the second half of FY20.

What did management say?

BlueScope managing director and CEO, Mr Mark Vassella, commented on the performance achieved so far. He said:

All operating segments are performing well and momentum has continued to build as we approach the end of 1H FY2021. Residential alterations and additions activity, demand for detached new housing, and growth in demand for e-commerce warehouse and logistics facilities are all robust and US automotive industry demand is recovering strongly.

Demand strength, particularly in the Australian market, has continued to outpace our expectations. We now expect that Australian construction and manufacturing activity will remain strong, driving elevated domestic steel despatches for the balance of 1H FY2021.

Benchmark steel spreads in East Asia and the Midwest US are currently above longer-term averages as the beginning of 2H FY2021 approaches. Nonetheless there remains uncertainty around spreads and volumes given the risks of the evolving impact of COVID-19 which could disrupt demand, supply chains and operations, and broader macroeconomic activity.

BlueScope share price summary

The BlueScope share price is making a stunning comeback since falling to as low as $8.03 in March. Shares in the steel making company reached a new multi-year high yesterday of $17.26 before surging again to a fresh high following today’s release.

Based on the current BlueScope share price, the company has a market capitalisation of $8.5 billion and a price-to-earnings (P/E) ratio of 89.

More reading

• Top fundie, Wilson, names ASX shares to buy
• Why these 7 ASX 200 shares received broker upgrades this week
• ASX 200 Weekly Wrap: ASX snaps winning streak… just
• These were the best performing ASX 200 shares last week
• The ASX 200 was mixed today, it finished down 0.1%

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the BlueScope (ASX:BSL) share price is surging 6% appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3fdK2hW