As well as being home to countless blue chip shares, the Australian share market is home to a good number of promising small caps.

Three small cap shares that could be worth adding to your watchlist are listed below. Here’s what you need to know about them:

CleanSpace Holdings Limited (ASX: CSX)

CleanSpace is a designer, manufacturer, and seller of workplace respiratory protection equipment (RPE) for healthcare and industrial end markets. It recently listed on the Australian share market, raising $20 million to support its growth plans. These plans include building on the adoption of CleanSpace products in the healthcare and industrial markets, product development, expanding awareness, and entering new international markets.

IntelliHR Ltd (ASX: IHR)

Another small cap to watch is IntelliHR. It is a next-generation cloud-based people management and data analytics platform provider. Demand for its platform has been growing strongly this year, leading to the company reporting a 148% increase in subscriber numbers to over 30,000 during the first five months of FY 2021. This underpinned an 81.3% increase in its contracted annual recurring revenue (ARR) to $2.8 million. Pleasingly, management appears confident there will be more of the same in future thanks to the quality of its software, international expansion, and favourable industry trends.

Nitro Software Ltd (ASX: NTO)

A final small cap to watch is Nitro Software. It is a growing software company driving digital transformation in businesses around the world across multiple industries. Nitro’s key solution is the Nitro Productivity Suite. This provides integrated PDF productivity and electronic signature tools to customers via a software-as-a-service and desktop-based software solution. Demand for its offering has been stronger than expected in FY 2020, leading to management recently upgrading its guidance. Nitro expects its subscription ARR to come in at $26 million to $27 million in FY 2020. This compares to the $24.4 million ARR it guided to in its IPO prospectus.

More reading

• The Whispir (ASX:WSP) share price is 30% lower than its 52-week high
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• 2 exciting small cap ASX shares to watch this month
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• Why Nick Scali, Nitro Software, Silver Lake, & Xero shares are dropping lower

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended CleanSpace Holdings Limited and Nitro Software 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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Shares in 3P Learning Ltd (ASX:3PL) have soared as the online educator announced a potential merger with e-learning company, Blake.

At close of trade today, the 3P Learning share price was up 12.3% at a price of $1.37.

3P Learning is a global online educator with cloudbased, software as a service products. The tech company offers courses in numeracy, literacy and science for students ranging from kindergarten to year 12.

Blake merger proposal

The 3P Learning share price surged higher today after the company entered into a non binding term sheet to pursue the merger. Under the agreement, 3P Learning will acquire 100% of the equity in Blake in exchange for 137 million shares. The deal is subject to satisfactory due diligence by both parties and subsequently entry into definitive documents.

Assuming a $1.35 issue price, the merger will cost 3P Learning $185 million. The purchase price assumes Blake will have an appropriate level of working capital at completion and will be adjusted for excess cash and debt. As a result, on completion of the merger, owners of Blake will hold a 49.5% stake in the company.

Furthermore, on completion of the deal a number of Blake’s management team will join 3P Learning. Blake founder and executive chair Matthew Sandblom will join the board as non-executive chair while Blake CEO Jose Palmero will become interim CEO of 3P Learning.

More about Blake

Blake is a privately owned, Australian publisher of online education products similar to 3P Learning. It’s core literacy product Reading Eggs was launched in 2008 and is used by more than 3.4 million users in 169 countries.

What’s more, the two companies have a long-standing relationship dating back to 2014, before 3P Learning’s initial public offering (IPO) days.

An earlier takeover bid fails

Back in November last year, the 3P Learning share price soared 13% higher on news of a 100% takeover bid by Indian company BYJU.

This has not transpired. After completing due diligence towards the end of 2020, BYJU did not provide a firm proposal for 3P Learning’s consideration. As such, given the exclusivity agreement now signed with Blake, the company will cease further engagement with BYJU at this time.

What now

The due diligence process is expected to will take about six weeks. Should the parties then enter into a binding agreement to implement the merger proposal, the transaction will be subject to shareholder approval at a general meeting.

3P Learning will update the market as soon as it has additional information to share with investors. However the company reminded shareholders that there is no certainty the agreement will result in a binding transaction.

More reading

• 4DS Memory (ASX:4DS): Non-volatile memory, volatile share price
• 2 tech ETFs delivering rapid growth
• Here’s why the K2Fly (ASX:K2F) share price is pushing higher
• Why the Medical Developments International (ASX:MVP) share price jumped 5% higher
• Why the CogState (ASX:CGS) share price shot 8% today

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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The 4DS Memory Ltd (ASX: 4DS) share price has set a new 52 week high today. At the time of writing, shares are trading 29.41% higher at 22 cents.

Although there is no news out today, this could be a delayed reaction to the company’s quarterly activity report that was released yesterday.

Let’s take a look at a few of the details highlighted in the report, as well as recapping the recent stellar share price performance.

Important details for the 4DS Memory share price

Progress and pending

The semiconductor development company highlighted for the quarter ended its Second Non-Platform Lot wafers had been successfully manufactured by imec.

Reportedly, the technical team within 4DS is still reviewing the data from these wafers with the expectation of analysis completion prior to the end of January.

Additionally, 4DS confirmed that its Second Platform Lot wafers will commence by mid-Q1 2021. Discussions are already in the works between imec (the manufacturer) and 4DS to determine the precise time of commencement.

Both the details of Non-Platform results and Platform scheduling is slated to be announced by 4DS in a further update before the end of this month. The company believes the outcome of results from the analysis will pave the way for further steps towards fabricating fully functioning megabit memory.

Imec collaboration extension being finalised

4DS’ manufacturing partner, imec, is still discussing the terms of the extension to their collaboration. With the finalisation of the extension in the works, 4DS informed the market that it will provide an update once the extension has been solidified.

A few other details

Some other important details in the quarterly included the recap of Dr. Wilbert van den Hoek being appointed as the new Chairperson of the Board on 30 November 2020. The previous Chairperson, Mr. Jim Dorrian, remains on the board as a Non-Executive Director.

We were also reminded that 4DS has a sales incentive in place. The purpose of this is to incentivise the members to pursue potential takeover deals of the company or sale of the company’s intellectual property.

Speaking of which, 4DS now holds 29 USA patents pertaining to its memory technology.

The company also reported that there are no current COVID-related restrictions impeding the company’s operations.

Lastly, 4DS’ cash as at 31 December, stands at $6.5 million. This is a reduction from the $7.6 million from the end of the previous quarter. Net cash used in operating activities during the quarter came in at $1.18 million. This was a reduction on the $3.29 million from the previous September quarter. This reduction was mainly attributed to the decrease in research and development spending and admin costs.

4DS Memory share price snapshot

The 4DS share price is up an impressive 247.46% in the last 12 months. This is even more impressive when compared to the March low in 2020 of 2.7 cents, making it nearly an 8X from that point.

These gains don’t come for the faint at heart though. It has not been a straight line up over this time, with the share price ebbing and flowing by 16% a week on average.

4DS now has a market capitalisation of $224 million.

More reading

• 2 tech ETFs delivering rapid growth
• Here’s why the K2Fly (ASX:K2F) share price is pushing higher
• Why the Medical Developments International (ASX:MVP) share price jumped 5% higher
• Why the CogState (ASX:CGS) share price shot 8% today
• Why the Genetic Signatures (ASX:GSS) share price surged 6% higher today

Motley Fool contributor Mitchell Lawler 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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There are some tech exchange-traded funds (ETFs) that are delivering rapid growth.

Past performance doesn’t mean it will be repeated in the future, but they have been strong performers in recent years.  

Here are two of those fast-growing ETFs:

Betashares Nasdaq 100 ETF (ASX: NDQ)

The tagline for this ETF, offered by Betashares, is: “Own the future in a single ASX trade. Gain exposure to many of the world’s most innovative companies that are revolutionising our everyday lives.”

This ETF is invested in 100 of the largest businesses on the NASDAQ, which includes many of the global companies (based in the US) which are at the forefront of the new economy, according to Betashares.

In terms of actual businesses that it holds in its portfolio, the biggest positions are: Apple, Microsoft, Amazon, Tesla, Facebook, Alphabet, Nvidia, PayPal and Netflix. But there’s more to the ETF than just the ‘FAANG’ shares.

Other shares within the Betashares Nasdaq 100 ETF include: Intel, Adobe, Broadcom, Qualcomm, Texas Instruments, Advanced Micro Devices, Applied Materials, Intuit, Intuitive Surgical, Mercado Libre, Booking Holdings, Activision Blizzards, JD.com, Baidu, Docusign and Zoom.

There are also quite a few non-tech shares in the portfolio including Costco, PepsiCo, Regeneron, Moderna, Starbucks and Monster Beverage.

The management fee of this ETF is not as high as many internationally-focused fund managers. Betashares Nasdaq 100 ETF has an annual management fee of 0.48% per annum.

Including those fees, Betashares Nasdaq 100 ETF has delivered a net return of 34.8% over the past year, 27.4% per annum over the past three years and 22% per annum over the last five years.

Betashares says that with its strong focus on technology, the ETF provides diversified exposure to a high-growth potential sector that is under-represented in the Australian share market.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

This is another ETF provided by Betashares.

The idea behind Betashares Asia Technology Tigers ETF is to gain exposure to the 50 largest Asian technology companies outside of Japan in a single ASX trade.

Due to its younger, tech-savvy population, Asia is surpassing the West in terms of technological adoption and the sector is anticipated to remain a growth sector, according to Betashares.

Over half of the ETF is invested in businesses based in China. Another 20.7% is invested in Taiwan. After that, there is a 19.2% weighting to South Korean businesses. India is the final country with substantial exposure of 5.1%.

In terms of sectors, there are four sectors that have an allocation of more than 10%. The first is a 28.3% weighting to internet and direct marketing retail. The next allocation is a 19.2% position in semiconductors. The third biggest weighting is a 16.6% position to interactive media and services. The fourth biggest sector position is technology hardware, storage and peripherals with a 15.6% weighting.

The largest portfolio holdings include: Samsung, Taiwan Semiconductor Manufacturing, Meituan, Tencent, Alibaba, JD.com, Pinduoduo, Infosys and Netease.

The ETF has an annual management fee of 0.67% per annum. Despite the fee, it is delivered enormous short-term returns. Over the past six months the net return has been 33.2%, over the last year the net return has been 62% and since inception in September 2018 the net return has been 33.5% per annum.

More reading

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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 BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. 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 K2Fly Ltd (ASX: K2F) share price pushed higher today after the company announced its newly-acquired Sateva business is exceeding expectations.

The K2Fly share price reached an intraday high of 34 cents in mid-afternoon trade, before retreating slightly to close at 30 cents, up 3.39.

What’s moving the K2Fly share price?

In today’s release, K2Fly advised that it has received more than $850,000 in new purchase orders from its Sateva business. In comparison, when Sateva was a standalone company, it achieved revenue of $1.4 million for the entire 2020 financial year.

K2fly, an asset management consulting service, formally acquired Sateva in November last year through a share sale agreement.

The company attributed its sound sales performance to Model Manager – a block model management tool within the Sateva suite. K2Fly reported that major mining companies within the iron ore industry have taken up the specialist software.

In addition, K2Fly revealed that it has trialled a new automated ore blocker solution at a major iron ore producer site in Western Australia. The company has entered contract negotiations with two major mining companies based on the strong results. K2fly forecasts its current client list to grow at a rapid pace.

The final result of the trials is expected to be released to the company’s global mining partners from next month.

Management comments

K2Fly chief commercial officer Nic Pollock welcomed the positive result, saying:

We couldn’t be happier with the timing of the Sateva acquisition and the opportunities it presents for us to better service the global iron ore producers, particularly here in our home patch of Western Australia.

With the purchase orders already received we are clearly over-performing on the first element. We are also very pleased at the response of our customers to the new product offerings which are incredibly timely for the iron ore industry, as well as other bulk open pit mining operations like gold and copper.

K2Fly share price summary

The K2Fly share price has had a strong run over the past 6 months, reaching a 52-week high of 42 cents in October. Its shares have dipped lower since November, but the K2Fly share price has regained some composure in its increase today.

More reading

• Why the Medical Developments International (ASX:MVP) share price jumped 5% higher
• Why the CogState (ASX:CGS) share price shot 8% today
• Why the Genetic Signatures (ASX:GSS) share price surged 6% higher today
• 3 reasons why Soul Patts (ASX:SOL) is a great ASX dividend share
• Top brokers name 3 ASX shares to sell 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 Medical Developments International Ltd (ASX: MVP) share price was a strong performer on Thursday.

The healthcare company’s shares closed the day a sizeable 5% higher at $7.18.

This means the Medical Developments International share price is now up 35% since the start of November.

Why did the Medical Developments International share price storm higher?

As well as getting a boost from improving investor sentiment, the Medical Developments International share price was given a lift today from the release of an announcement relating to its capital raising.

In December, the company announced a $30 million capital raising. These funds were to be used to accelerate the commercialisation of its Penthrox “green whistle” product in Europe, to strengthen the depth and breadth of its team, and to complete clinical and other studies.

Its commercialisation strategy is being led by two new appointments from biotech giant CSL Limited (ASX: CSL) – Gordon Naylor (incoming Chairman) and Brent MacGregor (CEO).

Medical Developments International’s capital raising comprised a $25 million institutional placement and a $5 million share purchase plan. Both were being undertaken at $6.50 per new share, which represented an 8.5% discount to its last close price at the time of announcement.

The institutional placement successfully completed in December and the share purchase plan was finalised today. However, due to strong demand for the latter, the company has raised more than it set out to do.

According to its release, the company received applications totalling $11.768 million from eligible shareholders. In light of this, it has elected to accept the oversubscribed amount, bringing its capital raising to a total of approximately $36.8 million.

This means approximately 1,810,412 new shares will be issued on 27 January 2021, representing approximately 2.61% of its shares on issue.

With the Medical Developments International share price closing the day at $7.14, those new shares are already in the money by just under 10%.

More reading

• Why the CogState (ASX:CGS) share price shot 8% today
• Why the Genetic Signatures (ASX:GSS) share price surged 6% higher today
• 3 reasons why Soul Patts (ASX:SOL) is a great ASX dividend share
• Top brokers name 3 ASX shares to sell today
• What a dramatic day in the US could mean for ASX shares in 2021

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 CSL Ltd. and Medical Developments International Limited. The Motley Fool Australia has recommended Medical Developments International 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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CogState Limited (ASX: CGS) shares performed well today after the company released its second quarterly report for FY21. At the market’s close, the CogState share price was trading 8.3% higher at $1.105. 

What drove the CogState share price?

The CogState share price was on the rise today after the company posted strong results for the second quarter of FY21. During the period, CogState executed $14.3 million in sales contracts. This took total sales contracts for the 2020 calendar year to $41.7 million.

In regards to the health provider’s cash flow, CogState recorded inflows of $13.95 million for the quarter, including net operating cash inflow of $15.5 million. Contributing to these numbers were cash receipts of $22.3 million received from customers and the one-off payment from Japanese pharmaceutical company Eisai.

Moreover, due to the significance of the agreement with Eisai, CogState is working with its advisors on the appropriate accounting treatment for the agreement. As such, audited half year revenue results will be included with the financial statements for the period ended 31 December. These are scheduled to be released on 25 February 2021 and will include details of the non-refundable cash payment Eisai paid to CogState for a global license agreement.

Business update

CogState’s overall results for the December half were strong, exceeding the company’s own expectations. During the half year, CogState executed sales contracts with existing customers in addition to first-time agreements with several new customers. In the context of restrictions relating to the pandemic, CogState advised it was particularly pleased with its success surrounding new customers.

The company’s FY21 second quarter result represented 72% growth on the prior quarter but was 26% less than the previous corresponding period. However, the previous corresponding quarter included execution of large, phase III Alzheimer’s disease contract with a total value in excess of $13 million. In comparison, the largest contract executed by the company in the December 2020 quarter was under $5 million.

Including today’s gains, the CogState share price is currently trading 121% higher than this time last year.

More reading

• What’s moving the Cogstate (ASX:CGS) share price today?

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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The Genetic Signatures Ltd (ASX: GSS) share price has been pushing higher with the market today.

In afternoon trade the specialist molecular diagnostics company’s shares are up 3% to $1.96.

Though, at one stage today, the Genetic Signatures share price was up as much as 6% to $2.02.

Why did the Genetic Signatures share price jump higher today?

Investors were buying the company’s shares following the release of a second quarter update that revealed further strong sales growth.

According to the release, Genetic Signatures delivered a 738% increase in quarterly revenue to $8.2 million. This led to the company reporting record unaudited half year revenue of $18.7 million, which was up 638% on the prior corresponding period.

This impressive growth has been driven largely by strong demand for its COVID-19 testing kits. Genetic Signatures designs and manufactures a suite of real-time Polymerase Chain Reaction (PCR) based products for the routine detection of infectious diseases under the EasyScreen brand.

Pleasingly, this strong sales growth led to the company achieving its second consecutive cashflow positive quarter. It added $4.1 million in net cash from operating activities, including its $2.6 million R&D tax refund.

At the end of the period, the company had a cash balance of $36.3 million and no debt.

Management commentary

Genetic Signatures’ CEO, Dr John Melki, commented: “We pleased to report record half year revenue and a second quarter of positive cash flow. The recent supply agreement with Boston Medical Center has already seen two orders fulfilled, while a second US-based customer has been acquired. The investments made in personnel and warehousing facilities provides a strong foundation for Genetic Signatures as our team continues to pursue active leads in the North American market.”

“Recent developments in the United Kingdom, as well as localised outbreaks in Australia, have shown broad testing remains a pivotal tool in responding to COVID-19. We see strong demand continuing in the future as governments pursue various testing strategies. Genetic Signatures remains focused on both ensuring the consistent and reliable supply of test kits to support these ongoing measures and introducing these customers and others to the benefits of the broader EasyScreen suite of diagnostic tests.”

More reading

• Why the Genetic Signatures (ASX:GSS) share price is rocketing 25% higher

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

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There are some key reasons why Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is a popular ASX dividend share. This business is also called Soul Patts, for short.

What is Soul Patts?

Soul Patts is an investment conglomerate that has been listed since 1903.

Its leadership has consisted of successive family members who value the history of the company.

More than 40 employees have worked for the company for over 50 years. Five generations of the Pattinson family have served the company, as have three generations of the Dixson, Spence, Rowe and Letters families.

The company started out as an Australian pharmacy business. It still has indirect investment exposure to pharmacies with an investment in Australian Pharmaceutical Industries Ltd (ASX: API).

Here are some reasons why Soul Patts is an interesting ASX dividend share:

Diversified portfolio

A diversified portfolio means that the diversification may be able to lower risks when it comes to specific company risk or industry risk.

Soul Patts is invested in a variety of different industries such as telecommunications, building products, resources, listed investment companies (LICs), agriculture, swimming schools, financial services, healthcare, pharmacies and electrical and electronic products.

Those industries are represented by both ASX shares and non-ASX and unlisted companies. Its listed holdings include TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), API, New Hope Corporation Limited (ASX: NHC), Bki Investment Co Ltd (ASX: BKI), Milton Corporation Limited (ASX: MLT), Clover Corporation Limited (ASX: CLV) and Palla Pharma Ltd (ASX: PAL).

Some of the non-ASX share businesses include Round Oak Minerals, Apex Healthare, Ampcontrol and Aquatic Achievers.

Investment style

Its objective is to deliver superior returns to our shareholders by creating capital growth along with steadily increasing dividends.

Soul Patts is a long-term investor with a broad mandate. The flexible mandate allows Soul Patts to invest in companies at an early stage and grow with them over the long-term.

Its approach is to be counter cyclical and be focused on value. For example, it recently made its investment into agriculture at a time when Australia was going through one of its worst droughts.

Soul Patts described itself as a trusted partner that actively assists its portfolio companies in accessing growth capital and undertaking strategic acquisitions.

The ASX dividend share has been a long-term investor in TPG, ever since it was a much smaller company. The New Hope investment was another time Soul Patts invested in a business when it was much smaller.

Long-term dividend record

Soul Patts has two different dividend records.

One of the records that the ASX dividend share likes to tout is that it has increased its dividend every year since 2000. That actually means that Soul Patts has the longest dividend growth streak on the ASX. Ramsay Health Care Limited (ASX: RHC) used to have a strong dividend record too, but that ended in 2020 due to COVID-19.

The other dividend record that Soul Patts has is that it has paid some sort of dividend every year going back to 1903, including through world wars, recessions and the Spanish Flu.

Soul Patts funds its growing dividend from its investment portfolio income. Businesses like TPG and Brickworks provide the bulk of the money used to fund the growing dividend. The rest of the net cashflow is re-invested into other opportunities for more growth.

In terms of the current dividend yield at the current Soul Patts share price, it has a trailing grossed-up yield of 3%. If the FY21 dividend is 62 cents per share, then it has a forward grossed-up dividend yield of 3.1%.

More reading

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• 2 outstanding blue chip ASX shares to buy right now
• Why Frontier Digital Ventures, JB Hi-Fi, Regis, & Tyro are dropping lower
• Here’s why the Regis Healthcare (ASX:REG) share price is crashing 11% lower
• 3 top ASX dividend shares to buy for income

Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Ramsay Health Care 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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On Wednesday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three ASX shares that have just been given sell ratings by brokers are listed below. Here’s why these brokers are bearish on them:

Blackmores Limited (ASX: BKL)

According to a note out of Citi, its analysts have retained their sell rating and $60.50 price target on this health supplements company’s shares. While the broker believes that Blackmores’ earnings are likely to have bottomed in FY 2020, it is waiting for evidence of this before becoming more positive on the company. Especially given the difficulties it has been facing in the key China market. Citi appears concerned this could stifle its top line growth. The Blackmores share price is trading at $71.95 today.

Commonwealth Bank of Australia (ASX: CBA)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating but lifted their price target on this banking giant’s shares to $78.50. According to the note, the broker is expecting the banks to outperform the market this year. However, it sees more value in other banks and feels Commonwealth Bank’s shares have now peaked following their recovery over the last three months. In light of this, the broker is sticking to its underweight rating for now. The CBA share price is fetching $85.23 this afternoon.

Scentre Group (ASX: SCG)

Analysts at UBS have downgraded this shopping centre operator’s shares to a sell rating with an improved price target of $2.58. According to the note, the broker made the move on valuation grounds following a strong rise in the Scentre share price since the start of November. UBS believes that the retail re-opening trade has now played out and its shares have peaked. The broker also has concerns over occupancy rates due to COVID-19. The Scentre share price is trading at $2.82 on Thursday.

More reading

• 4 ASX shares picked for returns in 2021 by brokers and fundies
• Aussies ready to splash on travel, entertainment, cars
• Leading brokers name 3 ASX shares to sell today
• ASX dividends: Are miners the new bank shares?
• Pendal (ASX:PDL) posts $5 billion increase in FUM

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores 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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