The Archer Materials Ltd (ASX: AXE) share price is on the march today after the company released an announcement pertaining to its quantum computing chip.

Following today’s 33% gain, the Archer share price has now returned over 238% in the past year. For comparison, the S&P/ASX 200 Index (ASX: XJO) has slipped 4.1% over the same period.

Why is the Archer Materials share price moving higher?

This morning Archer Materials updated the market regarding the granting of its first patent for the company’s 12CQ quantum computing chip. More specifically, the patent granted is a Japanese patent (No. 6809670) for the protection of intellectual property of the 12CQ chip.

In the update, Archer noted the patent gives access to the high-value Japanese market for the 12CQ chip.

Considering the stringency of the world’s largest patent office, Archer also believes that further patent application processes will now be streamlined. These future patent applications include the jurisdictions of Australia, South Korea, Hong Kong, China, Europe, and the United States.

Quantum computing is an emerging technology, mostly restricted to research and development. Existing limitations of scale, temperature and pressure requirements have long impeded the application of quantum computing at a consumer level.

Archer aims to build quantum computing that is operational at room temperature, thereby making the technology adoptable by a wider addressable market.

CEO commentary on the update

Archer CEO Dr Mohammad Choucair commented on the news, stating:

Archer’s quantum computing chip IP is now well protected in Japan – a major global economy and centre for technological innovation. The grant of a patent in Japan further validates, and substantially derisks, our unique technology.

This update comes only a month after Archer announced it was partnering with the Brisbane based artificial intelligence (AI) firm Max Kelsen.

Archer Materials trying to knock on Google’s door

Real-world problems are being solved more and more with the application of quantum computing. Last week, it was published that Google’s quantum AI division was working alongside a pharmaceutical company to facilitate the development of new drugs.

Google’s quantum computing division will help develop new drugs https://t.co/BZ9yS5yT0V pic.twitter.com/t9B37TrvHo

— Engadget (@engadget) January 11, 2021

https://platform.twitter.com/widgets.js

For now, most applications involve utilising quantum computing as a service. Companies that currently offer such a service include IBM, Google, Amazon, and Microsoft. However, much like the original computer, there are companies working on making this technology accessible to the everyday consumer. The question is, will we see the the consumer value unlocked in this case, as we did in the era of PC’s by Microsoft and Apple?

Following today’s rally in the Archer materials share price, the company now has a market capitalisation of around $118 million.

More reading

• Why the Archer Materials (ASX:AXE) share price is up 2% today

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Mitchell Lawler owns shares of Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Microsoft and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Apple. 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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Australia’s leading investment platform provider CommSec has released data on the most traded ASX shares on its platform from last week.

Here’s the data:

Brainchip Holdings Ltd (ASX: BRN)

BrainChip was the most traded share on the CommSec platform last week, accounting for 2.2% of total trades. Approximately 60% of these trades came from buyers, but that couldn’t stop the artificial intelligence technology company’s shares falling 1% over the five days. Despite this, the BrainChip share price is up almost 100% in the space of a month. This has been driven by the announcement of its first Akida IP license agreement.

Mesoblast limited (ASX: MSB)

Mesoblast shares were popular with investors last week and accounted for 2% of trades on the CommSec platform. While the buying and selling was evenly split, the buyers will certainly have been the happier group. The biotech company’s shares jumped over 9% last week thanks to the release of positive data from a heart failure phase 3 trial.

Afterpay Ltd (ASX: APT)

This buy now pay later giant was responsible for 1.7% of shares on CommSec last week. And although only 40% of these came from the buy side, it couldn’t stop the Afterpay share price storming almost 15% higher to a new record high. This appears to have been driven by the successful IPO of rival Affirm in the United States and a positive broker note out of Morgan Stanley.

CSL Limited (ASX: CSL)

Another ASX share that was popular with CommSec users was CSL. The biotherapeutics company’s shares were attributable for 1.5% of trades on the platform, with a massive 83% coming from buyers. Unfortunately for them, the CSL share price fell 5% over the five days. This appears to have been driven by concerns over plasma collection headwinds.

Betashares Nasdaq 100 ETF (ASX: NDQ)

This exchange traded fund (ETF) was popular with investors again last week and was accountable for 1.5% of trades on CommSec. Once again, the buying was strong, with 80% of trades coming from the buy side. This ETF is proving to be very popular with investors as it gives them exposure to the likes of Apple, Amazon, Facebook, and Tesla.

More reading

• Why Afterpay, Ansell, MyDeal, & PolyNovo shares are storming higher today
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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 BETANASDAQ ETF UNITS and CSL Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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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Despite the News Corporation (ASX: NWS) share price getting a 31% bump between November last year and today, News Corp is not an ASX company you hear too much about these days. To understand why that is, lets take a closer look at the company structure and what they have been up to lately. 

News Corp is a rather interesting company. It’s listed on the ASX under the ticker symbol NWS and is also listed over in the United States, on the Nasdaq exchange.

Additionally, News Corp has another interesting characteristic: it has two classes of shares.

News Corp Class A and News Corp Class B

There’s News Corp Class A (NASDAQ: NWSA) and News Corp Class B (NASDAQ: NWS). The ASX-listed variation is actually a Chess Depository Interest (CDI), which basically means it is the same stock as News Corp Class B on the Nasdaq.

Why two classes of shares?

Well, over in the States, dual-class structures are legal and accepted (unlike on the ASX). It gives a company’s founders or management the ability to dilute their economic holdings of a company without diluting their ownership.

Let me explain.

In News Corp’s case, the Class B shares get a single vote over the management of the company, just like any ASX share entitles the owner to. The News Corp Class A shares, however, do not come with that vote. They are equal in terms of economic value, but unequal in terms of voting power.

This structure enables the owners of large tranches of Class B shares to maintain their control of the company by ensuring that a large shareholder base gets no voting power.

News Corp is not the only company to employ such a structure. Other prominent examples include Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL), Facebook Inc (NASDAQ: FB), and even Warren Buffett’s Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B).

But I digress…

News Corp’s complicated history

News Corp is most famous for being majority-owned by Rupert Murdoch and the Murdoch family. The company owns the Murdoch print assets like The Wall Street Journal and Australia’s The Daily Telegraph, Herald Sun, and The Courier Mail. It also owns a range of other assets, including a large stake in REA Group Ltd (ASX: REA) as well as the Foxtel Pay TV business.

However, the business used to be a lot larger.

Back in 2013, News Corp spun out most of its media assets, including 21st Century Fox TV and Film and Fox News, into the 21st Century Fox Company. In 2019, the Walt Disney Co (NYSE: DIS) bought most of 20th Century Fox’s television and film assets, which included iconic brands like The Simpsons.

However, 20th Century Fox kept its television assets like Fox News. Subsequently, the company rebranded to Fox Corporation (NASDAQ: FOX)(NASDAQ: FOXA). Note the retainment of the dual-lass structure.

Today, both News Corp and Fox Corp are still majority-owned and run by Rupert Murdoch and his family. This brings us to a predicament for News Corp shareholders.

There’s one in every family…

Fox isn’t the most popular company right now, even in the Murdoch family itself. Reporting from the Australian Financial Review (AFR) this week told us that James Murdoch, son of Rupert, has publicly criticised the company for a perceived role in the riots at the US Capitol building earlier this month. The AFR states that Mr. Murdoch was asked whether Fox News had played a role in the riots.

Fox is a dominant and conservative news network in the US. Mr. Murdoch reportedly responded by saying that “media groups had amplified election disinformation, leaving ‘a substantial portion’ of the public believing ‘a falsehood’”.

He went on to state the following:

The damage is profound… The sacking of the Capitol is proof positive that what we thought was dangerous is indeed very, very much so. Those outlets that propagate lies to their audience have unleashed insidious and uncontrollable forces that will be with us for years… I hope that those people who didn’t think it was that dangerous now understand, and that they stop.

James Murdoch used to be the Chief Executive of the old 21st Century Fox. He famously cut ties with the family business in August when he resigned from the News Corp board. James Murdoch reportedly cited “disagreements over certain editorial content” as the reason.

Should News Corp shareholders be worried?

So how does this affect News Corp shareholders?

Well, in this business, reputation can be a powerful force. If there does happen to be more fallout over the role that Fox News played in the recent incidents at the US Capitol, it could have unforeseen consequences.

Remember, both companies are controlled by the same large shareholders, namely, the Murdoch family. The AFR report tells us that James Murdoch stated that he is “praying for people to come to their senses” and talked of a “reckoning” for the media industry.

Those words from a former board member would make any News Corp shareholder worried, I’d wager.

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Sebastian Bowen owns shares of Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Walt Disney. The Motley Fool Australia has recommended REA Group Limited and Walt Disney. 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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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.

It’s official. On Monday, Tesla Inc (NASDAQ: TSLA) announced that it has started selling domestically-made Model Y’s in China. The company released a comment on Twitter saying simply “Model Y deliveries in China have officially begun.” 

Tesla broke ground on its Shanghai manufacturing plant two years ago, and the company delivered the first Model 3 sedans from the factory a little over one year ago. As the company expands its offerings from the facility, competing Chinese electric-vehicle (EV) makers have also been enlarging product portfolios. Nio Inc (NYSE: NIO) just unveiled its first luxury sedan at its “Nio Day” event earlier this month. 

Nio’s ET7 will directly compete with Tesla’s Model S luxury sedan when it becomes available early next year, while Tesla’s Model Y will compete with Nio’s SUV products. But the Model S isn’t made at the Chinese factory. The plant will ultimately have a production capacity of 500,000 vehicles annually. 

Tesla sold 138,000 Model 3 sedans in China in 2020, representing a little over 12% of all EV’s sold in the country, according to The Wall Street Journal. Automakers expect that to grow quickly, as the Chinese government wants to almost quintuple EV sales by 2025. 

Tesla offers three models of its Model Y in the United States. However, the standard range basic model will not be offered from the Shanghai plant. The Chinese-made long range model will sell for $52,425 and performance models will be priced at $57,050, according to reports. 

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

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Howard Smith 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 Tesla and Twitter. 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 Downer EDI Limited (ASX: DOW) share price is edging higher today. This comes after the company announced it has been awarded a new contract with Telstra Corporation Ltd (ASX: TLS).

At the time of writing, the Downer share price is up 2.2% to $5.48.

New contract win

In today’s release, Downer revealed that it has won a field services contract by Telstra for infrastructure works. The deal, worth approximately $330 million, will run over a 4-year period, with a possible one-year extension.

Under the agreement, Downer will carry out a number of services, which include:

• Network asset relocations;
• Wideband business services;
• Facilities design and construction activities including Telepower and building upgrades; and
• Continuation of the 5G mobile rollout;

The works are scheduled to commence this month across New South Wales, Victoria, Tasmania, South Australia and the Northern Territory.

Quick take on Downer

Downer is an integrated services company that operates primarily in Australia and New Zealand.

The multi-functional company has three divisions: infrastructure, mining and rail. These industries move into market sectors such as minerals and metals, oil and gas, power, transport, telecommunications, water and property.

Most notably, Downer is a leading provider of fixed and wireless network services and one of the largest constructors of telecommunications carrier networks.

What did the CEO say?

CEO Grant Fenn welcomed the extended partnership, saying:

Downer has been working closely with Telstra for over a decade and we have earned a reputation as a high-quality contractor trusted for our delivery excellence.

Downer is proud of our involvement in the Field Optimisation initiative assisting Telstra as it simplifies its business. We look forward to continuing our partnership with Telstra and transitioning into the new Field Services contract.

Downer share price snapshot

The Downer share price has been trekking higher over the last 9 months, since its steep fall from COVID-19. Reaching as low as $2.58 in March, the company’s shares stand at a 112% increase over the period since.

Based on its current share price, Downer commands a market capitalisation of $3.3 billion.

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Motley Fool contributor Aaron Teboneras owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra 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 Strategic Elements Ltd (ASX: SOR) share price has been an exceptionally strong performer on Wednesday.

At one stage today, the technology-focused investment and development company’s shares were up as much as 36% to a record high of 92 cents.

When the Strategic Elements share price hit that level, it meant it was up a remarkable 475% in the space of one month.

So, with 378.4 million shares on issue, this gave Strategic Elements a market capitalisation of ~$350 million.

Why is the Strategic Elements share price rocketing higher?

Investors have been scrambling to buy Strategic Elements shares since this time last month due largely to an announcement at the end of the year relating to its printable Nanocube Memory technology.

According to the release, testing has confirmed that the printable Nanocube Memory technology has potential as printable brain-inspired (neuromorphic) computing hardware.

Management advised that work at the University of New South Wales (UNSW) has confirmed that the Nanocube Memory structure and operation allows it to combine computing and memory in one place in a way similar to how biological neurons operate.

This is potentially a big positive as experts in the memory technology field believe the future of computing will be about rethinking processor architecture from the ground up to emulate how a brain efficiently processes information.

Management notes that artificial synapses fabricated by UNSW using the Nanocube Memory technology provide a potential hardware solution that has combined data storage and processing abilities. This is key to neuromorphic computing.

On Tuesday, the company responded to a media article commenting that “the next goal in the memory tech space is to print one megabit of memory on to a piece of plastic, which Strategic expects will be completed by May.”

Strategic Elements responded by confirming that the technology is still under development, but it is aiming to develop the one megabit ultra-low power, flexible, transparent memory by May 2021.

This update appears to be what has given the Strategic Elements share price an added boost this week.

Insider share selling.

Insider selling is often regarded as a bearish indicator as few should know the intrinsic value of a company better than its directors.

So, it is worth noting that since November the company has filed countless change of director’s interest notices which reveal that insiders have been selling millions of the company’s shares over the last two and a half months.

Nevertheless, that hasn’t appeared to put a dampener on the Strategic Elements share price rise over the same period.

More reading

• Why AVZ Minerals, Immutep, Kogan, & Strategic Elements shares are pushing higher
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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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It seems like Rhythm Biosciences Ltd (ASX: RHY) can do no wrong by investors at the moment. Today, the company’s shares have risen to another all-time high record following the update on the initial manufacturing of ColoSTAT.

During early morning trade, the Rhythm share price rose to an intraday high of $1.38. However, some profit taking have led its share to slightly retreat to, at the time of writing, $1.35, up 7.14%.

What’s driving the Rhythm share price to new highs?

The Rhythm share price is breaking new highs as investors are fighting to get a hold of its shares.

In its announcement, Rhythm advised that its global manufacturer, Biotem, has completed initial ColoSTAT prototype test kits. The small-scale production of ColoSTAT devices commenced in December, with delivery fulfilled ahead of schedule later that month.

Having received the first prototype units, Rhythm began testing the performance of ColoSTAT test kits with cancerous and healthy blood samples. The company noted that full testing is underway and will form Study 6, due to be completed by March 2021.

Rhythm noted that early quality assurance and performance test work is consistent with its own prototype test results.

Room for improvement

In addition to the assembly of ColoSTAT, the company stated that it has continued its efforts in advancing the technology behind the test kit. The current version, which is considered far superior than the current market standard faecal test, is undergoing improvements.

Rhythm advised it has allocated extra resources to its algorithm and software development division to enhance the existing technology on offer. As more samples arrive, it will use this to create a larger dataset to assess any performance changes made. New developments will be applied to study 7 and onward.

CEO commentary

Rhythm CEO, Mr Glenn Gilbert, hailed the milestone achievement, saying:

The objective of design transfer of the core ColoSTAT technology to our global manufacturer, Biotem, is to demonstrate that they are able to produce, in a commercial setting, the same consistent and high performing ColoSTAT test kit that Rhythm had achieved in lab.

The early view on the performance of the test kits manufactured by Biotem provides further confidence on our underlying technology that will drive the success of ColoSTAT into the future.

More reading

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

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In early afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to make it two days in a row of solid gains. At the time of writing, the benchmark index is up 0.4% to 6,770.6 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower today:

Frontier Digital Ventures Ltd (ASX: FDV)

The Frontier Digital Ventures share price has sunk over 14% lower to $1.49. This decline has been driven by news that its largest shareholder is selling down its holding. According to the release, Catcha Group has sold ~45.9 million shares via an off-market block trade. This transaction reduces its shareholding from 26.5% to 13.1%. The transaction, undertaken at $1.50 per share, received strong support from institutional investors, with the introduction of multiple new domestic and international institutional shareholders.

JB Hi-Fi Limited (ASX: JBH)

The JB Hi-Fi share price is down 2.5% to $52.37. This appears to have been driven by profit taking following some strong gains this week. Investors were buying the retailer’s shares earlier this week after it revealed very strong sales and profit growth for the first half of FY 2021.

Regis Healthcare Ltd (ASX: REG)

The Regis Healthcare share price is down over 8% to $1.70. The catalyst for this was news that Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) has given up on its attempt to take over the aged care provider. The investment house withdrew its takeover approach after having bids of $1.65 per share and $1.85 per share rejected by the Regis board. They believe the offers materially undervalue the company.

Tyro Payments Ltd (ASX: TYR)

The Tyro share price has fallen 7% to $2.69. This decline may be attributable to a broker note out of Macquarie this morning. According to the note, the broker has downgraded the payments company’s shares to an underperform rating and slashed the price target on them to $2.55. Macquarie is concerned that the recent terminal outage has done significant damage to Tyro’s reputation.

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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 Frontier Digital Ventures Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Frontier Digital Ventures 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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There are some compelling ASX growth shares to look into right now.

Here are some of those ideas:

Audinate Group Ltd (ASX: AD8)

Audinate is an ASX growth share that owns the Dante platform, which distributes audio signals across computer networks. The company boasts about being the lead supplier of digital and audio video networking for the professional AV industry.

The sectors of corporate conferences and higher education have been recovering well for Audinate since May. However, other groups of Audinate’s customer groups are still struggling, such as live sound and large events.

In the first quarter of FY21, it generated revenue of US$5.2 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of AU$0.3 million. For the first half of FY21 it made US$11.1 million of revenue.

Audinate also revealed that it is investing money on a video development team in Cambridge. The ASX growth share thinks that video will be a key part of growing Dante and expanding its total addressable market.

EML Payments Ltd (ASX: EML)

EML Payments has a number of different payment services for clients to use. EML Payments has general purpose reloadable offerings such as gaming payouts with white label gaming cards, salary packaging cards, commission payouts and rewards programs. EML Payments also offers physical gift cards, shopping centre gift cards and digital gift cards. Finally, the ASX growth share offers virtual account numbers.

In the first quarter of FY21 EML’s total revenue grew 20%, compared to the fourth quarter of FY20, to $40.6 million. EBITDA generated in the FY21 first quarter was $10 million, which was 69% higher than the fourth quarter of FY20.

Dominic Rose from Montgomery Lucent Investment Management said at the start of December that the company was bouncing back well from COVID-19 impacts. He said: “the recent encouraging vaccine news materially increases confidence in a solid earnings recovery in FY22. Market estimates are for earnings before interest, tax, depreciation and amortisation to rebound 40 per cent in FY22 to $74 million, still well below pre-COVID expectations of $95-100 million.

“Looking back, one positive arising from the pandemic was EML’s ability to reprice and restructure the Prepaid Financial Services (PFS) deal in late March, allowing the company to retain a strong balance sheet ($118 million net cash as at the end of June) which offers optionality for further acquisitions. Valuation remains attractive for the growth potential of the business, in our view, with the stock trading on 12x recovered EBITDA (FY23 EBITDA $93 million).”

According to Commsec, EML Payments is priced at 38x FY23’s estimated earnings.

Pushpay Holdings Ltd (ASX: PPH)

This ASX growth share is quickly becoming an important player in the electronic donation space for the large and medium US churches.

Pushpay expects “significant operating leverage to accrue as operating revenue continues to increase, while growth in total operating expenses remains low.”

The company has continued to see its profit margins continue to rise. In the FY21 half-year result its gross profit margin went up from 65% to 68% and the earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) margin rose from 17% to 31%.

In FY21 the company is now expecting EBITDAF to be in the range of US$56 million to US$60 million. This is the latest profit upgrade from the company.

According to the Commsec, Pushpay is valued at 19x FY23’s estimated earnings.

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 and recommends EML Payments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO and PUSHPAY FPO NZX. The Motley Fool Australia has recommended AUDINATEGL FPO, EML Payments, and PUSHPAY FPO NZX. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (Index:^AXJO) hit a high for 2021 and ASX stocks that just got upgraded to “buy” are leading the charge.

The top 200 stock index gained 0.6% in late morning trade to 6,781 with all sectors bar Real Estate trading in the black.

But two ASX stocks that got upgraded by leading brokers are outpacing the broader market gains.

US foreclosures drive upgrade for this ASX stock

The first is the Computershare Ltd (ASX: CPU) share price. The CPU share price jumped over 2% at the time of writing to $14.69.

ASX investors are getting excited after Macquarie Group Ltd (ASX: MQG) lifted its recommendation on the stock to “outperform” from “neutral”.

The broker believes the Computershare share price is under appreciated due to the upside from the group’s US mortgage servicing business.

Growth in higher margin business

“Foreclosures remain prohibited until at least 31 January 2021 which is impacting CPU’s higher margin ancillary revenues (~1/3 of ancillary revenues are foreclosure related),” said Macquarie.

“We are forecasting a gradual recovery in ancillary revenues from February 2021 to the end of FY21.”

The US government banned foreclosures to protect vulnerable households during COVID-19, but the ban is about to expire.

The broker’s 12-month price target on the CPU share price is $15.95 a share.

Market share wins prompts “buy” upgrade

Another stock that’s outrunning the ASX 200 this morning is the Hub24 Ltd (ASX: HUB) share price.

Credit Suisse upgraded its rating on the wealth platform to “outperform” from “neutral” following management’s better-than-expected update yesterday.

HUB reported funds under advice of $22 billion for the December quarter. This is 16% above the previous quarter and 5% better than consensus estimates.

Net capital inflow also hit a record of $1.7 billion. That’s 35% above the September quarter and well ahead of Credit Suisse’s $1.4 billion prediction.

Key growth drivers for HUB share price

“HUB is capturing significant marketshare within the platform industry,” said the broker. “We expect it to grow from 2.1% market share in FY20 to 5.6% by FY25E.”

The expected expansion of the addressable market size for HUB’s platform due to advisors moving to independent practices is one of the drivers for the upgrade.

The broker also believes these advisors will be giving greater allocation of their client’s capital to HUB.

Furthermore, there’s potential upside from large institutional deals.

The broker lifted its 12-month price target on the HUB share price to $26 from $21.50 a share.

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Brendon Lau owns shares of Macquarie Group Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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