At lunch on Wednesday the S&P/ASX 200 Index (ASX: XJO) is on course to extend its winning run. The benchmark index is currently up 1.3% to 6,422.8 points.

Here’s what has been happening on the market today:

Commonwealth Bank Q1 update.

The Commonwealth Bank of Australia (ASX: CBA) share price is pushing higher today after the release of its first quarter update. For the three months ended 30 September, the bank posted an unaudited net profit after tax of $1.8 billion. This was a 16% decline over the prior corresponding period. In addition to this, Commonwealth Bank revealed a sharp reduction in its COVID-19 temporary loan deferrals during October. The bank recorded a net reduction in total loan deferred facilities of 59% during the month, representing a monthly net reduction in deferred balances of ~$21 billion.

Tech shares rebound.

The Australian tech sector has rebounded on Wednesday after a horror showing on Tuesday. The likes of Altium Limited (ASX: ALU) and Xero Limited (ASX: XRO) are recording solid gains and helping to drive the S&P/ASX All Technology Index (ASX: XTX) 2% higher. One tech share that is still struggling today is Afterpay Limited (ASX: APT). Its shares are down slightly at lunch. Though, it is worth remembering that they have more than tripled year to date.

Gold miners sink lower again.

It has been another red day for gold miners such as Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST). Although the gold price has recovered from its Monday night selloff, it appears that investors are not in a rush to invest. With risk sentiment improving, funds have been piling into areas of the market that have underperformed in 2020.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Wednesday has been the Virgin Money UK CDI (ASX: VUK) share price with a 13% gain. The prospect of a working COVID-19 vaccine has given the UK-based bank a big boost. The worst performer is the JB Hi-Fi Limited (ASX: JBH) share price with a 5% decline. This morning the retailer’s shares were downgraded by analysts at Macquarie.

More reading

• Why CBA, Straker, Woodside, & Xero shares are surging higher
• CBA (ASX:CBA) share price lifts on first quarter results
• These ASX dividend shares offer 4.5%+ dividend yields
• 5 things to watch on the ASX 200 on Wednesday
• Enjoying your ASX 200 gains? Here’s why you should watch out for January

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’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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.

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The share price of Bingo Industries Ltd (ASX: BIN) has slipped 1.5% this morning following the company’s outlook for FY21 at the annual general meeting (AGM) this morning. Let’s take a look.

Highlights from the AGM

• Revenue $486.7 million, up by 21% from prior year
• Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was $152.1 million, up 40.8% 
• Net Profit After Tax (NPAT) to $66 million, up by 196%
• Operating free cash flow of $160.1 million, up 37.4% 
• Achieved all safety targets for financial year 2020, recording a lost-time injury frequency rate of 0.4, which is a 50% improvement 

Management admitted that the company has been impacted hard by COVID-19, and it expected to be further impacted in the second half of FY21. 

The company is also anticipating increased regulations, which will result in increased compliance costs. It says that the Australian Competition and Consumer Commission (ACCC) market investigation is ongoing and the outcome is yet to be determined. 

Update and guidance for FY21

• Views on the outlook for FY21 remain unchanged, as the company anticipates COVID-19 headwinds may continue to impact the business in 2021.
• As a result, Bingo expects group EBITDA margin to decline in FY21 by approximately 2% to 3%, before rebounding to its longer-term target of 30%.
• Pre-collections volume continue to be affected by the ongoing impacts of COVID-19, down 10-15% below pre-COVID-19.
• Post-collections volume however, which accounts for approximately 72% of EBITDA, continued its strong momentum in volumes in the first four months of FY21.

What does Bingo do?

More reading

• ASX 200 up 1.3%: CBA Q1 update, tech shares rebound, JB Hi-Fi sinks
• ASX small cap RXP (ASX:RXP) is up 54%: Here’s why
• Why CBA, Straker, Woodside, & Xero shares are surging higher
• This under-the-radar ASX tech company’s shares are up 150% since March
• The Resources & Energy (ASX:REZ) share price dived 33% on open today. Here’s why.

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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French consulting giant Capgemini SE (EPA: CAP) has announced it will buy Australian digital services provider RXP Services Ltd (ASX: RXP).

RXP is very much a small cap on the ASX, with a market capitalisation of under $60 million before the ASX opened Wednesday. Capgemini is a multinational worth $32 billion.

Capgemini will pay $95.5 million in cash for a 100% acquisition, equating to 55 cents per share.

RXP shares closed Tuesday at 34 cents – but exploded on Wednesday to be 54% up at 11:08 am AEDT, to hit 52 cents.

The buyout shows its intent in the Asia-Pacific, according to Capgemini.

“The acquisition of RXP Services will make Capgemini a market leader in Australia in digital, data and cloud,” said Capgemini Asia-Pacific and Middle East executive chair Luc-Francois Salvador.

“Both companies share similar values and vision of the role of technology and humanity in successfully transforming businesses and society. Our strengths will enable us to use insights, design and technology to create inclusive and sustainable futures for our clients.”

The transaction is currently undergoing all the necessary legal, regulatory and shareholder approvals and is expected to close in March 2021.

Carrot for existing shareholders

The RXP board stated Wednesday morning that it unanimously recommended the deal be accepted.

“The RXP board believes the offer from Capgemini represents an excellent opportunity for RXP shareholders to realise certain value at a significant premium.”

If shareholders approve the buyout a special dividend of 5 cents per share may be paid, although this amount would be taken out from the final 55 cents sale price.

The company already provides a fully franked yield of 10.29%.

RXP founder and chief executive Ross Fielding’s stake would turn into a $5 million payday when the buyout closes.

“I am very excited for the growth opportunities this will create for our 550 employees within a global and culturally aligned business,” he said.

“RXP’s valued clients stand to gain from an integrated group through increased scale.”

Once the deal is completed, RXP would become a wholly owned subsidiary of Capgemini.

More reading

• Why CBA, Straker, Woodside, & Xero shares are surging higher
• This under-the-radar ASX tech company’s shares are up 150% since March
• The Resources & Energy (ASX:REZ) share price dived 33% on open today. Here’s why.
• Why the Mesoblast (ASX:MSB) share price is jumping higher today
• Sky Network (ASX:SKT) share price shoots 6% higher on upgraded guidance

Motley Fool contributor Tony Yoo 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.

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to extend its winning run with another solid gain. At the time of writing the benchmark index is up over 1% to 6,406.3 points.

Four shares that are climbing more than most today are listed below. Here’s why they are surging higher:

Commonwealth Bank of Australia (ASX: CBA) 

The CBA share price is up over 2% to $74.04 following the release of its first quarter update. For the three months ended 30 September, the banking posted an unaudited net profit after tax of $1.8 billion. This was a 16% decline over the prior corresponding period. In addition to this, the bank revealed a sharp reduction in its COVID-19 temporary loan deferrals in October.

Straker Translations Ltd (ASX: STG)

The Straker share price has zoomed almost 44% higher to $1.30. Investors have been buying the translation platform provider’s shares after it announced a major deal with IBM. The global tech giant has appointed Straker as a strategic translation service provider on a two-year agreement. This agreement commences in January and comes with an option for an additional two years. It extends the company’s current relationship with IBM from one language (Spanish) to 55 languages.

Woodside Petroleum Limited (ASX: WPL)

The Woodside Petroleum share price has climbed 3% to $20.31. Today’s gain appears to have been driven by a rise in oil prices and the release of its investor day presentation. In respect to the latter, the company spoke positively about its future and confirmed its full-year output guidance of 99 to 101 million barrels of oil equivalent.

Xero Limited (ASX: XRO)

The Xero share price has surged 8% higher to $124.48. This is despite there being no news out of the business and accounting platform provider. However, with its half year results due to be released on Thursday, some investors may be buying shares in anticipation of a strong result.

More reading

• Why the Straker Translations (ASX:STG) share price is rocketing 37% higher today
• CBA (ASX:CBA) share price lifts on first quarter results
• These ASX dividend shares offer 4.5%+ dividend yields
• 5 things to watch on the ASX 200 on Wednesday
• Vaccine hopes cause ASX 200 to rise on Tuesday

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 Xero. The Motley Fool Australia has recommended Straker Translations. 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.

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Medical imaging and data management company Mach7 Technologies Ltd (ASX:M7T) has delivered some impressive shareholder returns this year. Despite all the commercial headwinds from COVID-19.

After falling to a 52-week low of just 37 cents in late March, the ASX small cap company’s share price has rallied strongly. In recent months, the Mach7 share price has soared more than 150% higher to 96 cents at the time of writing. This puts its shares up more than 45% so far this calendar year.

What has driven the gains?

Results for FY20 were positive across most financial metrics. Revenues surged 102% higher year-on-year to $18.9 million. The company also reported its first full year of profitability: earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $3.3 million, while net profit after tax was $0.2 million. Most of the uplift in revenues came from licensing fees, either from new customers or existing customers repurchasing licenses.

Annualised recurring revenues also jumped 35% to $9 million. These are subscription and support services revenues received from customers who are “live” on the Mach7 platform. The company will want to continue to grow this category of revenues in particular, as the more revenue the company can “lock in” each year, the less variability there will be in its financial results.

First quarter FY21 results haven’t been quite as strong. Annualised recurring revenues increased by $0.9 million, while the company generated $3.3 million worth of new sales orders. It also completed the acquisition of Client Outlook during the quarter, at a cost of $40.8 million. Client Outlook is a Canadian technology company servicing the healthcare industry, which specialises in medical imaging.

What does Mach7 actually do?

Mach7 develops a centralised software platform for healthcare professionals, with a focus on medical imaging. Patient data can be stored in multiple formats across multiple different systems. Mach7 aims to create a single, integrated source of reliable patient data that can be used by doctors and other healthcare professionals to deliver better results for their patients. The company already has a diverse range of clients, including Singapore General Hospital, Massachusetts General Hospital, and the Hamad Medical Corporation in Qatar.

When releasing Mach7’s first quarter results, company CEO Mike Lapron said: “We have very experienced individuals who are bullish about the product potential and confident in our ability to become a dominant player in the imaging market.”

Our Foolish analysts agreed with Lapron’s bullish outlook, and Mach7 earned itself a place on the Motley Fool’s Hidden Gems scorecard back in June. Our analysts liked the company’s strong business momentum and global market opportunities. 

More reading

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Rhys Brock 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 MACH7 FPO. The Motley Fool Australia has recommended MACH7 FPO. 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.

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The Resources & Energy Group Ltd (ASX: REZ) share price took a 33% dive on open following its drill results this morning. 

Let’s take a look.

About the company 

Resources & Energy is a gold explorer, developer and producer with projects in Western Australia and Queensland. 

In Western Australia, the company’s flagship site is the East Menzies Gold Project, situated 130km north of Kalgoorlie. The site represents a 112sq km package of contiguous mining, exploration and prospecting licenses. 

In Queensland, the company has a 12sq km mineral development licence over the Mount Mackenzie Mineral Resource. An initial scoping study for the project shows a positive net $63 million of free cash. 

Resources & Energy share price surge in October

The Resources & Energy share price surged more than 200% on 20 October following the discovery of a new high-grade zone of gold mineralisation with a peak result of 76.4 gt/au. This was at the Gigante Grande Prospect situated at its East Menzies Gold Project.

Resources & Energy executive director Richard Poole said the results supported “the overwhelming evidence that the East Menzies Gold Field is one of Australia’s best and most overlooked exploration target areas”. 

Drill results

The gold miner announced its drilling results from its Gigante Grande prospect today. They showed the drill holes, which were targeting a potential continuation of mineralisation, resulted in a peak assay of 3.85 gt/au.

As a result, the Resources & Energy share price opened 33% lower and is currently trading near its intraday lows, down 29.5% at 7.4 cents. The bar may have been set too high after its previous high-grade zone discovery or its share price may have been pumped too high. Nonetheless, investors were clearly far from impressed with today’s drill results. 

Resources & Energy has previously delivered an announcement under similar circumstances where the market was not impressed. On 3 November, the company announced a resource upgrade at its Goodenough Project located within the central west part of the East Menzies Gold Project. In what appears to be a positive announcement, the Resources & Energy share price slipped 5% lower on the day. 

More reading

• Why the Mesoblast (ASX:MSB) share price is jumping higher today
• Sky Network (ASX:SKT) share price shoots 6% higher on upgraded guidance
• Why the Straker Translations (ASX:STG) share price is rocketing 37% higher today
• Computershare (ASX:CPU) share price higher after AGM
• CBA (ASX:CBA) share price lifts on first quarter results

Motley Fool contributor Lina Lim 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.

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The Mesoblast limited (ASX: MSB) share price is bouncing back today from a heavy decline on Tuesday.

In morning trade the biotech company’s shares are up 5.5% to $3.30.

Why is the Mesoblast share price jumping higher?

Investors have been buying the company’s shares after the release of a promising announcement this morning.

That announcement reveals that the company has achieved positive feedback from its randomised controlled Phase 3 trial of remestemcel-L in patients with moderate to severe acute respiratory distress syndrome (ARDS) due to COVID-19 infection.

According to the release, Mesoblast has received a recommendation to continue from the independent Data Safety Monitoring Board (DSMB) following completion of the trial’s second interim analysis.

That analysis was performed on the trial’s first 135 patients, which represents 45% of the total target of up to 300 randomised patients.

The DSMB is recommending the continuation of the trial after reviewing the trial’s primary endpoint, all-cause mortality within 30 days of randomisation and all safety data.

Complementary to a COVID-19 vaccine.

Mesoblast’s Chief Medical Officer, Dr Fred Grossman, was very pleased with the DSMB’s recommendation and sees room in the market for the treatment even if a successful vaccine is developed.

He said: “We are very pleased with the recommendation by the DSMB, as we seek to confirm whether remestemcel-L improves survival in ventilated COVID-19 patients with moderate to severe ARDS. Patients who have co-morbidities or are older are likely to continue to be at high risk of ARDS and death, even if COVID-19 vaccines become available. This is why having a potential treatment that reduces mortality in these patients is so important.”

“ARDS is the principal cause of death in COVID-19 infection and is thought to be due to a dysregulated immune response in the lungs to COVID-19. Deaths continue to increase in ventilator-dependent ARDS patients as COVID-19 cases continue to surge globally. Despite improved treatment and earlier intervention in hospitalized COVID-19 patients overall, the mortality rate in COVID-19 ARDS patients who are over 60 years old remains more than 60%,” he added.

More reading

• These are the 10 most shorted shares on the ASX
• Why the Mesoblast (ASX:MSB) share price crashed 40% lower in October
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• These were the worst performing shares on the ASX 200 in October
• Why the Mesoblast (ASX:MSB) share price gained today as the ASX 200 fell

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. 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.

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The Sky Network Television Ltd (ASX: SKT) share price is shooting higher today following the release of an upgraded guidance announcement.

In early morning trade, shares in the television services company are up 6.8% to 15.5 cents. In comparison, the All Ordinaries Index (ASX: XAO) is up 1.1% to 6,617 points.

Upgraded guidance

According to the release, Sky advised it has upgraded its revenue and profit guidance for the remainder of FY21. The reforecasting exercise was based on the positive momentum experienced in the first four months of trading for the new financial year.

Sky’s direct satellite customer base has grown for six consecutive months, driven by an improvement in FY21 annualised churn to 12.2%. This is a reduction from the 13% and 15% achieved in FY20 and FY19, respectively.

The company attributes it upturn in results to its customer management process and refocused sales efforts. This led to greater-than-anticipated growth in streaming revenue, particularly from the Neon entertainment platform.

As key metrics have outperformed earlier predictions, Sky increased its revenue guidance range for FY21. The company now calculates revenue to be around $680 million to $710 million, compared to the previous estimate of $660 million to $700 million.

In addition, earnings are expected to benefit from one-off cost savings as a result of the renegotiation of certain contract rights. Sky stated that it’s also continuing to exercise careful cost control measures across its operations.

Off the back of the upgraded outlook and tight cost control, earnings before interest, tax, depreciation and amortisation (EBITDA) is also projected to lift. Current estimates put EBITDA for FY21 between $140 million and $155 million, a jump from the $125 million to $140 million declared in September.

Net profit after tax is also forecasted to swell to $20 million to $30 million, almost doubling prior guidance.

What did management say?

Sky chief executive Mr Martin Stewart commented on the strong start to the financial year:

While external economic factors remain challenging and uncertain, our internal performance in managing and serving our satellite customers well has resulted in much lower churn and improved acquisitions, leading to six consecutive months of growth in direct Sky satellite customers. We also continue to see pleasing growth from, and engagement with, our Neon streaming service.

The last few months have reinforced the ‘power of our bundle’ and our ability to offer a one-stop- shop for all of our customers’ entertainment and sport needs. We are looking forward to making life even better for our satellite customers when we add Sky Broadband to the mix in early 2021.

Sky share price summary

Despite today’s positive announcement, Sky shareholders would be disappointed with the company’s share price performance over the last few years. Reaching as high as $6.27 in 2014, Sky shares can be picked up for now 15.5 cents, representing a massive fall of 97%.

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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. 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.

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The Straker Translations Ltd (ASX: STG) share price has been an exceptionally strong performer on Wednesday.

In early trade the translation platform provider’s shares were up a massive 37% to $1.24.

Why is the Straker share price rocketing higher today?

Investors have been fighting to get hold of the company’s shares this morning after it announced a major deal with global tech giant International Business Machines Corporation (IBM).

According to the release, IBM has appointed the company as a strategic translation service provider on a two-year agreement. This agreement commences in January and comes with an option for an additional two years.

The agreement will see Straker support IBM Cloud Services, IBM Adaptive Translations Services, and IBM Global Media Localisation.

It also extends the company’s current relationship with IBM from one language (Spanish) to 55 languages. This includes a number of key popular languages such as French, Chinese, Portuguese, and Japanese.

The agreement will utilise Straker’s proprietary artificial intelligence-powered RAY platform by directly linking with IBM’s technology platforms.

Straker Translations’ CEO and Co-Founder, Grant Straker, commented: “We are thrilled to have secured this strategic agreement with IBM, and further build our existing relationship with a world leader in data management, software, artificial intelligence and cognitive computing.”

“Our industry, like almost every other, is being fundamentally changed by the accelerating use of AI across all facets of localisation. The agreement requires extensive integration with IBM and the opportunity to build a deep partnership with the world’s leading AI company is hugely exciting. We expect it will open up new opportunities for us to partner on innovation within our industry,” he added.

What is the deal worth?

Due to the nature of the agreement, management advised that it is not possible to quantify the potential revenue that will be generated from IBM.

This is because such financial effect can only be determined over time based on usage volume. However, it notes that historically, the contribution from IBM related translation services has been a material contributor to company revenue.

In addition to this, management advised that the expanded scope means the company anticipates a ~30% increase in its headcount to support future service provision.

More reading

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Straker Translations. 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.

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