• 2 exciting small cap ASX shares to watch this month

    If you’re interested in gaining exposure to the small side of the market, then you might want to take a look at the shares listed below. 

    Here’s why these two small cap shares have been named as ones to watch in 2021:

    Nitro Software Ltd (ASX: NTO)

    Nitro Software is a software company aiming to drive digital transformation in organisations around the world across multiple industries.

    Its core solution is the Nitro Productivity Suite. This provides integrated PDF productivity and electronic signature tools to customers through a horizontal, software-as-a-service, and desktop-based software solution.

    Demand for its subscriptions has been strong despite the pandemic. This led to Nitro delivering third quarter cash receipts of $11.6 million, up 17% on the previous quarter.

    This has put the company on course to deliver subscription annualised recurring revenue (ARR) of $26 million to $27 million in FY 2020, which is ahead of its prospectus guidance of  $24.4 million.

    Analysts at Morgan Stanley have been pleased with its performance. They have an overweight rating and $3.50 price target on its shares. This compares to the latest Nitro share price of $3.14.

    Openpay Group Ltd (ASX: OPY)

    Another small cap to watch is buy now pay later provider Openpay. Like many of its peers such as Afterpay Ltd (ASX: APT), it has been growing at a strong rate over the last 12 months.

    For example, Openpay’s total transaction value (TTV) in November reached a record of $35.7 million. This was driven by strong Black Friday and Cyber Monday sales, with the former representing the best day of trading in Openpay’s history. Black Friday 2021 saw TTV of $2.3 million, almost double a year earlier.

    At present the company operates in Australia and the UK, but has announced plans to enter the lucrative US market. If this expansion is a success, it could give its TTV a major boost in 2021.

    One broker that is bullish on the company is Shaw and Partners. Its analysts have a buy rating and $5.00 price target on its shares at present. This compares to the current Openpay share price of $2.30. Shaw and Partners notes that that Openpay’s shares are trading at a significant discount to its peers.

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended 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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  • Viva (ASX:VVA) share price moves on acquisition news

    woman looking up as if watching asx share price

    The Viva Leisure Ltd (ASX: VVA) share price climbed 2% this morning, after the company announced the acquisition of 6 health clubs in Victoria.

    However, the Viva share price has since retreated from $2.99 to $2.93 – the same price it closed at on Friday.

    What’s moving the Viva share price

    In a statement before market open today, Viva Leisure advised it has signed a binding agreement to buy out six Pinnacle health clubs with a combined total of at least 6,500 members. The clubs are located at Caribbean Park, Mulgrave, Oakley, Parkdale, Scoresby, and Upwey.

    The deal is for a consideration of between $6.05 million and $6.25 million, depending on various completion conditions. It’s expected to be completed within the next 60 days. Viva will fund it using 50% debt, and 50% equity from a recent capital raise.

    Commenting on the deal, Viva Leisure chief executive Harry Konstantinou said,

    The Pinnacle business is a highly complementary business to Viva Leisure, and provides attractive membership options which could be rolled out through the rest of the Viva Leisure network.

    Why the purchase

    The acquisition will boost Viva Leisure’s presence in Victoria from 8 locations to 14 locations.

    This is consistent with the company’s strategy to own more than 400 corporate locations by 2025, up from the 79 locations it has at the end of FY20.

    Furthermore, Viva said the financials for the Pinnacle clubs have been solid, with the company reporting a FY19 revenue of $7.5 million, and an earnings before interest, tax, depreciation, and ammortisation (EBITDA) of $1.75 million.

    For FY20, the Pinnacle clubs being acquired reported a COVID-19 impacted revenue of $5.8 million.

    What does Viva Leisure do

    Founded in 2014, Viva Leisure operates health clubs in Australia. The company’s brands include Clublime, Ladies Only, Psyclelife, Hiit Republic, Swim School, GymmyPT and others. 

    It also owns the master franchise for the Plus Fitness, which comprise approximately 200 clubs.

    About the Viva share price

    Despite disruptions as a result of the government imposed lockdowns last year, the Viva share price still returned a respectable 8% in one year.

    This is after the share price lost more than 70% of its value in March 2020, at the height of the pandemic.

    Viva Leisure commands a market cap of $240 million.

    Where to invest $1,000 right now

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  • What’s been happening with the Magellan (ASX:MFG) share price?

    asx growth shares represented by question mark made out of cash notes

    Iconic Australian fund manager Magellan Financial Group Ltd (ASX: MFG) has a lengthy history of success.

    Looking back, 2019 was a particularly strong year for Magellan, with the Magellan share price rocketing more than 158% higher during the calendar year.

    Shares in the company, co-founded by Hamish Douglass, reached an all-time closing high on 14 February 2020 of $73.67 per share.

    Then came the COVID-19 market panic. By 23 March 2020, the share price had crashed 58%. While shares have recovered strongly from that low, up 68%, the Magellan share price remains down 31% from the 14 February peak. And, so far, it’s been sliding in the new year, down 4% year-to-date in 2021.

    Which has many investors wondering, is now the time to buy Magellan shares?

    What are analysts saying about the Magellan share price?

    After a stellar 2019, the latter quarters of 2020 were certainly not the best for Magellan shareholders.

    As the Australian Financial Review (AFR) reports:

    Weighing on Magellan’s share price are the below-par fund returns in recent months of its Magellan Global equities fund. At November 30, that fund’s six-month return trailed the index by 8.2 per cent and most likely fell further behind in December as its largest holding Alibaba has sold off.

    The AFR also notes that there’s no consensus at this time among analysts on whether or not the stock is a buy, “[b]roadly speaking, analysts are split on Magellan, with three buys, four holds and five sells on the stock.”

    With that said, it’s worth having a look at the company’s funds under management and performance fee update, released to the ASX this morning.

    Magellan reported that in December it had $579 million of net inflows, comprised of $252 million in net institutional inflows and $327 of net retail inflows. The company stated it will pay distributions of roughly $132 million in January.

    The company also revealed it is entitled to performance fees of around $12 million for the 6-month period ending 31 December.

    Magellan Financial Group company snapshot

    Magellan is a funds management business that invests in some of the world’s top companies. Magellan’s investment team manages global equity and infrastructure strategies to high net worth and retail investors in Australia, New Zealand and institutional investors globally.

    Magellan shares began trading on the ASX in 2004 and it is now part of the S&P/ASX 200 Index (ASX: XJO). On current prices, the company pays a 4.2% dividend yield, 75% franked.

    Where to invest $1,000 right now

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  • Why the Shaver Shop (ASX:SSG) share price is roaring 14% higher

    unstoppable asx share price represented by man in superman cape pointing skyward

    The Shaver Shop Group Ltd (ASX: SSG) share price is surging today. This comes after the company provided a positive update to its trading performance.

    At the time of writing, the Shaver Shop share price is up 14.1% to $1.21.

    What’s driving the Shaver Shop share price?

    The Shaver Shop share price is driving higher following the release of its robust first-half year result.

    In today’s release, Shaver Shop announced that it has achieved growth in key categories, underpinned by favourable trading conditions.

    For the period ending 31 December, the personal grooming retailer delivered an increase of 12.4% for total sales in Q2. Like-for-like sales across the business improved 13.7%, and online sales represented a 64.7% jump for the quarter. The latter was the driving force behind the like-for-like sales performance.

    A snapshot for the upcoming half-year result indicated that Shaver Shop continued to grow in all business segments. Total sales lifted 15.2%, and like-for-like sales surged 17.3% over the prior corresponding period. Most notably, demand for shopping over the internet rocketed, with a 100.2% increase for online sales, reflecting 30.3% of total sales.

    The company also revealed that its gross margin profit is projected to reach more than 200 basis points from the first-half of the year. This is due to management executing strategic decisions in balancing volume growth and profit margins during key holiday periods.

    Management commentary

    Shaver Shop managing director and CEO Cameron Fox welcomed the result,saying:

    I am exceptionally proud of our team and our first half performance. Shaver Shop has now delivered 24 months of consecutive like for like sales growth, underpinned by the accelerating trends towards DIY personal care solutions. Our customer database now exceeds 600,000 members and our online sales more than doubled in the first half to $37.5 million reflecting our position as the leading omni channel retailer in our core categories.

     Mr Fox said Shaver Shop teams across Australia and New Zealand had “remained focused and resilient”, consistently delivering “exceptional customer service during an incredibly uncertain time”.

    With in-store sales conversion more than 50% and average transaction values increasing more than 10%, our store teams were able to more than offset the 20% plus decline in outside foot traffic we saw in December. We expect our first half profit to increase 75-85% when we release our results in February and we are on track deliver another record profit for the full year.

    First half FY21 guidance

    Taking into account its performance so far, Shaver Shop is gearing up for a positive half-year results release in February. The board advised that net profit after tax will be in the range of $13.5 million to $14 million. Previously, the company reported $7.6 million in net profit after tax for the first half of FY20.

    Where to invest $1,000 right now

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  • Stock market rally: why I’d invest today to achieve financial freedom

    Cloud against blue sky with cash falling from it representing rich investors

    The past performance of equities suggests that a long-term stock market rally is likely to take place. After all, indices such as the FTSE 100 Index (FTSE: UKX) and S&P 500 Index (SP: .INX) have recorded annualised total returns in the high-single digits over recent decades despite experiencing challenging periods along the way.

    Even though many shares have made gains following the 2020 stock market crash, a number of companies continue to trade at low prices. As such, buying them today and holding them ahead of a sustained bull market could increase an investor’s chances of obtaining financial freedom.

    A long-term stock market rally

    The prospect of a long-term stock market rally may seem unlikely to some investors at the present time. After all, risks such as political instability in Europe and a weak global economic outlook could hold back company performance and investor sentiment.

    However, the past performance of the stock market shows that it has always overcome short-term threats to post impressive returns over the long run. Furthermore, the global economy is expected to recover sharply over the coming years following present challenges. With significant monetary policy stimulus already announced in major economies, the prospects for many businesses could improve dramatically over the long run. This may allow them to command higher valuations that have a positive impact on an investor’s financial outlook.

    Buying cheap stocks today

    Despite a likely stock market rally over the long run, many shares currently trade at cheap prices. Investor sentiment is relatively cautious, which is understandable after what was a very challenging 2020. Many investors continue to demand wide discounts to the intrinsic values of companies that trade in industries where operating conditions are tough. For example, many banking shares, energy stocks and consumer goods companies trade on valuations that could undervalue their long-term recovery prospects.

    Buying a diverse range of cheap stocks could lead to high returns in the long run. They may be able to outperform the wider stock market, since their prices are starting from a low level. And, with share valuations having historically reverted to their long-term averages in the past following bear markets, a similar outcome could lift the prices of today’s cheap shares in a stock market rally.

    Achieving financial freedom

    Clearly, achieving financial freedom from buying shares will take a long time – even with a likely stock market rally in the coming years. However, an investor can enjoy an improving financial situation in the long run – even if they obtain the same return as the stock market has delivered in the past.

    For example, assuming an 8% annual return on a $500 monthly investment, it is possible to build a portfolio valued at around $1 million over a 35-year time period. By investing money in today’s cheap shares, it may be possible to beat that rate of return and build an even larger portfolio over the same time period.

    Where to invest $1,000 right now

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  • Why the Althea (ASX:AGH) share price is flying high this morning

    cannabis leaves on a rising line graph representing growth of ASX cannabis shares

    The Althea Group Holdings Ltd (ASX: AGH) share price is tearing higher this morning after the company posted a record monthly sales result.

    At the time of writing, Althea shares are swapping hands for 46 cents per share, giving the company a market capitalisation of $118 million.

    Why is the Althea share price surging?

    This morning, the Aussie medicinal cannabis company provided an update on its Australian and UK operations.

    Althea recorded a 40% month-on-month (MoM) increase in group sales to $1,190,473 in December 2020. That represents the first time that monthly sales have exceeded $1 million for the company.

    Australian sales surged to an all-time high, up 22% MoM to $902,466 in December 2020. Althea Australia recorded its highest average number of new patients and new healthcare professionals per business day of 45.5 and 2.7, respectively.

    The Althea share price has jumped 4.5% in early trade on the news, with Althea’s UK operations also recording a strong result.

    Althea’s UK sales jumped 90% from November 2020 to total of $209,706 last month. That represented 18% of Althea’s total revenue for the month of December as the company continues to focus on the “growing market”.

    Althea CEO Josh Fegan said Althea was “extremely pleased” to close out the “challenging” year on a high. 

    Shares in the Aussie medicinal cannabis company are down 4.3% in the last 12 months having climbed as high as 67 cents per share in September 2020.

    Today’s update follows the announcement of a supply and distribution agreement on 23 December. Althea entered into an agreement with Lyphe Group for the supply and distribution of Althea products in the UK and Jersey. Lyphe Group is a UK provider of patient focused medicinal cannabis care and medicine. 

    The new agreement is for an initial term of 12 months with an option to extend for further terms by agreement.

    Foolish takeaway

    The Althea share price is one to watch after jumping 4.5% higher to start the day following the bumper sales result.

    This Tiny ASX Stock Could Be the Next Afterpay

    One little-known Australian IPO has doubled in value since January, and renowned Australian Moonshot stock picker Anirban Mahanti sees a potential millionaire-maker in waiting…

    Because ‘Doc’ Mahanti believes this fast-growing company has all the hallmarks of genuine Moonshot potential, forget ‘buy now pay later’, this stock could be the next hot stock on the ASX.

    Doc and his team have published a detailed report on this tiny ASX stock. Find out how you can access what could be the NEXT Afterpay today!

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    Motley Fool contributor Ken Hall 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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  • Liontown (ASX:LTR) share price is shooting up this morning. Here’s why.

    rising asx share price represented my man in hard hat giving thumbs up

    The Liontown Resources Limited (ASX: LTR) share price has climbed in early trade today after the company announced a major update on its lithium-tantalum project in Western Australia.

    The Liontown share price is trading up 4.4% at 47.5 cents at the time of writing..

    What was announced this morning

    The lithium miner says the next stage is now set on its 100% owned Kathleen Valley Lithium-Tantalum Project, and it will begin to conduct a definitive feasibility study (DFS).

    To conduct this study, the company will engage several credentialed consultants including Lycopodium Minerals for process engineering and Snowden Mining for mine engineering. Knight Piésold will take care of tailings and hydrogeological engineering, MBS Environmental for environmental work, and ALS Metallurgy for metallurgical testing.

    Liontown also reported that it has completed further geotechnical and water exploration drills to acquire data required to complete the DFS.

    This geotechnical drilling was made up of six diamond core holes totaling 1,312m, and was designed to provide rock quality data for the proposed underground portals.

    Data obtained so far from the holes have indicated good conditions for underground mining, and are consistent with previous drilling conducted at the pre-feasibility study (PFS) stage.

    The assay data from these holes will be used to upgrade its mineral assets category – from Estimate to the Indicated category. This will subsequently be moved to the Reserves category after the completion of the DFS.

    Liontown advised that further metallurgical test work on approximately 3 tonnes of material will also be conducted. This is done in order to provide the DFS with data on variability, grind size optimisation and comminution.

    About the Kathleen Valley project

    The Kathleen Valley Lithium-Tantalum Project is 100% owned by Liontown, and located in the north eastern goldfields of Western Australia, approximately 400km north of Kalgoorlie.

    The mine is strategically located with well-established transport and energy infrastructure in place.

    The company acquired the project in 2017. So far, it has drilled 461 RC and diamond core holes for a total of 89,066m, with the aim of producing lithium hydroxide or lithium sulphate.

    About the Liontown share price

    The Liontown share price is one of the strong performers in 2020, rising by 278%.

    The lithium mining company was among the best performers in the All Ordinaries (ASX: XAO) during 2020.

    The share price has continued its upward trend in 2021, increasing by 9.5% so far this year.

    Liontown commands a market cap of $822 million.

    Where to invest $1,000 right now

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  • Why the Sayona (ASX:SYA) share price is rocketing 100% higher today

    Rocket launching into space

    The Sayona Mining Ltd (ASX: SYA) share price has returned from its trading halt and is rocketing higher on Monday.

    At the time of writing, the emerging lithium miner’s shares are up 100% to 2.8 cents.

    Why is the Sayona Mining share price rocketing higher?

    Investors have been fighting to get hold of the company’s shares this morning after it announced a deal with fellow lithium miner Piedmont Lithium Ltd (ASX: PLL).

    According to the release, the two companies have signed a strategic partnership that will accelerate the development of Sayona’s lithium projects in Québec, Canada.

    Under the agreements, Piedmont will acquire an initial 9.9% equity interest in Sayona and two unsecured convertible notes for US$7 million. The latter would see Piedmont Lithium issued a further 10% equity interest in Sayona upon conversion.

    In addition to this, Piedmont will invest approximately US$5 million in cash for a 25% stake in Sayona Québec.

    Sayona’s management notes that the funding will help advance its growth plans in the province, including its flagship Authier Lithium Project, the emerging Tansim Lithium Project, and the creation of a lithium hub in Québec’s Abitibi region.

    Offtake agreement.

    The two companies have also agreed a binding offtake arrangement under which Piedmont Lithium will acquire up to 60,000 tonne per annum of spodumene concentrate or 50% of Sayona Québec’s production, whichever is greater.

    The supply agreement is for Sayona Québec’s life‐of‐mine operations and is based on market pricing, with a minimum price of US$500 per tonne and a maximum price of US$900 per tonne on a delivered basis to Piedmont’s planned lithium hydroxide plant in North Carolina.

    However, the supply agreement is conditional upon Piedmont and Sayona agreeing to a start date for spodumene concentrate deliveries between July 2023 and July 2024, based on the development schedules of both parties.

    Piedmont Lithium’s President and CEO, Keith D. Phillips, commented: “Piedmont is building a world‐class spodumene‐to‐hydroxide business in North Carolina, and we are now very pleased to be partnering with Sayona to advance a similar business in Québec.”

    “Québec is destined to become one of the world’s major lithium hydroxide production centres given its abundant mineral resources, low‐cost, sustainable hydroelectric power, proximity to major U.S. and European electric vehicle markets, and pro‐electrification stance of provincial leaders.”

    “This is a very exciting step for Piedmont, and we look forward to supporting Sayona’s team as they drive day‐to‐day activities in Québec, while Piedmont’s team focuses on its core interests in North Carolina,” he concluded.

    Sayona’s Managing Director, Brett Lynch, echoed this sentiment.

    He said: “Piedmont has shown tremendous vision in creating a base in North Carolina, a centre of lithium hydroxide production in the United States, and has secured significant supply agreements with leading EV makers.”

    “I am delighted to welcome Piedmont as a strategic partner. This agreement will underwrite the future of our Authier project, expedite our growth plans in Québec including our bid for North American Lithium, and enhance access to the U.S. market and investors,” Mr Lynch added.

    This Tiny ASX Stock Could Be the Next Afterpay

    One little-known Australian IPO has doubled in value since January, and renowned Australian Moonshot stock picker Anirban Mahanti sees a potential millionaire-maker in waiting…

    Because ‘Doc’ Mahanti believes this fast-growing company has all the hallmarks of genuine Moonshot potential, forget ‘buy now pay later’, this stock could be the next hot stock on the ASX.

    Doc and his team have published a detailed report on this tiny ASX stock. Find out how you can access what could be the NEXT Afterpay today!

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  • Here’s why the Splitit (ASX:SPT) share price is surging 7% higher today

    miniature rocket breaking out of golden egg representing rocketing share price

    In early trade on Monday the Splitit Ltd (ASX: SPT) share price is pushing higher.

    At the time of writing, the buy now pay later provider’s shares are up 7% to $1.39.

    Why is the Splitit share price pushing higher?

    Investors have been buying the company’s shares this morning after it announced the signing of an agreement with tech giant Google in Japan.

    According to the release, for the first time ever, Google customers will be able to use instalment plans to make purchases from the Google Store in Japan.

    In the coming weeks, customers purchasing Google’s new 5G phone, the Pixel 5, or Nest devices from the Google Store, will be able to split their payments into equal monthly instalments.

    The Afterpay Ltd (ASX: APT) rival has, however, warned that the materiality of the agreement with Google in Japan is unknown “due to the variable nature of revenues which are dependent on customer uptake of specific products.”

    Asian opportunity.

    Splitit’s CEO, Brad Paterson, commented: “This is one of the strongest case studies yet of our unique offering. We are working with Google in its effort to provide the best possible experience for its customers, and the seamless integration of Splitit into Google Store Japan means they never have to leave the platform.”

    Mr Paterson appears to believe that Japan is a great fit for Splitit due to the high prevalence of credit card use in the country.

    He explained: “Splitit is the only instalment provider to service the huge credit card industry, with 68% of adults in Japan holding a credit card, the highest in Asia. Splitit does not issue new credit to consumers, but rather allows existing credit card holders to make higher value purchases more easily, without incurring additional costs or fees. We are excited to allow Google customers to use their existing credit to pay for their new Pixel 5, Nest or Chromecast products.”

    “This partnership marks the next phase in our expansion into Asia as we continue to grow our footprint with our global platform” he concluded.

    This Tiny ASX Stock Could Be the Next Afterpay

    One little-known Australian IPO has doubled in value since January, and renowned Australian Moonshot stock picker Anirban Mahanti sees a potential millionaire-maker in waiting…

    Because ‘Doc’ Mahanti believes this fast-growing company has all the hallmarks of genuine Moonshot potential, forget ‘buy now pay later’, this stock could be the next hot stock on the ASX.

    Doc and his team have published a detailed report on this tiny ASX stock. Find out how you can access what could be the NEXT Afterpay today!

    Returns as of 6th October 2020

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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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  • Why the CV Check (ASX:CV1) share price is charging 8% higher

    shares higher, growth shares

    The CV Check Ltd (ASX: CV1) share price has started the week strongly.

    In morning trade the online integrated screening and verification company’s shares are up 8.5% to 19 cents.

    This latest gain means the CV Check share price is now up 72% over the last six months from 11 cents.

    Why is the CV Check share price charging higher?

    Investors have been buying the company’s shares this morning following the release of its second quarter update.

    According to the release, CV Check booked a record $3.5 million of revenue in the second quarter, which was up 12% on the prior corresponding period. The majority of this was from its B2B business, which generated revenue of $2.7 million.

    This led to the company delivering record half year revenue of $7 million and over $10.2 million in annualised recurring revenue (ARR). Management advised that this was driven by new client wins coupled with recovering order flow from established customers.

    Pleasingly, the company was modestly cash flow positive in the second quarter, leading to it ending the period with a cash balance of $5.2 million and no debt. Some of this was attributable to $0.1 million in COVID-19 assistance early in the second quarter. However, the company does not anticipate further such receipts given the improved trading conditions.

    The company’s Chief Executive Officer, Rod Sherwood, was very pleased with the second quarter and first half performance.

    He commented: “CV1 revenues surged during the second quarter to set all-time company records for a quarter, for a half year and for a booked 12-month ARR figure. We will provide a more comprehensive update on the quarter in coming weeks.”

    No comments were made on the company’s expectations for the second half. This is likely to be provided to investors with the release of its audited first half results in February.

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    Returns as of 6th October 2020

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

    The post Why the CV Check (ASX:CV1) share price is charging 8% higher appeared first on The Motley Fool Australia.

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