There are some ASX shares which may be able to make at least decent investment returns over the longer term.

Here are two ASX shares that could be worth looking at:

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

This investment is invested entirely in businesses listed in the US. The Australian dollar has been getting stronger compared to the US dollar, so it’s getting cheaper for Aussies to buy exposure to US businesses like the ones in this ETF’s portfolio.

VanEck Vectors Morningstar Wide Moat ETF gives investors exposure to a diversified portfolio of attractively priced US companies with sustainable competitive advantages according to Morningstar’s equity research team.

Morningstar’s rigorous equity research process is used to calculate an estimate of fair value. Then the idea is to find companies that are trading at attractive prices compared to that estimate of fair value.

Looking at VanEck Vectors Morningstar Wide Moat ETF’s top holdings at 13 January 2021, its biggest 15 exposures were: Charles Schwab, Corteva, John Wiley and Sons, Wells Fargo, Bank of America, US Bancorp, Cheniere Energy, Constellation Brands, Zimmer Biomet Holdings, Intel, Aspen Technology, Medtronic, Yum! Brands, Raytheon Technologies and Berkshire Hathaway.

Looking at the diversification of the portfolio, there are five sectors that have a weighting of more than 10%: health care (18.8%), financials (17.6%), information technology (17.5%), industrials (12.2%) and consumer staples (10.8%).

The ASX share has an annual management fee of 0.49%, which is higher than some other internationally-focused ETFs but it hasn’t stopped the ETF from generating compelling long-term returns.

Over the past five years the ETF has generated net returns of 16.6% per annum, which was a stronger return than the S&P 500. Over the past 10 years the index that the ETF tracks has returned almost 19% per annum, beating the S&P 500’s return of 17.4% per annum.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is an electronic donation payments business which helps large and medium US churches receive donations from their congregations.

The ASX share is gaining market share as it wins over more churches and more people use the service, particularly during the COVID-19 pandemic.

In the FY21 half-year result Pushpay reported that its total processing volume went up 48% to US$3.2 billion and the operating revenue grew by 53% to US$85.6 million.

Despite the growth that Pushpay has already achieved, it’s expecting a lot more growth.

Fund manager Ben Griffiths from Eley Griffiths said about the ASX share: “Over the last 12 months it has become clear Pushpay is at an inflection point for both cashflow and earnings. Under the stewardship of CEO Bruce Gordon, Pushpay has transitioned from a founder-led investment phase into an optimize/monetization phase. What is more surprising is the very conservative nature of the accounts (a rarity in small cap tech, outside Iress Ltd (ASX: IRE)). We believe the next few years for Pushpay will be rewarding and that COVID-19 will accelerate the already entrenched trend to digital giving/engagement from cash.”

On the revenue and market share side, Pushpay’s management thinks that it can reach a market share of approximately 50% which could translate into annual revenue of US$1 billion.

With its profit margins, Pushpay expects significant operating leverage to accrue as operating revenue continues to increase, whilst growth in total operating expenses remains low. Those thoughts about operating leverage growth are despite the gross profit margin already increasing by another three percentage points from 65% to 68% and the earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) margin jumping from 17% to 31%.

According to Commsec, the Pushpay share price is values the ASX share at 22x FY23’s estimated earnings.

More reading

• 2 fantastic ASX shares to buy and hold until 2031
• 2 ASX ETFs to buy for 2021 and beyond
• These ASX shares are growing at a rapid rate in FY 2021
• 3 quality ETFs for ASX investors to buy today
• 3 reasons why the Pushpay (ASX:PPH) share price could be a buy

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 PUSHPAY FPO NZX. The Motley Fool Australia has recommended IRESS Limited, PUSHPAY FPO NZX, and VanEck Vectors Morningstar Wide Moat ETF. 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 Xero Limited (ASX: XRO) share price has been volatile in recent times. There are some reasons why investors may want to research Xero.

What’s Xero?

Xero describes itself is one of the fastest growing software as a service (SaaS) companies globally. It boasts that it leads the New Zealand, Australian, and United Kingdom cloud accounting markets, employing a quality team of more than 3,000 people. Forbes identified Xero as the world’s most innovative growth company in 2014 and 2015.

It operates cloud-based accounting software to connect people with the right numbers anytime, anywhere, on any device. For accountants and bookkeepers, Xero helps build a trusted relationship with small business clients through online collaboration.

Reasons why Xero shares may be a compelling idea

The Xero share price has fallen by 13% since 5 January 2021. These are some reasons that investors may like Xero:

Reason 1: High gross profit margin

Xero is an ASX technology share with one of the highest gross profit margins in Australia or New Zealand.

In the FY21 half-year result Xero reported that its gross profit margin percentage improved from 85.2% to 85.7%.

Whilst the gross profit margin is not the bottom line net profit, it is a contributing factor to boosting that profit. The high gross profit margin is one of the main reasons why the 21% increase in operating revenue to NZ$410 million led to a NZ$56 million increase in earnings before interest, tax, depreciation and amortisation (EBITDA), a NZ$33 million rise in net profit after tax and a NZ$49.5 million jump in free cash flow.

The ASX share may be able to achieve more operating leverage as it continues to scale with more global subscribers.  

Reason 2: Global subscriber growth

Xero’s revenue comes from its subscribers in the form of monthly subscription payments. In the FY21 half-year period it saw global subscribers grow by another 19% to 2.45 million. This drove annualised monthly recurring revenue higher by 15% to NZ$877.5 million and the total lifetime value of subscribers went up 15% to $6.17 billion.

Some of the strongest performing ASX shares over the last decade have been businesses exposed to international growth. Look at large caps like CSL Limited (ASX: CSL), Macquarie Group Ltd (ASX: MQG), Goodman Group (ASX: GMG) and Aristocrat Leisure Limited (ASX: ALL).

In the FY21 half-year result, Xero revealed that its Australian and New Zealand subscribers grew by 21% and 13%.

Management were pleased that UK subscribers went higher by 19% to 638,000. North American subscribers went up 17% to 251,000. Rest of the world subscribers rose by 37% to 136,000 with growth being led by South Africa and further growth was made in Singapore.

Reason 3: Platform effects

Businesses that boast of platform effects can create a very strong ecosystem. For example, accountants that love Xero may want their clients to shift to using Xero. Clients that love Xero will want to stick around – Xero does have a high retention rate.

The cloud accounting software business also offers various add-ons and access for third party developers to create their own modules to work and add further functions for users.

Xero recently acquired Hubdoc. Hubdoc is a data capture tool which extracts key data from documents, then creates transactions in Xero. It has also made an alliance with US payroll provider Gusto and it has acquired invoice lending platform Waddle.

More reading

• 2 super ASX tech shares to buy
• What’s next for WAAAX shares in 2021? 
• 2 stellar ASX growth shares to buy this week
• The Xero (ASX:XRO) share price is down 10% in 2021: Is this a buying opportunity?
• ASX 200 down 0.4%: Afterpay tumbles, bank shares lower, gold miners crash

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 CSL Ltd. and Xero. The Motley Fool Australia owns shares of and has recommended Macquarie Group 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 S&P/ASX 200 Index (ASX: XJO) was out of form last week and dropped lower. The benchmark index fell 0.6% to end the week at 6,715.4 points.

Fortunately, not all shares dropped lower with the market. Here’s why these were the best performing ASX 200 shares last week:

Pro Medicus Limited (ASX: PME)

The Pro Medicus share price was the best performer on the ASX 200 last week with a massive gain of 17.1%. Investors were buying the health imaging software company’s shares after it announced another major new contract win. Pro Medicus has signed a seven-year contract worth $40 million with Salt Lake City based Intermountain Healthcare. The deal will see its Visage 7 Viewer and Visage 7 Open Archive products implemented across all of Intermountain’s radiology and subspecialty imaging departments. This is its fifth major contract win in the space of six months.

Afterpay Ltd (ASX: APT)

The Afterpay share price wasn’t far behind with a 14.8% gain over the five days. Bullish sentiment in the buy now pay later sector following Affirm’s IPO in the US and a positive broker note out of Morgan Stanley gave its shares a boost. In respect to the latter, Morgan Stanley retained its overweight rating and lifted its price target on the payments company’s shares to $136.00. The broker points out that app downloads have been increasing strongly in the US and UK. It is expecting Afterpay to report 13.6 million active customers for the first half of FY 2021. This will be a 37.4% increase from 9.9 million active customers at the end of FY 2020.

Whitehaven Coal Ltd (ASX: WHC)

The Whitehaven Coal share price was on form last week and recorded a sizeable 13% gain. This followed the release of its quarterly update, which reaveled that Whitehaven Coal achieved a 64% increase in managed run-of-mine (ROM) production to 5.1Mt for the three months ended 31 December. And while its sales were flat on the prior corresponding period, management has tightened its sales guidance range to between 19Mt and 20Mt from 18.5Mt and 20Mt. The company also revealed that coal prices have been improving strongly.

Mesoblast limited (ASX: MSB)

The Mesoblast share price returned to form at last and jumped 9.4% over the five days. Investors were buying the biotech company’s shares after it finally released a positive announcement. Mesoblast announced that its rexlemestrocel-L drug provides a reduction in heart attacks, strokes, and cardiac death in patients with chronic heart failure. According to the study, heart attacks and strokes were reduced by 60% from a single dose.

More reading

• These were the worst performing ASX 200 shares last week
• ASX 200 ends flat on Friday
• What’s in store for the ASX tech sector in 2021?
• Singular Health IPO, another medical imaging contender?
• Pro Medicus (ASX:PME) share price hits record high: Is it too late to invest?

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 Pro Medicus Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Pro Medicus 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 fund managers out there that have positive or bullish thoughts about some ASX shares.

Spheria Emerging Companies Ltd (ASX: SEC) is one of the listed funds on the ASX, it recently shared some thoughts about some of the positions in its portfolio.

Spheria’s portfolio has outperformed its benchmark by more than 10% over the last six months.

These are two of the ASX shares that it talked about:

Fletcher Building Limited (ASX: FBU)

Fletcher Building was the largest position in the Spheria portfolio at the end of November 2020. It made up 4.3% of the portfolio.

This company is a diversified construction business. It makes building products including insulation and cement. Fletcher Building also operates retail businesses that sells those products and others to tradespeople across the Tasman. The company also builds homes, buildings and infrastructure.

Spheria said that Fletcher Building was the lead contributor to the portfolio, gaining 39% during the month on the back of a strong trading update for the first four months of the year followed by a strong profit guidance increase towards the end of the month.

In the first four months it saw revenue up slightly by 1%, with earnings before interest and tax (EBIT) growing by $80 million to $227 million. The EBIT margin rose by 2.9 percentage points to 8.4% because of the improved operating efficiency. In the first half of FY21, Fletcher Building is expecting EBIT to be in the range of $305 million to $320 million, up from $219 million in the prior corresponding period.

The fundie explained that Fletcher Building is seeing the benefit of a recovering housing market in both Australia and New Zealand plus the benefits of streamlining its operations over the recent housing downturns. Since the sale of the Formica division around two years ago, the Fletcher Building balance sheet has been lowly geared, putting the business in a good position for a re-bound according to Spheria.

Fletcher Building also said recently that the board expects the company will resume dividend payments in FY21.

A2B Australia Ltd (ASX: A2B)

A2B was another performer for the Spheria portfolio in November, rising by 37%.

It’s the business behind Cabcharge, Silver Service, 13cabs and other brands. Cabcharge allows passengers and drivers access to fast and secure cashless payment methods. Silver Service is a premium taxi service. 13cabs provides the booking service platform, it trains drivers and helps them obtain a taxi licence, buying a vehicle and it also helps with insurance.

Spheria said that the ASX share is perceived as being a beneficiary of social movement. Having Melbourne emerge from lockdown has clearly helped the short-term outlook for A2B. The fund manager believes the company is misperceived on many levels.

The first misconception, according to the fundie, is that it’s suffering major disruption from ridesharing companies. It thinks this is an incorrect view because ridesharing has grown the overall personal transport market, it hasn’t dramatically reduced the number of cab trips being taken.

The fund manager believes the second major misperception is that the company doesn’t have any growth potential. Spheria pointed that A2B has been heavily re-investing into payments and cab-hailing technology.

The ASX share’s present valuation is still incredibly supportive and the outlook for the business both here and internationally has hardly been stronger. Despite the re-rating over the month, the fundie believes A2B is still only trading on an enterprise value / EBIT ratio of 7 times.

More reading

• These were the worst performing ASX 200 shares last week
• Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy
• ASX 200 ends flat on Friday
• What’s behind the sleepy Somnomed (ASX:SOM) share price?
• The Energy Technologies (ASX:EGY) share price has charged 9% higher. Here’s why.

Motley Fool contributor Tristan Harrison 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 was a disappointing five days for the S&P/ASX 200 Index (ASX: XJO) last week. Over the period the benchmark index fell 0.6% to end the period at 6,715.4 points.

While a good number of shares dropped lower, some fell more than most. Here’s why these were the worst performing ASX 200 shares last week:

Polynovo Ltd (ASX: PNV)

The PolyNovo share price was the worst performer on the ASX 200 last week by some distance with a 28% decline. Investors were selling the medical device company’s shares following the release of a trading update. During the first half, PolyNovo delivered a 31% increase in sales. While this is strong growth, it fell well short of expectations due to a weak second quarter. Bell Potter commented: “Polynovo announced a relatively disappointing trading update, with 1H FY21 sales growth of 31% vs the pcp well below our forecasts, consensus and management expectations.”

Resolute Mining Limited (ASX: RSG)

The Resolute share price was the next worst performer with a 15.1% weekly decline. The majority of this came on Friday following the release of a disappointing production update. For the three months ended 31 December, Resolute achieved gold production of 89,888 ounces. This led to its calendar year production coming in at 395,136 ounces, which fell short of its downgraded guidance of 400,000 ounces. In 2021, management expects production to fall to between 350,000 to 375,000 ounces.

Westgold Resources Ltd (ASX: WGX)

The Westgold Resources share price was out of form last week and dropped 9.8%. This appears to have been driven by weakness in the gold price last week after bond yields widened. It wasn’t just Westgold Resources dropping lower. The S&P/ASX All Ordinaries Gold index lost almost 5% of its value during the five days.

Altium Limited (ASX: ALU)

The Altium share price was a poor performer and tumbled 9.7% lower over the week. The electronic design software provider’s shares came under pressure following the release of its guidance for the first half. Altium revealed that it expects to deliver revenue of around US$89.6 million for the half, which will be a drop of 3% on the prior corresponding period. Management advised that COVID-19 lockdowns have been impacting its sales and led to declines in the United States and Europe. However, it is worth noting that Altium is expecting a much stronger second half and has retained its full year guidance.

More reading

• ASX 200 ends flat on Friday
• 2 fantastic ASX shares to buy and hold until 2031
• Why Advance Nanotek, Polynovo, Resolute, & Tyro shares are dropping lower
• ASX 200 up 0.4%: Afterpay hits record high, bank shares rise, Resolute disappoints
• Here’s why the Resolute (ASX:RSG) share price is sinking lower

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

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

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

The WAM Capital portfolio has delivered an investment return of 16.4% per annum since inception in August 1999, before fees, expenses and taxes. This gross return outperformed the S&P/ASX All Ordinaries Accumulation Index return of 8.3% per annum over the same timeframe.

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

Ingenia Communities Group (ASX: INA)

WAM explained that Ingenia Communities owns, operates and develops a portfolio of 74 holiday and lifestyle communities throughout Australia. According to the ASX, it has a market capitalisation of $1.56 billion.

In December, the ASX share announced three acquisitions: the Big4 Inverloch Holiday Park in the Gippsland region of Victoria, the Middle Rock Holiday Park and Village in Port Stephens, New South Wales and the Merry Beach Caravan Park on the New South Wales South Coast for a total cost of $73.9 million.

The fund manager is positive on Ingenia’s holiday parks division, which is benefiting from strong levels of domestic tourism and WAM believes that the company will continue to make earnings accretive acquisitions. Given the positive backdrop of increasing property prices across Australia, the fundie expects strong demand for Ingenia’s residential business, which should be reflected in stronger than expected settlements at the half year result in February.

Australian Finance Group Ltd (ASX: AFG)

WAM explained that this ASX share operates the largest aggregation platform of mortgage brokers in Australia, with almost 3,000 brokers offering business finance, insurance and securitised products. According to the ASX, Australian Finance Group has a market capitalisation of $722 million.

With the company leveraged to new loan originations and refinancing for homeowners, the fund manager see a positive outlook for the company going forward, driven by a combination of record low interest rates, government stimulus measures and improving consumer confidence.

The ASX share recently gave an update at its annual general meeting (AGM). The quarter ending 30 September 2020 was a record quarter of lodgement activity in the residential broking division. October volumes continued with that momentum.

Significant government incentives at both a federal and state level have targeted the first home buyer market. As a result, the first home buyer market share activity has increased to 23% in October, up from 15% in the same period last year.

Looking at October trading showed increases in lodgements across the country. Lodgement volumes for October exceeded $6.7 billion. That was the highest the company has ever recorded and represented a 16% increase from October last year. WA saw the largest percentage increase in volume with lodgements increasing 41% from the same period last year. Queensland growth was 30%, South Australian growth was 25%, NSW growth was 7% and Victoria growth was 11%.

More reading

• 4 ASX shares that helped this fund outperform in December
• Why the Ingenia (ASX:INA) share price is moving higher this morning
• These are the 5 best ASX real estate shares of 2020

Motley Fool contributor Tristan Harrison 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 S&P/ASX 200 Index (ASX: XJO) was flat today, ending at 6,715 points.

Here are some of the highlights from inside and outside the ASX 200:

Objective Corporation Limited (ASX: OCL)

The Objective Corporation share price went up 4% in reaction to a profit update for the first half of FY21.

Based on management accounts produced for the six months to 31 December 2020, the company expects to report revenue growth of 40% to $46.5 million in its upcoming report. The annual recurring revenue rose by 30% to $70.1 million. It also said that its research and development investment went up 45% to $11.1 million.

Earnings before interest, tax, depreciation and amortisation (EBITDA) went up 74% to $11.8 million and net profit after tax (NPAT) grew by 70% to $7.2 million.

The company said that its cash balance was $27.7 million at 31 December 2020.

Objective Corporation’s CEO, Tony Walls, commented on potential customer wins: “Engaging on some new customer opportunities proved more difficult than usual in the first half of FY21, but we expect the strong momentum demonstrated in the first half to continue for the full financial year.”

Integrated Research Limited (ASX: IRI)

The Integrated Research share price went up 1% after the company gave an update about its FY21 half-year result.

The company is in the early stages of preparing its interim financial statements for the six months ending 31 December 2020. Based on internal management accounts and subject to audit review, the company anticipates both revenue and profit after tax to be at the lower end of the guidance provided.

That guidance was that revenue for the first half would be in the range of $34 million to $37 million, compared to the prior corresponding period of $53.2 million. The guidance for profit after tax is expected to be in the range of breakeven to $2 million, compared to the prior corresponding period of $11.8 million.

Integrated Research said that it had a cash balance, net of debt, at 31 December 2020 was $1.7 million. Cash receipts from customers for the period exceeded $40 million and there were no material doubtful debt exposure arising during the period.

Tyro Payments Ltd (ASX: TYR)

The Tyro share price fell almost 12% before the company went into a trading halt.

It was the target of a short attack from Viceroy Research that said that the issues Tyro is experiencing with its payment terminals is worse than what is being reported.  

Tyro is currently going through the process of trying to fix the issue by collecting the terminals from merchants, fixing them and giving them back.

The company said that Viceroy’s report contained false assertions contrary to the company’s recent disclosures.

Next week Tyro intends to provide the ASX with an update about the progress of its recovery plan, an update about its transaction values and a position statement in relation to the assertions, which Tyro said is false.

Afterpay Ltd (ASX: APT)

The Afterpay share price went up another 10% today to finish just over $133. It was the top performer in the ASX 200. The strength of the Affirm share price in the US has really helped push the Afterpay share price higher.

Afterpay’s market capitalisation rose above the market capitalisation of Telstra Corporation Ltd (ASX: TLS) as it continued to strength.

The Afterpay share price has gone up 20.8% over the last two days.

More reading

• What’s in store for the ASX tech sector in 2021?
• Why Advance Nanotek, Polynovo, Resolute, & Tyro shares are dropping lower
• Tyro Payments (ASX:TYR) share price crashes 12% on short seller attack
• ASX 200 up 0.4%: Afterpay hits record high, bank shares rise, Resolute disappoints
• Why Afterpay, BHP, Objective, & Pro Medicus shares are charging higher

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 Integrated Research Limited, Objective Limited, and Tyro Payments. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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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The Somnomed Limited (ASX: SOM) share price closed 2.3% lower today at $2.12.

While the SomnoMed share price has bounced back 67.5% over the past half year, it still remains more than 11% down on this time last year. We take a closer look at what’s been impacting the healthcare equipment company’s share price.

2020 financial year highlights

The Somnomed AGM presentation from November 2020 draws attention to strong growth in the US and new sales leadership heading up Canada. New key appointments were also announced in Sydney.

Somnomed continued to promote the company’s continuous open airway therapy (COAT) technology as a best-in-class treatment for sleep apnea. The company did not offer FY 2021 guidance in its latest report, due to uncertainties created by COVID-19.

Comparing FY19  to FY20, revenue was down 3% and earnings before interest, tax, depreciation and amortisation (EBITDA) took a 5% hit.

Commenting on the company’s previous 12-month performance, CEO Neil Verdal-Austin said, “The past 12-months have been a mixed bag of, on the one side an incredible overall performance to March but on the other side, a dramatic and almost reverse of those fortunes in Q4 due to COVID-19.”

Why did COVID-19 serve such a harsh blow to the Somnomed share price?

Unfortunately, there are a few middle-men between Somnomed and its customer base. A doctor needs to diagnose a condition, a dentist is then required to fit the COAT device.

During times of lockdowns caused by a global pandemic, people simply can’t accommodate these types of services. That means sales go down. 

From a $2.95 close on 20 February 2020 to 91 cents on 06 April 2020, it’s very clear that the coronavirus had a fierce impact on the company’s shares. 

However, in more positive news, as we move into 2021 Morgans has retained a positive recommendation for Somnomed shares and has increased the target price to $2.55, up from $2.02.

More reading

• The Energy Technologies (ASX:EGY) share price has charged 9% higher. Here’s why.
• Why the Cue Energy (ASX:CUE) share price is soaring 9% today
• Why the Northern Star and Saracen Mineral merger is getting closer
• 2 fantastic ASX shares to buy and hold until 2031
• Joe Biden unveils massive US$1.9 trillion coronavirus stimulus package

Motley Fool contributor Gretchen Kennedy 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 Energy Technologies Limited (ASX: EGY) share price charged higher today on news the company has won a sovereign grant.

Shares in the cable manufacturer were up 9.2% at 8.3 cents in closing trade, after hitting a 20.83% high of 14.5 cents this morning.

What Energy Technologies does

Based in New South Wales, Energy Technologies manufactures and sells specialist industrial cables. The company focuses on the Australian market through its 100% ownership in Bambach Wires and Cables Pty Limited and Cogenic.

In addition, Energy Technologies is also actively seeking potential acquisitions for the group through other products, businesses and opportunities. The $25 million market cap company was founded in 1983 and listed 10 years later on the ASX.

What happened today?

The company advised that Bambach has won a $1.34 million government grant.

The sovereign industrial capability priority grant aims to improve Australia’s manufacturing capability. It specifically supports the Continuous Shipbuilding Program, which includes submarine acquisitions, land combat, protecting vehicles and technology upgrades.

The grant will enable the company to boost its existing capability in manufacturing small, medium, and large diameter, low-voltage silicone copper cables. These are essential for use in submarines and shipbuilding. Total cost for the project is estimated $1.74 million, of which the government is contributing $1.34 million.

Furthermore, Energy Technologies will not have to spend on additional infrastructure as the current Bambach facility in Rosedale is large enough to house the new equipment. As such, construction will start immediately.

Management comments

Energy Technologies CEO Alf Chown welcomed the news, stating:

It is an exciting time for Bambach, with a great deal of the commissioning of Rosedale now complete and the move into larger Government contract work through the timely installation of the Silicon manufacturing equipment, the company is looking at a bright future.

We would also like to thank the Federal Government for the professional manner in which they have worked with us and the support they have shown to Australian manufacturing.

More reading

• Why the Cue Energy (ASX:CUE) share price is soaring 9% today
• Why the Northern Star and Saracen Mineral merger is getting closer
• 2 fantastic ASX shares to buy and hold until 2031
• Joe Biden unveils massive US$1.9 trillion coronavirus stimulus package
• What’s in store for the ASX tech sector in 2021?

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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Cue Energy Resources Limited (ASX:CUE) shares have accelerated upwards today. This comes after the company announced it has started oil production from Mahato PSC in Indonesia.

At the time of writing, the oil and gas company’s shares are up 9.21% to close at 8.3 cents.

What did Cue announce?

Cue Energy advised that it has now begun extracting oil from its PB field in the Mahato PSC.

Located in Indonesia, Mahato PSC is a 5,600sq km basin that is close to several producing oil fields. Multiple surveys and exploration results have mapped the area to contain a highly lucrative resource opportunity.

According to Cue’s release, the start of operations follows the settled dispute between the company and its joint venture partners. The disagreement arose from Texcal Mahato EP, which operates the Mahato PSC.

Cue previously stated that Texcal and other joint venture partners attempted to exclude the company from two wells, named PB-1 and PB-2. Cue’s subsidiary, Cue Mahato holds a 12.5% interest in Mahato PSC.

As part of the settlement, Texcal will issue a cash call for roughly US$300,000 from Cue to conduct exportation activities in PB-2.

Furthermore, Cue will pay US$380,000 to the joint venture partners, which it will tap into its existing cash reserves of US$111,000. The remaining amount will be paid from the company’s share of the PSC performance bond.

Both payments are due to be finalised at the end of this month.

What is the status of both wells?

Since the resolved dispute, Cue revealed that the PB-1 well is producing around 600 barrels of oil per day. The oil is refined and exported through existing third-party facilities.

In regards to PB-2, Cue noted that is it working to bring the well into production with 3 further drills planned. Its anticipated that the drilling program will start sometime in the current quarter.

What did the CEO say?

Commenting on the production launch, Cue Energy CEO Matthew Boyall said:

Cue is excited to see oil production from the PB field after exploration success in late 2019. This is a rapid progression from exploration to production. The PB field will be a third revenue stream for Cue and will further strengthen our business.

The differences between the joint venture partners and Cue have now been resolved and we look forward to a fruitful partnership as production from the PB field increases and further exploration is undertaken in the Mahato PSC.

About the Cue Energy share price

The Cue share price was gaining ground through the course of last year before it lost more than 60% in December. This is when it advised the market it was abandoning the Ironbark-1 exploration well.

Its shares hit a low of 6 cents in March and reached a multi-year high of 24 cents prior to the December announcement.

More reading

• Why Beach (ASX:BPT) and Cue Energy (ASX:CUE) shares are sinking lower

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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