The Perenti Global Ltd (ASX:PRN) share price has closed higher today after the mining company announced a $200 million contract with Yaramoko. The Perenti share price ended the day 1.72% higher to $1.18 per share.

What does Perenti do?

Perenti is a global diversified mining services company with key operations in Australia and Africa. They have businesses in surface mining, underground mining and mining support services, to name a few.

The group has operations in 13 countries across 4 continents, has more than 8,000 employees and currently has a market capitalisation of $810 million.

Details of the contract

Today, Perenti announced that its subsidiary, Barminco, was awarded a contract extension at Roxgold’s Yaramoko mine. The mine is located 200 kilometres southwest of Burkina Faso’s capital city, Ouagadougou.

The contract extension is valued at approximately $200 million over 2 years, from December 2021 to December 2023. This extension follows on from the existing development and production scope currently being executed, taking the total contracted work at Yaramoko to approximately $350 million.

Barminco’s CEO, Paul Muller, stated:

The high-grade Yaramoko complex is an important project for Roxgold, Barminco and the people of the Yaramoko community. We are very pleased to extend our contract with Roxgold to December 2023 and look forward to continuing to create enduring value and certainty for our client, employees, shareholders and the people of Yaramoko and Burkina Faso alike.

Perenti managing director Mark Norwell also spoke highly of the contract, saying:

Barminco and AUMS combined are a global leader in hard rock underground mining. This contract extension reinforces their sector leading position and underlines the Group’s focus on profitable growth through extending existing contracts and winning new work aligned with our 2025 strategy. We very much value the Roxgold and AUMS relationship and we look forward to continuing to deliver for our client.

What now for Perenti

Perenti recently posted record revenue as the company looks to scale up its operations. This deal represents a step in the right direction although the share still has a long way to go to hit its pre-COVID-19 highs. The share price is currently trading at $1.18 with its 52-week high sitting at $2.40.

More reading

• ASX 200 rises 1%, CSL (ASX:CSL) leads the way
• Perenti share price on watch after posting record revenue result

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. 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.

The post Perenti (ASX:PRN) share price pushes higher as contract secured appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2FgXm7n

The S&P/ASX 200 Index (ASX: XJO) rose by 0.5% to 5,909 points today, undoing some of the decline from yesterday.

Here are some of the biggest headlines from today:

Gold miners (mostly) glitter

Some of the best performers in the ASX 200 today were gold miners.

The Gold Road Resources Ltd (ASX: GOR) share price rose by 6.2%, the Saracen Mineral Holdings Limited (ASX: SAR) share price went up 4.6%, the Northern Star Resources Ltd (ASX: NST) share price grew 3.4%, the Newcrest Mining Limited (ASX: NCM) share price rose 1.8% and the St Barbara Ltd (ASX: SBM) share price went up 2.1%.

However, there was one ASX 200 gold miner that had a tough day. The Resolute Mining Limited (ASX: RSG) share price was the worst performer today, falling 6.1%.

Last night after trading hours Resolute Mining gave a Syama update. It told the market that the Union Nationale des Travailleurs has decided to do a 10-day strike at the Syama mine in Mali unless certain demands are met. The main demand is for Syama workers to be reinstated who have been stood down on full day due to Resolute’s COVID-19 protocols.

Resolute Mining explained that it had implemented a plan to prioritise the health of employees, contractors and stakeholders. It limited the travel of non-essential workers from outside the surrounding region to the mine site to limit virus transmission between populations and maintain the mine’s solation from the virus.

The ASX 200 gold miner is considering how to respond, but it called the strike notice “irresponsible” and “opportunistic”.

Clinuvel Pharmaceuticals Limited (ASX: CUV)

The Clinuvel Pharmaceuticals share price went up 9.2% today, it was the best performer in the ASX 200.

The company announced the progression of its drug, Scenesse, to treat the disease xeroderma pigmentosum (XP). The aim of the development program is to confirm the drug’s ability to regenerate DNA of skin exposed to ultraviolet (UV) damage.

Clinuvel is expanding its clinical research, aiming to confirm how intervention with the drug enhances elimination of photoproducts and regeneration of DNA.

The company is first treating patients with XP who have the most extreme deficiencies in their DNA repair processes, leading to a 10,000-fold increase in their risk of skin cancer.

Clinuvel’s chief scientific officer, Dr Dennis Wright, said: “After two decades of clinical research, I’m delighted that our team can now focus on the XP patients who are severely affected by UV radiation leaving them a short life expectancy. We will facilitate treatment for the first patient in the next few weeks.”

The results from the DNA repair program are expected to be reported in 2021.

Nearmap Ltd (ASX: NEA)

Nearmap went into a trading halt today as it announced a capital raising.

The ASX 200 business plans to raise a minimum of $70 million from institutional investors and a further $20 million in a share purchase plan (SPP).

The cash will be used to accelerate its growth. It will scale its investment in sales and marketing, particularly in North America. Nearmap also plans to expand its product solutions to high-value use cases. It will accelerate the roll-out of its Hypercamera3 systems, to generate expanded coverage at higher fidelity and expand into new geographical markets.

Other uses for the cash are investing in its operational systems and data to support rapid scaling. It could also pursue other growth opportunities.

Nearmap said that its pro forma cash balance at 31 August 2020 after the placement will be a minimum of $105 million.

The capital raising is being done through an institutional bookbuild with an underwritten floor price of $2.69 per new share. The underwritten floor price represents a 6.9% discount to the closing price of $2.89. The bookbuild price cap is $2.77 per share.

More reading

• Why the Rio Tinto share price is outperforming its peers
• Why I would buy Telstra (ASX:TLS) and 1 other ultra-cheap ASX share today
• Is the Wesfarmers (ASX:WES) share price a quality buy for ASX dividends?
• Why Myer, Resolute, SKY, & Whispir shares are tumbling lower today
• ASX 200 up 0.7%: Nearmap (ASX:NEA) launches capital raising, Afterpay (ASX:APT) rebounds

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 Nearmap Ltd. The Motley Fool Australia has recommended Nearmap Ltd. 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.

The post ASX 200 rises 0.5%, gold miners glitter appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3m1XWa5

I think that small cap ASX shares are attractive ideas to invest into.

It’s a lot easier for a smaller business to double in size compared to a large business. A company’s potential market is limited to a certain size. If it’s near the limit of its market share, then future growth will be lower. It’s a lot easier for a small business to deliver market-beating returns because it’s starting from a small base. However, higher potential rewards do come with higher risks.

But which ASX small cap shares should you buy? I think these three will be market-beating ideas over the next five to ten years:

Share 1: Bubs Australia Ltd (ASX: BUB)

Bubs is a rapidly-growing infant formula business which specialises in goat milk products.

The Bubs share price has drifted lower by 15.5% since 24 August 2020 to $0.82. Since then it released its FY20 result and also announced a capital raising.

I thought the FY20 result was quite impressive. Full year revenue was up 32% to $62 million, infant formula revenue grew 58% to $30 million. The ASX share showed that Chinese revenue grew 32% to $13 million and export revenue outside of China increased by five-fold. That ex-China export revenue represented 10% of group revenue.

The normalised gross profit margin increased from 21% to 24% and it is going for a locally-produced manufacturing option (with Bubs’ ingredients) in China with joint venture partner Beingmate. Part of the capital raising money will be used to buy a stake in the Chinese manufacturing facility.

Bubs has a lot going on, I can understand the market uncertainty. But there are plenty of positives. It’s launching new products, including a vitamin and mineral range. It now has a global brand ambassador. It’s growing in multiple markets.

I’d be happy to buy a parcel of Bubs shares at the current share price.

Share 2: Citadel Group Ltd (ASX: CGL)

Citadel is an ASX technology share. The company provides important data management software to clients in sectors like education, healthcare and defence.

The Citadel share price has drifted lower by 15% since 24 August 2020. That was despite a solid underlying result in FY20 as it navigated through COVID-19 and acquired the UK healthcare software operator Wellbeing.

That FY20 result showed underlying revenue increased by 29.4% to $128.4 million and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rising by 25.3%.

I’m excited by the medium-term potential that the Wellbeing acquisition brings for the ASX share. It means Citadel is shifting towards higher margin, recurring revenue. It also means that Citadel can sell its Australian software into the UK, it can sell the UK software into Australia and it can offer the combined package to new clients and markets.

At the current Citadel share price it’s trading at under 12x FY23’s estimated earnings.

Share 3: BWX Ltd (ASX: BWX)

BWX is a natural beauty business with a number of brands including Sukin (the core brand), online retailer Nourished Life and two US brands called Andalou Naturals and Mineral Fusion.

FY20 was a strong year despite COVID-19 impacts. BWX has really bounced back over the past couple of years. Revenue grew by 25.5% to $187.7 million, gross profit increased by 30.2% to $108.8 million, underlying EBITDA rose 45.3% to $30.9 million and underlying net profit jumped 38.9% to $15.3 million. Reported net profit actually rose faster, it increased by 59.1% to $15.2 million.

For me, two of the most important metrics from the ASX share were the increasing profit margins. The gross profit margin improved by 210 basis points to 58% and the underlying EBITDA margin increased by 230 basis points to 16.5%. I think that shows the pleasing scalability of the business.

Operating cashflow also improved significantly, up from $3.7 million in FY19 to $28 million in FY20.

It’s heading in the right direction and I think there is good potential for international growth in the US, Asia and Europe in the coming years.

At the current BWX share price it’s trading at 23x FY23’s estimated earnings.

Foolish takeaway

I believe that each of these ASX share small caps have great growth potential and they’re trading attractively cheap for their medium-term outlooks. At the current prices I think both Bubs and Citadel look particularly compelling.

More reading

• Bubs Australia (ASX:BUB) share price falls as share purchase plan opens
• 2 ASX shares I’d buy with $750 right now
• Top ASX growth shares to buy in September 2020
• Bubs share price trading at a 5-month low. Is this a buying opportunity?
• Here’s how to make a $1 million portfolio by investing $1,000 a month

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO and BWX Limited. The Motley Fool Australia has recommended Citadel Group Ltd. 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.

The post 3 small cap ASX shares I’d buy with $3,000 right now appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2ZoyNga

The Lynas Corporation Ltd (ASX: LYC) share price was flat today, moving to 0.00% to remain at $2.39. Lynas Corporation announced this morning that it had completed its retail entitlement offer.

What was the offer?

Lynas shareholders were offered the right to purchase 1 Lynas share for every 7.7 shares held at 7pm on the record date. The issue price was $2.30 per share. The retail offer closed on 7 September 2020 at 5pm Sydney time.

Lynas said retail shareholders supported the offer with a take-up rate of approximately 44%. The company will issue 22 million shares. It raised $60 million from investors, including $10 million from shareholders who applied for additional shares. With these shareholders included, the total take-up rate was approximately 53%.

There were 23 million shares that were not taken up under the offer. These will be allotted to the sub-underwriters of the retail entitlement offer.

Additionally, Lynas completed an institutional rights issue and institutional placement. The total amount raised from retail and institutional investors was $425 million.

The funds raised from the capital raising will be put toward a new rare earths processing facility in Kalgoorlie, Western Australia and an upgrade of the company’s processing plant in Malaysia.

Lynas’ operations are considered of national interest to both Australia and the United States. China accounted for at least 85% of rare earth materials production in 2019 and has restricted supply in the past. Lynas’ Mt Weld deposit in Western Australia is acknowledged as one of the highest grade rare earths mines in the world. 

About the Lynas share price

Lynas is a rare earths miner and processor with assets in Australia and Malaysia along with a plan to build a processing plant in the US. The company has been listed on the ASX since 1986.

In the year to 30 June 2020, Lynas had revenue of $305.1 million. The company’s earnings before interest, tax, depreciation and amortisation (EDITDA) in the 2020 financial year were $59.8 million, down from $100.7 million in the 2019 financial year. The company experienced a production halt during the 2020 financial year as a result of COVID-19 which affected its results.

The Lynas share price has soared 312% since its 52-week low of 58 cents. It is up 4.37% since the beginning of the year and in line with this time last year.

More reading

• Top brokers are urging investors to buy these ASX stocks today
• Lynas announces FY 2020 results and $425 million equity raising
• Why the rise of electric vehicles could benefit ASX mining shares

Motley Fool contributor Chris Chitty 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.

The post Lynas (ASX:LYC) share price stands its ground as retail offer finalised appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3imH63y

Technology shares have carried the share market out of COVID-19 misery both in Australia and the US.

Investor darlings include Australia’s Afterpay Ltd (ASX: APT), which has rocketed more than 750% since March, and Tesla Inc (NASDAQ: TSLA), which surged 400% before a correction the last few days.

The Nasdaq Composite Index (NASDAQ: .IXIC) itself rose 75% since the COVID-19 trough before settling down a bit this month.

So naturally the big question on everyone’s mind is: When will the rally stop?

No expert, let alone an amateur punter, has a crystal ball. 

But one fund manager reckons he has a sure-fire signal that will indicate when fortunes have peaked.

“The biggest risk… for the tech sector is when interest rates increase,” said Wilson Asset Management lead portfolio manager Oscar Oberg.

“If you see that, that’s a sign to get out of that space.”

Oberg told an investor call that what’s happened to tech stocks the last 6 months is not sustainable.

“You can’t just look at companies like Afterpay, which went from $8 to $90, and think that’s the new normal.”

Calling the ‘end of tech’

Wilson has been incorrectly “calling the end of the tech market for the last 3 years”, admitted Oberg. 

Its flagship exchange-traded fund (ETF) WAM Capital Limited (ASX: WAM) even reduced its exposure to tech this year from about 10% to 6%.

“The reason we have been wrong is purely because of where interest rates are,” Oberg said.

“Interest rates, as we all know, are at record lows. That increases valuations and that’s why we’ve seen this momentum in companies like Tesla and Salesforce.”

Wilson Asset Manager founder and chair Geoff Wilson said the current situation reminded him of the tech bubble in the late 1990s.

“I’ve been thinking back to 1999–2000 when we had the ‘tech wreck’,” Wilson told investors.

“There wasn’t a specific event that created the tech wreck… It was just over-evaluations, then heat coming out of the market.”

Wilson forecast that current tech investors would have to prepare for a “reasonable-sized adjustment”.

Wilson Asset Management operates 6 LIC ETF products, with more than $3 billion under management.

More reading

• Tech shares lead ASX rebound but Afterpay (ASX:APT) faces mounting competition
• ASX 200 up 0.7%: Nearmap (ASX:NEA) launches capital raising, Afterpay (ASX:APT) rebounds
• Why Afterpay, Clinuvel, IDP Education, & Saracen shares are charging higher
• Where to invest your first $1,000 into ASX shares
• 5 things to watch on the ASX 200 on Thursday

Tony Yoo owns shares of AFTERPAY T FPO and WAM Capital Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Salesforce.com and Tesla. 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.

The post The biggest threat to tech shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/35n2XEj

The Archtis Ltd (ASX:AR9) share price has rocketed today as the company announced a landmark deal with the Australian Department of Defence. The Archtis share price soared 25% higher to 52.5 cents in early afternoon trade before dropping back to 50 cents at the time of writing.

What Archtis does

Archtis is a Canberra-based cyber security technology company that specialises in the safe design and development of cloud based, secure information management and collaboration software. Since its establishment in 2006, the company has provided cyber security consulting and infrastructure and software development services to Australian government clients.

In a bid to commercialise its services, Archtis launched its software-as-a-service (SaaS) Kojensi platform last year to service government, defence and commercial clients.

Landmark contract win for Archtis

Archtis’s share price was sent flying today as the company announced a $4.2 million deal with the Australian defence department. It includes three licences of the Archtis Kojensi platform and will be used to perform risk reduction activity for multinational information sharing and cross domain services. The risk reduction activity will be conducted over the next 12 months. It will include development, building and accreditation activities to provide defence.

Furthermore, it will provide an information-sharing architecture pattern for cross and multi domain services between different allied partners. Thus the contract has the potential to springboard Archtis into prominence as its product will be shared with other large allied nations.

This is the company’s largest contract to date, reflecting its growing maturity and the defence force’s commitment to investing in premium sovereign information security capabilities.

Archtis CEO Daniel Lai said:

I am delighted that Archtis has been selected to lead this risk reduction activity. The need to share, control and trust information in the warfighter domain, between forces and with allies remains a critical requirement and archTIS is well-positioned to deliver on this.

What now for the Archtis share price?

The Archtis share price has performed exceptionally well this year to date with the growing awareness around cyber security providing a strong tailwind. Archtis’s share price is currently up 300% so far this year.

More reading

• The Archtis share price soars on new contract
• The Archtis share price has doubled in a week! Here’s why

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. 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.

The post Why the Archtis (ASX:AR9) share price is rocketing up today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3k313MZ

The S&P/ASX 200 Index (Index:^AXJO) surrendered its morning gains as did most of the major miners. But the Rio Tinto Limited (ASX: RIO) share price is proving to be one of the few exceptions.

The 1.2% jump in Rio Tinto’s share price to $100.25 this afternoon is made even more notable as speculation swirls that is may be forced to boot its chief executive.

The Australian Financial Review reported that Jean-Sebastien Jacques and top of his top lieutenants may be forced to resign after the miner “accidentally” blew up the culturally significant Juukan Gorge.

Rio Tinto shares upgraded to “buy”

But investors aren’t too fussed even as the BHP Group Ltd (ASX: BHP) share price dips into the red and Fortescue Metals Group Limited (ASX: FMG) share price loses 0.8% to $17.86.

Perhaps an upgrade by Citigroup could be making the difference. The broker declared the stock its top pick for the sector as it lifted its recommendation on Rio Tinto to “buy” from “neutral”.

This bullish review comes after Citi admitted that it had been too pessimistic about the iron ore price.

Iron ore price stronger for longer

“While we expect a modest price pullback in the iron ore near term, we now forecast benchmark iron ore to stay in a range of US$100-$120/t for the balance of 2020,” said the broker.

“We also lift forecasts for 2021-23 based on a more constructive Chinese steel demand outlook.”

Citi is now expecting iron ore prices to average US$90 a tonne in 2021, US$80 a tonne in 2022 and US$75 a tonne in the following year. This compares to its previous forecast of US$60 to US$65 a tonne for the three years.

China and Brazil driving upgrades

“A re-focus on the domestic market as a key growth driver, highlighted during the mid-year politburo meeting, suggests that steel-intensive sectors including property, infrastructure and automotive sectors remain key pillars for China’s economic growth,” added the broker.

“As a result, we now expect steel end use demand to rise 1-2% y/y per annum during 2021-23, compared to our earlier forecast of a modest 1% decline per annum.”

It’s not only stronger demand from China that is driving the upgrade. The broker also thought supply would be better than reality but the devastating COVID-19 outbreak in Brazil is curbing output.

Big earnings boost

While Citi isn’t its long-term price projection for the steel making mineral to fall to US$60 a tonne, it acknowledges that the commodity will take a longer than expected time to get there.

The brighter near to medium-term forecast for iron ore will lead to a big increase in earnings for iron ore stocks. But Rio Tinto is the best placed to benefit given size of iron ore footprint.

However, it isn’t only Rio Tinto that got upgraded. Citi also lifted its rating on the Mount Gibson Iron Limited (ASX: MGX) share price to “buy” from “neutral”, although it calls the smaller miner a “high-risk” investment.  

More reading

• Is the Wesfarmers (ASX:WES) share price a quality buy for ASX dividends?
• ASX 200 up 0.7%: Nearmap (ASX:NEA) launches capital raising, Afterpay (ASX:APT) rebounds
• Should you ‘buy the dip’ with ASX shares?
• Should you buy Bega Cheese (ASX:BGA) shares at near an all-time high?
• An all-weather ASX resources shares strategy

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited and Rio Tinto Ltd. 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.

The post Why the Rio Tinto share price is outperforming its peers appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2FmISD7

If you’re looking for some new additions to your portfolio, then I think the S&P/ASX 50 index is a good place to start.

This large cap index is home to 50 of the largest and most liquid shares listed on the ASX by float-adjusted market capitalisation.

Two ASX 50 shares that I would buy today are listed below:

Goodman Group (ASX: GMG)

One of my favourite ASX 50 shares is Goodman Group. This integrated commercial and industrial property company owns, develops, and manages industrial real estate globally. At present it has a portfolio of warehouses, large scale logistics facilities, and business and office parks across a total of 17 countries. 

While there are a lot of property companies to choose from on the Australian share market, few (if any) have as bright a future as Goodman Group in my opinion. This is due to the way the company has built its portfolio to give it exposure to industries benefiting from structural tailwinds such as online, logistics, food, consumer goods, and the digital economy. 

Telstra Corporation Ltd (ASX: TLS)

Another ASX 50 share to consider buying is Telstra. Although times have been hard for the telco giant, I believe its long term outlook is very positive. This is thanks largely to its T22 strategy which is stripping out costs and simplifying its business. In addition to this, with the end of the NBN rollout now in sight, the company could soon return to growth.

In light of this, I think now would be a good time to consider a long-term investment. Especially if you’re looking for dividends in this low interest rate environment. Based on the current Telstra share price, it will offer investors a 5.6% fully franked yield in FY 2021 if it is able to maintain its current dividend of 16 cents per share.

More reading

• Why I would buy Telstra (ASX:TLS) and 1 other ultra-cheap ASX share today
• Whispir (ASX:WSP) share price sinks 9.5% lower on major shareholder sell-down
• Why the Telstra share price is a good buy for dividends
• 3 ASX shares for growth, income, and value investors to buy right now
• ASX 200 Weekly Wrap: Friday crash pulls ASX back below 6,000 points

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

The post Why I would buy Telstra (ASX:TLS) and this outstanding ASX 50 share appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3himB6B

Shares in ASX-listed airliner Regional Express Holdings Ltd (ASX: REX) have tripled since March.  

Despite the COVID-19 pandemic wreaking havoc on the airline industry, shares in Australia’s largest regional airliner are soaring.

Here’s why the Regional Express share price has been flying and why it could be a long-term buy.

How has Regional Express performed?

Late last month, Regional Express released its annual report for FY20.

Despite receiving $53.9 million from the Federal Government, Regional Express recorded a statutory loss after tax of $19.4 million.  The loss is a huge turnaround for the company, after recording a profit of $17.5 million the previous financial year.

Regional Express has been able to ride out the pandemic with total revenue of $321 million. Government subsidies were the company’s second largest source of revenue. In the 12 months to June 20, Regional Express noted it had received $63 million in government subsidies and grants.

Turnover for the full year also remained flat at $321.8 million. However, Regional Express assured investors that the airliner remained profitable on an underlying basis. The airline’s passenger revenue fell $65 million in the last quarter of FY20. Despite this Regional Express was able to post a small underlying profit before tax of $250,000.  

What’s fuelling the Regional Express share price?

The Regional Express share price has been flying on the back of expansion to its domestic operations.

Earlier this year, the airliner announced it would be expanding its domestic operations into the ‘Golden Triangle’. In local aviation terms, the ‘Golden Triangle’ refers to the lucrative domestic routes between Sydney, Melbourne and Brisbane.

As a result, Regional Express is looking to raise $30 million to support the initiative by purchasing a set of narrow-body jets to be based in major cities on the east coast. 

Should you invest in Regional Express?

Regional Express currently dominates regional services, covering 85% of the routes on offer.

The company is headed by a strong board and management. If Regional Express can build on existing infrastructure and maintain a low-cost base, they should maintain profitability.

However, expansion of its operations could come with additional risks.

Firstly, it’s important to note that the aviation industry remains highlight volatile given the COVID-19 pandemic. Until there is a full recovery, the sector will see more money going into capital than profits coming out.

Therefore, there is no need to jump the gun and invest at the current Regional Express share price, which is trading at the time of writing at $1.02. In my opinion, investors have plenty of time to assess conditions before making an investment decision.

More reading

• Qantas share price is facing this new challenge in FY21

Motley Fool contributor Nikhil Gangaram 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.

The post The Regional Express (ASX: REX) share price has tripled since March appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3k7DV01

The Buddy Technologies Ltd (ASX:BUD) share price has continued its impressive run as once again it broke its record for orders of smart lights. The Buddy share price is currently trading 3.75% higher at 83 cents.

Smashing orders

It seems not long ago that I was writing about the last time Buddy announced record smart light orders. Sure enough, less than 3 weeks ago, the Buddy share price soared 19% as they hit light orders of $4.3 million. Nonetheless, that record has been swiftly eclipsed as the company announced orders of $10.5 million for its smart lights.

The record number of orders are aimed to help meet 4th calendar quarter holiday demand in Europe and North America. They exclude the LIFX Clean and LIFX Switch, with both expected to be ordered separately and subsequently. The Buddy share price exploded as the LIFX clean was announced in late August. 

Buddy CEO David McLauchlan described 2020 as “a remarkable year of disruption and dislocation, none more so than for our Melbourne-based team who have admirably kept up an amazing level of productivity and good spirits despite the COVID-19 curfews and lockdown in place there. Their efforts, and the patience and support of our shareholders, is being rewarded with orders flowing in, and the company now having more lights currently in the process of being manufactured and shipped, than at any other time in the company’s history.”

What does Buddy do?

Founded in 2006, Buddy Technologies provides cloud-based technology that aims to make its customers’ work and living spaces smarter, via IoT connected devices.

Buddy’s consumer business trades under the LIFX brand and is a provider of smart lighting solutions. The company has a wide portfolio of Wi-Fi enabled lights that are used in nearly 1 million homes and sold in more than 100 countries.

Where to now for the Buddy share price

The Buddy share price has been driven by good news in recent months capped off by its impressive results in late August. The light manufacturer’s share price is now up a huge 105% for the year.

More reading

• The Buddy share price is up 33% higher today. Here’s why
• Buddy share price leaps 18% following letter to shareholders
• Buddy share price soars 19% on record orders

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. 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.

The post Why the Buddy (ASX:BUD) share price is lighting up appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2GCxzHl