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The Aurizon Holdings Ltd (ASX: AZJ) share price is in the red despite a big win for the company’s planned acquisition of One Rail.

The $2.35 billion purchase has been given the tick of approval from Australia’s competition watchdog.

At the time of writing, the Aurizon share price is $3.75, 2.09% lower than its previous close.

The company is currently its sector’s worst performer, helping drag the S&P/ASX 200 Industrials Index (ASX: XNJ) 0.1% lower.

Let’s take a closer look at today’s major news from the S&P/ASX 200 Index (ASX: XJO) rail freight operator.

Aurizon share price slips despite ACCC win

The market is bidding the Aurizon share price lower on Thursday despite the company’s multi-billion-dollar acquisition passing a notable hurdle.

The Australian Competition and Consumer Commission (ACCC) won’t oppose Aurizon’s purchase of One Rail if the ASX 200 company divests its east coast business.

One Rail operates the 2,200-kilometre Tarcoola-to-Darwin railway line. It also controls an east coast haulage business in New South Wales and Queensland.

“Without the divestment of One Rail’s east coast business, the ACCC considered that the proposed acquisition would reduce the number of main competitors in the supply of coal haulage in New South Wales and Queensland from three to two, likely resulting in higher prices or decreased service levels,” ACCC chair Gina Cass-Gottlieb said.

Aurizon now expects to finalise the acquisition by the end of this month. It will get started on the demerger immediately afterwards.

The company plans to integrate the remaining One Rail assets into its bulk business.

Aurizon managing director and CEO Andrew Harding commented on today’s news of the “transformative” acquisition, saying:

The transaction secures one of Australia’s most important infrastructure assets, connecting regions rich in resources and agricultural commodities with Darwin, the closest port to Asia.

In addition, the business includes bulk haulage operations, facilities, and a 400-strong workforce in South Australia and the Northern Territory to serve existing customers and growth opportunities in base metals, agriculture, iron ore and for new economy metals such as manganese and copper.

The Aurizon share price slumped 6% when Aurizon’s planned acquisition of the business was announced in October 2021.

Then, One Rail was described as a “strong, profitable business”. It had aggregate estimated earnings before interest, tax, depreciation, and amortisation (EBITDA) of $220 million for 2021.

Around $140 million of that was expected to come from the east coast rail business.

The post Aurizon share price sinks despite ‘transformative’ acquisition win appeared first on The Motley Fool Australia.

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More reading

• Why Aurizon, Bega Cheese, Flight Centre, and Lake Resources shares are sinking
• Here are the top 10 ASX shares today

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Aurizon Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is on course to record a decent gain despite weakness on Wall Street overnight. In afternoon trade, the benchmark index is up 0.45% to 6,652.2 points.

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

Aurizon Holdings Ltd (ASX: AZJ)

The Aurizon share price is down 2% to $3.75. This is despite the company revealing that the ACCC will not oppose the proposed acquisition of One Rail by Aurizon. However, the rail freight operator will have to divest One Rail’s east coast business to complete the deal.

Bega Cheese Ltd (ASX: BGA)

The Bega Cheese share price is down 7.5% to $3.28. This morning the food company released its FY 2023 guidance and revealed that it expects to report EBITDA of $160 million to $190 million. This will mean no growth and potentially even a decline year on year based on FY 2022’s guidance of $175 million to $190 million. A note out of Bell Potter today reveals that it was forecasting EBITDA of $195 million in FY 2023.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price is down 3% to $16.53 despite there being no news out of the travel agent. However, it is worth noting that other travel shares are also falling on Thursday. Investors may be concerned that rising inflation could impact consumer spending on travel.

Lake Resources N.L. (ASX: LKE)

The Lake Resources share price is down 5% to 64 cents. This morning this lithium developer’s shares returned from a trading halt after responding to a scathing report from J Capital. Although management said that the report “puts forth incorrect information on technical matters and inaccurate assertions on Lake Resources’ progress to date,” it hasn’t stopped investors selling down its shares today.

The post Why Aurizon, Bega Cheese, Flight Centre, and Lake Resources shares are sinking appeared first on The Motley Fool Australia.

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More reading

• Here are 3 ASX 200 shares tumbling to new 52-week lows today
• ASX 200 midday update: Telstra completes acquisition, Lake Resources and Bega Cheese sink
• Own ASX travel shares? Here’s the outlook for FY23
• ‘Incorrect’ and ‘inaccurate’: Lake Resources delivers response to shares short-seller
• The best and worst ASX All Ords mining shares of FY22

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Aurizon Holdings Limited and Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s been a positive day so far this Thursday for the S&P/ASX 200 Index (ASX: XJO). The ASX 200 is up a pleasing 0.5% or so as it currently stands. But it’s been an even better day for the TPG Telecom Ltd (ASX: TPG) share price thus far.

TPG shares are rising robustly today. This ASX 200 telco is currently up 3.5% at $6.06 a share, well outperforming the broader market. So what’s going on with TPG that might be eliciting this share price reaction today?

Well, it could be the result of a statement TPG put out this morning. TPG and its telco peer Telstra Corporation Ltd (ASX: TLS) are currently involved in a tussle with rival Optus. Back in February, Telstra and TPG surprised investors by announcing a partnership.

This will see TPG gain access to roughly 3,700 of Telstra’s mobile network assets in regional and suburban areas, resulting in the company boosting its 4G coverage from 96% to 98.8% of the Australian population. In return, Telstra is expecting to bank an extra $1.6-$1.8 billion in revenues over the next decade.

TPG share price climbs as telco bites back

But TPG and Telstra rival Optus is not happy about this tie-up. Last month, the Singaporean telco put out a press release calling on the Australian Competition and Consumer Commission (ACCC) to reconsider the deal.

It stated that if the arrangement were to proceed, it would “lead to a loss of competition and material consumer and public detriment… [and] ‘locking’ competition out of the regional market and eliminating choice in regional Australia”.

Well, today, TPG has exercised its right of reply. According to reporting in The Australian, TPG has issued a rebuttal. It described Optus’ comments as “scaremongering” and stated they were based on “factual errors”.

Here is some of what TPG executive James Rickards went on to say:

Contrary to the assertions of Optus, this is not a merger… To suggest otherwise is an attempt to mislead the public, industry and key stakeholders in the hope of creating controversy where none exists.

This is an infrastructure sharing agreement in the interests of all Australians... Similarly, statements regarding the arrangements for pooling of spectrum in the shared network have seemingly been twisted intentionally.

So perhaps investors have been comforted by this defiant statement from TPG today. Whatever the reason, it’s certainly been a pleasing day for the telco.

At the current TPG share price, this ASX 200 telco has a market capitalisation of $10.97 billion, with a dividend yield of 2.83%.

The post TPG share price rises as telco hits back at Optus over ‘factual errors’ appeared first on The Motley Fool Australia.

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More reading

• Here are 3 ASX 200 shares tumbling to new 52-week lows today
• ASX 200 midday update: Telstra completes acquisition, Lake Resources and Bega Cheese sink
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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

Investors have mixed feelings about eBay (NASDAQ: EBAY). The e-commerce website and platform thrived at the pandemic’s onset when hundreds of millions wanted to avoid shopping in person. As a result, sales and customer signups surged. The economic reopening has had the opposite effect. After being cooped up at home for over a year, people want to get out of the house. 

However, it’s not all bad news for eBay from now on. The company is implementing a strategy to boost revenue, even as customer spending is falling. Let’s take a closer look at eBay’s green and red flags below. 

Green flag: Increasing the take rate

Notably, eBay does not own any inventory for sale on its platform. Instead, it encourages buyers and sellers to meet on its website to make transactions. eBay makes money by taking a percentage of each sale (its “take rate”).

Similarly, eBay leaves shipping and handling to buyers and sellers. That way, it doesn’t need to own or operate fulfillment centers. It’s an asset-light business model that works to deliver higher profit margins than if eBay were to participate in owning inventory or fulfillment centers.

Indeed, eBay’s operating profit margin in the past decade has increased from 20.5% to 29.6%. Meanwhile, rival Amazon, which famously owns its fulfillment network, generated a measly operating profit margin during the same period.

EBAY Operating Margin (Annual) data by YCharts. 

The good news for eBay investors is that the company has been increasing its take rate in recent quarters. Between the fourth quarter of 2020 and the first quarter of 2022, eBay’s take rate rose from 10% to 12.1%. Furthermore, considering that Etsy, a competitor with a similar business model, has sustained and increased its take rate in its previous five quarters at over 17%, suggests that eBay has room to expand its take rate further. 

eBay’s rising transaction take rate has prevented revenue from falling as consumers return to shopping in person. The potential for more increases on this front is surely a green flag. 

Red flag: Declining customer spending

As mentioned earlier, people want to leave their homes and shop more in person. That means less money is available to spend at online stores like eBay. As a result, eBay’s gross merchandise value (GMV), a metric that measures overall customer spending on its site, has declined for four consecutive quarters, starting with Q2 2021.

GMV fell from $24.1 billion in Q1 2021 to $19.4 billion in Q1 2022. The dramatic fall is not entirely due to economic reopening. The first quarter of 2021 held a major fiscal stimulus package, which boosted consumer spending in the U.S.

Still, the economic reopening is a significant headwind for eBay. Folks have more options on what to do with their time and money, and they’re choosing to take dollars away from eBay and allocate them elsewhere. There’s no telling how far or how long this transition will be, adding an element of risk to the situation.

This red flag can primarily explain why eBay’s stock is off 47% from its highs. While the risk should not be ignored, it’s no reason for shareholders to sell eBay stock. The majority of the bad news is arguably priced into the stock, while the potential to continue increasing the take rate could boost revenue, even as customer spending falls. 

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

The post 1 green flag for eBay, and 1 red flag appeared first on The Motley Fool Australia.

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More reading

• eBay could be a market-beating moneymaker, but it needs to stay focused

Parkev Tatevosian has positions in eBay. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon and Etsy. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended eBay and has recommended the following options: short July 2022 $57.50 calls on eBay. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

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

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The All Ordinaries Index (ASX: XAO) is currently up 0.5% in afternoon trading.

The All Ords has broadly shrugged off the shockingly high inflation data reported overnight by the United States, with prices in the world’s top economy rising at the fastest pace in 40 years.

While that 0.5% gain is nothing to complain about, these two ASX All Ords mining shares are smashing those returns today.

2 ASX mining shares charging higher

First, we have Talga Group Ltd (ASX: TLG).

The technology minerals company is primarily focused on graphite exploration and development in Sweden.

Talga shares closed yesterday trading for $1.10 and are currently trading for $1.16, up 5.9%.

The latest price-sensitive news from the ASX mining share was released last Wednesday, when it reported intersecting high-grade graphite zones at its Swedish Vittangi graphite project during the initial drill campaign.

At the current share price, Talga has a market cap of $351 million.

The second ASX All Ords mining share rocketing higher today is Tietto Minerals Ltd (ASX: TIE). Tietto is primarily focused on gold exploration and production in West Africa.

The company’s shares closed yesterday at 37 cents and are currently trading for 41 cents, up 11.0%.

Investors look to be bidding up the ASX mining share after it provided a construction update for its 3.45-million-ounce Abujar Gold Project, located in Côte d’Ivoire.

The company said that construction is on schedule and budget, and it expects the first gold pour to occur in the December quarter. Concrete works at the project are now 80% complete, with the bulk of the remaining work set to be finished in July.

Talga and Tietto share price snapshots

Despite today’s lift, both ASX mining shares remain down for the calendar year. Year-to-date, the Tietto share price is down 17% while the Talga share price is down 32%.

Longer-term, both miners have delivered strong returns.

Over the past five years, the Tietto share price is up 76% while the Talga share price has gained 69%.

That compares to an 18% five-year gain for the All Ords.

The post 2 ASX All Ords mining shares smashing the benchmark on Thursday appeared first on The Motley Fool Australia.

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More reading

• Why Domino’s, EML, Talga, and Woolworths shares are pushing higher

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) has defied the selling on Wall Street and pushed higher. At the time of writing, the benchmark index is up 0.45% to 6,652.2 points.

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

Data#3 Limited (ASX: DTL)

The Data#3 share price is up almost 11% to $5.36. Investors have been buying this business technology solutions company’s shares following the release of a trading update. That update reveals that Data#3 expects to report a full-year profit before tax of $44 million in FY 2022. This is up 19% year on year.

Netwealth Group Ltd (ASX: NWL)

The Netwealth share price is up 5.5% to $13.14. This follows the release of a trading update which revealed that the investment platform provider achieved annual net inflows of $13 billion for FY 2022. This was its highest ever annual net inflows and an increase of 32.4% on last year’s numbers. This led to Netwealth’s funds under administration (FUA) reaching $55.7 billion at the end of June.

New Hope Corporation Limited (ASX: NHC)

The New Hope share price is up 6.5% to $4.28. Investors have been buying New Hope and other coal shares this week after coal prices continued to rise. In addition, the company’s shares were given a boost from a broker note out of Credit Suisse on Wednesday. Its analysts have retained their outperform rating and $4.90 price target on its shares.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price is up almost 3% to $2.43. After a poor start to the day, this lithium share is rebounding. Although Pilbara Minerals reported its first decline in the price received from a BMX lithium auction, it is still commanding a price that is materially higher than 12 months ago.

The post Why Data#3, Netwealth, New Hope, and Pilbara Minerals shares are pushing higher appeared first on The Motley Fool Australia.

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More reading

• Here’s why ASX 200 coal shares are firing up today
• Netwealth share price up 6% as annual net inflows reach new record
• ‘Strong FY22 performance’: Here’s why the Data#3 share price just rocketed 14%
• The best and worst ASX All Ords mining shares of FY22
• Pilbara Minerals share price drops on latest BMX lithium auction update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netwealth. The Motley Fool Australia has positions in and has recommended Netwealth. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Overall, it’s been a rather happy day for ASX shares so far this Thursday. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is gaining a robust 0.4% and is back over 6,640 points.

But that goodwill hasn’t extended to all ASX shares. In fact, there are now three ASX 200 shares that have already hit new 52-week lows today. Let’s check them out.

3 ASX 200 shares hitting new 52-week lows today

Sandfire Resources Ltd (ASX: SFR)

Our first ASX 200 share to check out is copper miner Sandfire Resources. Sandfire shares are down 0.77% at the time of writing to $3.86 a share. But earlier today, this miner dropped as low as $3.79. That’s this company’s new 52-week low.

Sandfire shares are now down 43% in 2022 so far. This appears to be the result of copper prices sinking to near-two-year lows in recent weeks, which is obviously bad news for Sandfire.

Pendal Group Ltd (ASX: PDL)

Our next share worth taking a look at is Pendal Group. This fund manager has had a wild few months. It was over $5 a share at the start of June but has since dipped to the new 52-week low of $4 that we saw earlier this morning. This is all despite the absence of any major news or developments out of the company for some time.

Pendal even impressed investors when its interim results were released back in May, which saw the company post a 59% surge in underlying profits. So clearly investors have deduced that things are less rosy for Pendal today. At the time of writing, the Pendal share price is down 2.27% at $4.10.

Bega Cheese Ltd (ASX: BGA)

Our third ASX 200 share today is none other than Bega Cheese. This consumer staples company has had a clanger today, with the Bega Cheese share price down a nasty 7.61% at the time of writing at $3.28 a share.

Earlier this morning, Bega dipped as low as $3.20, which is now the company’s new 52-week low. In this case, it seems the trading update the company released this morning is responsible for this latest low.

As we covered at the time, Bega announced that its farm gate milk prices in Victoria have jumped 30% over FY 2022’s prices, which is more than the rise of 15-20% that it previously expected. Investors obviously haven’t taken kindly to this news, and have evidently punished Bega shares accordingly.

The post Here are 3 ASX 200 shares tumbling to new 52-week lows today appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: Telstra completes acquisition, Lake Resources and Bega Cheese sink
• Bega share price slides as milk prices skim away
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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The Galileo Mining Ltd (ASX: GAL) share price is soaring in afternoon trade on Thursday.

At the time of writing, shares in the miner are trading 9% higher at $1.27 apiece, despite no market-sensitive updates.

In wider market moves, the S&P/ASX 300 Metals & Mining index (ASX: XMM) is also strengthening and is up 2% on the day.

What’s up with the Galileo Mining share price?

While mining stocks are gaining, it is noteworthy that Galileo posted a change in substantial holding today indicating a key investor had upped their stake.

Successful Western Australian mining investor Mark Creasy, and relevant interests, increased the equity stake in Galileo to more than 26.21%. Previously, Creasy held a 24.82% voting power in Galileo.

Creasy is a mining entrepreneur who has a long and successful track record of investing in prospective and wildcat mining companies.

Shares were purchased on market and via a placement at $1.20 per share through his investment vehicles Yandal Investments Pty Ltd, Australian Gold Resources Pty Ltd, and Dunstan Holdings Pty Ltd.

History tells us that investment from Creasy is a vote of approval in many ways, with many names in the ASX mining space catching a bid on the back of his interest.

Back in May, investors rallied Galileo shares on the back of Creasy’s first investment when he scaled up his position by around 3 million shares.

As of today’s rebalance, he now owns more than 51 million Galileo shares (up from roughly 44 million), at an unknown average share price.

What else is happening with Galileo Mining?

The move likely follows on from the mining company’s update yesterday in which it advised all 11 holes at its second drilling program at the Norseman Project are now complete.

As reported by my Foolish colleague Bernd yesterday, “all 11 holes intersected disseminated sulphide mineralisation similar to what was intersected in its first round of drilling”.

“Assays show the sulphide layer to be associated with palladium, platinum, gold, rhodium, nickel and copper metal.”

Creasy made a similar move back in May when Galileo first made the discovery of these resources at the Norseman Project.

In the last 12 months, the Galileo share price has gained almost 300%. It is also up around 450% this year to date.

The post Why the Galileo Mining share price is charging 9% higher today appeared first on The Motley Fool Australia.

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More reading

• Why Galileo Mining, Platinum, Sezzle, and Woodside shares are dropping
• Up 430% in 2022, Galileo share price wobbles today despite strong drill results
• Why is the Galileo Mining share price galloping 17% higher today?
• What’s behind the frozen Galileo Mining share price today?
• Why Beach, BHP, Bubs, and Galileo Mining shares are sinking

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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S&P/ASX 200 Index (ASX: XJO) coal shares are running hot today … again.

At the time of writing, the ASX 200 is shrugging off sky-high inflation figures from the United States for a gain of 0.3%.

But ASX 200 coal shares are leaving the benchmark’s gains in the dust.

The Whitehaven Coal Ltd (ASX: WHC) share price is up 6.9% in early afternoon trade. Whitehaven shares closed yesterday at $5.39 and are currently trading for $5.76 apiece.

Rival ASX 200 coal share New Hope Corporation Limited (ASX: NHC) is also charging 7.0% higher. New Hope closed yesterday trading for $4.02 per share and is currently at $4.30.

So, what’s firing up investor interest in the coal sector?

Coal prices back near record highs

The fortunes of ASX 200 coal shares, and the investors who hold them, are closely tied to the price of the ‘other’ black gold they dig from the ground.

And coal prices, already running at historic highs, have again tipped back to record territory.

According to data from Trading Economics, Newcastle coal futures have rocketed back above US$430 per tonne. That’s within a whisker of the previous all-time highs set back in the first week of March this year.

Energy prices were already moving higher heading into 2022 as the world began to shake off COVID-19 closures and demand rebounded amid limited new supplies.

Then oil and coal-rich Russia invaded Ukraine, and the resulting sanctions on Russian exports saw energy prices rocket as European and Asian nations looked elsewhere for their energy needs.

How have ASX 200 coal shares performed amid rocketing prices?

With a relative dearth of recent investments in coal exploration and new projects, surging demand has seen the price for thermal coal rocket from US$154 on 4 January to the US$430 recorded in futures contracts today.

As you’d expect, ASX 200 coal shares have been major beneficiaries of soaring prices for their product.

Since the opening bell on 4 January, the New Hope share price has surged 86%.

Whitehaven coal has fared even better, with shares up 109% year-to-date.

And this in a year that’s seen the ASX 200 fall by 12%.

The post Here’s why ASX 200 coal shares are firing up today appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: Telstra completes acquisition, Lake Resources and Bega Cheese sink
• Here are the top 10 ASX shares today
• Why Block, Megaport, Navigator Global, and Whitehaven Coal shares are rising
• These were the 5 top performing ASX energy shares of FY22
• Why did ASX coal shares leap today?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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The Australian Ethical Investment Ltd (ASX: AEF) share price is seesawing today following the company’s funds under management (FUM) update.

At market open, the fund manager’s shares were down almost 3% to $5.04. However, since then, its shares have rebounded to trade at $5.27, up 1.74%.

Australian Ethical delivers FUM and earnings guidance update

Investors are sending the Australian Ethical share price higher after digesting the company’s FUM and merger update with Christian Super.

In its release, Australian Ethical reported positive net flows of $102 million. This included a $150 million redemption by an institutional client that is internalising management of its sustainable option.

When excluding the institutional redemption, net flows came to $252 million for the June quarter.

Management noted that the performance was underpinned by superannuation contributions which recorded net flows of $200 million. However, managed funds experienced net flows of $50 million on the back of cautious market sentiment, amid volatility.

In total, net flows for FY22 stood at $943 million.

Although, when excluding the institutional portfolio, net flows were $1.14 billion – a 20% increase on FY21.

Overall, FUM at 30 June 2022 fell 9% to $6.2 billion with investment performance impacted by highly volatile investment markets.

Nonetheless, FUM for FY22 is up 2% due to strong net flows which offset the negative investment performance.

In addition to the FUM update, Australian Ethical announced it has signed a successor fund transfer deed with Christian Super. This will see all of Christian Super members, as well as its $1.96 billion of FUM, transferred into Australian Ethical super in late 2022.

Lastly, Australian Ethical noted that its emerging companies fund will pay a performance fee of $400,000 after outperforming its benchmark.

As such, the FY22 underlying profit after tax (UPAT) guidance range now sits between $10 million to $10.4 million.

Australian Ethical share price snapshot

Since the start of 2022, the Australian Ethical share price has continued to tread downwards posting a loss of 62%.

Its shares hit a 52-week low of $4.34 last month and have moved sideways since.

Australian Ethical commands a market capitalisation of roughly $582.17 million.

The post Australian Ethical shares wobble amid 9% fall in funds under management appeared first on The Motley Fool Australia.

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More reading

• Is it time to go bargain hunting for ASX shares?
• I think these excellent ASX growth shares are buys for 2022 and beyond

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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