Tag: Motley Fool

March 2022 could be the month to look at some exciting ASX growth shares which are expecting growth in the coming years.

The Russian invasion of Ukraine as well as inflation concerns have seemingly caused a lot of volatility in 2022 so far.

Warren Buffett once said: “Be fearful when others are greedy and greedy when others are fearful.”

With that in mind, here are two ASX growth shares to consider:

Australian Ethical Investment Limited (ASX: AEF)

Australian Ethical is one of the fastest-growing fund managers in Australia. It provides investment products that can align with investors’ ethics. Typically, Australian Ethical avoids sectors like fossil fuels or tobacco.

Its funds under management (FUM) continues to grow. The FUM reached $6.9 billion at 31 December 2021, up 38%. This helped drive operating revenue higher by 38% to $35.2 million.

Underlying profit after tax grew 12% to $5.4 million.

Why did profit grow less than revenue? The ASX growth share is investing in a number of key areas to deliver long-term growth.

Operating expenses jumped 45% as it invested in its business capability with a number of strategic hires. It’s investing in marketing to grow brand awareness and expand the preference for Australian Ethical with advisers. Expenses related to the implementation of technology initiatives, new product launches and acquisition due diligence costs also grew.

Australian Ethical says it is in an enviable position to capture its “natural and achievable share” of a rapidly growing addressable market of investors who want greener or more ethical investment options.

Airtasker Ltd (ASX: ART)

Airtasker is a company that operates a platform for ‘taskers’ to provide services to people who are willing to pay for work to be done.

The ASX growth share is seeing growth in the number of tasks done on its platform as well as the average price per task, which could suggest inflation but also that more people are trusting Airtasker for more complicated tasks.

The FY22 first half saw gross marketplace volume (GMV) grow 15.5% year on year to 83.6%. But there were lockdowns in the first quarter, the second quarter saw GMV growth of 39% quarter on quarter. The average task value reached $255 in the second quarter, up 24% year on year.

International growth is a very important area of focus for the ASX growth share because countries like the UK and the US have much larger total addressable markets than Australia.

In the US, in the second quarter, the US saw task growth of 71% quarter on quarter. It’s focused on cities like Atlanta, Kansas City, Dallas and Miami, though it’s also seeing growth in ‘non-core’ cities.

In the UK, Airtasker’s second-quarter GMV was up 121% year on year thanks to both supply and demand rising.

The ASX growth share has a very high gross profit margin, which allows the business to re-invest that cash flow for growth.

Airtasker is growing quicker than expected, so it increased its FY22 second half GMV guidance to a range of $107 million to $110 million, up from $105 million.

The post 2 exciting ASX growth shares for March 2022 appeared first on The Motley Fool Australia.

More reading

• Airtasker (ASX:ART) share price falls 4% amid half-year plagued by COVID
• Why Australian Ethical, Domino’s, Scentre, and St Barbara shares are falling
• Australian Ethical Investment (ASX:AEF) share price falls despite profit boost
• Own Airtasker (ASX:ART) shares? Here’s what to watch when the company reports tomorrow
• 2 ASX shares every growth investor needs to know about

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Australian Ethical Investment Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/S9kzuil

The S&P/ASX 200 Index (ASX: XJO) had its worst showing since 2020 last week. Over the five days, the benchmark index dropped 3.1% to end the period at 6,997.8 points.

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

Cimic Group Ltd (ASX: CIM)

The Cimic share price was the best performer on the ASX 200 last week with a gain of 35%. Investors were fighting to get hold of the engineering company’s shares after it revealed the receipt of a hostile takeover approach. According to the release, Cimic’s majority shareholder, HOCHTIEF, is planning to make an off-market takeover offer of $22 cash per share.

Hub24 Ltd (ASX: HUB)

The Hub24 share price was some way behind as the next best performer with a 16.3% gain. A week earlier the investment platform provider was the worst performer on the ASX 200, but quickly reversed that decline following the release of its half year results. For the six months ended 31 December, Hub24 reported a 72% increase in revenue to $81.6 million and an 80% lift in EBITDA to $29.7 million. This was underpinned by a 118% increase in funds under administration (FUA) to $68.3 billion.

Monadelphous Group Limited (ASX: MND)

The Monadelphous share price was on form and charged 14.5% higher last week. Investors were buying the mining services company’s shares in response to the release of its half year results. Monadelphous reported a 12% increase in revenue to $1,065 million and a 17.7% jump in net profit after tax to $30.1 million. This solid result was underpinned by record half year maintenance and industrial services revenue.

Cochlear Limited (ASX: COH)

The Cochlear share price wasn’t far behind with a solid 13.3% gain over the five days. The catalyst for this was the release of the hearing solutions company’s half year results. For the six months ended 31 December, Cochlear delivered a 26% increase in half year underlying net profit to $158 million. This was well ahead of the market consensus estimate.

The post These were the best performing ASX 200 shares last week appeared first on The Motley Fool Australia.

More reading

• These were the worst performing ASX 200 shares last week
• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts this Friday
• Back on the horse! ASX tech shares stage stunning comeback following sell-off
• Magellan (ASX:MFG) share price slips 6% as funds continue mass exodus

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. owns and has recommended Cochlear Ltd. and Hub24 Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/TH7ZXKf

The ASX share market has been through a lot of volatility in recent times. This may be opening up opportunities for investors who are looking for lower prices in March 2022.

Businesses that continue to grow their revenue and operations might be potential candidates to consider. A lower share price doesn’t necessarily mean the underlying growth is slowing.

With that in mind, these are two ASX shares which are growing but have been sold off:

Adore Beauty Group Ltd (ASX: ABY)

The Adore Beauty share price is showing a lot of red. The past month shows a 24% decline. It’s down 48% since the start of the calendar year, which is less than two months old!

This e-commerce business specialises in the beauty sector. It sells over 11,700 products from over 270 brands.

Despite the sell-off, Adore Beauty continues to report revenue growth. It isn’t seeing a decline of its year-on-year numbers like plenty of other e-commerce retailers have.

Half-year revenue was up 18% to $113.1 million, with active customers increasing 13% to 876,000. Returning customers grew 56%. Annual revenue per active customer rose 5% year on year to $224, driven by higher average order values and an increasing proportion of returning customers.

The company is investing in content engagement and brand building. Adore Beauty’s growing organic channels are showing early results. The owned market channels are helping marketing costs.

The ASX share is investing in a number of areas including private label products, its mobile app, loyalty and adjacency expansion. It’s on track on launch its first private label skincare brand in the fourth quarter. This can help it grow its market share in the $11 billion category which is benefiting from “significant” structural tailwinds. More shoppers are buying their products online.

It’s currently rated as a buy by Morgan Stanley, with a price target of $4. That’s almost 90% higher than where it is today.

City Chic Collective Ltd (ASX: CCX)

City Chic is one of the world’s leading retailers of plus-size clothing for women. It operates through several brands including City Chic, Evans in the UK and Avenue in the US.

The City Chic share price is down 28% since the start of the year. It’s close to a 52-week low, with that lower price being back in March 2021.

The ASX share recently reported its FY21 half-year result which showed 49.8% growth of revenue to $178.3 million. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was up 1% to $23.5 million and underlying net profit was flat. Online sales surged 52.5%. The company suffered from lockdowns and store closures in the first half.

City Chic has global growth ambitions. It’s launching its different brands into different geographic markets to deliver growth. It’s also making acquisitions, such as the Navabi deal in July 2021 to help it grow in Europe.

The first couple of months of the second half of FY22 showed ongoing revenue growth, with online sales growth. The UK and EU sales are showing signs of recovery and they are getting closer to pre-acquisition levels.

With its partner business, it’s planning to launch new programs and launch new ranges with existing partners, as well as onboard new partnerships in the second half of FY22 and into FY23.

The ASX share is maintaining elevated stock levels to ensure it has enough stock for the summer sales period in the northern hemisphere.

It’s currently rated as a buy by UBS, with a price target of $5. That’s around 27% higher than it is today.

The post Is now the time to buy these 2 beaten-up ASX shares in March 2022? appeared first on The Motley Fool Australia.

More reading

• Why Appen, City Chic, Flight Centre, and Life360 shares are sinking
• Dividend ditched: City Chic (ASX:CCX) share price plummets 30% on half-year earnings
• Why is the Adore Beauty (ASX:ABY) share price having an 8% glow up today?
• Is now the time to buy these 2 great ASX tech shares?
• Are these 2 top ASX growth shares buys?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/QiNvbol

Experts have named some leading ASX dividend shares as buys.

These are companies that are expected to pay a solid yield in 2022 and potentially deliver long-term growth.

Dividends are not guaranteed and only a few companies have been able to deliver consistent growth. However, analysts are expecting these two businesses to pay attractive dividends this year:

Inghams Group Ltd (ASX: ING)

Inghams is one of Australia’s largest poultry businesses, supplying a range of different commercial customers.

It’s currently rated as a buy by the broker Credit Suisse with a price target of $4.05. How big is the broker expecting the dividend to be? In FY22 the grossed-up dividend yield is expected to be 4% and in FY23 it’s expected to be 8%.

The first half of FY22 was tricky with challenges caused by COVID with lockdowns and operational disruptions.

Inghams continues to invest in achieving operational efficiencies across the business, leading to limited cost growth. This helped underlying net profit grow by 5.9% in the first six months of FY22.

Whilst the ASX dividend share is expecting a shorter-term profit hit, Inghams said that it can recover quickly.

Telstra Corporation Ltd (ASX: TLS)

Telstra is buy-rated by several brokers, including Morgan Stanley which has a price target of $4.60 on the business. This is around 16% higher than where it is today.

In Telstra’s recent announcement of its T25 strategy, it said that it was targeting growth of the dividend over time as earnings and franking credits grow. The telco has a number of plans to help grow profit including cutting more costs, diversifying earnings (such as the Digicel Pacific acquisition) and winning market share thanks to 5G. The new 5G offering can help customers switch over to a high-margin fixed wireless service.

The ASX dividend share has committed to keep paying an annual dividend of $0.16 per share. That translates into a grossed-up dividend yield of 5.8% at the current Telstra share price.

Telstra recently announced a regional network sharing agreement with TPG Telecom Ltd (ASX: TPG). TPG will get access to around 3,700 of Telstra’s mobile network assets.

Telstra said that this deal with TPG will provide significant value to shareholders. It will realise more value from Telstra’s network infrastructure while making a very significant contribution to Telstra’s wholesale mobile revenue.

TPG will provide Telstra with access to some of its existing 4G spectrum and 5G spectrum in the regional network.

The post 2 buy-rated ASX dividend shares for income: experts appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts this Friday
• Telco blip: Telstra (ASX:TLS) share price slips on TPG deal scrutiny
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Top brokers name 3 ASX shares to buy today
• These 3 ASX 200 shares are topping the volume charts this Wednesday

Motley Fool contributor Tristan Harrison 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 owns 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/xEgh4om

Last week was a tough one for investors, with the S&P/ASX 200 Index (ASX: XJO) having its worst showing since 2020. Over the five days, the benchmark index lost 3.1% of its value to end the period at 6,997.8 points.

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

Appen Ltd (ASX: APX)

The Appen share price was the worst performer on the ASX 200 last week with a 21.6% decline. Investors were selling down this artificial intelligence data services company’s shares following the release of its full year results. That release revealed that Appen delivered a 3% increase in underlying EBITDA to US$77.7 million in FY 2021, which fell short of its revised guidance. Management’s lack of guidance for FY 2022 also weighed on sentiment.

PointsBet Holdings Ltd (ASX: PBH)

The PointsBet share price wasn’t far behind with its decline of 20.2%. At the start of the week, this sports betting company’s shares came under fire due to the release of a disappointing update from rival DraftKings. Its shares crashed after revealing a loss of US$326 million for the fourth quarter. It also warned that it was likely to make a loss of US$1 billion in FY 2022. A selloff in the tech sector later on in the week also put pressure on PointsBet’s shares.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The Domino’s share price was out of form and tumbled 18.9% last week. Investors were selling the pizza chain operator’s shares after its half year earnings fell short of expectations. Domino’s reported an 11.1% increase in network sales but a 5.3% decline in underlying net profit after tax to $91.3 million. This earnings miss was driven by the underperformance of its Asian operations.

Magellan Financial Group Ltd (ASX: MFG)

The Magellan share price continued its slide and dropped a further 18.1% over the five days. A good portion of this decline came on Friday when the embattled fund manager revealed that its funds under management (FUM) has declined again over the last two weeks. Magellan advised that its total FUM now stands at $77.2 billion, which is down 11.4% since its last update on 11 February.

The post These were the worst performing ASX 200 shares last week appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts this Friday
• Why Blackmores, BWX, Kogan, and Magellan shares are dropping
• Why Adbri, Appen, Block, and Life360 shares are storming higher
• Here’s why the Appen (ASX:APX) share price is racing 14% higher today

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. owns and has recommended Appen Ltd and Pointsbet Holdings Ltd. The Motley Fool Australia owns and has recommended Appen Ltd. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited and Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/RkJ3ygv

While the outlook for interest rates is certainly improving, it looks likely to still be some time until rates reach levels that investors could earn a sufficient income from savings accounts and term deposits.

In light of this, the dividend shares listed below could be top options for income investors for the foreseeable future. Here’s what you need to know about them:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The first ASX dividend share to look at is the Charter Hall Social Infrastructure REIT. As its name implies, this real estate investment trust invests in social infrastructure properties. These properties, which are on very long leases, include bus depots, police and justice services facilities, and childcare centres.

Goldman Sachs is positive on the company and currently has a conviction buy rating and $4.20 price target on its shares. The broker was pleased with its half year results, highlighting its solid like for like rental growth, 100% occupancy, and weighted average lease expiry of 14.6 years.

As for dividends, Goldman is forecasting dividends per share of 17.2 cents in FY 2022 and 18.3 cents in FY 2023. Based on its current share price of $3.80, this implies yields of 4.5% and 4.8%, respectively.

Coles Group Ltd (ASX: COL)

Another ASX dividend share for investors to consider is Coles. It is of course one of the big two supermarket chains, operating over 800 supermarkets. It also operates over 900 liquor retail stores and more than 700 Coles Express stores

This strong network, its defensive qualities, and track record of same store sales growth, has analysts predicting growing dividends in the coming years.

For example, analysts at Morgans are forecasting fully franked dividends of 61 cents per share in FY 2022 and then 63 cents per share in FY 2023. Based on the current Coles share price of $17.49, this will mean yields of 3.5% and 3.6% respectively.

Morgans also sees decent upside for its shares. The broker currently has an add rating and $19.70 price target on its shares.

The post These ASX dividend shares have been given buy ratings by analysts appeared first on The Motley Fool Australia.

More reading

• The oil price has just hit an 8-year high. What might this mean for ASX shares?
• These are some of the only ASX shares in the green today. Here’s why
• Top brokers name 3 ASX shares to buy today
• The market responds to Russian aggression and COVID costs crimp Coles. Scott Phillips on Nine’s Late News
• Why Cochlear, Coles, Costa, and Monadelphous shares are racing higher

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 owns and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/fjStrzW

Today, the S&P/ASX 200 Index (ASX: XJO) avoided negative territory after its worst fall in 17 months yesterday. At the end of the session, the benchmark index finished 0.1% higher at 6,997.8 points.

Investors were torn in two directions today as the market unleashed a number of well-received company earnings, while the terror of Russia’s invasion of Ukraine raged on.

Surprisingly, it was the tech sector that aided in the positive performance across the Aussie index. Remarkably, every tech share in the ASX 200 finished in the green, putting the sector at an 8.14% gain.

The question is: which shares managed to stay in the green on the ASX today? Here are the top ten stocks that pulled through for investors:

Top 10 ASX shares countdown today

Looking at the top 200 listed companies, Paladin Energy Ltd (ASX: PDN) was the biggest gainer today. Shares in the uranium mining company charged ahead 12.41% after losses narrowed to US$11 million in the first half. Find out more about Paladin Energy here.

The next biggest gaining ASX share today was APM Human Services International Ltd (ASX: APM). The employment and health services provider experienced a 10.90% jump in its share price. Investors were reacting positively following its solid first-half result. Uncover the latest APM Human Services International details here.

Today’s top 10 biggest gains were made in these ASX shares:

ASX-listed company	Share price	Price change
Paladin Energy Ltd (ASX: PDN)	$0.77	12.41%
APM Human Services International Ltd (ASX: APM)	$2.95	10.90%
Liontown Resources Ltd (ASX: LTR)	$1.43	10.00%
Yancoal Australia Ltd (ASX: YAL)	$3.49	7.39%
Chalice Mining Ltd (ASX: CHN)	$7.40	7.25%
Telix Pharmaceuticals Ltd (ASX: TLX)	$5.19	7.23%
Lynas Rare Earths Ltd (ASX: LYC)	$9.57	6.93%
Imugene Ltd (ASX: IMU)	$0.235	6.82%
Home Consortium Ltd (ASX: HMC)	$6.45	6.61%
Nickel Mines Ltd (ASX: NIC)	$1.54	6.57%

Our top 10 ASX shares today countdown is a recurring end-of-day summary to ensure you know which companies were making big moves on the day. Check-in at Fool.com.au after the market has closed during weekdays to see which stocks make the countdown.

The post Here are the top 10 ASX shares today appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts this Friday
• Back on the horse! ASX tech shares stage stunning comeback following sell-off
• Magellan (ASX:MFG) share price slips 6% as funds continue mass exodus
• ASX 200 (ASX:XJO) midday update: Block rockets, Blackmores sinks
• Paladin (ASX:PDN) share price soars 14% on ‘strong cash position’

Motley Fool contributor Mitchell Lawler owns Lynas 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 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.

from The Motley Fool Australia https://ift.tt/y5Rk1LF

ASX lithium shares may be hot at the moment, but which is the best value on the market?

Two ASX lithium shares that reported earnings recently are Pilbara Minerals Ltd (ASX: PLS) and Mineral Resources Limited (ASX: MIN). The Pilbara share price finished 4.58% in the green today, while Mineral Resources climbed 2.54%

So which of these top lithium shares does one expert recommend?

Which lithium stock is best?

ASX lithium shares are popular right now due to surging demand and tight supply, with lithium a critical component in electric vehicle (EV) batteries.

Speaking with livewire yesterday, Eley Griffiths Group analyst and portfolio manager Tim Serjeant gave some clues to the best ASX lithium shares to buy.

Which is the cheapest lithium stock in the market? Look, it’s how adventurous you want to be.

I think today, [Pilbara] has the best exposure to current pricing dynamics… it is incredibly challenging to bring these assets into production. And I think that reinforces the positions of the incumbents. 

Pilbara Minerals reported its half-year financial results to the market this week, while Mineral Resources presented its financial results on 9 February. Pilbara reported an underlying profit after tax of $84.2 million and the shock exit of its CEO. Meanwhile, as my Foolish colleague James reported, the half-year results presented by Mineral Resources fell short of expectations.

One to buy, one to hold, says expert

Serjeant recommends shareholders buy Pilbara, and hold Mineral Resources, saying:

I think in the shorter term, [Pilbara] is a clean 100% exposure to that raw material shortage in lithium, through spodumene. For me, given the pricing backdrop, I think in the shorter term that’s probably where you want to be.

[Mineral Resources] is a hold today but their position in the value chain — being further downstream — means there is a lot of embedded growth to come over the next three to five years. 

Serjeant said he did not believe there was enough incentive to take risks with emerging ASX lithium shares compared to six to nine months ago.

However, he noted that Core Lithium Ltd (ASX: CXO) and Liontown Resources Limited (ASX: LTR) may be worth considering if the bigger players underperformed.

That said, I think the lithium industry is going to prove that you want to back one of the incumbents as opposed to backing smaller players outside of that. That’s how I expect it will play out.

How have these ASX lithium shares been performing?

The Pilbara share price has soared 151% in the past year, while Mineral Resources has surged nearly 13%.

In comparison, the benchmark S&P/ASX 200 Index (ASX: XJO) has climbed 2.4% in the past year.

Year to date, Pilbara has plunged 14%, while Mineral Resources has tumbled about 20%.

The post Is this the best-value ASX lithium share right now? appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts this Friday
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• How have ASX lithium stocks been faring this reporting season?
• These 3 ASX 200 shares are topping the volume charts this Wednesday
• Pilbara Mineral (ASX:PLS) share price sinks 7% amid half-year results and CEO exit

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/WrBaDN7

The Tesserent Ltd (ASX: TNT) share price surged by 15% today after the cybersecurity provider released its half-year results.

The company reported increases in earnings and revenue, alongside the induction of three acquired businesses.

At the market close, the Tesserent share price was up 15.38% at 15 cents. To compare, the S&P/ASX 200 Information Technology Index (ASX: XIJ) closed up 8.14% today.

So what did the IT company report to make its share price skyrocket?

Tesserent share price surges on rise in earnings, revenue

The Tesserent share price surged today on the back of the half-year results for the period ending 31 December 2021. Key takeouts included (against the prior corresponding period):

• Normalised earnings before interest, taxes, depreciation and amortisation (EBITDA) up 102% to $5.6 million
• Turnover up 72% to $62.9 million
• Statutory revenue up 52% to $43.9 million

All in all, the company’s annual recurring revenue increased by 44%, though no dividend was declared for the half year.

What else happened?

During the half, Tesserent underwent a branding and integration facelift — remodelling the company as “a single customer-facing brand”.

Further, the IT company completed the acquisitions of three businesses — Loop Secure, Clarinet, and Pearson Corporation.

In order to fund these takeovers and “strengthen the balance sheet”, the company successfully completed a $25 million capital raise during the period.

This has led to organic growth and a higher turnover, Tesserent said.

What did management say?

Commenting on the results that boosted the Tesserent share price today, executive chairman Geoff Lord:

The management team successfully executed its brand and business unit integration strategy – strengthening Tesserent’s commercial position in the market by enabling the Group to enhance its value proposition to existing and new clients and improve gross margins and net margins reported across the business.

Given the significant events that are occurring in eastern Europe, we are also mindful of the heightened level of cyber security risk that exists for Tesserent clients. We note that Tesserent has targeted capabilities to address these risks in its Cyber Enhanced Situational Awareness and Response (CESAR) capabilities.

Tesserent share price snapshot

In the last 12 months, the Tesserent share price has dropped by 54%. It saw a 52-week high price of 33 cents at the end of July, after releasing a quarterly report for the period ending 30 June 2021. However, Tesserent shares hit a 52-week low of 13 cents just yesterday.

Tesserent shares have fallen 12% this year to date and 6% over the past month.

The company has a market capitalisation of $163.56 million.

The post Tesserent (ASX:TNT) share price rockets 15% as earnings, revenue soar appeared first on The Motley Fool Australia.

More reading

• Back on the horse! ASX tech shares stage stunning comeback following sell-off

Motley Fool contributor Alice de Bruin 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/TVD8acb

Inflation keeps rearing its ugly head amongst investor circles this year and that’s got both individual investors and money managers planning to tackle the worst in 2022.

Whilst the core level of inflation seems to be faring better in Australia than other jurisdictions, the situation isn’t nearly as glossy when factoring in all components of the consumer price basket.

Not only inflation, but the topic of interest rates is one of hot debate right now, as investors try to navigate the next moves of central banks in anticipation of a number of rate hikes in 2022.

The volatility has crept over into the Australian treasuries market, the benchmark equity index being the S&P/ASX 200 index (ASX: XJO) and AUD/USD forex rates, as seen on the chart below.

Alas, what is there to do in these pressing times, to counteract the dark forces of inflation and establish a reasonable hedge to the regime?

What about QBE shares as a hedge to inflation?

Firstly, there needs to be some distinction on what we actually mean here. An inflation hedge can act as so in a few ways.

Most commonly, this is either by producing a ‘real rate of return’ (i.e, adjusted for inflation) that outpaces the level of aggregate price growth in the economy. If inflation is at 2%, say, then we want assets that produce a real return of at least 4%, for instance as a reasonable hedge.

The other way to look at it is in the correlation, or directional relationship, in how an asset class performs in times of high or low inflation.

This can boil down to a myriad of factors, not in the least related to asset class, investment style and/or, in the case of equities, the company backing stock itself.

Take insurance giant QBE Insurance Group Ltd (ASX: QBE) for instance. It lies within the insurance industry, one that is highly sensitive to small changes in interest rates.

Let’s also remember that the Reserve Bank of Australia (RBA)’s main weapon in targeting headline inflation is its influence over interest rates in the economy.

Whilst the RBA doesn’t touch commercial or consumer-level rates directly, it makes adjustments to the cash rate to do so, producing an impulse effect in the credit markets.

In a nutshell, when inflation rises, the RBA will seek to push interest rates higher to increase the costs of credit, and (hopefully) compress the level of price increases seen throughout the economy. The opposite is true when inflation stalls.

As the RBA looks well poised for a few rate hikes in 2022–23′, according to many economists, insurance shares like QBE might be well placed to benefit from the change.

That’s what Lazard Asset Management portfolio manager Aaron Binsted said when speaking with Livewire recently, noting the insurance giant could be a major benefactor to an increase in rates.

Binsted estimates that for every 25 basis point jump in average interest rates, QBE’s earnings are set to lift dramatically – with earnings per share (EPS) as high as 5-6% from that jump.

In other words, QBE’s earnings are sensitive to changes in the interest rate cycle and could offer a return that is tied to a spike in rates – something most companies don’t enjoy the luxury of.

Binsted might be onto something too, as, at a quick glance, when charting the three datasets of inflation year on year change, Australian interest rates and QBE shares together over the last decade, the dispersion is remarkably similar, as seen below.

QBE shares gained 24% over the last 12 months and have climbed a further 4% this year to date to now trade near 52-week highs.

The post Should you buy QBE (ASX:QBE) shares as an inflation hedge? appeared first on The Motley Fool Australia.

More reading

• 3 ASX 200 value shares to buy for higher inflation: fundie
• Banking on the QBE (ASX:QBE) dividend? Here’s what you need to know
• Leading brokers name 3 ASX shares to buy today
• Why Fortescue, Goodman, Inghams, and QBE shares are dropping
• ASX 200 (ASX:XJO) midday update: QBE sinks but Magellan rockets

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/zLOjY76