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The Seven West Media Ltd (ASX: SWM) share price is sinking after a strong start to today’s session. It’s currently down 5.41% at 70 cents, having shot up 5.4% to 78 cents at market open.

Seven West shares closed yesterday at 74 cents.

It comes after the ASX media conglomerate released its financial results for the half-year ending 25 December (H1 FY22). Below we take a look at the highlights.

Seven West share price falls despite strong results

• Group revenue of $819.5 million, up 27.2% on the prior corresponding period
• Earnings before interest, tax, depreciation and amortisation (EBITDA) of $215.3 million, up from $164.9 million in H1 FY21.
• Underlying net profit after taxes (NPAT) of $128.7 million, up from $87.1 million year-on-year
• Underlying earnings per share (EPS) of 8.4 cents, up from 5.7 cents in the prior corresponding half-year.

What else happened during the half-year?

The Seven West share price is slipping despite the company reporting it took the No. 1 spot in broadcast television. Additionally, 7plus was first in broadcaster video on demand (BVOD).

The TV advertising market was described as “robust”, with a 13% year-on-year increase in metropolitan TV advertising, a 7.2% increase in regional advertising, and BVOD advertising increasing by 58%.

Driven by strong digital growth in the metropolitan TV advertising market and the growth of 7plus, net debt during the half-year was cut by $212.4 million to $116.7 million as at 25 December.

Regarding the group’s Seven West Ventures, Seven West Media’s CEO James Warburton said:

Seven West Ventures has strong momentum, completing six investments in the period, including four new companies with large addressable markets. The investments are predominantly via media for equity which can be supercharged by SWM’s assets. The portfolio value increased 56% to $87 million in the period.

What did management say?

Commenting on the half-year results, Warburton said:

This result reflects the successful execution of our strategy over the past 30 months… We have completed the acquisition of the assets of Prime Media Group, which unlocks an unrivalled opportunity for the business to capture a greater share of the $3.8 billion total television market.

The balance sheet has been significantly strengthened over the past 18 months, with leverage now at 0.9x net debt/EBITDA on a pro-forma basis after the acquisition of Prime. The Board will assess capital management options during the second half to further enhance shareholder value.

We had an amazing start to the financial year with the Olympic Games Tokyo 2020, which was the biggest television and streaming event in Australian history.

What’s next?

The Seven West share price is struggling despite the company upgrading its full-year group EBITDA guidance to $315 million-$325 million (including $10 million second-half contribution from Prime).

Management noted that the strong performance of the television and BVOD advertising markets witnessed in the first half are continuing into the second half-year.

Seven West share price snapshot

The Seven West share price has gained 44% over the past 12 months. That compares to a gain of 5% posted by the S&P/ASX 200 Index (ASX: XJO).

So far in 2022, Seven West shares are up almost 12%.

The post Seven West (ASX:SWM) share price heads south despite soaring earnings appeared first on The Motley Fool Australia.

More reading

• 4 reasons to buy these ASX media shares this month: UBS
• 2 cheap ASX 200 shares rated as top buys

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.

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Property management company and REIT Dexus Property Group (ASX: DXS) today announced its results for the half year ended 31 December 2021.

At the time of writing, shares in Dexus are rangebound from the open and are trading less than 1% in the red at $10.14 apiece.

Dexus share price steady as profits, rent collection grows

The company advised on several investment takeouts this half, including:

• Net profit after tax (NPAT) of $803.2 million, up 82% year on year (YoY)
• Adjusted Funds from Operations (AFFO) of 28.1 cents per security, down 2.4%
• A distribution of 28 cents per security, down 2.8% YoY, primarily driven by lower trading profits of $21.6 million (post tax) in HY22
• Rent collections remained strong at 97.9%
• Gearing remains conservative at 31.1%
• $1.6 billion of cash and undrawn debt facilities
• High occupancy of 95.1% for the Dexus office portfolio and 98.6% for the Dexus industrial portfolio
• Raised $1.3 billion of new equity across existing funds since 30 June 2021

What else happened this half for Dexus?

The key takeout was Dexus carrying $803.2 million through to NPAT for 1H FY22. This represents an increase of $362 million, or 82% on the same time last year.

Dexus notes the gain was underscored by “net revaluation gains of investment properties of $486.2 million, which were $341.5 million higher than the previous corresponding period”.

The REIT also saw a valuation uplift on 124 of its office, industrial and healthcare assets. This resulted in a valuation increase across the industrial portfolio of 9%. Meanwhile, the office portfolio increased 1.1% on prior book values “on the back of leasing success at some assets”.

As a result, valuation gains across the total property portfolio this half resulted in a 3.1% gain in net tangible asset (NTA) per security to $11.77.

Furthermore, Dexus’ total property portfolio weighted average capitalisation rate decreased 0.15% over the past six
months to 4.76%.

The amount of profit carried through to Dexus’ bottom line enabled its board to approve a distribution per security of 28 cents, although this was down roughly 3% YoY. The company notes this is mainly due to “the amount of trading profits in the first half of FY22 being lower than those in the first half of FY21, as well as higher maintenance capital expenditure and incentives”.

Even still, the distribution payout ratio remains in line with free cash flow in accordance with Dexus’s
distribution policy, the release notes.

Finally, Dexus integrated the funds of APN Property Group onto its platform, acquiring both Dexus Convenience Retail REIT (ASX: DXC) and Dexus Industria REIT (ASX: DXI) in the process.

Management commentary

Speaking on the announcement, Dexus Chief Executive Officer, Darren Steinberg said:

Despite impacts from the pandemic, it has been an active start to the year with growth in our funds management business, continued leasing activity, as well as new acquisitions and selective asset sales. This momentum demonstrates our continued focus on leveraging our platform capabilities to drive performance across our portfolio and in our third party funds.

Our strategy is to deliver superior risk-adjusted returns from high-quality real estate and seek opportunities that can deliver sustainable income streams while growing and diversifying our funds management business

What’s next for Dexus?

The release noted that Dexus maintains its guidance of “delivering distribution per security growth of not less than 2% for the 12 months ended 30 June 2022”.

It bases these forecasts on current COVID-19 expectations and “barring unforeseen circumstances”.

Also, two of its latest sales are expected to settle this year. The sale of 383 Kent Street, Sydney for net proceeds of $385 million is expected to occur in July 2022, whereas 140 and 150 George Street should settle in August with net proceeds of $155 million.

Dexus share price snapshot

In the last 12 months, the Dexus share price has climbed a little over 17%, although it has slipped 8% into the red so far this year.

The post Profit up 82%: Dexus (ASX:DXS) share price steady on active half year results appeared first on The Motley Fool Australia.

More reading

• Here are the latest broker updates from Macquarie. It’s not all pretty for ASX shares.

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.

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The ELMO Software Ltd (ASX: ELO) share price is pushing higher following the release of its half year results.

At the time of writing, the cloud-based HR and payroll software company’s shares are up over 3% to $4.02.

ELMO share price higher after delivering more strong growth

• Annualised recurring revenue (ARR) up 35% since the end of June to $98.3 million
• Revenue up 41% over the prior corresponding period to $43.1 million
• Cash receipts up 63% to $56.0 million
• Positive EBITDA of $0.3 million, up $0.9 million year on year
• Cash balance of $58.4 million at the end of December
• Reiterated recently upgraded FY 2022 ARR guidance of $107 million to $113 million

What happened during the first half?

For the six months ended 31 December, ELMO grew its ARR to $98.3 million. Management advised that this reflects strong trading conditions due to the increased adoption of cloud-software solutions by businesses to manage remote or hybrid workforces.

This led to ELMO’s midmarket business continuing to grow strongly. At the end up the period, its customers reached 3,281 and its segment ARR was up 31.4% over the prior corresponding period to $38 million. And while the midmarket gross margin softened to 84.2%, its churn levels improved to 9.3%. This translates into a net dollar retention of 103%.

ELMO’s small business solution, Breathe, grew rapidly and reported 10,232 customers and annualised ARR growth of 41%. Positively, management revealed that Breathe’s gross profit margin remains high at 89.4% and its ARR churn improved to 10%. This translates to a net dollar retention of 101%.

But perhaps the biggest positive is the operating leverage the company is achieving. This reflects its strong revenue growth and a reduction in key spend ratios across the business which has driven the positive EBITDA and reduced operating monthly cash burn by 36% year on year.

Management commentary

ELMO’s CEO, Danny Lessem, was pleased with the company’s solid half.

He said: “The ELMO Group has experienced strong growth in the first half of FY22. We are continuing to experience increased demand as more organisations adopt cloud-based technology to manage disparate workforces. The COVID-19 pandemic has accelerated the move to hybrid working which has in turn increased adoption by businesses of cloud-based systems to manage their people, allowing us to upgrade our guidance [on 1 February].”

“We launched two new modules to market in the half that respond to the changing nature of the workplace environment; COVIDSecure and Experiences. Our UK acquisitions are performing exceptionally well and provide a solid foundation to increase our market share in the region. We are on the cusp of surpassing the $100 million in ARR milestone and have solid momentum to continue this growth going into the second half of FY22.”

I was fortunate to have the opportunity to chat with Mr Lessem following the results release. They key takeaway from that chat is that demand for ELMO’s software is continuing to grow due to the hybrid working shift, which is only really getting started.

The CEO also highlighted that ELMO has high gross margins and a very large addressable market, which positions it to become a highly profitable company at scale.

Mr Lessem also notes that its cash balance of $58.4 million is expected to comfortably see ELMO through to breakeven in the not so distant future.

Outlook

Management has reiterated its recently upgraded FY 2022 guidance. It continues to forecast ARR of $107 million to $113 million (28% and 35% growth).

The company also expects positive EBITDA of $1.5 million to $6.5 million for the year.

The post ELMO Software (ASX:ELO) share price higher after reporting more stellar growth appeared first on The Motley Fool Australia.

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• 2 top ASX growth shares with compelling potential
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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 Elmo Software. The Motley Fool Australia owns and has recommended Elmo Software. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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.

What happened

Last week, in a short series of thrilling stock market sessions, a tiny, all-but-unknown Australian maker of electrical equipment — Tritium DCFC Limited (NASDAQ: DCFC) — rocketed to stock market stardom. President Joe Biden appeared to make Tritium the centrepiece of his $7.5 billion plan to build a nationwide network of electric vehicle charging stations, you see. And before you knew it, Tritium stock had exploded 130% higher.

But easy come, easy go. Just two days after its run higher began, Tritium stock lost all its momentum and proceeded to plunge. On Monday, that slump continued and, as of 11:35 a.m. ET, Tritium shares are down another 10.2%.

So what

On Friday, you see, after close of trading for the weekend, Tritium notified investors some shareholders may be preparing to cash in on those gains.  

Filing an F-1 statement with the SEC [Securities and Exchange Commission], Tritium advised that insider shareholders may be preparing to sell 115.4 million shares of stock that they already hold, as well as 8.4 million warrants that confer the right to buy 21.8 million more shares.

Now what

In short, there’s now the potential for more than 137 million shares of Tritium to soon flood onto the market and swamp demand for the stock, driving down share prices even more than they’ve already fallen.

Investors who’ve already seen almost all of their gains from last week washed away aren’t interested in waiting around for the next flood. They’re selling Tritium shares en masse. And given that Tritium is unprofitable and burning cash, and yet the stock still sells for a multiple of 25 times sales, I cannot say I blame them.

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

The post Why Tritium shares keep falling appeared first on The Motley Fool Australia.

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• Why Tritium shares dropped 15% today
• Zap! Tritium (NASDAQ:DCFC) share price rockets another 65%. What’s next?
• Tritium (NASDAQ:DCFC) share price rockets 39% on what Biden describes as ‘great news for the planet’
• Why did the Tritium (NASDAQ:DCFC) share price just leap 7%?
• Here’s how Tritium (NASDAQ:DCFC) has been performing since listing in the US

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

 

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

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The Adore Beauty Group Ltd (ASX: ABY) share price is racing higher on Tuesday following the release of its half year results.

In morning trade, the online beauty retailer’s shares are up 7% to $2.89.

Adore Beauty share price higher following further strong growth

• Revenue up 18% on the prior corresponding period (pcp) to $113.1 million
• Active customers increased 13% on the pcp to 876,000
• Returning customer growth of 56% on pcp
• Gross profit margin up 0.6 percentage points to 33.1%
• EBITDA of $3.8 million and EBITDA margin of 3.3%
• Cash balance of $25.1 million and no debt

What happened during the first half?

For the six months ended 31 December, Adore Beauty delivered record revenue, customer numbers, and multiple record trading days.

During the first half, Adore Beauty reported an 18% increase in revenue to $113.1 million and EBITDA of $3.8 million.

This was driven by a 13% lift in active customers to 876,000, returning customer growth of 56%, and a 5% increase in annual revenue per active customer to $224.

Management commentary

Adore Beauty’s CEO, Tennealle O’Shannessy, appeared to be pleased with the half.

She said: “Adore Beauty has delivered another strong financial result with record revenue, active customers and multiple record trading days, one of which was achieved postlockdown. Valuable returning customers were the key growth driver in H1 FY22, growing 56% on the prior period and delivering 71% of revenue. These loyal returning customers become more valuable the longer they are with us, increasing their basket size and order frequency every year they spend on our platform.”

O’Shannessy also revealed that Adore Beauty is faring better with its marketing spend than other ecommerce players thanks to its various marketing channels. This is allowing the company to focus on reinvesting in its business instead of extra marketing.

“Our owned marketing channels are also positively impacting marketing costs, which are trending significantly below industry inflation. We continue to re-invest in our longer-term strategic priorities, including private label, mobile app, loyalty and adjacency expansion, which support future outperformance and increase our market share within an $11 billion category benefitting from significant structural tailwinds,” the CEO explained.

Outlook

The second half has started positively for Adore Beauty. During the first six weeks of the half, the company’s revenue has grown 14% over the prior corresponding period.

Though, it has warned that there is ongoing uncertainty given the current COVID situation.

Looking ahead, Adore Beauty has reaffirmed its target to achieve an EBITDA margin of 2% to 4% in the short to medium term while reinvesting to drive above market growth. In the longer term, as the business grows, scale benefits are expected to increase operating leverage and deliver further EBITDA margin expansion.

Overall, management believes the company “is well positioned to capture market share in a large and growing market benefitting from structural tailwinds.”

The post You beauty! Adore Beauty (ASX:ABY) share price up 7% after record half year result appeared first on The Motley Fool Australia.

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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 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.

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It’s been well documented that there are some sensational bargains out there after the S&P/ASX 200 Index (ASX: XJO)’s 8% dip in January.

But which ones are value traps and which companies are truly ready to take off once the market roars back?

This week experts picked out 2 ASX shares in the latter category, recommending investors buy them right now for a party later:

Living, and travelling, with the virus

The Omicron variant of COVID-19 put a rude stop to the travel industry’s revival late last year.

But despite four-figure daily infection numbers still prevalent in NSW and Victoria, activity is starting to pick up again.

And out of all the ASX shares in the travel sector, Sequoia Wealth Management senior wealth manager Peter Day likes Corporate Travel Management Ltd (ASX: CTD).

“Corporate Travel Management has a higher than average level of exposure to essential and domestic travel,” he told The Bull.

“In future, the company is expected to generate higher market share than pre-COVID-19 levels.”

After falling as much as 22% off its November high, the stock price has already rocketed almost 13% in the last few days.

“Share price catalysts include borders reopening and the execution of a highly accretive acquisition in Helloworld Corporate,” said Day.

“Also, a lower cost base is anticipated. The balance sheet is strong and Corporate Travel Management has plenty of liquidity.”

The ASX share that loves interest rate rises

QBE Insurance Group Ltd (ASX: QBE) seems to be a “buy” favourite among analysts at the moment, as interest rates are anticipated to rise.

Burman Invest chief investment officer Julia Lee is one of the fans.

“QBE’s investment portfolio benefits when interest rates rise. And, the market is pricing in higher interest rates,” she said.

“Premium revenue has been growing. Margins have been increasing.”

It’s one of the few ASX shares that have risen this year, with the price up 6.5% since we sang Auld Lang Syne. The stock is up more than 14% just in February, to close Monday at $12.70.

Morgans has a price target of $14.32 with an “add” rating.

“We like the company’s outlook,” said Lee.

“QBE plans to report full-year results on February 18.”

The post 2 ASX shares to buy that are perfectly set up to rally appeared first on The Motley Fool Australia.

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• These were the best performing ASX 200 shares last week
• Own QBE (ASX:QBE) shares? Here’s what to watch when the insurer reports next week
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Motley Fool contributor Tony Yoo owns Corporate Travel Management Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Helloworld Limited. The Motley Fool Australia owns and has recommended Helloworld Limited. The Motley Fool Australia has recommended Corporate Travel Management Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Vulcan Energy Resources Ltd (ASX: VUL) share price is pushing higher on Tuesday.

In morning trade, the lithium developer’s shares are up 3% to $9.08.

What’s going on with the Vulcan share price today?

This morning Vulcan revealed that it will become the first ASX-listed company to have a dual listing on the regulated market of the Frankfurt Stock Exchange (FSE). This follows the submission of a dual listing application last week and the receipt of approval from the German Federal Financial Supervisory Authority (BaFin) today.

As a result of this approval, Vulcan’s ordinary shares are expected to trade on the FSE under the ticker “VUL” from 15 February 2022.

Why is this a positive?

Management believes this could be a positive for the Vulcan share price as it will provide European investors with easy access to it shares. And given that its Zero Carbon Lithium Project is based in Germany, investor interest could be high.

Vulcan’s Managing Director, Dr. Francis Wedin, commented: “An ASX first, the FSE dual listing will increase the international profile of Vulcan, while providing the full range of the European investment community an opportunity to invest in the Company and the Zero Carbon Lithium Project, which has a German base and plays a role in the EU energy transition.”

“The Prime Standard has the strictest levels of governance and reporting on the FSE, including additional regulatory obligations and increased transparency requirements. The robust requirements ensure Vulcan meets the highest calibre of corporate governance,” he added.

This news is the likely to have gone down well with analysts at Germany-based Alster Research.

In a recent note, it suggested that this listing could be a positive catalyst for the Vulcan share price, which it believes is significantly undervalued.

The broker said: “At this point, Vulcan has marketed its initial production volumes for the first 5-6 years. We expect the upcoming definitive feasibility study (DFS) to create some leeway. In the near term, we expect the admission to FSE as a catalyst for the stock, as future capital increases will be accessible to a broader audience. Thus, liquidity and interest will most likely increase. We confirm our PT of AUD 25.00, equivalent to EUR 15.81, and reiterate our BUY recommendation.”

The post Why is the Vulcan (ASX:VUL) share price charging higher today? appeared first on The Motley Fool Australia.

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• 2 ASX lithium shares with huge upside potential in 2022
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• Here’s why the Vulcan Energy (ASX:VUL) share price is climbing today
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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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Ansell Limited (ASX: ANN) share price is in the green on Tuesday after the company released its earnings for the first half of financial year 2022.

At the time of writing, the Ansell share price is $25.92, 0.64% higher than its previous close.

Ansell share price higher despite disappointing first half

• The company saw around US$1 billion of sales over the half year – a 7.6% increase on the prior comparable period
• Its earnings before interest and tax (EBIT) came to US$111 million – down 24.3%
• The company’s profits for the half year slipped 27% to US$77.6 million
• Ansell reported 60.6 US cents of earnings per share (EPS), representing a 26.5% drop
• Its operating cash flow came to US$22.1 million
• The company announced an interim dividend of 24.25 US cents per share – a 26% drop on its previous interim dividend

Over the 6 months ended 31 December 2021, the personal safety and protection equipment manufacturer saw its sales grow despite increased challenges.

The company’s improved EBIT margin came from sales growth and higher production volumes, as well as manufacturing efficiencies and selling, general, and administrative expenses operating leverage.

Its operating cash flow was weaker due to a drop in profitability, employee costs for financial year 2021, and an increase in working capital.

The company’s manufacturing operations in South East Asia were hit by COVID-19-induced lockdowns early in the half.

Following the lockdowns, the company found itself facing a labour shortage and logistical delays, contributing to increased backorders for some products.

Its 24.25 US cents interim dividend represents a payout ratio of around 40%, consistent with Ansell’s dividend policy.

It ended the first half with US$382.1 million in debt and US$182.9 million of cash and equivalents.

What else happened during the half?

The company’s healthcare global business unit’s sales for the first half came to US$632.1 million – 15% more than during the first half of financial year 2021. It saw organic growth in all its strategic business units.

The unit’s internally manufactured products saw volume growth.

However, its Exam/Single Use unit outsourced products’ sales volumes dropped due to increased supply and third parties apparently reducing inventory levels.  

The healthcare global business unit’s EBIT fell 36.6% over the half, with margins dropping 820 basis points to 10.1%.

Selling high-cost inventory from outsourced suppliers at lower margins, COVID-19 related manufacturing disruptions, higher freight costs, and the company’s share of loss from Careplus joint venture were key drivers for EBIT margins’ fall.

Meanwhile, Ansell’s industrial global business unit saw US$377.1 million of sales over the half – 2.8% lower than the prior comparable period.

The business’ Mechanical unit grew 3.2% while its Chemical unit’s growth slumped 10.9%.

What did management say?

Ansell managing director and CEO Neil Salmon commented on the half year just gone, saying:

Ansell’s [financial year 2022] first half results were delivered in a challenging external environment…

Even in this challenging and complex operating environment we have made significant progress against the most important longer-term drivers of value creation. We are seeing strong interest in new products that address important unmet safety needs, we are winning new customers for our more differentiated product lines, and we are seeing continued strong growth in emerging markets.

Sales growth was encouraging across most of our portfolio as we successfully executed on our long-term strategic plans.

Surgical and Life Sciences grew above market rates showing the benefit of some important new business wins.

Mechanical achieved respectable growth in a mixed industrial demand environment, delivering very strong results in emerging markets and success with new products.

What’s next?

As market watchers might have noticed, Ansell dropped its financial year 2022 guidance late last month to the detriment of its share price.

It now expects to provide between 125 US cents and 145 US cents of EPS for financial year 2022.

That assumes sales growth for its Industrial and Surgical and Life Sciences businesses for the second half due to higher production and a seasonal sales increase.

It also assumes that the company’s Exam/Single Use unit will see a drop in sales in the second half but that its prices will stay above pre-COVID-19 levels.

Finally, it assumes outsourced supplier costs will continue to fall.

Ansell share price snapshot

The Ansell share price has tumbled into 2022.

It has fallen 21% year to date. The drop can mostly be attributed to the 14% plunge experienced after the company downgraded its guidance.

The Ansell share price is also 32% lower than it was this time last year.

The post Ansell (ASX:ANN) share price gains despite profits tumbling 27% in ‘challenging’ half appeared first on The Motley Fool Australia.

More reading

• These were the worst performing ASX 200 shares last week
• Down 20% in 2022, is the Ansell (ASX:ANN) share price a bargain buy?
• Why Amcor, Ansell, Block, and Credit Corp shares are sinking today
• Ansell (ASX:ANN) share price falls again amid broker upgrade
• How will ASX shares perform this earnings season? Experts explain what to look for

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 Ansell Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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.

What happened?

Today’s price action in the crypto world has been relatively muted, following the highly anticipated “Crypto Bowl,” which saw many cryptocurrencies take center stage at yesterday’s Super Bowl. Two of the key tokens investors were watching on the advertising slate were Dogecoin (CRYPTO: DOGE) and Crypto.com (CRYPTO: CRO) Coin. Unfortunately for investors, as of 12:20 p.m. ET, these tokens were down 3.9% and 5.8%, respectively.

Dogecoin initially ran higher heading into the Super Bowl, with fans expecting some sort of positive announcement from McDonald’s about the potential for Dogecoin to be accepted as payment. This speculation was spurred by previous tweets between the iconic fast-food franchise and Dogecoin supporter Elon Musk. However, no such announcement came.

For Crypto.com Coin, an ad featuring LeBron James piggybacked on a previous partnership initiative for Web3 development education. That said, investors appear to have wanted to see more.

Metaverse-related crypto project The Sandbox (CRYPTO: SAND) also sunk 1.3% over the past 24 hours as of 12:20 p.m. ET, as investors shrugged off a high-profile partnership announcement with Hong Kong-based entertainment resort developer Ocean Park.

So what?

This year’s Super Bowl has been often referred to as the “Crypto Bowl” in a similar fashion to the “Dot-Com Bowls” of the past. Investors looking for exciting speculative catalysts were watching eagerly yesterday, looking to trade these tokens, which happen to be open for trading 24/7.

For a number of tokens such as Dogecoin, a lack of news flow, despite various teases that suggested a crypto partnership with McDonald’s could be in the books, took this token on a volatile ride lower immediately during the game. Crypto.com Coin followed suit, while other high-risk, high-upside cryptocurrencies like The Sandbox dipped in sympathy before recovering most of these losses.

The bar was seemingly set very high for these cryptocurrencies, with any sort of previously priced-in enthusiasm being sucked out of the market in short order.

Now what?

The price action for these three tokens has been interesting to watch over the past 24 hours. Specific tokens that saw outsized hype heading into yesterday’s game have underperformed many other top cryptocurrencies, which are actually trending higher today. As a matter of fact, the entire crypto sector has moved 0.9% higher over the past 24 hours, as of 12:20 p.m. ET.

Thus, perhaps the rotation away from more speculative, catalyst-driven tokens into more stable, “established” cryptocurrencies is still underway. It’s also unclear as to whether investors believe that sustained hype can drive valuations of certain meme tokens higher on a consistent basis, as in previous rallies last year. 

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

The post What did ‘Crypto Bowl’ ads do for these tokens? appeared first on The Motley Fool Australia.

More reading

• 2 reasons Shiba Inu and Dogecoin are soaring this weekend
• Why Dogecoin and these other cryptocurrencies surged more than 10% today
• Down 81% since May, can the Dogecoin price go to zero?
• What? 2 days of gains for Bitcoin, Ethereum, and Dogecoin?
• Bitcoin (CRYPTO:BTC) takes most popular crown, here are 3 cryptos hot on its heels

Chris MacDonald 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.

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

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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.

Payment and digital banking company Block (NYSE: SQ) has struggled over the past several months, falling nearly 60% from its all-time highs as of Monday’s prices. Investors have soured on the stock, flocking to more defensive companies; meanwhile, tech giant Apple‘s (NASDAQ: AAPL) decision to launch iPhone payment terminals, becoming a direct competitor with the Square seller ecosystem, could be making sentiment worse.

A company’s path is not always smooth or straightforward, and understanding the difference between fundamental problems and temporary distractions is key to identifying good buying opportunities. Is Block a broken stock or a broken company? Here are three key points to consider when considering Block shares.

1. Digital banking through Cash App

When boiled down to its most simple form, Block’s business makes it simple to move money between people and merchants. For merchants, the seller ecosystem has grown from a payment terminal into an all-in-one hardware and software package that merchants can use to run their businesses.

However, Cash App has emerged on the consumer side; what started as a simple app for peer-to-peer payments, like “Hey, send me $10 for pizza last night,” has steadily involved into a feature-rich app capable of handling the majority of your financial needs. Users can now deposit checks, buy stocks and Bitcoin (CRYPTO: BTC), and order the Cash Card, a debit card that draws from your Cash App balance, like any bank card.

In its most recent quarter, Cash App generated $512 million in gross profit, a 33% year-over-year increase. The company focuses on gross profit instead of revenue because Bitcoin trade volume inflates revenue but adds almost no gross profit to the business. According to data tracking company App Annie, Cash App’s momentum appears strong; it was a top 10 smartphone app in the US in 2021.

Cash App is disrupting banking, creating digital tools for its users to manage their money. Block benefits from lower customer acquisition costs because there are no buildings to manage or staff to pay. Traditional banks still control most consumer wealth, but Block’s younger users could mean more market share for the company over time. It opened the app up to users aged 13-17 in 2021.

2. Square seller ecosystem versus Apple

Apple made headlines by announcing that merchants could soon use their iPhones as payment terminals, but how much of a threat is this to Block? Nobody will know for sure until it plays out over future quarters, but I suspect it won’t be as significant a threat as one might think.

Consider the value that the Seller ecosystem has today. The payment terminal itself is a small piece of the value that Block has built. Frankly, it’s not the payment terminal that’s the secret sauce. Instead, it’s the many tools Block offers through the Seller platform, including point-of-sale, inventory management, marketing, gift cards, loyalty programs, banking, and more.

There’s so much that the ecosystem can do that it probably doesn’t make sense for many merchants beyond the most basic to leave it in favor of Apple’s payment terminal. Apple could always prove otherwise, and perhaps its tap-to-pay gains serious traction, but I’m willing to give Block the benefit of the doubt for now.

3. Afterpay could drive growth moving forward

The negativity surrounding Block has washed away much of the positivity around its acquisition of buy now, pay later company Afterpay, which recently closed. Block’s wasted no time rolling out features, including adding buy now, pay later features to its Seller ecosystem and plans to integrate it with Cash App too.

Afterpay already had roughly 98,000 merchants on its platform, selling to more than 16 million active users. Sales on Afterpay, the value of transactions on the platform, grew 102% to $22.4 billion in 2021, generating $693 million in net revenue for the company. Afterpay also gives Block more international exposure; the company has a large footprint in Australia, North America, and a presence in the United Kingdom.

According to Allied Market Research, the buy now, pay later industry could grow more than 40% per year to reach nearly $4 trillion in transaction volume by 2030. Afterpay gives Block direct exposure to this growth, both as a stand-alone buy now, pay later business and as a tool for bringing potential new users into the Seller and Cash App ecosystems.

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

The post 3 things the doubters could be missing about Block shares appeared first on The Motley Fool Australia.

More reading

• There’s a new kid on the Block (ASX:SQ2), but how does it make money?
• ASX falls almost 3% More on the way?
• Block (ASX:SQ2) shares are now trading on the ASX
• 5 things to watch on the ASX 200 on Thursday
• Nick Molnar and Anthony Eisen will say goodbye to their Afterpay (ASX:APT) shares tomorrow. What will they be left with?

Justin Pope has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Block, Inc and Bitcoin. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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