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The S&P/ASX 200 Index (ASX: XJO) has continued to power ahead this Wednesday so far with another healthy gain. At the time of writing, the ASX 200 is up a robust 1.3% at 7,098 points, rising steadily for most of the day

So let’s dig a little deeper and check out the ASX 200 shares that are currently at the top of the ASX 200’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Wednesday

Telstra Corporation Ltd (ASX: TLS)

Telstra is the first ASX 200 share worth taking a look at today. This telco has seen a hefty 13.9 million of its shares bought and sold so far this Wednesday. This might have something to do with the announcement Telstra made this morning. As we covered earlier, the company has gazetted two new infrastructure programs, a satellite system and a new ‘dual’ fibre network. Amid this announcement, the Telstra share price has risen strongly today, currently up 1.4% to $4 a share. It’s this combination that has probably earned Telstra its place on this list today. 

Pilbara Minerals Ltd (ASX: PLS)

Lithium share Pilbara is next up this Wednesday. The ASX 200 resources company has had a sizeable 15.01 million of its shares swap hands thus far today. There’s not much in the way of news out of Pilbara today. However, the company has been the beneficiary of some broker love, as my Fool colleague James covered this morning. The Pilbara share price is also enjoying some pleasing gains today. It’s presently up a meaty 4.3% at $3.40 a share. It’s probably this combination that has helped Pilbara experience such high trading volumes.

BHP Group Ltd (AS:X BHP)

Our final and most traded ASX 200 share today is none other than the mining giant BHP. The Big Australian’ has had an impressive 17.08 million of its shares traded on the markets thus far this Wednesday. BHP shares have had a solid day on the ASX today, rising by 1.8% to $45.74 a share. However, it’s likely that BHP’s unification is also lending a hand to this trading volume. This week, BHP ended its London listing, which resulted in millions of LSX-listed shares being relocated to the ASX. This might be why we are finding BHP at the top of the volume tables today. 

The post These 3 ASX 200 shares are topping the volume charts on Wednesday appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
• Why Aussie Broadband, BrainChip, Talga, and Telstra shares are pushing higher
• Oil prices are at an 8-year high, so why isn’t the Woodside (ASX:WPL) share price?
• ASX 200 (ASX:XJO) midday update: Amcor slides, BHP and Fortescue storm higher
• Telstra (ASX:TLS) share price climbs on new $1.6 billion ‘nation-building’ projects

Motley Fool contributor Sebastian Bowen owns 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 owns and has recommended Telstra Corporation 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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Key points

• The Flight Centre share price has gained 10.56% in a week
• Flight Centre shares up 1.38% in today’s trade
• International border reopening hope is helping ASX travel shares

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The Flight Centre Travel Group Ltd (ASX: FLT) share price is flying high this week, taking off since Australia Day.

The travel company’s shares are up 10.56% since market close on 25 January. In today’s trade the Flight Centre share price is up 1.38%, swapping hands for $17.58 at the time of writing.

Let’s take a look at what could be impacting this ASX travel share.

What’s been happening at Flight Centre?

Flight Centre shares may be ascending, but they are not the only ASX travel share on the rise.

Since market close on 25 January, Qantas Airways Limited (ASX: QAN) shares have risen 7.83%. And the Webjet Limited (ASX: WEB) share price is soaring 8.84% in the same timeframe.

Meanwhile, Corporate Travel Management Ltd (ASX: CTD) has climbed 5.46%, and Helloworld Travel Ltd (ASX: HLO) has leapt 11.16% in that time.

Flight Centre and ASX travel shares appear to be on the rise on the back of positive news on the international border.

Prime Minister Scott Morrison provided hope international borders may be open before Easter. He made the comments during a visit to Cairns on Friday.

In an interview with 4CA, Mr Morrison said:

I look forward to international visitors more broadly, tourists coming back.

And that’s our next, that’s our next hurdle. And we’re working away to just get the timing of that right, and I don’t think it’s too far away.

… I’d like to see us get there soon, certainly before Easter, well before Easter.

Meanwhile, the Australian Tourism Export Council has weighed into the debate on borders today, stating international closures are “no longer a viable or sensible approach”.

Managing director Peter Shelley said:

Given every person arriving in Australia has to be fully vaccinated and tested, there simply is no greater health risk which would result from reopening our international borders – rather it would provide a huge relief to an already burdened and struggling tourism sector.

The hermit kingdom approach to protecting our borders is no longer viable and we need urgent clarity from the government on when we can welcome international visitors.

What’s the outlook for Flight Centre?

Citi has lowered its price target for the Flight Centre share price, News Corp reported yesterday.

Commenting on his outlook for Flight Centre shares, Citi vice president and analyst Sam Seow said:

Our cautiousness on Flight Centre increases as cash burn appears to have increased during this (Omicron) period and it appears to be getting closer to debt covenants.

Meanwhile, my Foolish colleague James recently reported Flight Centre is the most shorted share on the ASX.

Share price recap

The Flight Centre share price has surged 21% in the past 12 months but is down 0.23% year to date.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has gained nearly 5% in the past 52 weeks.

The company has a market capitalisation of about $3.5 billion based on the current share price.

The post Why has ASX travel share Flight Centre (ASX:FLT) lifted 10% in a week? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Are Virgin Australia shares set to rejoin the ASX soon?
• When will Flight Centre (ASX:FLT) pay a dividend again?
• The Flight Centre (ASX:FLT) share price just hit a 5-month low. Is now the time to buy?
• These are the 10 most shorted ASX shares

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, Flight Centre Travel Group Limited, and Webjet 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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Key points

• The Webjet share price is still nearly 40% lower than it was before the pandemic began. That’s despite the broader market having arguably recovered
• However, light might have appeared at the end of the tunnel. The prime minister has seemingly flagged the end to many of Australia’s border restrictions
• International travellers from much of the world could be holidaying in Australia before Easter

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Australia’s COVID-19 response has been a flurry of movement lately, but many travel shares like Webjet Limited (ASX: WEB) are still caught up in border chaos.

Now, an industry body is calling for international border restrictions to end. Simultaneously, the prime minister has signalled the government’s intent to open up as soon as possible.

At the time of writing, the Webjet share price is $5.17. That’s 39% lower than it was at the end of January 2020, just weeks before Australia’s international borders slammed shut to travellers in the wake of the COVID-19 pandemic.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently 1% higher than its final close of January 2020.

Australia’s international borders could soon be back to normal

The Webjet share price could be in for a boost in the near future as prime minister Scott Morrison reportedly said he’s “cautiously optimistic” about allowing all travellers back into Australia.

According to reporting by the Guardian, the prime minister told a press conference today he’s called on health officials to provide advice on the impact that opening the nation’s borders could have on the hospital system.

It was only days ago Morrison commented that the government hopes to welcome all international visitors back “well before Easter”. He told Cairns radio station 4CA:

[W]e’re just watching how Omicron is sort of washing over the eastern states at the moment, but with Omicron peaking, that then starts opening up opportunities… we’ve already got those backpackers and students coming back and we’re seeing arrivals now back into the country, you know, going back up very, very quickly.

But tourism and health bodies are calling for a faster restart to tourism.

The Australian Tourism Export Council (ATEC) released a statement today saying Australia’s border restrictions are “no longer a viable or sensible approach”. It said their unnecessary closure is impacting the recovery of industries including tourism, hospitality, and farming.

The body is calling for the federal government to announce a reopening date. ATEC managing director Peter Shelley stated:

Given every person arriving in Australia has to be fully vaccinated and tested, there simply is no greater health risk which would result from reopening our international borders, rather it would provide a huge relief to an already burdened and struggling tourism sector.  

Meanwhile, the World Health Organisation recommended nations remove travel bans last week. It argues they “do not provide added value and continue to contribute to the economic and social stress” during Omicron outbreaks.

Webjet share price snapshot  

Right now, the Webjet share price is flat with its final close of 2021.

Though, it is 2.5% higher than it was this time last year.

The post Could the Webjet (ASX:WEB) share price be about to get a boost? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Is February 2022 the time to buy these 2 beaten-up ASX shares?
• Are Virgin Australia shares set to rejoin the ASX soon?
• What might the WA border closure mean for the Webjet (ASX:WEB) share price?
• These are the 10 most shorted ASX shares

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 Webjet 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

ARB Corporation Limited (ASX: ARB)

According to a note out of Citi, its analysts have retained their buy rating and lifted their price target on this 4×4 parts manufacturer’s shares to $57.00. This follows the release of its first half trading update which outperformed Citi’s estimates. Looking ahead, the broker is positive on ARB’s medium term outlook. It notes that the company has significant medium-term growth drivers including its partnership with Ford, distribution gain opportunities in the US, and opportunities to expand in Europe. The ARB share price is trading at $46.86 this afternoon.

ELMO Software Ltd (ASX: ELO)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $7.80 price target on this HR technology company’s shares. This follows the release of a first half trading update which revealed a strong rebound in demand for its offering. In addition, the broker was pleased to see ELMO’s cash burn reduce and its recurring revenue guidance increased. The ELMO share price is fetching $4.19 today.

Pilbara Minerals Ltd (ASX: PLS)

Analysts at Macquarie have retained their outperform rating and $3.70 price target on this lithium miner’s shares. Pilbara Minerals fell short of Macquarie’s production expectations during the second quarter due largely to labour shortages. As a result, it suspects a guidance downgrade is coming with its half year results. However, this is only expected to be temporary. Furthermore, offsetting this bad news was higher lithium price expectations for the second half. The Pilbara Minerals share price is trading at $3.41 today.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares this Tuesday
• Leading brokers name 3 ASX shares to sell today
• Here’s why the Elmo (ASX:ELO) share price is surging 9% today
• ASX lithium shares in focus amid potential supply squeeze
• ARB Corporation (ASX:ARB) share price goes into overdrive, up 9% on revenue surge

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 Australia has recommended ARB Corporation 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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Key points

• Almost every Australian has some awareness of crypto
• At least 25% of Aussies trust digital currencies 
• 40% expect to own crypto in the next 5 years

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2022 hasn’t been off to the greatest start for crypto investors.

The world’s top crypto by market cap, Bitcoin (CRYPTO: BTC) is down 20% since 1 January. The Bitcoin price currently stands at US$38,231 (AU$54,466).

Ethereum (CRYPTO: ETH) has been doing it even tougher. The Ethereum price is currently at US$2,685. That’s down 29% so far in 2022.

But according to a new survey commissioned by Australian cryptocurrency exchange CoinSpot, that’s unlikely to deter millions of Aussies from investing in crypto over the coming years.

What did the CoinSpot Crypto Awareness Survey reveal?

Among its key findings, the survey revealed that Australians’ awareness of crypto assets has hit 97%.

Along with increased awareness, “trust, ownership, risk appetite and legitimate investing for wealth building” all increased down under, with some strong growth witnessed among older cohorts.

While still a minority, 22% of respondents said they’d bought, sold, swapped or traded crypto over the last 4 years.

As for trust, 27% of Aussies said they trust crypto completely, “especially when it comes to navigating financial and economic concerns” and hedging against inflation. Adding to that, 42% said they think the risks of digital assets will decrease over time and that they’ll become more widely accepted.

The number of respondents saying they expect to own crypto in the next 5 years reached 43%. That figure has more than doubled since 2020, when only 20% had the same expectations.

Not just for fun anymore

Another big shift among respondents came around the question of whether they were investing for enjoyment, with 10% fewer saying this was the case than in June 2021. Since then, 8% more Aussie investors said they’re investing in crypto for business and 6% more are employing it for personal use.

Additionally, 55% said they invest with a long-term focus. And some 40% are “willing to accept moderate to high levels of financial risk” when investing in crypto.

Generation X joining in the crypto charge

Some of the biggest changes in responses since 2020 came from those belonging to Generation X.

Awareness of digital tokens (knowing a “fair bit” or a “little bit”) among this cohort increased from 34% in 2020 to 61% in the 2022 survey.

Trust among the Gen X group also increased markedly, up from 46% in 2020 to 61% today.

Commenting on the survey results, Tim Wilks, marketing executive at CoinSpot, said:

The younger generations will always be early adopters of tech, which we’ve seen in previous iterations of this report. From the data it appears as though we are reaching an inflection point in mainstream adoption when the historically more conservative/risk averse generations start to jump on board in larger numbers.

From institutional investors, private offices, corporates, to everyday Mums and Dads, the appeal and opportunity that exists with crypto is becoming better understood.

The post Aussie crypto investments tipped to soar in 2022: survey appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
• What we now know (and don’t know) about inflation and interest rates
• This ASX energy share is rocketing 71% so far this week. Here’s why
• Earlypay (ASX:EPY) share price leaps 9% as profits, dividends surge
• Here’s why the Altium (ASX:ALU) share price is ‘significantly undervalued’

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. 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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Key points

• Yesterday, the Reserve Bank of Australia (RBA) kept interest rates on hold
• The current cash rate of 0.10% is the lowest in history
• What could force the RBA to raise rates sooner than it is predicting?

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The talk of the ASX town so far this week has more or less centred on the Reserve Bank of Australia (RBA). Yesterday, the RBA met for its monthly consideration of monetary policy. As most investors expected, the RBA kept the official cash rate on hold at its historic low of 0.10%. However, it did announce the end of its quantitative easing (QE) bond buying programs that have been ongoing since the outbreak of the pandemic in 2020.

Yesterday’s meeting was a highly watched one for a number of reasons. Since the RBA last gathered in December, the global inflation outlook has shifted considerably. We’ve seen decades-high inflation over in the United States. And Australia’s own inflation numbers have recently come in at far higher rates than what the RBA was predicting only a few months ago.

For most of last year, the RBA was telling Australians not to expect any increases in interest rates until 2024. Given that inflation is now inching closer to the upper end of the RBA’s 2-3% target band, many investors were expecting the RBA to move the goalposts on this prediction.

RBA governor Lowe addresses the nation

As it happens, the Governor of the Reserve Bank, Dr Philip Lowe addressed the National Press Club today after yesterday’s meeting. His remarks shine a light on where the RBA’s thinking now stands. So let’s check out what we now know about interest rates, and what we still don’t know.

So Dr Lowe has brought forward the RBA’s expectations for when interest rates will rise. Lowe confirmed that the RBA is now pricing in a wages growth rate of 3% over 2023, which, going off some of his previous comments, would suggest that the RBA would raise rates in 2023, and not 2024 as previously flagged.

Even though underlying inflation is today at 2.6% (with CPI inflation at 3.5%), it seems the RBA is still waiting on the wage growth index to rise further. It’s currently at 2.25. Here’s some of what Lowe said on these matters today:

As I have said on previous occasions, the Board will not increase the cash rate until inflation is sustainably within the 2 to 3 per cent range… aggregate wages growth in Australia remains low and is at a rate that is unlikely to be consistent with inflation being sustained around the midpoint of the target range…

While inflation has picked up in Australia, it remains substantially lower than [other advanced economies] and it has not been accompanied by strong wages growth… These are important differences…

Based on the evidence we have, it is too early to conclude that inflation is sustainably in the target range… aggregate wages growth in Australia remains low and is at a rate that is unlikely to be consistent with inflation being sustained…

Inflation might be picking up, but don’t expect rates to follow (yet)

So it seems that the RBA is sticking to its guns for the most part, albeit with the implicit suggestion that we might see rate hikes in 2023 rather than 2024. But it all seems to rest on wages growth, rather than headline inflation. So keep an eye on that number if you want to attempt to predict what the RBA might do next.

But these things can change as fast as the weather, so keep that in mind as well. 

The post What we now know (and don’t know) about inflation and interest rates appeared first on The Motley Fool Australia.

More reading

• This ASX energy share is rocketing 71% so far this week. Here’s why
• Earlypay (ASX:EPY) share price leaps 9% as profits, dividends surge
• Here’s why the Altium (ASX:ALU) share price is ‘significantly undervalued’
• Sparc Technologies (ASX:SPN) share price slides 12% despite Fortescue buy in. What’s happening?
• Why Aussie Broadband, BrainChip, Talga, and Telstra shares are pushing higher

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 Bruce Jackson.

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Key points

• The FAR share price has jumped more than 70% in the last week
• The price movement comes amid a takeover offer from an investment company
• A decision on the takeover is pending

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The FAR Ltd (ASX: FAR) share price is having a stellar week, jumping by 71%.

The oil and gas company’s shares have been climbing since FAR received a takeover offer earlier this week.

At the time of writing, the FAR share price is up 16.5% today to 60 cents.

Let’s take a closer look at what’s going on with the ASX energy share.

FAR responds to takeover offer

Earlier this week, the energy explorer received a conditional takeover offer from Samuel Terry Asset Management (STAM), a Sydney-based investment management company.

STAM proposed to acquire all FAR shares, offering 45 cents cash per share, with conditions including a 50.01% acceptance level.

However, on the same day, FAR advised its shareholders to take no action as the offer was not yet open.

The company said the offer recognised its shares were undervalued given the company’s cash reserves and a potential $55 million payment from the sale of its interest in an oil project in the West African nation of Senegal.

FAR advised it has appointed legal advisors and said it would consider the offer and advise shareholders in due course.

FAR proud of strong cash position

Prior to the acquisition offer, FAR released its activities and cash flow report for the quarter ending 31 December 2021.

In it, the explorer revealed cash holdings of US$55.6 million and said it allowed the company to “consider its options for the future, not limited to its current portfolio of oil assets”.

FAR also reported its efforts to decrease costs. It estimated employment, administration, and corporate costs to be $820,000 for the upcoming quarter.

It paid 80 cents a share of capital return in late September. In October, the company announced the Australian Taxation Office had issued a class ruling that no part of the payment would be assessable as a dividend.

FAR share price snapshot

Over the last 6 months, the FAR share price has dropped by 45%. In the days leading up to its September business snapshot presentation, it dived 48%.

However, year to date, the company’s shares have gained almost 56%.

The company has a market capitalisation of almost $60 million with 99 million shares on offer.

The post This ASX energy share is rocketing 71% so far this week. Here’s why appeared first on The Motley Fool Australia.

More reading

• Earlypay (ASX:EPY) share price leaps 9% as profits, dividends surge
• Here’s why the Altium (ASX:ALU) share price is ‘significantly undervalued’
• Sparc Technologies (ASX:SPN) share price slides 12% despite Fortescue buy in. What’s happening?
• Why Aussie Broadband, BrainChip, Talga, and Telstra shares are pushing higher
• Here’s why the Dicker Data (ASX:DDR) share price is having such a great week

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.

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Key Points

• Earlypay shares rocket on back on record result for H1 FY22
• NPATA came in at $7.5 million, an increase of 110% over the prior comparable period
• Upgraded guidance for the FY22 full-year in the range of $13 million and $14 million

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The Earlypay Ltd (ASX: EPY) share price is in fine form today following a positive trading update from the company.

At the time of writing, the payment advance company’s shares are up 9.30% to 47 cents a pop.

Earlypay continues its growth story

Investors are snapping up Earlypay shares after the company reported a robust result for the first-half of FY22.

According to its release, Earlypay achieved Net Profit After Tax before amortisation (NPATA) of around $7.5 million. This represents an increase of 110% over the prior corresponding period and is well ahead of forecasts.

Earlypay attributed the strong result to its core Invoice Finance product which is offered to small and medium-sized enterprises clients.

Total transaction volume (TTV) for the 6 months stood at $1.2 billion, up 35% on this time last year. The Equipment Finance business also saw substantial improvement in new originations in recent months and returned to growth.

Earlypay noted that January which is normally impacted by holiday seasonality performed ahead of expectations. This was driven by organic growth in client numbers and continued high utilisation rate of Invoice Finance facilities.

Due to the solid performance of the first-half along with favourable trading conditions, Earlypay upgraded its FY22 NPATA guidance.

As such, the company is anticipating NPATA of between $13 million and $14 million, which is 60% higher than the result achieved in FY21.

The strong profit result is expected to materially increase the first-half FY22 dividend compared to pcp. Earlypay’s dividend payout ratio will remain at 60% of NPATA across the full year.

Management commentary

Earlypay CEO, Daniel Riley commented:

We are delighted to announce a record H1 FY22 result, which shows material growth in Invoice Finance. The stronger than expected earnings have been driven by record TTV, lower cost of debt and increased utilisation of proprietary technology to facilitate operating leverage for the business.

It is also pleasing to see the equipment finance book return to growth in recent months. Following the record first half and a notable pickup in SMEs looking for alternate funding, Earlypay has upgraded its FY22 NPATA Guidance from $13m+ to $14m+.

The company noted it will provide additional information in the release of its FY22 first-half results on 24 February.

Earlypay share price snapshot

It has been a solid 12 months for the Earlypay share price, rising by 23% over the period. Year to date, the company’s shares are almost 10% higher.

Based on valuation grounds, Earlypay commands a market capitalisation of around $132.29 million and has approximately 281.47 million shares outstanding.

The post Earlypay (ASX:EPY) share price leaps 9% as profits, dividends surge appeared first on The Motley Fool Australia.

More reading

• Here’s why the Altium (ASX:ALU) share price is ‘significantly undervalued’
• Sparc Technologies (ASX:SPN) share price slides 12% despite Fortescue buy in. What’s happening?
• Why Aussie Broadband, BrainChip, Talga, and Telstra shares are pushing higher
• Here’s why the Dicker Data (ASX:DDR) share price is having such a great week
• The Computershare (ASX:CPU) share price is leaping 5%. Top broker says buy now

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 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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Key points

• The Altium share price could be significantly undervalued today based on management’s comments
• It previously rejected a takeover offer of $38.50 per share from Autodesk
• The company is rapidly expanding its cloud operations with Altium 365 adoption by clients

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The Altium Limited (ASX: ALU) share price could be “significantly undervalued”, according to the people who know the business the best.

For readers that don’t know, Altium is one of the leading electronic PCB design software businesses in the world. It also offers other services including Octopart, a search engine for electronic parts.

Is the Altium share price really good value?

The people who probably know the business best are the ones that work in the business, particularly management.

In June 2021, readers may remember that Altium received a formal, non-binding indicative proposal from US tech business Autodesk to buy the whole Altium business for A$38.50 per share.

Altium didn’t go for the offer, it wasn’t interested, though it appreciated the interest which evolved from dialogue about a strategic partnership.

The board said that the offer of $38.50 “significantly undervalued” Altium’s prospects and rejected the other. At the time of writing, the Altium share price is $37.11. So, it’s around 4% lower than the offer price which the board said significantly undervalued the business.

Since that takeover interest lapsed, Altium shares reached just over $45 by the end of 2021. However, it has dropped 17% since the start of the year.

Why is the ASX share undervalued?

The board said that Altium has a unique position in the electronics ecosystem. Its strong track record of setting ambitious long-term goals and achieving them gave the board confidence in its ability to pursue its transformative strategy.

Having successfully pivoted to the cloud through Altium 365, the company said it’s well positioned to pursue market dominance and industry transformation.

The business says that Altium 365 is the platform for all software engineering disciplines to collaborate to design and build electronics for manufactured products.

At the company’s AGM said that Altium 365 already has more than 17,000 active users and more than 7,000 active accounts. It also said that 15% of seats were on the cloud subscription and 40% were in transition.

What are some of the growth initiatives?

Management are working on several things to help grow the profit and the Altium share price.

The business is looking to accelerate adoption of the Altium 365 and Nexar ecosystem.

Another focus is scaling enterprise sales through strategic partnerships to expand its total addressable market within the PCB market.

Altium is rolling out its digital sales platform with the first US digital hub and taking the transactional sales global for expanded reach.

The next goal is expanding its Octopart total addressable market with its integration into Nexar.

The company is wanting to grow its licence compliance in China and, over time, generate recurring revenue through its Altium 365 China division.

Finally, the company is launching Altimade and lay the foundation for ‘smart’ manufacturing with a high profit margin.

FY22 expectations

At the AGM, Altium said that it had a strong first four months of FY22 with the core business growing well, Octopart outperforming, China and Nexus going well and Altium 365 cloud adoption accelerating.

It also said that it’s confident that based on business momentum, it is not likely to be at the low end of its guidance range.

As a reminder, it’s expecting to grow FY22 revenue by 16% to 20% to between US$209 million to US$217 million. The underlying earnings before interest, tax, depreciation and amortisation (EBITDA) margin is predicted to be between 34% to 36%. Annualised recurring revenue (ARR) growth is expected to be between 23% to 27%.

Altium share price snapshot

Altium shares are up 1% today and have risen 8.6% since the bottom of the recent decline on 27 January 2022.

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Motley Fool contributor Tristan Harrison owns Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Altium. 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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Key points

• The Sparc Technologies share price exited a trading halt today and is currently down 12%, trading at $1.44
• The fall follows news hydrogen-giant Fortescue Future Industries is buying into the Sparc Hydrogen Joint Venture
• Under the deal announced today, both entities will end up with 36% of the venture, with the University of Adelaide holding the remaining 28%

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The Sparc Technologies Ltd (ASX: SPN) share price is tumbling lower on Wednesday despite one of the ASX’s biggest names taking a sizable stake in the company’s hydrogen venture.

Fortescue Metals Group Limited‘s (ASX: FMG) hydrogen-focused renewable energy leg, Fortescue Future Industries (FFI), is set to snag up to 36% of the newly-formed Sparc Hydrogen Joint Venture.

Unfortunately, the market is reacting poorly to the news. At the time of writing, the Sparc Technologies share price is $1.44, 12.73% lower than its previous close. Meanwhile, the Fortescue Metals share price has gained 3.47%.

Let’s take a closer look at the latest news from the technology company.

A quick recap: What is Sparc Hydrogen?

The Sparc Hydrogen Project is developing the thermo-photocatalysis process – whereby hydrogen is created from water using radiation from the sun.

Thus, it bypasses the need for other forms of renewable energy when creating green hydrogen.

Theoretically, only light energy, water, and a catalyst are needed in the process. However, no technology using the method has been commercialised.

Prior to FFI’s entrance, Sparc held 72% of the venture while the University of Adelaide held the other 28%. The joint venture was first announced in October.

Sparc Technologies share price tumbles on joint venture news

The freshly-thawed Sparc Technologies share price is slipping lower despite a major hydrogen entity gaining an interest in Sparc Hydrogen.

Under the deal announced today, Fortescue Future Industries will initially be paying $1.8 million to get a 20% hold of the venture as part of its stage 1 funding. Sparc will issue the Sparc Hydrogen shares to FFI immediately.

Sparc Technologies will receive an approximately $512,000 reimbursement through FFI’s initial funding contribution.

The following funding stage will see Sparc Technologies paying $1.025 million and Fortescue Future Industries putting forward $1.475 million.

That will see both entities with a 36% holding in Sparc Hydrogen. The university will continue to own 28% of the venture.

The market might believe Sparc Technologies is getting a raw deal, inspiring its share price to tumble today.

Though, both parties will ultimately end up putting forward $3,257,000 for their holding. Sparc Technologies’ contribution will include three million shares given to the University of Adelaide and the University of Flinders.

Additionally, the university has provided all technology under development, including intellectual property, to Sparc Hydrogen under an exclusive licence.

What did management say?

Sparc Technologies chair Stephen Hunt commented on today’s news:

Sparc is extremely excited to be working with a company of the calibre of FFI, which has demonstrated its credentials as being a world leading company in green hydrogen. FFI is very well placed to assist the development and commercialisation of Sparc Hydrogen’s green hydrogen photocatalytic technology.

Fortescue Future Industries CEO Julie Shuttleworth responded to the deal:

Green hydrogen is a practical, implementable solution to decarbonise hard to abate sectors, including heavy industry. The research being undertaken by Sparc Hydrogen is important for FFI’s growing technology portfolio as we develop technologies to lower emissions globally.

Sparc Technologies share price snapshot

Since the end of 2021, the Sparc Technologies share price has slid 11%.

Though, it’s still 388% higher than it was this time last year.

The post Sparc Technologies (ASX:SPN) share price slides 12% despite Fortescue buy in. What’s happening? appeared first on The Motley Fool Australia.

More reading

• Fortescue (ASX:FMG) Future Industries to buy stake in Sparc Hydrogen
• Why is the Sparc Technologies (ASX:SPN) share price on ice today?
• Here are the 5 best performing ASX hydrogen shares of 2021

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 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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