Tag: Motley Fool

Key points

• The Boral share price has gained 4.8% on Friday to trade at $5.95
• This might be due to the broader market’s performance today, as well as the materials sector’s increase
• The gain could also be a response to the stock’s recent slump

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The Boral Limited (ASX: BLD) share price is taking off today, surging higher despite no news having been released by the company.

However, its home sector is having a great day as the broader market bounces back from this week’s struggles.

At the time of writing, the Boral share price is $5.95, 4.84% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is finally higher, boasting a 2.1% gain right now. The ASX 200’s day in the green follows yesterday’s slip that officially saw it hit correction territory.

Let’s take a look at what might be helping the building products and construction materials’ stock on Friday.

What’s driving the Boral share price higher?

The Boral share price is pushing higher as the broader market rebounds today. Luckily for shares like Boral, the S&P/ASX 200 Materials Index (ASX: XMJ) is among Friday’s winners.

The sector isn’t recording the same gains as the likes of the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) or the S&P/ASX Consumer Staples Index (ASX: XSJ) – which are up 3.5% and 3% respectively.

Still, it’s well and truly in the green, boasting a 1.66% increase, making its performance notably better than many other sectors’ on Friday.

Boral is its home sector’s second-best performer today, behind only Champion Iron Ltd (ASX: CIA). The latter’s stock has gained an impressive 8% today.

However, the materials index is being weighed down by the Ramelius Resources Limited (ASX: RMS) share price. It has slipped 7% on the back of its report for the December quarter and newly released drill results.

Though, Boral’s increase might not have much to do with its home sector’s gains. The company’s stock could be experiencing a ‘correction’ of its own.

Prior to today’s session, the Boral share price had tumbled 6.8% since the final close of 2021.

It’s now down just 2.5% over that time frame. Though, it’s still fallen 24% over the last 6 months.

The post The Boral (ASX:BLD) share price is surging 5% on Friday. Here’s what might be going on appeared first on The Motley Fool Australia.

More reading

• 2 cheap ASX 200 shares rated as top buys
• Why Anteotech, Appen, Boral, and Kogan shares are rising today
• ASX 200 (ASX:XJO) midday update: Whitehaven sinks, BHP to unify
• How did the Boral (ASX:BLD) share price manage to climb 23% in 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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Key points

• Dusk shares are bouncing off a 3-month low today.
• Shares are soaring 15% into the green at the time of writing after a sharp snapback
• The company released its latest trading update on Monday
• Dusk is rated as a buy from 4 brokers covering the stock

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The Dusk Group Ltd (ASX: DSK) share price is soaring 14.83% into the green today despite no market-sensitive information from the company.

At the time of writing, shares in the fragrance retailer are changing hands at $2.71 apiece.

Why’s the Dusk share price charging higher?

In the absence of any price-sensitive information, it’s not abundantly clear what’s underneath the Dusk share price today which is keeping it afloat. But it hasn’t been quiet in Dusk’s corner lately, that’s for sure.

For example, Dusk shares did bounce off a 3-month low today. However, the trend was downwards following the release of its latest trading update on Monday.

In it, the company recognised a number of headwinds that had a material impact on both sales and earnings. For instance, sales fell 12% year over year to $80 million, whereas it lost a total of 5,483 trading days this year due to mandated lockdowns from COVID-19.

Aside from that, the company made the acquisition of Eroma Group on a valuation of $28 million. Dusk sees value arising from the transaction and reckons it will realise a 20% accretion at the earnings per share (EPS) level. The transaction is due for settlement today.

It also managed to open another 6 stores in its network, now claiming a total of 128 stores in its network despite the headwinds from COVID-19.

Plus with lockdowns, Dusk recognised a 4% gain in online sales year over year – which now makes up nearly 10% of total sales.

Investors weren’t impressed by the candle specialist’s numbers on the day, sending its share price well into the red and maintaining the pressure until the close on Thursday.

However, shares are trading back near 52-week lows as well, and the sharp pullback appears to have piqued investors interests, perhaps given the mixed earnings result.

Not to mention the company received a new bullish update from Shaw & Partners, who raised its price target on the stock by approximately 6% to $3.70 per share.

The firm joins Barrenjoey Capital Markets, Canaccord Genuity and Barclay Pearce Capital in recommending Dusk as a buy, with a consensus price target of $4.08 per share.

Keep in mind that both Shaw and Barrenjoey released their revised valuation updates post Dusk’s trading update, which also could have been picked up by the market today.

Either way, should Dusk converge to the consensus price target, this offers around 55% upside potential at the time of writing.

Dusk share price summary

In the last month, the Dusk share price has held onto gains and is now 15% in the green during that time.

Thing’s aren’t so rosy this year to date however, as shares have collapsed 15% since January 1.

Hence today’s gains are a welcomed liftoff from the selling pressure that’s been in situ since we rolled into 2022.

The post Why is the Dusk (ASX:DSK) share price firing 15% higher today? appeared first on The Motley Fool Australia.

More reading

• Why Champion Iron, Dusk, Hipages, and Imugene shares are charging higher
• 2 cheap ASX shares that value investors could love
• Dusk (ASX:DSK) share price slides as 5,483 trading days get smoked
• These 3 ASX retail shares have grossed-up dividend yields over 8% right now
• Top ASX shares to buy in January 2022

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 recommended Dusk 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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Key points

• Appen used to be a high-growth WAAAX share market darling
• The company has had a stunning fall from grace
• When will the tide turn for Appen?

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It certainly hasn’t been a great month for most ASX shares. As my Foolish colleague Bernd covered today, the S&P/ASX 200 Index (ASX: XJO) has officially slipped into correction territory. This is defined as a 10% or more drop from the most recent high. But it has been an especially punishing time to own Appen Ltd (ASX: APX) shares.

The Appen share price is down by 17.6% in January alone, despite a 5% gain today. The company’s shares have fallen by a horrible 60% over the past 12 months on the ASX.

Not only that, Appen is also down close to 77% from its all-time high of $40 reached in August 2020. Currently, the Appen share price is $9.18.

It’s a stunning fall from grace for what used to be one of the market’s most exciting growth shares.

Appen is (or at least was) a member of the WAAAX group of ASX shares. Like its fellow WAAAXers Afterpay, WiseTech Global Ltd (ASX: WTC), Xero Limited (ASX: XRO) and Altium Limited (ASX: ALU), Appen used to be a top pick for those wanting exposure to companies at the forefront of the ASX tech sector.

While some WAAAX shares have gone to new heights since 2020, and Afterpay has been acquired, the Appen share price remains in the dirt.

So what’s in store for the annotated dataset provider? After this 77% fall, is the bottom finally here?

Is the Appen share price in the buy zone?

Well, one broker who thinks it might be is Citi. As my Fool colleague James covered last week, Citi has retained a buy rating on Appen shares. However, it has pared its 12-month price target down to $14.80 a share. Even so, if Appen were to hit that share price over the next year, it would represent a 61% gain.

Citi is bullish on Appen because it reckons the company has a fair chance of achieving its FY21 guidance. Therefore, it estimates that ASX investors might be too pessimistic about Appen shares. No doubt Appen’s long-suffering investors will be keeping their fingers crossed that this turns out to be the case.

At the current Appen share price, this company has a market capitalisation of $1.1 billion. Its dividend yield is 1.12%.

The post Down 77%! Is the Appen (ASX:APX) share price a buy today? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• What happened to ASX tech shares today?
• These are the 10 most shorted ASX shares
• The Nasdaq Index fell 2.7% on Friday. What does that mean for ASX tech shares?
• Top brokers name 3 ASX shares to buy next week

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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. owns and has recommended Appen Ltd. The Motley Fool Australia owns and has recommended Appen 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is rebounding strongly from recent declines. At the time of writing, the benchmark index is up 2.3% to 6,994.7 points.

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

Champion Iron Ltd (ASX: CIA)

The Champion Iron share price is up 7% to $6.25. This follows a positive reaction to the iron ore producer’s quarterly update from a number of brokers. One of those brokers is Citi. This morning the broker retained its buy rating and lifted its price target on the company’s shares to $6.50. Citi was pleased with its quarterly update and has adjusted its estimates to reflect stronger iron ore prices.

Dusk Group Ltd (ASX: DSK)

The Dusk share price is up 14% to $2.70. Investors have been buying the retailer’s shares following the release of a bullish broker note out of Shaw & Partners. According to the note, the broker has retained its buy rating and lifted its price target on the company’s shares to $3.70.

Hipages Group Holdings Ltd (ASX: HPG)

The Hipages share price is up 7.5% to $3.00. Investors have been buying the tradie marketplace provider’s shares after Goldman Sachs reaffirmed its buy rating on them following a disappointing quarterly update. The broker believes the soft quarter was a one-off due to COVID impacts and nothing structural. Goldman has a $3.60 price target on its shares.

Imugene Limited (ASX: IMU)

The Imugene share price is up 9% to 31.2 cents following the receipt of a patent. According to the release, the immuno-oncology company has received a notice of grant from the European Patent Office for its HER-Vaxx immunotherapy. This is currently in development for HER-2 positive gastric cancer.

The post Why Champion Iron, Dusk, Hipages, and Imugene shares are charging higher appeared first on The Motley Fool Australia.

More reading

• Brokers name 3 ASX shares to buy today
• ASX 200 (ASX:XJO) midday update: ResMed and PointsBet disappoint
• Why the Imugene (ASX:IMU) share price advanced 5% on market open
• Why Evolution, Cettire, Hipages, and Kogan shares are sinking
• Champion Iron (ASX:CIA) share price jumps on quarterly results

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 Hipages Group Holdings Ltd. The Motley Fool Australia owns and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia has recommended Dusk 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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Key points

• The Essential Metals share price is up 16% this afternoon, trading at 47 cents
• The gain follows the release of the company’s quarterly report
• Within the report, the company outlined its exploration activities and strong cash position

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The Essential Metals Ltd (ASX: ESS) share price is surging on Friday after the company released its activities and cash flow report for the December quarter.

At the time of writing, shares in Essential Metals are swapping hands for 47 cents. That represents a 16.05% gain on the company’s previous close.

Essential Metals share price gains on strong financial position

• Last quarter, the company received assay results from the Dome North project
• It also began another drilling campaign at Dome North
• It had $9 million cash on hand at the end of the quarter
• Finally, it worked to divest a Canadian asset

Over the quarter just been, Essential Metals received assay results from a 5,934m reverse circulation drill program completed at the Dome North lithium project in Western Australia earlier last year, with the best results found at the Cade Deposit.

Additionally, another 13-hole diamond drill program began at the project in December.

Finally, the company completed a baseline environmental survey – part of its activities to prepare Dome North for development.

Also over the quarter, Essential Metals received $400,000 from Australian Nickel Company as a milestone payment in accordance with the Blair–Golden Ridge Nickel Farm-in/Joint Venture.

As of 31 December, the company had $8.99 million of cash in the bank and no debt. That’s enough to fund it for another 12 quarters of similar activities.

What else happened during the quarter?

The company also worked to sell its 51% interest in Canada’s Mavis Lake lithium project last quarter.

The asset was sold to Critical Resources Ltd (ASX: CRR). Though, the sale wasn’t finalised until after the quarter’s end.

It saw Essential Metals walk away with $750,000 in cash – 50% withheld for Canadian tax purposes – and 34 million Critical Resources shares calculated at 2.2 cents each.

Right now, the Critical Resources share price is around 10 cents.

The Essential Metals share price gained 8% after the company announced the divestment in mid-October.

What’s next?

The company is currently continuing the 13-hole diamond drill program at Dome North. That’s expected to be completed in mid-February.

Additionally, it recently began a 30-hole air-core drilling program to follow up on anomalism from the previous program at Dome North.

Essential Metals share price snapshot

This year has been particularly good to the Essential Metals share price.

It has gained a whopping 135% since the final close of 2021. It is also 176% higher than it was this time last year.

The post Here’s why the Essential Metals (ASX:ESS) share price is leaping 16% today appeared first on The Motley Fool Australia.

More reading

• 149% in a month: Essential Metals (ASX:ESS) share price glides higher on lithium update

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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It has been another busy week for Australia’s top brokers. This has led to the release of a large number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Hipages Group Holdings Ltd (ASX: HPG)

According to a note out of Goldman Sachs, its analysts have retained their buy rating but trimmed their price target on this tradie marketplace provider’s shares to $4.60. This follows the release of Hipages’ second quarter update, which fell short of expectations due to the impact of the Omicron variant on its tradie base. While Goldman was disappointed with the quarter on quarter decline in subscription tradies, it doesn’t believe this represents any structural issue in the marketplace and its positive view is unchanged. The Hipages share price is trading at $3.02 this afternoon.

Life360 Inc (ASX: 360)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $16.50 price target on this app maker’s shares. This follows the release of a strong fourth quarter update which led to Life360 outperforming the broker’s expectations in FY 2022. Morgan Stanley appears confident its strong form can continue and sees the recent share price weakness as a buying opportunity. The Life360 share price is fetching $7.58 on Friday.

Premier Investments Limited (ASX: PMV)

Analysts at Macquarie have retained their outperform rating and lifted their price target on this retail conglomerate’s shares to $35.00. This follows the release of Premier Retail’s first half trade update which revealed solid earnings growth despite the loss of a significant number of trading days due to COVID-19. Macquarie notes that its strong online businesses and cost control have supported its growth and expects this trend to continue. The Premier Investments share price is trading at $28.67 this afternoon.

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

More reading

• 5 things to watch on the ASX 200 on Friday
• Top brokers name 3 ASX shares to sell today
• Why Beach, Jumbo, Premier Investments, and Western Areas are pushing higher
• 3 ASX small cap shares landing on an expert’s buy list
• Why Evolution, Cettire, Hipages, and Kogan shares are sinking

Motley Fool contributor James Mickleboro owns Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Hipages Group Holdings Ltd. and Life360, Inc. The Motley Fool Australia owns and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia has recommended Premier Investments 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

• Bendigo shares have fallen in recent times. But can the dividend make up for it?
• It has a trailing grossed-up dividend yield of more than 8%.
• Analysts are expecting the bank to grow its dividend in each of the next few years

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The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price has been falling over the last few weeks. It has dropped close to 10% since 18 January 2022.

Can the dividend yield make up for the falling share price?

How big is the dividend yield?

FY21 saw the business generate 85.6 cents of cash earnings per share (EPS), which was an increase of 43.4%. The board decided to pay a total fully franked dividend of 50 cents per share.

At the current Bendigo Bank share price, it has a grossed-up dividend yield of 8.3%.

That’s higher than quite a few other ASX banks including Commonwealth Bank of Australia (ASX: CBA) and Macquarie Group Ltd (ASX: MQG).

The Bendigo and Adelaide Bank board is proud of the “continuing history of rewarding shareholders with a high yield and long-term returns”.

In deciding on that level of payout, Bendigo Bank said that ongoing stress testing continues to support the bank’s “strong balance sheet and capital position”.  

But that’s the past. What about the dividends for the upcoming results?

Upcoming dividends

Commsec numbers suggest the Bendigo and Adelaide Bank is going to pay a rising dividend in FY22, FY23 and FY24.

The FY22 dividend is expected to be $0.53, translating to a grossed-up dividend yield of 8.7%.

FY23’s annual dividend could be $0.54 per share. That’s a potential grossed-up dividend yield of 8.9%.

The FY24 dividend might be $0.565 per share, turning into a grossed-up dividend yield of 9.3%.

Is that enough to make up for the decline?

There are not many positive ratings on the regional bank at the moment. For example, Morgan Stanley rates the Bendigo Bank share price as a sell, though the price target is $9.50. The broker reckons that rising interest rates can help the banks beat the returns of the overall share market.

Plenty of other brokers currently rate the challenger bank as a ‘hold’ or ‘neutral’. Citi currently rates the Bendigo and Adelaide Bank as ‘neutral’ with a price target of $9.25.

It also notes the recent digital transformation announcement.

This is where the bank’s strategy is to shape the future of banking, by being customer-focused, achieving growth and making sure it has the offering to win new, young customers.

In FY22, the bank said that it was expecting above-system lending growth, driven by its consumer business and further advances in the small business and agribusiness sectors. But Bendigo Bank is also going to be focused on costs, improving productivity and preserving a strong and resilient balance sheet.

What is the Bendigo Bank share price valuation?

Using Commsec’s estimates, Bendigo Bank shares are valued at 11x FY22’s estimated earnings.

Based on Citi’s numbers, the regional bank is priced at 12x FY22’s estimated earnings.

The post Can the Bendigo Bank (ASX:BEN) 8% dividend yield make up for its share price correction? appeared first on The Motley Fool Australia.

More reading

• What’s happening to ASX bank shares today?
• The Bendigo Bank (ASX:BEN) dividend is smashing the big four right now
• Could this impact the performance of ASX 200 banks more than interest rates in 2022?
• How the Bendigo Bank (ASX:BEN) share price went in 2021

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 Bendigo and Adelaide Bank Limited. The Motley Fool Australia has recommended Macquarie 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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Key points

• CBA shares are trailing the ASX 200 index today
• Tasmania tops the states and territories in economic performance
• CommBank the leading bank for Australian debt capital markets
• Stressed parents turning to BNPL for back-to-school items

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The Commonwealth Bank of Australia (ASX: CBA) share price is trailing the broader market rally today.

While the S&P/ASX 200 Index (ASX: XJO) is turbulently moving higher, currently up 2%, CBA shares are up a more muted 1.42% to $95.11 per share.

That’s the early afternoon price action today.

Below we look at what the big bank has been reporting this week.

Tasmania leads the charge

On Monday, CBA revealed that Tasmania once again came in as the best economic performer among the states and territories over the past quarter. That made for Tassie’s 8th consecutive title win in the CommSec State of the States report.

Craig James, chief economist at CBA’s wholly-owned affiliate CommSec, said that Tasmania could face stiff competition from the other states in the year ahead.

“Tasmania has held top position in the performance rankings – solely or jointly – for eight consecutive quarterly surveys,” he said. “While it is likely to remain on top in the short-term, much can change over 2022.”

CBA is Australia’s debt capital markets leader

Later in the week, CBA shares were in the spotlight when the bank reported on Bloomberg data showing it was “the leading bank for Australian debt capital markets in 2021″.

In calendar year 2021, CommBank raised $19.7 billion for its clients.

The bank was also the most active provider of syndicated loans in 2021, reporting it had supported 57 deals raising $15.5 billion of funding for its clients.

While all this was happening, the CBA share price was rising and finished the year up 23% for its shareholders.

Looking ahead, CBA’s managing director of Global Syndicate, Des Fennell was bullish on 2022:

We anticipate Australian public debt market issuance will grow in 2022, as more domestic financial institutions return to normalised issuance patterns, while the education and public finance sector continues to take advantage of historically low rates.

$2 billion back-to-school splash spurs BNPL intentions

Yesterday, CBA revealed that Aussie parents are looking at spending a combined $2 billion to get their kids set for the new school year.

The 9% year-on-year increase in expenditure works out at $435 for the average family.

And not everyone is planning to hand over cash on the day of purchase.

With 65% of parents saying they’ll have difficulty affording everything they need to buy, 58% are planning to break out the credit card or make use of buy now, pay later (BNPL) services.

This trend, CommBank reported, is helping drive demand for its own BNPL product, StepPay:

The popularity of buy now, pay later to manage expenses continues to grow, with over 150,000 customers and 1.5 million transactions on CBA’s own buy now, pay later product, StepPay, since its launch in August.

How has the CBA share price been performing this year?

CBA shares have broadly performed in line with the ASX 200 in the new year.

Since the opening bell on 4 January, the ASX 200 is down 8.1% while CBA shares have lost 7.3%.

Based on today’s share price, CBA pays a 3.7% dividend yield and this is also fully franked.

The post Own CBA (ASX:CBA) shares? Here’s what the big bank reported this week appeared first on The Motley Fool Australia.

More reading

• ASX share market on watch: Is the RBA going to increase interest rates in 2022?
• What is the CBA (ASX:CBA) dividend payout ratio sitting at?
• CBA reveals the Australian economy’s leading state amid COVID surge
• What’s happening to ASX bank shares today?
• Own CBA (ASX: CBA) shares? Here’s what’s happening with the big bank this week

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

• Nitro shares retrace despite robust Q4 FY21 performance
• Key financial metrics increased by double-digits
• FY21 EBITDA expected to be at a loss, but an improvement from earlier guidance

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The Nitro Software Ltd (ASX: NTO) share price is on course to end the week deep in the red.

In mid-afternoon trade, the document productivity and eSigning company’s shares are down 4.34% to $1.765.

When factoring in the past week, Nitro shares have shed more than 20% in value.

What’s dragging the Nitro share price down today?

Investors have been selling down the Nitro share price following the release of the company’s cash flow report for Q4 FY21.

For the three months ending 31 December, Nitro reported revenue of US$50.7 million (A$72.01 million) excluding Connective, up 26% compared to FY20. This was at the top end of the upgraded guidance range provided in October of US$49 million to US$51 million.

FY21 revenue including Connective came to approximately US$50.9 million ($A72.29 million).

Annual Recurring Revenue (ARR) at the year’s end was at US$40.1 million (A$56.96 million) excluding Connective. This reflected a 41% increase from 31 December 2020 and is in line with the guidance range of US$39 million to US$42 million.

ARR at 31 December 2021 including Connective was US$46.2 million (A$65.65 million). Key customer wins and expansions in the quarter included Deutsche Bank, ICON, Eversheds Sutherland, Swiss Re and Ausenco.

Nitro’s transition to a Software-as-a-Service (SaaS) business model is continuing along, with subscription revenue in Q4 2021 representing 71% of total revenue. When measured against Q4 2020, this represents a 58% increase.

The company noted it maintains a strong financial position to pursue growth opportunities. At the end of the calendar year, cash and equivalents stood at US$48.2 million with no debt.

FY21 Outlook

Although the company signalled the last quarter of FY21 as a positive performance, it appears investors were expecting better results. This has led the Nitro share price to fall to July 2020 levels.

Nitro stated that operating earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to result in a loss of between US$7.5 million to US$8 million. The operating EBITDA guidance was upgraded given the strong numbers on revenue.

In late October, the company forecasted EBITDA to be at a loss of US$8 million to US$10 million.

Nitro is scheduled to release its FY21 audited results along with ARR, revenue and operating EBITDA guidance for FY22 on 24 February.

The post Here’s why the Nitro (ASX:NTO) share price is backtracking 6% today appeared first on The Motley Fool Australia.

More reading

• 3 exciting small cap ASX shares to watch
• 2 buy-rated ASX tech shares with 100% upside in 2022
• 2 beaten down ASX tech shares tipped as buys
• 2 exciting small cap shares named as buys
• 2 buy-rated ASX tech shares with huge upside potential

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 recommended Nitro Software 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

• Macquarie comes out with a list of downgrades today
• The 3 ASX shares are all concentrated in resources and mining
• The ASX 200 Resources Index has fallen 8% this week after collapsing on 20 January.

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The benchmark S&P/ASX 200 index (ASX: XJO) failed an attempted intraday snapback rally earlier this week after suffering extensive losses and is now down more than 7% for the month.

Meanwhile, as the selling impulse extends its reach throughout the markets, the S&P/ASX 200 Resources Index (XJR) also turned sharply last Thursday and is now 8% in the red for this week.

Amid the recent market calamity, investors are starting to unwind their exposure to growth and are budgeting less risk with their positioning.

That’s true as companies who lack robust fundamentals and balance sheet credentials can’t withstand a rates shock or economic downturn compared to their ‘healthy’ counterparts. As Warren Buffet said, “only when the tide goes out do you discover who’s been swimming naked”.

As such, the team at Macquarie just downgraded these three ASX shares. Let’s take a look.

Cooper Energy Ltd (ASX: COE)

Macquarie slashed its recommendation on Cooper Energy and now reckons the stock is set to underperform in 2022.

Analyst Mark Wiseman slashed the broker’s valuation on Cooper by 14% to 24 cents, which implies a 19% downside potential at the time of writing.

The downgrade comes after the company released its quarterly update for the three months ended 31 December 2021 yesterday.

In its report, Cooper recognised a “record year to date production sales volume, and revenue”, as YTD production is up 35% to 1.57MMboe and sales volume is up 67% to 2.02MMboe.

On this, revenue had climbed 96% to $95.4 million according to the earnings release. However, with respect to quarterly production, sales volume and revenue, the situation was in reverse.

“Total production down 6% to 0.76 MMboe, sales volume down 4% to 0.99 MMboe and revenue down 2% to $47.3 million; mainly impacted by planned downtime associated with the cut over from the Iona Gas Plant to the Athena Gas Plant” the company said.

In fact, compared to Q1 FY22, the company saw a net decrease in all items of sale volume and revenue quarter on quarter, whereas average realised prices increased marginally.

Hence, with this result in mind, Macquarie is less rosy on the outlook of Cooper rolling through the remainder of FY22. On last check, shares were down less than 1% on the day at 29.8 cents apiece.

OZ Minerals Ltd (ASX: OZL)

Macquarie downgraded OZ Minerals to neutral from outperform following the release of its quarterly results yesterday as well.

Despite achieving record FY revenue of $2.1 billion and meeting guidance for the 7th consecutive quarter, investors continued applying the selling pressure yesterday as shares finished in the red.

However, the OZ Minerals share price is stuck in a downward spiral that’s been in situ since 20 January, in lock-step with a selloff in the wider market.

For instance, the S&P/ASX 200 Resources Index (XJR) has collapsed over 7% in the past week whereas OZ has plunged 14%.

Macquarie isn’t so rosy on the outlook in 2022 and 2023 for the company and joined a slew of fellow brokers in downgrading OZ from a buy following the report.

Analyst Hayden Bairstow cut the recommendation in a note today and also cut the investment bank’s price target on the stock by 21% to $29.10 in doing so.

Curiously, Bloomberg Intelligence reports that “Investors who followed Bairstow’s recommendation received a 36% return [on OZ] in the past year, compared with a 35% return on the [OZ Minerals] shares”.

Mincor Resources NL (ASX:MCR) 

Another ASX share that Macquarie revised downwards today was Mincor Resources. This time Bairstow cut the broker’s recommendation from an outperform to neutral.

However, even with the revised sentiment, Bairstow actually increased Macquarie’s valuation on Mincor by 10% to $1.70 per share.

Each of these moves occurred following the release of Mincor’s quarterly activities report as well, to which the broker was hoping for more juice that’s worth the squeeze.

Macquarie’s valuation of Mincor now sits above the consensus price target of $1.60 per share, which is curious given the broker’s decision to change its rating to the downside. Although, notably, the theme for the broker’s downgrades today have been resource/mining based.

Indications of sector sentiment from Macquarie? It’s hard to say. Although, the broad sector is certainly facing challenges on the charts early in 2022.

Plus it’s not hard to see Macquarie’s stance in the near-term, given the market correction that’s been in place since January 1 at least.

Throughout its analysis of Mincor, Macquarie upgraded the company to a buy in December after starting coverage at neutral in August 2021. When the stock was rated to outperform, it gained circa 33%, whereas it climbed just 13% in the time it was rated a hold.

Time will tell if the broker’s thesis comes to fruition in any way. At the time of writing, the Mincor Resources share price has climbed more than 1% and is now fetching $1.62 apiece, after rallying more than 57% in the last 12 months.

The post Time to sell? Macquarie just downgraded these 3 ASX shares from buys appeared first on The Motley Fool Australia.

More reading

• The OZ Minerals (ASX:OZL) share price has dumped 11% this week. Is it a bargain?
• OZ Minerals (ASX:OZL) share price slips despite record $2 billion revenue
• 2 ASX shares to guide you out of this bloodbath: expert
• 2 top ASX shares to buy according to WAM
• Leading brokers name 3 ASX shares to sell today

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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