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It hasn’t been a great day for the S&P/ASX 200 Index (ASX: XJO) this Thursday so far. At the time of writing, the ASX 200 has lost a depressing 1.58% and is sitting at 6,851 points. That comes after an initial spike into positive territory this morning. But that’s nothing compared to the Xero Limited (ASX: XRO) share price today.

Xero shares are currently down a nasty 4.91% at $106.68 a share. But Xero descended as low as $103 a share earlier today, a drop of 8% on the previous closing price.

That is a new 52-week low for Xero shares. It also puts this online accounting software-as-a-service (SaaS) company a long way from its last record high of $156.65 a share that we saw just back in early November. That means this once-high-flying ASX growth share has given back around 32% of its value over just the past 3 months or so.

It also means the Xero share price is now down around 25% over the past 12 months. Saying that, long-term shareholders are still well out in front. Even after these nasty falls, the Xero share price remains up a very pleasing 475% over the past 5 years.

So let’s take a closer look at this dramatic slump in value that Xero shareholders have had to suffer through recently.

Why are Xero shares hitting new lows today?

Well, it’s not entirely clear, unfortunately. There hasn’t been much in the way of big news or announcements from Xero recently. Indeed, the last major development out of the company was the pre-Christmas announcement that Xero is to acquire the Canadian tax software company TaxCycle for C$75 million (AU$83 million).

So we could mark Xero’s descent to a new 52-week low down to the savage sell-off in ASX tech shares that has been playing out over the past month or two. This period has seen most ASX tech shares smashed, mirroring similar moves over on the US markets.

The tech-heavy NASDAQ-100 (INDEXNASDAQ: NDX) Index has lost a painful 14.5% or so since 27 December, putting it well and truly in ‘correction’ territory. Over a similar time span, the S&P/ASX All Technology Index (ASX: XTX) has given up more than 20%.

So it hasn’t just been Xero getting whacked recently. We’ve seen steep falls in shares like Afterpay… sorry Block Inc (ASX: SQ2), Zip Co Ltd (ASX: Z1P), Altium Limited (ASX: ALU) and WiseTech Global Ltd (ASX: WTC) over the past month or so.

But it might not be all bad for Xero shareholders. My Fool colleague Zach recently covered 3 different top ASX brokers who are still seeing some significant upside in the Xero share price from here. So make sure to check that out.

At the current Xero share price, this ASX 200 share has a market capitalisation of $16.72 billion.

The post From hero to Xero (ASX:XRO): share price tumbles 8% to hit 52-week low appeared first on The Motley Fool Australia.

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• 2 ASX growth shares analysts love
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• 5 things to watch on the ASX 200 on Thursday
• Are these 2 high-growth ASX shares now beaten-up opportunities?

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 Altium, Block, Inc., WiseTech Global, Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended WiseTech Global and Xero. 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 Champion Iron share price soared 6% in early trading today
• The move coincides with the miner’s latest quarterly announcements
• The company has declared an inaugural dividend of 11 cents per ordinary share

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The Champion Iron Ltd (ASX: CIA) share price is up today after the company released a landslide of announcements to investors.

Among them was its latest quarterly activities report, and a declared dividend for shareholders.

And it appears the news has been well received by investors, with Champion Iron shares jumping as high as $6.03 apiece after market open, a rise of almost 6% on their previous close.

However, at the time of writing, the Champion Iron share price has settled back down to $5.76, an increase of 1.23%.

So what did the iron ore exploration and development company announce today? Let’s take a deeper look into Champion Iron’s quarterly operations and results…

What did Champion Iron report?

The key points in Champion Iron’s quarterly report for the period ended December 31 2021 included (all figures in Canadian dollars unless stated):

• Net income of C$68 million (AU$75.6 million) compared to C$120.8m for the prior corresponding period (pcp) in 2020
• Gross profit of C$132,550, down 38% on the pcp
• Earnings before interest, taxes, depreciation and amortisation (EBITDA) of C$122,127, down 43% on the pcp
• Revenues of C$253,016, down 23% on the pcp
• C$543.4 million in total cash on hand and restricted cash
• Total assets at C$1.92 million, up 52% on the pcp
• Total liabilities at C$827,728, up 2% on the pcp

The miner has also declared an inaugural dividend of 10 Canadian cents (approximately 11 Australian cents) per ordinary share to be paid 1 March 2022.

Overall, Champion Iron is confident its balance sheet shows potential for growth, being positive at C$11.07 million.

Since 31 December, the Champion Iron share price has increased by 5.5%.

What happened in the first half?

All in all, Champion Iron’s revenues for the three and nine-month periods ending 31 December 2021 were C$253 million and C$1.12 billion, respectively.

This compares to the prior corresponding periods of C$329.5 million and C$885.1 million respectively.

The company reported an increase in freight costs for the three-month period, compared to the year before (which were mainly put down to the booking time of transport).

According to Champion Iron, these freight prices “reached levels not seen since 2009, partially due to port congestion across Asia, with prices recently reverting to their historical relationship with iron ore prices”.

In fact, freight (and other costs) amounted to 27% of the gross average realised selling price, compared to 15% in the prior corresponding period.

However, costs have also been put towards phase II preparations at its Bloom Lake site in Québec, Canada.

Development at the Bloom Lake project

Champion Iron is looking ahead to its Bloom Lake phase II expansion project, in which a number of essential requirements have been ticked off the list.

Among the appeal of the site is a railway that can effectively transport produced iron concentrate into a loading port in Sept-ÎIes in Québec.

During the quarter, the company has injected an additional C$93.7 million of capital expenditure and start-up costs into the project, alongside C$2.4 million in advanced payments.

The project is expected to be commissioned by April, and be ready for commercial production by the end of the year. Some 400 people are working on the site to meet these milestones despite coronavirus challenges.

Champion Iron share price snapshot

In the last 12 months, the Champion Iron share price has increased by around 3%. However, it is up 6% this year to date.

It hit its 52-week-high of $7.60 in late July and its 52-week-low of $4.05 in early November.

The miner has a market capitalisation of $2.88 billion.

The post Champion Iron (ASX:CIA) share price jumps on quarterly results appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares in December

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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CSL Limited (ASX: CSL) shares are joining the broader ASX selloff today, down 3.93% to $248.20 per share.

The S&P/ASX 200 Index (ASX: XJO) is falling hard too, down 1.47% after posting early morning gains of 0.5%.

That’s today’s CSL share price action.

Now we turn to why CSL is throwing in the towel on its 2-year long research into COVID-19 vaccines.

Why is CSL moving on from COVID research?

CSL has long been involved in formulating novel vaccines against a range of ailments.

When the coronavirus went global in early 2020, CSL turned its sights onto beating the virus that stemmed from Wuhan, China.

In a partial success story, the biopharmaceutical company manufactured AstraZeneca under license for Australia distribution in Melbourne. Following the reports that AstraZeneca could lead to blood clots in certain rare cases, primarily among younger people, the vaccine was eventually rebranded as Vaxzevria.

However, CSL’s efforts at creating its own COVID vaccine eventually failed. The trial vaccine created together with researchers at the University of Queensland had promising results. But the drug was pulled after revelations that it could lead to false positive tests for HIV.

CSL also was part of a larger group of global companies working on a hyperimmune therapy in 2020. That project was ditched after it failed to meet expectations.

Now, as The Australian reports, “CSL … has quietly pulled the plug on developing Covid-19 antiviral treatments as it steams ahead on other projects in its $1bn-a-year research program.”

According to a CSL spokesman, “CSL is proud of the role we have played in bringing the Vaxzevria vaccine to millions of Australians, as well as neighbouring countries. At present we are not investigating any antiviral treatments for Covid-19.”

But that doesn’t spell the end of the company’s $1 billion annual research program.

In December, CSL chairman Brian McNamee said (quoted by The Australian):

We are firmly committed to advancing our next-generation sa-mRNA vaccine technology which aims to address some of the challenges presented by the current technology. We will utilise our global network, including research facilities in Cambridge, Massachusetts and clinical scale manufacturing facilities in Holly Springs, North Carolina, to achieve this.

How have CSL shares been performing?

CSL shares have been on a bit of a rollercoaster over the past 12 months, leaving them down 10%. By comparison the ASX 200 is relatively flat since this time last year.

So far in 2022, CSL shares have fallen 15%.

The post Own CSL (ASX:CSL) shares? Here’s why the company is moving on from COVID research appeared first on The Motley Fool Australia.

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• Analysts name 2 beaten down ASX shares with 30% upside
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• Has the CSL (ASX:CSL) share price dropped back into the buy zone?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd. 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 Accent Group Ltd (ASX: AX1) share price is under pressure again on Thursday.

In afternoon trade, the footwear retailer’s shares are down 4% to a 52-week low of $1.94.

This means the Accent share price is now down 21% since the start of 2022.

Is the Accent share price a bargain buy?

While the recent weakness in the Accent share price is very disappointing, one leading broker appears to believe that it has created a buying opportunity for investors.

According to a note out of Bell Potter, in response to the company’s recent trading update, its analysts have retained their buy rating but trimmed their price target on its shares to $2.75.

Based on the current Accent share price, this implies potential upside of 42% for investors over the next 12 months. And that doesn’t include dividends. Bell Potter expects a 3% dividend yield from its shares at current levels, stretching the total potential return to 45%.

What did the broker say?

Bell Potter notes that Accent has guided to earnings before interest and tax (EBIT) of $30 million to $31 million during the first half. This fell short of its estimate of $34 million due to a significant slowdown in sales due to the spread of the Omicron variant.

This has unsurprisingly led to the broker making some major revisions to its earnings and dividend estimates for the remainder of the financial year.

Nevertheless, its analysts believe this is a short term headwind and remain positive on its long term outlook. Furthermore, the broker feels the Accent share price is trading at a very attractive level despite its earnings revisions.

It concluded: “Notwithstanding COVID impacts on recent trading, we believe AX1’s core business remains strong with all growth levers intact. Valuation also remains undemanding with FY23/FY24 PE of 14.6x/12.1x. Accordingly, we retain our Buy rating on the stock.”

The post Broker sees 42% upside for the Accent (ASX:AX1) share price appeared first on The Motley Fool Australia.

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• The Accent (ASX:AX1) share price is down 17% this year, is it a buy?
• Why Accent, BrainChip, Fortescue, and Novonix shares are sinking
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• 2 high yield ASX dividend shares named as buys
• These ASX shares could be buys for value investors

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group. 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 Wesfarmers share price is down 5% today
• There are talks of Wesfarmers setting up a healthcare fund
• The market has overlooked the company in recent times and shares are down 14% this year to date

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The Wesfarmers Ltd (ASX: WES) share price is struggling today and is now trading 5% in the red at $50.15.

Shares in the conglomerate are trending down today amid reports the group is in the process of hiring new recruits to potentially establish a new healthcare fund.

With the group’s recent acquisition of Australian Pharmaceutical Industries (ASX: API) for circa $760 million, Wesfarmers has already embarked on its first escapade in the sector.

Now many are wondering what might be the group’s next acquisition, and whether there is any link to the recent hiring events and its next moves.

What could be the next acquisition move for Wesfarmers?

Recently the $59 billion company by market cap won the acquisition race to purchase API against rival Woolworths Group Ltd (ASX: WOW).

With the momentum in place, there are talks of Wesfarmers setting up a healthcare fund to potentially target a big fish within the healthcare space.

Now it is understood the company is targeting top executives in the health insurance space to build out its new venture according to reporting from The Australian.

The commentary builds on language from Wesfarmers advising on its plans to build a healthcare platform to invest in following the API acquisition earlier this month.

“API would also provide the basis of a new Healthcare division of Wesfarmers and a platform from which to invest and develop capabilities in the growing health, wellbeing and beauty sector” the group’s Managing Director, Rob Scott said at the time.

The drift into healthcare wouldn’t be a maiden venture for Wesfarmers. It has thought of investing in several healthcare assets over the years and sold off its underwriting business to Insurance Australia Group Ltd (ASX: IAG) back in 2013.

Now with the API acquisition completed, investors are no doubt keen to understand where the company will deploy capital over the coming years.

And with trailing 12 months cash flow of $413 million and net profit of $2.3 billion at the last recording, the company certainly has the credentials to make it happen.

However, the market has overlooked Wesfarmers in recent times, and investors have kept the selling pressure high over these last 6 months.

As such, Wesfarmers (blue line) has underperformed the benchmark S&P/ASX 200 Index (ASX: XJO) substantially over that time, as seen on the chart below.

Wesfarmers share price snapshot

In the last 12 months, the Wesfarmers share price has fallen 9% and is now down 15% this year to date.

Across the past month, shares have slipped 15% and are trending behind the benchmark index’s return in that time.

The post Could this signal the next big acquisition for Wesfarmers (ASX:WES)? appeared first on The Motley Fool Australia.

More reading

• Here’s a deep dive into the historical returns of Wesfarmers (ASX:WES) shares
• What’s happening to the Wesfarmers share price (ASX:WES) this year?
• Kogan (ASX:KGN) share price hits new 52-week low. Down 37% in 6 months
• Leading brokers name 3 ASX shares to sell today
• Morgans upgrades Wesfarmers (ASX:WES) shares to buy rating

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 owns and has recommended Wesfarmers 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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Next month the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price will be in focus when it releases its first quarter update.

To get readers ready for the release, I’ve looked to see what a leading broker is expecting from the bank’s update.

What Is expected from ANZ during the first quarter?

According to a note out of Bell Potter, its analysts are expecting a first quarter cash profit of $1.59 billion. This will be down 12.2% from $1.81 billion in the prior corresponding period.

The broker commented: “We look at numbers on a continuing basis again following the renewed impact of COVID19 on community health and the economy. In terms of 1Q22, we estimate cash profit of around $1.59bn and cash EPS of around 56¢.”

“We were hoping for a quick end to support packages this time around but this was not to be given onset of the Omicron and other variants (and bearing in mind that support for home and business loans is still in excess of 90%). Nevertheless, we still expect the bank to revert back to credit impairment expenses in 1Q22 but not as much as before,” it added.

What else should you look out for?

Bell Potter expects ANZ to report a net interest margin (NIM) of 1.62% for the quarter, down from 1.64% in FY 2021. This reflects lower volumes in both Australia Retail and Commercial and Institutional.

Another metric investors might want to look out for is the bank’s costs. Largely due to one-offs in the fourth quarter, Bell Potter expects a decent reduction in the bank’s expenses. It explained: “We have opted for operating expenses of around $2.00bn in 1Q22, a fair drop from $2.28bn in 4Q21 of around 12% but mainly due to the removal of large/notable items.”

Finally, the broker is forecasting a CET1 ratio of 11.8%, which is notably higher than APRA’s unquestionably strong benchmark of 10.5%.

Is the ANZ share price in the buy zone?

The broker sees a lot of value in the ANZ share price at the current level and has retained its buy rating and lifted its price target to $31.00.

Based on the current ANZ share price of $26.62, this implies potential upside of 16% over the next 12 months.

And with Bell Potter forecasting a $1.44 per share fully franked dividend in FY 2022, the total return stretches to over 21%.

The post What to expect from the ANZ (ASX:ANZ) Q1 update next month appeared first on The Motley Fool Australia.

More reading

• The ANZ (ASX:ANZ) share price is outperforming its big bank peers in 2022. Here’s why
• What’s happening to ASX bank shares today?
• Brokers name 3 ASX shares to buy today
• ANZ (ASX:ANZ) share price raised to ‘buy’ at Morgan Stanley
• Will ASX big four bank ANZ (ASX:ANZ) raise its dividend in 2022?

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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Is it possible that the Reserve Bank of Australia (RBA) could increase interest rates in 2022? What would this mean for the ASX share market?

US interest rates headed higher

Central banks are now capturing a lot of investor attention and headlines.

After much speculation about when interest rates were going to increase in the United States, the Federal Reserve has officially indicated that rates are going to rise in March 2022. That’s just two months away.

The American central bank noted that indicators of economic activity and employment have continued to strengthen, with the sectors most adversely affected by the pandemic have improved in recent months.

Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation. Explaining the decision to plan for growing interest rates, the Federal Reserve said:

With inflation well above 2% and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate.

It has also been reducing the pace of its monthly asset purchases. In a separate statement, the Federal Open Market Committee said that it expects to significantly reduce the size of its balance sheet over time.

The global share market, including the ASX share market, has been more volatile with interest rate rises now firmly factoring into investors’ thoughts.

Is the RBA going to increase interest rates this year?

For a long time, RBA boss Dr Lowe had indicated that 2024 was going to be the year that Australian interest rates would rise.

However, as noted by the Australian Financial Review, there are three things that the RBA is focused on.

The most important factor is the RBA’s goals of ‘full employment’ and that inflation is “sustainably” being within its target band of 2% to 3%. Two other factors include the functioning of Australia’s bond market and the actions of other central banks.

Australia’s unemployment rate has recovered quickly. In the latest monthly update for December 2021, the Australian Bureau of Statistics (ABS) reported that the unemployment rate improved from 4.6% to 4.2% and the underemployment rate improved from 7.5% to 6.6%.

Meanwhile, the latest quarterly consumer price inflation showed a 3.5% increase year on year, with a quarterly change of 1.3%.

The ABC reported that ABS head of price statistics Michelle Marquardt, said: “Shortages of building supplies and labour, combined with continued strong demand for new dwellings, contributed to price increases for newly built houses, townhouses and apartments”

Economists are now thinking that the RBA could raise rates later this year. The Commonwealth Bank of Australia (ASX: CBA) chief economist Gareth Aird has noted that internal CBA data for the three months to December 2021 showed that wage growth was increasing. Mr Aird said:

Our expectation for the labour market to continue to tighten, for wages growth to accelerate and for underlying inflation to push towards the top of the RBA’s target band from here means the risk lies with an earlier hike than August 2022.

What would higher interest rates mean for the ASX share market?

No-one can say what share prices are going to do day to day, or even year to year.

Already in 2022, some ASX shares have seen some sizeable declines. For example, in this year to date, the CSL Limited (ASX: CSL) share price has fallen 16%, the Aristocrat Leisure Limited (ASX: ALL) share price has dropped 15%, the Xero Limited (ASX: XRO) share price has fallen 28% and the Zip Co Ltd (ASX: Z1P) share price has dropped 31%.

Investment outfit Magellan Financial Group Ltd (ASX: MFG) has this quote from Warren Buffett on its website about interest rates:

The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. So every business by its nature… its intrinsic valuation is 100% sensitive to interest rates.

The post ASX share market on watch: Is the RBA going to increase interest rates in 2022? appeared first on The Motley Fool Australia.

More reading

• 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
• What to expect from the CBA (ASX:CBA) half year result next month

Motley Fool contributor Tristan Harrison owns Magellan Financial Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd., Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Xero. 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 crypto world is now A$1.76 trillion lighter following a rough run for the alternative asset class
• Another crypto winter could be ahead with one expert predicting Bitcoin below A$10,000
• ARK Invest is still optimistic on Bitcoin, suggesting more upside from here

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It is beginning to feel uncomfortably cold in the cryptocurrency markets lately. In the space of two and a half months, approximately A$1.76 trillion of market capitalisation has been wiped from the global crypto market.

Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) have been leading these losses in dollar terms. In the last week alone, the top two cryptocurrencies have fallen 14.5% and 22.7% respectively.

After experiencing such a tremendous pullback in prices, some spectators are calling this the beginning of the next crypto winter. For the uninitiated, this is an extended period of time where the alternative asset class underperforms.

The last ‘crypto winter’ occurred after enthusiasm died off in early 2018. During this near three-year timeframe, Bitcoin traded below its previous high of ~A$25,700 set in 2017. Investors had to patiently wait until December 2020 to reclaim this milestone.

But what stance do experts currently hold on the future of Bitcoin?

Is it about to get colder for crypto?

For crypto investors, the short-term headwind resides in the monetary policy instated by the Federal Reserve. While the loose money printing of the past acted as a catalyst for the price of Bitcoin, the Fed’s signalling for tighter policy in the near term is having the opposite effect.

The likelihood of an increase to interest rates by the Federal Reserve was only further bolstered by the chair’s comments overnight. Jerome Powell suggested a rate rise in March was a strong possibility, especially following the surprising rebound in the jobs market.

For this reason, CEO and founder of Bull and Bear Profits, Jon Wolfenbarger is expecting further pain to come for crypto markets and the price of Bitcoin. The analyst is forecasting an 80% fall from the recent Bitcoin high, placing the cryptocurrency under A$10,000.

What about the bull case for Bitcoin?

While the sentiment is frosty for crypto at present, the team at ARK Invest remains bullish. In their Big Ideas Summit 2022, the innovation-focused fund manager assigned Bitcoin with a market cap projection for 2030.

According to the presentation, ARK analysts believe Bitcoin’s market cap could reach US$28.5 trillion by 2030. This would represent a more than 25-fold increase in the cryptocurrency’s current valuation.

The price of a single bitcoin could exceed $1 million by 2030.

We are still early. pic.twitter.com/rvja2h2vi5

— Yassine Elmandjra (@yassineARK) January 25, 2022

https://platform.twitter.com/widgets.js

To get to this estimate, the dominant cryptocurrency was allotted value based on eight different use cases. These various use cases are as follows:

• Remittance network
• Emerging market currency
• Economic settlement network
• Nation-state treasury
• Seizure-resistant asset
• Institutional investment
• Corporate treasury
• Digital gold

When combined, the total value per Bitcoin by 2030 — as ARK Invest sees it — could be US$1.36 million. This would make the crypto three times larger in value than the entirety of the gold market at present.

The post Is winter coming for the crypto world? A bull and bear case appeared first on The Motley Fool Australia.

More reading

• What? 2 days of gains for Bitcoin, Ethereum, and Dogecoin?
• Bitcoin and Ethereum are at 6-month lows. Is now the time to pounce?
• Could this Achilles’ heel bring Bitcoin tumbling down?
• This crypto will be the Ethereum of 2022
• Bitcoin in the crosshairs. What Russia’s proposed ban could mean: expert

Motley Fool contributor Mitchell Lawler owns Bitcoin and Ethereum. 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

• Jumbo shares on the move following UK-based acquisition of StarVale
• Initial consideration of $32.1 million funded by Jumbo’s new debt facility
• Low to mid single-digit EPS accretion in the first 12 months post-completion

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The Jumbo Interactive Ltd (ASX: JIN) share price soared by 6% in early trading today after the company revealed an acquisition to expand its presence in the United Kingdom (UK).

At the time of writing, the lottery ticket seller’s shares are $17.27, up 2.55%. Earlier today, Jumbo Interactive shares reached a price of $17.90, up 6%. They have since been caught up in this afternoon’s broader market sell-off, with the S&P/ASX 200 Index (ASX: XJO) down 2.64% to 6,778 points.

Jumbo bolsters United Kingdom portfolio

In a statement to the ASX, Jumbo Interactive advised it has entered into an agreement to acquire 100% of StarVale Group.

Based in the UK, StarVale is a leading External Lottery Manager (ELM) and a digital payments company. The group provides a full range of Society Lottery services (weekly lottery and raffle) and prize draw services.

StarVale services over 850,000 active players across more than 45 charity and not-for-profit clients around the country.

In total, 9.5 million direct debit transactions are processed, reflecting roughly £54 million (A$102.44 million) in transaction value.

Under the deal, Jumbo Interactive will conditionally acquire StarVale for an initial amount of $32.1 million.

In addition, between $7.5 million to $8.5 million of deferred consideration will be payable on 30 June 2023 upon achieving certain earnings hurdles.

The acquisition will be funded by Jumbo Interactive’s new $50 million senior debt facility.

Post-completion, StarVale is expected to deliver low to mid single-digit earnings per share (EPS) accretion within the first 12 months.

The acquisition remains subject to approval by the UK Gambling Commission. This is expected by the end of FY22.

Jumbo Interactive noted that this latest purchase provides a unique opportunity to significantly broaden its footprint across the UK.

This follows the acquisition of UK-based Gatherwell in November 2019 and the conditional acquisition of Canada-based Stride in August 2021.

Jumbo Interactive CEO and Founder, Mike Veverka commented:

We identified StarVale as one of our top acquisition opportunities in the UK given their scale and leadership position in the charity lottery market, strong brands, cultural alignment with Jumbo, and their talented leadership team.

The acquisition helps accelerate our strategy to grow internationally and adds significantly more scale to our Managed Services business in the UK.

Jumbo Interactive share price summary

Over the past 12 months, the Jumbo Interactive share price has posted a gain of almost 22%.

The company’s shares reached a 52-week high of $19.57 just before the turn of the calendar year. Since then, weak investor sentiment in the market has dragged Jumbo shares down.

Based on today’s price, Jumbo commands a market capitalisation of roughly $1.08 billion, with approximately 62.4 million shares on issue.

The post Jumbo Interactive (ASX:JIN) share price leaps 6% on acquisition announcement appeared first on The Motley Fool Australia.

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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. owns and has recommended Jumbo Interactive Limited. The Motley Fool Australia has recommended Jumbo Interactive 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

• Cochlear is one of the worst performing ASX 200 healthcare stocks on Thursday
• Right now, its share price is 5.2% lower, trading at $181.54
• No news to explain the slump but some brokers are bearish on revenue growth

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The Cochlear Limited (ASX: COH) share price is in the red today. In fact, its slump places it as one of the worst-performing healthcare stocks on the S&P/ASX 200 Index (ASX: XJO) on Thursday.

At the time of writing, the Cochlear share price is $181.54, 5.2% lower than its previous close.

For context, the ASX 200 is also in the red right now, having dipped 2.3% by lunchtime.

Let’s take a look at what’s happening with the hearing device manufacturer and distributor.

What’s dragging the Cochlear share price lower today?

Cochlear’s shares are weighing on the S&P/ASX 200 Health Care Index (ASX: XHJ) on Thursday.

Right now, healthcare is one of the ASX 200’s worst-performing sectors, having slumped 3.8%.

Though, the title has evaded it due to the S&P/ASX 200 Information Technology Index‘s (ASX: XIJ) 4.86% tumble.

Amongst the ASX healthcare stocks, the Clinuvel Pharmaceuticals Limited (ASX: CUV) share price is down 5%. The Resmed CDI (ASX: RMD) and CSL Limited (ASX: CSL) share prices are both down by about 3.7%.

To make Cochlear’s tumble more baffling, there’s been no price-sensitive news from the company since August. Then, it released its results for the financial year 2021, inspiring the market to bid the Cochlear share price 7.4% lower.

The company isn’t expected to release its results for the first half of the financial year 2022 until around 22 February.

However, The Motley Fool Australia has recently reported on multiple broker updates regarding the Cochlear share price.

For instance, Macquarie recently dropped its price target for Cochlear shares to $222.50, representing a 22% upside on its current level. Credit Suisse is bullish on the future of Cochlear, slapping a $235 price target on its shares.

Though, my Foolish colleague Tony recently reported that some experts are concerned about the company’s revenue growth amid the ongoing COVID-19 pandemic.

The post Why is the Cochlear (ASX:COH) share price tumbling 5% on Thursday? appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
• Here are the latest broker updates from Macquarie. It’s not all pretty for ASX shares.
• Leading brokers name 3 ASX shares to sell today
• Cochlear (ASX:COH) share price higher on FDA approval
• Hear this: Why the Cochlear (ASX:COH) share price had such a difficult time 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. owns and has recommended CSL Ltd. and Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and ResMed Inc. 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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