Tag: Motley Fool

The IDT Australia Limited (ASX: IDT) share price has been up and down today, currently down 2.46% to 59.5 cents per share.

Today’s price swings follow on from an outstanding performance yesterday.

After the ASX medical research company reported it had successfully created the first mRNA COVID-19 vaccine candidate in Australia, the IDT share price surged, closing the day up more than 38%.

As the Motley Fool reported yesterday:

The drug product passed all the required specifications and is now going through the release process for clinical trials. In total, 450 doses of the vaccine have been manufactured, allowing 150 volunteers to take part in the upcoming study. This is expected to commence in the new year, with results expected later in 2022.

Below we look at why IDT’s CEO, Dr David Sparling, says it’s critical for Australia to have its own messenger RNA (mRNA) production facilities.

Why mRNA is a vital tool against COVID variants like Omicron

With COVID-19 having again mutated, many experts predict that Omicron will replace Delta as the prevalent strain in 2022. And most experts agree that Omicron is unlikely to be the last variant we see before, hopefully, humanity gets ahead of the pandemic.

Sparling says it’s crucial that Australia obtains the ability to develop and produce its own mRNA vaccines domestically.

According to Sparling (quoted in the Australian Financial Review):

It’s quite pivotal when you think about it. The dividends that can pay off in the future is the ability for us to be less reliant on overseas suppliers of vaccines and more reliant on our own capabilities.

The IDT share price has been volatile as it developed its vaccine candidate in only 5 months. The company worked together with the Monash Institute of Pharmaceutical Sciences and Doherty Institute. Addressing the rapid development, Sparling said:

The reason why these vaccines were developed so quickly is because the vaccine can be modified very quickly. That is the beauty of this platform and this technology: you can put a new mRNA sequence into the vaccine and quickly change the vaccine for future variants…

Things can change very quickly, but what I would say is at least developing the capability to manufacture these things for ourselves puts us on the cutting edge of this science and put us in a very good position to fight whatever difficult issues that may come up next.

IDT share price snapshot

The IDT share price has had a tremendous year, up 213% since 4 January. For some context, the All Ordinaries Index (ASX: XAO) is up 8% year to date.

Over the past month IDT shares have gained 13%

The post IDT (ASX:IDT) share price swings as CEO lauds mRNA tech in fight against Omicron appeared first on The Motley Fool Australia.

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• IDT Australia (ASX:IDT) share price rockets 40% on COVID vaccine update

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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November wasn’t a great month for ASX shares, as we can now say since December has begun. Over the month just gone, the S&P/ASX 200 Index (ASX: XJO) went from 7,323.7 points at the end of October to yesterday’s closing figure of 7,256 points. That’s a month-on-month drop of 0.92%. But how did the BetaShares Global Cybersecurity ETF (ASX: HACK) perform?

HACK investors might be used to some healthy market-beating performance by now. That’s because the HACK exchange-traded fund (ETF) is a bit of a high flyer. As of 31 October, it has managed to return an average of 22.86% per annum since its inception in 2021, including a return of 51.49% over the 12 months to 31 October. 

So did HACK live up to this reputation over November? Let’s find out.

HACK hacks November

So HACK units were asking a price of $10.41 each as we began November. Yesterday, they finished up at $$10.97 each. That’s a monthly return of 5.38% or so. HACK didn’t pay any dividend distributions over the month either, so that’s also investors’ absolute return for November. It also doesn’t include the 1.4% fall HACK units have suffered so far today either (down at $10.82 a unit at the time of writing).

But even so, that 5.38% return is a meaningful outperformance of the ASX 200 and ASX shares in general. So where did this performance come from?

Well, as an ETF, HACK invests in an underlying basket of assets, in this case shares. Not just any shares, though. This ETF only selects companies from the Nasdaq Consumer Technology Association Cybersecurity Index. This index holds a concentrated portfolio of (presently) 36 shares from around the world. It aims to select companies that are leaders in the global cybersecurity space.

As of 31 November, its top holdings (and weightings) were as follows:

1. Palo Alto Networks Inc (NYSE: PANW) with a portfolio weighting of 7%
2. Accenture plc (NYSE: ACN) with a weighting of 6.3%
3. Cisco Systems Inc (NASDAQ: CSCO) with a weighting of 5.5%
4. Okta Inc (NASDAQ: OKTA) with a weighting of 4.9%
5. Crowdstrike Holdings Inc (NASDAQ: CRWD) with a weighting of 4.7%

So is it likely that the performances of these top holdings were largely behind the BetaShares Cybersecurity ETF’s stellar November? Let’s check it out.

So Palo Alto indeed had an impressive month, rising just under 7.5% over November as of this morning’s (our time) market close over in the US.

Accenture shares slipped 0.4% though over the same period.

Cisco shares also fell, this time by just over 2%.

Okta had a rather wild month, falling almost 13% over November by market close this morning.

And Crowdstrike came out on the bottom, delivering a nasty 23% or so fall over the month just gone.

What was behind the Global Cybersecurity ETF’s stellar month?

So it was actually the performance of HACK’s top holding in Palo Alto that is largely to thank for this ETF’s impressive November. But HACK’s month would have probably been a lot worse if it wasn’t for the Australian dollar also having a very poor month. The Aussie had a shocker, falling by more than 5% against the US dollar over November. It started the month close to 75 US cents, but is currently around 71 US cents as of today.

Since most of HACK’s top holdings are US companies priced in US dollars, a falling Aussie dollar makes these investments more valuable in Australian dollar terms. This would have given the BetaShares Cybersecurity ETF a huge buffer against any falls its portfolio would have suffered. 

So there you have it, the likely reasons behind the BetaShares Global Cybersecurity ETF’s stellar November. HACK charges a management fee of 0.57% per annum.

The post How did the Betashares Global Cybersecurity ETF (ASX:HACK) perform in November? appeared first on The Motley Fool Australia.

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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 shares of and has recommended BETA CYBER ETF UNITS and CrowdStrike Holdings, Inc. The Motley Fool Australia owns shares of and has recommended BETA CYBER ETF UNITS. 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 IOUpay Ltd (ASX: IOU) share price is heading south after coming out of a trading halt on Wednesday.

Earlier this morning, the Malaysia-based buy now, pay later (BNPL) provider announced an update on its investment in I.Destinasi Sdn Bhd (IDSB).

IDSB is a specialised finance company that provides instalment-based consumer credit services in Malaysia.

At midday on Wednesday, the IOUpay share price dropped 8.11% below yesterday’s close before making up some ground. At the time of writing, IOUpay shares are fetching 17.8 cents apiece, down 4.05%.

IOUpay moves ahead with planned investment

Investors are sending the IOUpay share price lower following a broader market sell-off on the All Ordinaries (ASX: XAO). The index is currently trading at 7,557 points, down 0.4% after some heavy losses recorded in Wall Street overnight.

In its announcement, IOUpay advised that it has satisfied all the required conditions to make its first payment for IDSB.

During September, IOUpay entered into a share purchase agreement to acquire a 42% interest in IDSB for approximately $41.3 million.

The terms of the deal would see the payment split into 2 equal tranches over a 6-month period.

As such, IOUpay tapped into its existing cash holdings to pay around $20.7 million to the vendors of IDSB. This represents 50% of the purchase price, or 21% of the shares in the total issued capital of IDSB.

The second tranche payment is due once the audit of IDSB’s FY21 statutory accounts is complete, or within 6 months after settlement. The date, however, can be brought forward if IOUpay wishes to do so.

The company stated it will assess its cash position before making the final payment. It noted that it could conduct an equity capital raise as well as use its cash reserves to fund the second tranche.

About the IOUpay share price

Looking at the past 12 months, the IOUpay share price has gone nowhere, registering nil gains for the period.

The company’s shares shot up in February, reaching a multi-year high of 85 cents, before gradually treading lower. More recently, the IOUpay share price hit a 9-month low of 15.5 cents on Monday.

IOUpay commands a market capitalisation of roughly $102 million at today’s current share price.

The post Here’s why the IOUpay (ASX:IOU) share price is sinking today appeared first on The Motley Fool Australia.

More reading

• IOUpay (ASX:IOU) share price halted amid acquisition news
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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. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The freeze on the Emerald Resources NL (ASX: EMR) share price has been extended today as the company prepares to release some potentially big news.

According to the gold producer, explorer, and developer, it is getting ready to announce a material acquisition.

Right now, the Emerald Resources share price is sitting at $1.07, where it will stay for the near future.

The Emerald Resources share price freeze continues

Today is now the fourth day the company’s stock has been frozen after it entered a trading halt on Friday last week.

As the initial trading halt was due to end today, this is likely why the company requested its stock be suspended from trade this morning.

Now, the market expects the company’s acquisition news to be announced sometime between now and Friday’s open. That is unless the company extends its freeze once more.

A little background…

In its most recent quarterly release, Emerald Resources advised it was assessing “value-adding assets for subsequent developments to create a multi-asset gold producing company”.

Emerald Resources has also recently ramped up its Okvau gold mine’s production to full capacity. Thus, it may have the time to put into a new development project.

Additionally, at the end of the September quarter, it had around $15.4 million in cash in the bank and $17.3 million worth of gold bullion at hand. The company also has access to a US$100 million acquisition and development facility.

The last time Emerald Resources broke a trading halt was back in June. It broke that halt with an update on its Okvau gold mine, including details of the project’s maiden pour.  

Then, its stock’s value soared 12% before tumbling once more to finish flat with its previous close.

Right now, the Emerald Resources share price is 14,5% higher than it was this time last month. It has also gained 18.3% since the start of 2021.

The post Why is the Emerald Resources (ASX:EMR) share price still in the deep freeze today? appeared first on The Motley Fool Australia.

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• 2 reasons why Shiba Inu surged more than 30% today
• GUD (ASX:GUD) share price plunges 6% following cap raise
• Why this billionaire investor thinks Omicron could be bullish for the share market
• The Magellan (ASX:MFG) share price dropped in November 2021. Here’s what happened

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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I absolutely loved Monday.

No, I didn’t avoid losing money,

No, I didn’t buy anything when share prices fell.

The reason I loved Monday had nothing to do with me.

It had everything to do with you.

Let me tell you a story.

When I joined The Motley Fool more than a decade ago, I had a meeting with our Global Chief Investment Officer, Andy Cross.

He wasn’t drilling me on stock picking.

He wasn’t telling me what recommendations to make.

Typically of The Motley Fool, and unusually just about everywhere else, he wanted me to make sure I was looking after our members.

“We’ll get — and keep — the members we deserve”, I remember him saying.

No, not in a sales or marketing sense.

Not even in a stock-picking sense.

His very clear message to me was that while we’re ostensibly here to pick stocks, we have a much deeper and greater responsibility.

“Get them ready for whatever comes”, is another line I recall, as clearly as if it was yesterday.

Look, I try not to do too much selling in these pieces. We do enough of that elsewhere, which gives me the luxury to write about what’s on my mind, and what I hope will be of benefit to our members and readers.

But I will say that Andy’s words are typical of him, and of the approach we have ever-after tried to instil in our team here in Australia.

We are here, yes, to pick stocks. But that’s only half the job. Maybe less than half.

The rest is making sure we prepare you to ride the waves.

Because no matter how good our stock-picking (and I reckon it’s pretty good), it’s useless to our members if they don’t have the preparedness to actually see it through.

Imagine buying Amazon.com, Inc. (NASDAQ:AMZN) shares at $100, only to sell out when they hit $9.

They’re now over $3,000.

Some people did precisely that.

(I own shares in Amazon. Unfortunately, I wasn’t smart enough to buy them at either $9 or $100!)

Poor buggers.

Right company. Right opportunity. Wrong temperament and/or understanding of markets.

We at The Motley Fool absolutely have to do the first bit. But unless you go with us on the second bit, it might come to naught.

Which brings me back to Monday.

Before the market opened, the ASX 200 futures were pointing to a 1.5% fall, in the face of Omicron uncertainty.

The market opened around 1.1% down.

By 4pm Sydney time, that fall had halved, to a decline of 0.54%.

No, the halving of that decline wasn’t why I loved Monday either.

Before the ASX opened, I tweeted and posted on Facebook Inc (NASDAQ: FB) that investors shouldn’t panic.

The result?

To a person, every comment was a version of either ‘nope, not selling’ or ‘I’m actually looking for bargains’.

Can I tell you, that’s about the highest praise I can get.

Those responses, and the fact that investors remembered that we’re playing a long game, were what I loved about Monday.

It was, to no small degree, an echo of an email I received the other day. After asking a question for our podcast mailbag episode, Michael added at the end:

“Thanks for the podcast; has enlightened me on hundreds of walks to work and helped me chill out and buy stocks in March 2020 which probably brought my retirement forward a few years.”

Now, I’m no saint, and I like earning a salary as much as the next bloke, but that sort of comment, and those on my social feeds on Monday, are exactly why I do this job.

Thank you for making it a joy.

Here’s to riding the waves, together, in calm confidence.

Fool on!

The post I lost money. I didn’t buy. But I loved Monday. appeared first on The Motley Fool Australia.

More reading

• 2 reasons why Shiba Inu surged more than 30% today
• GUD (ASX:GUD) share price plunges 6% following cap raise
• Why this billionaire investor thinks Omicron could be bullish for the share market
• The Magellan (ASX:MFG) share price dropped in November 2021. Here’s what happened
• Own IAG (ASX: IAG) shares? Here’s why the company is facing a shareholder class action

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Scott Phillips owns shares of Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Meta Platforms, Inc. The Motley Fool Australia has recommended Amazon and Meta Platforms, 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

What happened

Today, popular dog-themed cryptocurrency Shiba Inu (CRYPTO: SHIB) has surged more than 32% as of 9:30 a.m. ET. This move brings Shiba Inu to new weekly highs, and is a continuation of strong momentum yesterday.

There appear to be two key catalysts behind today’s price action.

First, market-related exuberance appears to be back, with most major cryptocurrencies trading significantly higher today. That said, Shiba Inu is currently the biggest winner out of any top-50 token, suggesting this meme cryptocurrency could have regained its momentum.

Second, a company-specific catalyst appears to be at play for Shiba Inu today. The Kraken exchange announced it would be supporting Shiba Inu from Nov. 30 on.

So what

Because it’s a meme token, momentum is everything for Shiba Inu. Strength in the crypto markets, combined with strong search trends for Shiba Inu this past week, could mean retail investor interest in SHIB is back.

However, this Kraken listing is a big deal. Kraken is the fourth-largest crypto exchange in the world, and is U.S.-based. This exchange listing provides more options for retail investors to get in on the action with Shiba Inu. Considering the fact that Shiba Inu recently passed 1 million wallet-holders, the hope for many speculators is that even more individuals will jump on this momentum-driven rally.

Now what

It’s important to note that the Kraken listing will allow for trading on this platform, but will not provide SHIB futures or margin trading services. That said, a win is a win, with retail investors and speculators cheering this move.

Momentum appears to be back in the meme token space, with Shiba Inu once again leading this surge. Speculation that another rally is underway is running rampant right now. Accordingly, this is a token that’s likely to see some significant volatility from here.

How high Shiba Inu can run from here remains to be seen. Indeed, it appears this token is finally headed in the right direction. That said, investors should always be aware of the extremely high risks associated with digital assets, and meme tokens in particular. We’ve seen what can happen when momentum dries up. 

However, for now, the party appears to be on. 

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

The post 2 reasons why Shiba Inu surged more than 30% today appeared first on The Motley Fool Australia.

More reading

• Why Shiba Inu Coin sank 7% today

Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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The GUD Holdings Limited (ASX: GUD) share price has returned to trading following the company’s completed institutional component.

GUD shares dropped ~10% at market open before finding a gear. At the time of writing, the diversified products company’s shares are swapping hands for $11.23, down 6.65%.

GUD shares resume trading

It has been a disappointing day for GUD shares, with investors selling their holdings amid the company’s successful equity raise.

GUD has raised gross proceeds of approximately $290 million through an institutional placement and institutional entitlement offer, according to its release.

The institutional component sees 1 share issued for every 3.46 GUD shares owned. Issued at $10.40 apiece, the majority of eligible institutional securityholders took up their allocated minimum entitlements.

The company will allot the newly-created shares to accounts on 8 December, and will be available to trade the following day.

Under the placement, about 11.5 million new shares have been issued at the offer price, raising $120 million.

With the institutional entitlement offer and placement now completed, the retail component will commence on 6 December. Hoping to raise an additional $115 million, GUD will offer the same terms and ratio of shares to eligible retail shareholders. The retail entitlement offer will close on 15 December.

In total, the company is aiming to raise $405 million for the acquisition of AutoPacific Group (APG). GUD recently entered into a share purchase agreement with APG for a total consideration of around $744.6 million.

GUD managing director and CEO Graeme Whickman commented:

We are pleased with the strong support shown by new and existing shareholders for the equity raising and the acquisition of APG, which will see the group make a meaningful step towards its vision of becoming an integrated leader in 4WD Accessories and Trailering in Australia and New Zealand with future export potential.

About the GUD share price

Trading along in small and sharp share price movements, GUD shares have gone nowhere over the last 12 months. Year-to-date share price performance is also similar, down by just 4% for the period.

GUD presides a market capitalisation of roughly $1.14 billion, with approximately 94.86 million shares on its books.

The post GUD (ASX:GUD) share price plunges 6% following cap raise appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: ANZ hit with class action, GUD sinks
• 5 things to watch on the ASX 200 on Wednesday
• GUD (ASX:GUD) share price halted amid $745 million acquisition

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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From time to time, the investing greats offer up their perspectives on what is happening in the share market. Considering the vast wealth of knowledge amassed over the years, investors will often pay close attention to what is said.

The latest news sending a jolt of nervousness through the market is the arising Omicron virus. This new COVID-19 variant has prompted governments to consider life with a possibly more contagious virus. In addition, fears of Omicron potentially being more resistant to current vaccines made the share market shudder.

On the day Omicron was designated as a ‘variant of concern’ by the World Health Organisation (26 November 2021), the S&P/ASX 200 Index (ASX: XJO) dropped 1.73%. However, Pershing Square Capital CEO and billionaire investor, Bill Ackman, is taking a contrarian view.

It might be better for the share market

In a tweet by the American hedge fund manager on Monday, Bill Ackman shared his thoughts on early data for Omicron. It is worth noting, the World Health Organisation is still unsure on whether the new variant is more transmissible or more severe.

However, some reports have indicated that Omicron appears to be spreading more rapidly in South Africa. Because of this, there is speculation over whether the new emerging variant could overtake Delta in the dominance of COVID-19 cases.

Ackman touched on this in his tweet, setting up his thoughts on how Omicron might influence the share market. While investors have mostly reacted with selling pressure since the coverage of the new variant, Ackman is open to a different idea.

If Omicron is less severe but more transmissible, then the outcome might be positive for markets. Although, it is still early days for understanding the details of the new virus.

A thought. While it is too early to have definitive data, early reported data suggest that the Omicron virus causes ‘mild to moderate’ symptoms (less severity) and is more transmissible. If this turns out to be true, this is bullish not bearish for markets.

— Bill Ackman (@BillAckman) November 29, 2021

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

For Australia, five Omicron cases have now been confirmed. Though, the government is taking a cautious approach rather than jumping the gun to go back into lockdowns. Currently, 87% of Australians over the age of 16 are now fully vaccinated.

Damage report

Over the last 5 days, some share market sectors have been battered and bruised worse than others. Fears of the unknown associated with Omicron has led to investors taking some risk off the table.

The worst impacted sectors include energy and financials, falling 7% and 4.2% respectively in the past 5 days. A possibility of reduced demand for oil and tighter budgets could be to blame. Meanwhile, materials and tech have managed to move higher during the uncertainty.

The post Why this billionaire investor thinks Omicron could be bullish for the share market appeared first on The Motley Fool Australia.

More reading

• GUD (ASX:GUD) share price plunges 6% following cap raise
• The Magellan (ASX:MFG) share price dropped in November 2021. Here’s what happened
• Own IAG (ASX: IAG) shares? Here’s why the company is facing a shareholder class action
• ASX 200 (ASX:XJO) midday update: ANZ hit with class action, GUD sinks
• Firefinch (ASX:FFX) share price leaps 5% on US$39 million payday

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

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The Magellan Financial Group Ltd (ASX: MFG) share price saw a decline in November 2021.

Magellan shares fell around 4% as the business continues to drift lower.

Since the start of FY22 (being July 2021), the Magellan share price has actually fallen by around 40%.

What’s happening to the Magellan share price?

Funds management businesses share prices sometimes follow the movement of the broader share market.

For example, today Magellan shares are down around 2% amid more comments from the US Federal Reserve. The Federal Reserve Chair Jerome Powell is not going to describe the current elevated inflation situation as “transitory” any more. With that in mind, the US Fed is going to slow down its purchases of assets quicker. Asset buying can be supportive of asset markets, like shares.

Investors are also coming to terms with the thought that vaccines may not be quite as effective against the new Omicron COVID-19 variant.

But that’s what is happening right now. What about November and the last few months?

Funds under management (FUM) and performance difficulties

Investors, analysts and brokers pay close attention to Magellan’s FUM movements. Investment fund performance also dictates whether the manager can earn performance fees.

In its update regarding the quarter to 30 September 2021, Magellan said it experienced net outflows of $1.53 billion, which was approximately 1.3% of average FUM over the quarter. This comprised net retail outflows of $617 million and net institutional outflows of $910 million. FUM movements can have an impact on the Magellan share price.

In regards to the net institutional outflows, $1 billion of outflows were the result of three clients rebalancing their portfolios across global equities ($410 million), infrastructure equities ($410 million) and Australian equities ($180 million). But, all three clients were retained, each with mandates of more than $2 billion with Magellan.

No institutional mandates were lost during that quarter. The global sustainable strategy secured its first mandates during the quarter.

In the latest monthly FUM update for October 2021, FUM increased $1.5 billion to $114.8 billion.

Some of Magellan’s main funds has been underperforming its benchmark. For example, the Magellan Global Fund (Open Class) (ASX: MGOC) had underperformed the MSCI World Net Total Return Index (AUD) by 22.8% over the prior year at 31 October 2021.

Analyst thoughts on the Magellan share price

Brokers at Macquarie Group Ltd (ASX: MQG) currently rate Magellan as a buy, with a price target of $38.

The broker acknowledged that the fund manager now wasn’t as highly valued by investors with its recent underperformance and said net flows may not improve over the rest of this financial year.

However, Macquarie thinks that Magellan shares now look attractive and offer a nice prospective dividend yield.

The Magellan share price is priced at 12x FY23’s estimated earnings with an estimated partially franked dividend yield of 7.5% for that financial year.

The post The Magellan (ASX:MFG) share price dropped in November 2021. Here’s what happened appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns shares of Magellan Financial Group. 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 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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Owners of Insurance Australia Group Ltd (ASX: IAG) shares might be interested to learn the company could be about to face a shareholder class action.

The class action refers to the company’s recent involvement in, and handling of, business interruption claims.

At the time of writing, the IAG share price is trading at $4.42, 0.23% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is down 0.3%, while the All Ordinaries Index (ASX: XAO) has slipped 0.37% .

Let’s take a closer look at the trouble that might soon find IAG.

Will IAG be hit with a class action this month?

Quinn Emanuel, a law firm specialising in class action, has announced plans to file a suit against IAG in the Supreme Court of Victoria before the year’s end.

The matter for which the class action refers to dates back to 2020, when COVID-19 first hit Australia.

As a result of the pandemic, businesses sought to claim their interruption insurance benefits. However, they were told their policies didn’t cover quarantinable diseases.

Some policyholders soon found the company’s business interruption policies referred to a redundant Act of Parliament to avoid paying out pandemic-related interruptions.

The policies referred to the Quarantine Act, which was repealed in 2016 and replaced by the Biosecurity Act.

The battle between insurers and insured was eventually brought in front of the New South Wales Court of Appeals. It’s worth noting that IAG wasn’t the only insurance provider to be involved in the initial court case.

This is where Quinn Emanuel’s suit begins.

The firm’s claim states IAG failed to make the market and owners of its shares aware of the likelihood the New South Wales Court of Appeal would find in favour of policyholders and how such a ruling would affect the company.

It plans to argue the company breached its continuous disclosure obligations and engaged in misleading and deceptive conduct.

Quinn Emanuel also notes the company had 5 years to amend its policies to include new legislation but failed to do so.

When the New South Wales Court of Appeal ultimately found in favour of policyholders, IAG was forced to put aside $865 million to pay the now-viable business interruption claims. It underwent a $750 million capital raise to cover the costs.

The law firm is claiming the IAG share price “fell materially” following the judgement and subsequent capital raise.

An IAG spokesperson said the company was aware of the firm’s intent to file a class action against it and it hasn’t been served with any legal proceedings yet.

IAG share price snapshot

The IAG share price has had a rough trot lately.

Right now, the company’s stock is trading 18% lower than it was before it announced the finding’s impact.

It’s also 6% lower than it was at the start of 2021.

The post Own IAG (ASX: IAG) shares? Here’s why the company is facing a shareholder class action appeared first on The Motley Fool Australia.

More reading

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• Could the IAG (ASX:IAG) share price be heading even lower?

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 owns shares of and has recommended Insurance Australia 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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