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The S&P/ASX 200 Index (ASX: XJO) has been enduring a rather disappointing four weeks or so of performance. Over the past month, the ASX 200 is down by roughly 1.7%, including the nasty 1.2% fall we’ve seen so far today. One ASX exchange-traded fund (ETF) is certainly putting the ASX 200 to shame over this period. That would be the ETFS Battery Tech & Lithium ETF (ASX: ACDC).

While the ASX 200 has gone backwards over the past month, the ACDC ETF has gone from a unit price of $93.91 to $96.95 that it is commanding currently. That’s a very pleasing gain of 4%, despite the 1.25% it has lost today thus far.

So how has a new ETF like ACDC pulled this off?

ACDC ETF gets a power surge

Well, let’s dig a little deeper into what kind of investments ACDC actually holds. An ETF is only worth the sum of its parts, after all.

So according to the provider ETFS, ACDC is an ETF dedicated to companies in the battery technology and lithium mining spaces. It is designed to track “the performance of companies that are providers of electrochemical storage technology and mining companies that produce metals that are primarily used for the manufacturing of battery-grade lithium batteries”.

The top part of the Battery Tech & Lithium ETF portfolio is currently (as of 31 October) positioned as follows:

1. BYD Co – weighting of 5.9%
2. Pilbara Minerals Ltd (ASX: PLS) – weighting of 5.3%
3. Tesla Inc (NASDAQ: TSLA) – weighting of 4.9%
4. SolarEdge Technologies Inc (NASDAQ: SEDG)– weighting of 4.7%
5. Livent Corp (NYSE: LTHM)– weighting of 4.6%

Over the past month, BYD shares are up 1.86%.

Our own Pilbara Minerals is up a pleasing 15.7%. 

Tesla is up 9.6% over the past month.

SolarEdge shares have risen 11%

And Livent Corp stock is up 19.1%.

Since these 5 companies comprise 25.4% of this ACDC ETF’s portfolio, it’s perhaps no surprise that ACDC has also had a successful month.

The ETFS Battery Tech & Lithium ETF charges a management fee of 0.69% per annum. Since its inception in August 2018, it has returned an average of 25.6% per annum.

The post Here’s why the ETFs Battery Tech & Lithium ETF (ASX:ACDC) is having such a rocking month appeared first on The Motley Fool Australia.

More reading

• Why is the Brickworks (ASX:BKW) share price struggling this week?
• Here’s why the Webjet (ASX:WEB) share price is getting hammered on Friday
• Here’s why the FBR (ASX:FBR) share price is sinking 7% today
• Why are ASX 200 travel shares having such a shocker today?
• The Telstra (ASX:TLS) share price is having a good month. Here’s why these top brokers are expecting more of the same

Motley Fool contributor Sebastian Bowen owns shares of Tesla. 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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Shares in Brickworks Limited (ASX: BKW) haven’t found range today and are inching lower at $23.30. It looked like a positive start to the day for investors, but shares fell south by mid-morning.

It’s been a wavy ride these past 3 months for Brickworks investors as well. Shares have bounced from a top of $25.93 in late September, and the trend has spilled over into this week’s trading.

Let’s take a closer look.

What’s got Brickworks share price battling this week?

The Brickworks share price has been underperforming the benchmark S&P/ASX 200 Index (ASX: XJO) these past few days.

Investors responded poorly to the company’s AGM presentation and trading update on Tuesday. In it, the company outlined both investment highlights and challenges to its shareholders.

The company says it has made a steady start to FY22, with first quarter revenue and EBITDA slightly ahead of the prior corresponding period.

However, sales in Sydney and Melbourne, Brickworks’ two largest markets, were impacted by construction restrictions due to the pandemic.

Sales across concrete products, including Austral Masonry, were down on the prior period, with this business “more exposed to the current weakness in the multi-residential segment”.

Meanwhile, construction of its brick facility at Horsley Park in Sydney is also “well underway” and is expected to be completed in around a year’s time.

Whilst Brickworks recorded a strong increase in sales, margins in its North America business remain compressed. It says it is experiencing cost pressures across the supply chain, including direct production inputs and transportation.

Labour shortages are resulting in higher wage rates to attract and retain staff, and activity in the higher margin commercial segment is expected to remain weak until Spring.

The company acknowledged that “there remains work to do to ensure this business reaches its full potential”, but that it is confident that North American operations will deliver improved earnings in the years ahead.

What’s the outlook?

Regarding the company’s outlook, management noted that within Australia, sales momentum is improving. It hopes the activity can remain elevated for the rest of the financial year.

In North America, it reckons FY22 earnings will benefit from capital management and rationalisation initiatives, despite ongoing margin pressures.

The merger of Soul Pattinson Ltd (ASX: SOL) and Milton Corporation Ltd (ASX: MLT) triggered a one-off non-cash profit to Brickworks, due to Brickworks’ share of the larger WHSP.

This profit will be in the range of $375-425 million (after-tax) and will be recorded in the first half of FY22.

Speaking on the company’s outlook, Brickworks’ Managing Director Lindsay Partridge said:

The pandemic has accelerated industry trends towards online shopping, and this is continuing to drive industrial property values higher. With our annual revaluation process to be completed prior to the end of the first half, we anticipate these trends will result in further revaluation gains across our portfolio.

Partridge continued:

In both countries [North America and Australia], there remains an ever-present threat of further unforeseen disruptions from the pandemic and related supply chain issues. Another strong half is expected for Property, and WHSP is expected to deliver a stable and growing stream of earnings and dividends over the long term.

Brickworks’ shares are down 5% on the month but have clawed 15% higher in the past year. This has come after rallying 21% since January 1, but its share price is now well off its 5-week high of $26.32.

The post Why is the Brickworks (ASX:BKW) share price struggling this week? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• 2 ASX dividend shares offering solid income and growing yields
• Why is the Brickworks (ASX:BKW) share price having such a lousy month?
• Why is the Washington H. Soul Pattinson (ASX:SOL) share price struggling in November?
• 2 ASX shares that could be buys for both growth and dividends

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of and has recommended Brickworks. 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 Webjet Limited (ASX: WEB) share price is dropping again. It is currently down by another 5% at the time of writing.

But this adds to declines that the business has seen over the last couple of weeks. Since Monday 8 November 2021, it has fallen by 19%.

But Webjet isn’t the only one suffering today. Other S&P/ASX 200 Index (ASX: XJO) shares are also in the red. The Corporate Travel Management Ltd (ASX: CTD) share price is down 5%, the Flight Centre Travel Group Ltd (ASX: FLT) share price is down 7.5% and the Qantas Airways Limited (ASX: QAN) share price is down 5.3%.

What’s going on with the Webjet share price

Sometimes investors are willing sell first and ask questions later when it comes to potential problems.

COVID-19 has been impacting the travel industry for almost two years now.

But whilst it seemed like everything was settling down, there are reports of a new COVID-19 variant that could be about to put a spanner in the works for the Webjet share price, and potentially many others.

According to reporting by various media, such as News.com.au, there is variant that prove to be even more troubling than the Delta strain.

The BBC reports that scientists say the variant has 50 mutations overall and more than 30 on the spike protein, which is the target of most vaccines and the “key the virus uses to unlock the doorway into our body’s cells”.

It’s reported that experts in South Africa have said the variant is “very different” to others that have circulated, with concerns that it could be more transmissible but also able to get around parts of the immune system.

Prof Ravi Gupta, from the University of Cambridge, said the new variant had the potential to escape immunity and have increased infectivity.

The BBC reported Prof Neil Ferguson, from the Imperial College London, has said it’s concerning the new variant appeared to be “driving a rapid increase in case numbers in South Africa” and said the move to restrict travel was “prudent”.

UK restricts travel

The UK has decided to act quickly to stop this variant getting into the country. People coming from several southern African countries – South Africa, Namibia, Zimbabwe, Botswana, Lesotho and Eswatini – will have to quarantine. All flights from those countries have been suspended.

Any British or Irish resident arriving from the countries will have to quarantine in a hotel from Sunday morning.

The BBC reported the flight ban will remain in place until the hotel quarantine system is up and running.

A big question for the Webjet share price, the ASX 200 travel share sector and the wider world will be what happens next if this new variant escapes southern Africa? Will there be more travel bans and quarantining?

UK Health Secretary Sajid Javid said these actions were about “being cautious and taking action and trying to protect. as best we can, our borders”.

What is the Australian response?

The World Health Organization’s technical working group is going to meet on Friday to discuss this new variant.

However, at this stage, Australia is not going to make any changes. The Guardian and many other media outlets reported that the Australian health minister, Greg Hunt, has told media there will be no changes to flights from South Africa.

But the Australian government will remain flexible and could make changes if needed. But passengers from South Africa are currently going through 14-day quarantine anyway.

Webjet share price snapshot

Despite the fact that Webjet shares are down so much over the last month, it is still up 7% in the last six months and 4% in 2021 to date.

The post Here’s why the Webjet (ASX:WEB) share price is getting hammered on Friday appeared first on The Motley Fool Australia.

More reading

• Why are ASX 200 travel shares having such a shocker today?
• ANZ (ASX:ANZ) share price shrugs off ASIC lawsuit
• Brokers name 3 ASX shares to buy today
• Are Qantas (ASX:QAN) shares a top reopening buy? Here’s what Motley Fool analyst Benny Ou thinks
• 5 things to watch on the ASX 200 on Friday

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 has recommended Corporate Travel Management Limited, Flight Centre Travel Group Limited, and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The FBR Ltd (ASX: FBR) share price is seeing red today following a company announcement regarding a recent capital raise.

At the time of writing, the robotics company’s shares are down 7.55% to 4.9 cents. It’s worth noting that regardless of the significant drop, its shares have shot 25% higher in the past month.

FBR completes placement

A major catalyst for FBR shares plummeting could be investor concerns about the impending dilution of shares.

According to its release, FBR advised it has received firm commitments from an array of investors to raise $10 million. The strongly supported placement primarily came from new and existing institutional and sophisticated investors from Australia, the United Kingdom, Hong Kong and the United States.

The placement will see around 222.22 million new ordinary shares created at an issue price of 4.5 cents apiece. This represents a 14% discount to the 5-day volume-weighted average price (VWAP) and an 11% discount to the 30-day VWAP.

FBR will use its existing placement capacity under listing rule 7.1. This allows up to 15% of its shares to be issued without shareholder approval. The new shares will rank equally with the company’s existing ordinary shares.

The proceeds received from the placement will be used for working capital and to deliver its commercialisation strategy. This includes:

• Complete 27 builds in pipeline, plus additional builds yet to be committed;
• Complete assembly of two additional Hadrian X construction robots to meet demand in Australian market;
• Finalise the design of the next iteration of the Hadrian X and commence manufacturing;
• Continue scale up of organisational capability post-COVID; and
• Further development of BIM architectural software to enable integration into construction design and planning with customers.

FBR managing director and CEO, Mike Pivac said:

We are pleased to have attracted support from both existing and new institutional and sophisticated investors to help us progress the commercialisation of FBR’s technology.

The funds raised will position the Company well to execute on and expand its current committed work pipeline and to capitalise on commercial opportunities that are frequently presenting themselves globally, particularly in North America and Europe.

FBR share price snapshot

Despite today’s fall, the FBR share price has delivered modest gains for the past 12 months, up 6%. The company’s share price reached a 52-week high of 6 cents in mid-November, before pulling back.

Based on valuation grounds, FBR presides a market capitalisation of roughly $108.12 million, with over 2.21 billion shares outstanding.

The post Here’s why the FBR (ASX:FBR) share price is sinking 7% today appeared first on The Motley Fool Australia.

More reading

• Why is the FBR (ASX:FBR) share price on ice today?
• Here’s why the FBR (ASX:FBR) share price is rocketing 8% on Wednesday
• Here’s why the FBR (ASX:FBR) share price is leaping 25% today

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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S&P/ASX 200 Index (ASX: XJO) travel shares are having a lousy day today.

In fact, Flight Centre Travel Group Ltd (ASX: FLT), Webjet Limited (ASX: WEB), and Qantas Airways Limited (ASX: QAN) are all in the unwelcome group of worst 5 performers on the ASX 200 today.

At the time of writing, the Qantas share price is down 5.1%, the Webjet share price is down 5.3%, and the Flight Centre share price is down a painful 6.7%.

The ASX 200 is also in the red, but ‘only’ down by 1.2%.

So what’s going on?

COVID variant hammers confidence in ASX 200 travel shares

ASX 200 travel shares, and indeed most risk-on assets, are taking a beating today on news of a new and potentially dangerous COVID variant.

The new variant – B.1.1.529 – emerged in South Africa where full vaccination rates remain below 40%. It’s believed the variant may have stemmed from an individual with HIV, according to Francois Balloux, director of the UCL Genetics Institute.

As Bloomberg reports, “The virus can linger for longer in people whose immune systems are compromised, potentially offering a bigger window for mutations.”

Of potential concern for the world’s reopening plans and investors in ASX 200 travel shares:

Scientists are still trying to determine whether the new variant … is more transmissible or more lethal than previous ones. What’s clear is that it has the most mutations of any strain yet identified.

Air travel restrictions rolled out

ASX 200 travel shares look to be getting sold off amid fears that initial travel restrictions just put in place overseas to mitigate the spread of the new variant may only be the tip of the iceberg.

Both the United Kingdom and Israel have already announced a temporary halt on flights from South Africa and 5 neighbouring nations.

Commenting on that move, the UK’s Health Secretary Sajid Javid said (quoted by Bloomberg): “As part of our close surveillance of variants across the world, we have become aware of the spread of a new potentially concerning variant.”

Travellers who do arrive from these nations will need to quarantine in hotels.

Unfortunately, as we came to see with the Delta variant, the genie may already be out of the bottle. Hong Kong has reported 2 travellers have tested positive for B.1.1.529, which has yet to receive its own Greek letter.

Certainly not the sort of news investors in ASX 200 travel shares hoping for a smooth reopening wanted to hear.

Don’t shoot the messenger!

The post Why are ASX 200 travel shares having such a shocker today? appeared first on The Motley Fool Australia.

More reading

• Brokers name 3 ASX shares to buy today
• Are Qantas (ASX:QAN) shares a top reopening buy? Here’s what Motley Fool analyst Benny Ou thinks
• Leading broker upgrades Webjet (ASX:WEB) shares to a buy rating
• How do you value the Flight Centre (ASX:FLT) share price?
• Qantas (ASX:QAN) share price down 5% so far this week despite boss spruiking ‘new opportunities’

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 Flight Centre Travel Group Limited and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Telstra Corporation Ltd (ASX :TLS) share price has indeed enjoyed a very successful month. Telstra shares are up a very robust 6.8% since this time last month, rising from approximately $3.80 to the $4.06 they are commanding today at the time of writing. And that’s including the 0.5% dip we’ve seen so far today.

But if we zoom out, the picture just seems to get better and better. Telstra is also up a healthy 34.9% year to date in 2021 so far, as well as 30.55% over the past 12 months. Since going under $2.70 a share back in October last year, Telstra is now up more than 50% from those lows.

So now that Telstra has enjoyed these strong runs, many an investor might be wondering where Telstra is headed from here.

Well, to assist in that question, let’s take a look at what some top ASX brokers are saying about this ASX 200 telco right now.

3 ASX brokers rate the Telstra share price as a buy

Investment bank and broker Goldman Sachs is bullish, for one. Goldman currently rates Telstra shares as a ‘buy’ with a 12-moth share price target of $4.40 – implying a potential 8.1% upside over the next 12 months (in addition to any dividend returns of course). Goldman likes what it sees in Telstra’s recent Digicel acquisition, and reckons the telco will continue to dole out dividends as well as share buybacks for investors.

But Goldman isn’t the only expert investor bullish on Telstra shares. As my Fool colleague James covered last week, broker Morgans has also issued an ‘add’ rating on Telstra recently. Morgans sees Telstra with a share price of $4.55 in a year’s time (upside of almost 12%). This broker is attracted by what it sees as Telstra’s strong and stable dividend.

My Fool colleague Zach also recently analysed fellow broker JPMorgan’s views on Telstra. JPMorgan goes further again, rating Telstra with a share price target of $4.60 (upside of 13%). This broker noted Telstra’s “headstart on the rollout of 5G infrastructure [which] should see market share gains of lucrative postpaid subscribers”.

It also likes what it saw with the Digicel acquisition as well, and calls the telco “the best placed in the Australian mobile market”.

So there you have it, what 3 top ASX brokers think of the Telstra share price right now. Time will only tell who turns out to be right. In the meantime, Telstra’s current share price of $4.06 gives it a market capitalisation of $48.3 billion, with a dividend yield of 3.94%.

The post The Telstra (ASX:TLS) share price is having a good month. Here’s why these top brokers are expecting more of the same appeared first on The Motley Fool Australia.

More reading

• Does the AGL share price really offer a 14% dividend yield?
• These 3 ASX 200 shares are topping the volume charts this Thursday
• Here are the 3 heaviest traded ASX 200 shares this Tuesday so far
• Is the Telstra (ASX:TLS) dividend heading up for the first time in almost 10 years?
• 2 quality ASX dividend shares with attractive yields

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Sebastian Bowen owns shares of JPMorgan Chase and Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in e-commerce company Kogan.com Ltd (ASX: KGN) haven’t found support today and are trading down 5.3% at $8.04. The result marks the fourth 52-week low for the Kogan share price this week after it closed down at $8.49 yesterday.

Investors applied more selling pressure yesterday after Kogan’s trading update and a remuneration strike from its annual general meeting (AGM).

Nonetheless, it’s been a sea of red for Kogan shareholders this year. Shares are down 83% from a high of $21.67 in January and have given away another 30% in just over a month.

Let’s hear what the experts have to say about the outlook for Kogan investors.

Can Kogan.com fall any lower?

Following Kogan’s trading update, the team at UBS see challenges ahead for the company but retained its neutral rating and $10 price target in a note today.

UBS notes that Kogan’s reinvestment strategy may increase its operating expenditure. It also reckons this trend is likely to increase with respect to Kogan’s growth model.

One point the broker highlights is that Kogan’s operating expenditure was $15 million for October, up 9% on the entire first quarter of FY22.

This occurred even as Kogan made a substantial reduction to its warehousing costs and lower inventory levels – moves typically made to lower operating expenses.

The broker notes that Kogan could keep investing capital to support its sales growth plus better premiums on its customer memberships.

The majority of analysts identified for this report have a neutral or sell rating on the Kogan share price, whereas just 3 are bullish. However, with the share trading at $8 and change, all of these brokers value Kogan at a higher price than the market.

For instance, the consensus price target is $11.15 from the analyst group, implying an upside potential of around 38%.

Credit Suisse is the most bullish, valuing Kogan at $13.88 a share back in October, whereas Jarden reckons it’s a sell at $8.86.

This dichotomy is an interesting one but could make sense given that 50% of the recommendations are neutral on the Kogan share price.

There could also be further updates from each of these brokers in the coming weeks following Kogan’s trading update yesterday.

Kogan share price snapshot

In the past 12 months, the Kogan share price has fallen by more than 50%. It has also crashed 57% this year to date. In the past week, shares are down by more than 11%.

Kogan is also lagging behind its peers and the benchmark S&P/ASX 200 index (ASX: XJO)’s return of around 10.5% in the last year.

The post The Kogan (ASX:KGN) share price just hit another 52-week low, its fourth this week. Can it fall any further? appeared first on The Motley Fool Australia.

More reading

• Kogan (ASX:KGN) share price falls amid remuneration second strike
• Kogan (ASX:KGN) share price higher on trading update and 5-year growth plan
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• Kogan shares or Temple & Webster? This expert has their say

The author Zach Bristow has no positions in any of the shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com 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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The Prophecy International Holdings Limited (ASX: PRO) share price is soaring today, up 32% to $1.61 in early afternoon trade.

This comes after the computer software applications and services company reported significant growth across its 2 product lines, Snare and eMite.

Snare is Prophecy’s cybersecurity software product line. It offers security monitoring, threat detection, security information and event management, and centralised log management. eMite is a SaaS (software as a service)-based customer experience and call centre analytics platform.

What growth figures were reported?

The Prophecy share price is surging after the company reported continued operational progress across its business units.

Prophecy said its subscription-based annualised recurring revenue (ARR) is up more than $1.8 million in November to date. Its total ARR now exceeds $15.4 million.

Breaking that down, ARR from its eMite segment stands at $10.5 million, with $4.1 million in ARR from its Snare business and another $600,000 from Legacy subscription revenue.

The company cited a number of new recurring customers for eMite, such as agricultural (Farmlands), finance (BPER Banca), and health (Providence St Joseph’s). It said there are more deals on the table it still expects to close in November.

To date for FY22 eMite sales growth has come in at 800% compared to the same period in FY21.

According to Prophecy:

In cloud migration, eMite is riding a significant growth trend. We expect that COVID-19 will accelerate cloud migration for the next several years as enterprise customers seek to enable working from home… We will add vendor partnerships similar to Genesys and Amazon for eMite.

As for Snare, FY22 sales growth to date is up 46% from the same period in FY22. The company said its new subscription sales model for Snare “enhances flexibility for customers and supports continued growth” in its base of ARR.

The Prophecy share price could also be getting a lift from the company’s outlook for the full 2022 financial year. It stated, “eMite and Snare’s strong performance is expected to continue in FY22”. Prophecy forecasts approximately $13 million in sales for eMite and $20 million for Snare.

Prophecy share price snapshot

The Prophecy share price has been red hot this year. Over the past 6 months alone, its shares have surged by around 210%. For comparison, the All Ordinaries Index (ASX: XAO) gained around 4.5% in that same period.

Over the past month, Prophecy’s shares are up by more than 50%.

The post Prophecy (ASX:PRO) share price rockets 32% on surging growth appeared first on The Motley Fool Australia.

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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 Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is seemingly unaffected by the ASIC lawsuit that has been announced.

At the moment, ANZ shares are up whilst the S&P/ASX 200 Index (ASX: XJO) is down around 1%.

ASIC lawsuit against ANZ

ANZ acknowledged that the Australian Securities and Investment Commission (ASIC) has commenced a civil penalty proceeding relating to three unlicensed third parties providing home loan application documents to ANZ lenders, including in connection with ANZ’s home loan introducer program.

ASIC is alleging that ANZ contravened the National Consumer Credit Protection Act in relation to 74 home loan applications made between 2016 and 2018, and contraventions of general conduct obligations owed by credit licensees under the Credit Act.

The big four ASX bank said that it has co-operated with ASIC during its investigation and has established a customer remediation program as well as continuously improving its home loan processes and controls.

ANZ is considering the matters raised in the ‘Concise Statement’ and won’t be providing further comment because the matter is now before the courts.

What is ASIC alleging that ANZ did?

The regulator says that ANZ’s program involved home loan referrals to ANZ from third party “introducers” from various professions, such as cleaners and real estate representatives.

ASIC noted that introducer programs received considerable criticism in the Financial Services Royal Commission.

It’s alleged that ANZ breached consumer protection credit laws by accepting customer information and documents from introducers and other unlicensed individuals when this was not allowed. ASIC also alleges that some of the documents provided were fraudulent.

ASIC is also saying ANZ breached its general conduct obligations by failing to take reasonable steps to ensure its representatives did not conduct business with unlicensed third parties and therefore failed to engage in credit activities “efficiently, honestly and fairly”.

Comments on the case

ASIC Deputy Chair Sarah Court said:

ASIC is concerned that as a result of this conduct some loans may have been granted by ANZ based on false information and some consumers may have entered into home loans that were beyond their ability to pay.

If banks are going to accept referrals of consumers seeking a home loan from unlicensed individuals, who receive commission payments for the referrals, they need to make sure they have the right systems in place to properly process those referrals.

How much could the penalty be?

Time will tell. ASIC said that “between 2015 to June 2020, more than 50,000 loans were referred to ANZ through the introducer program, resulting in lending of more than $18.5 billion. In September 2018, the introducer program contributed to approximately 10% of all home loans sold by ANZ’s branch network in Australia.”

Though ASIC is referring to 74 home loan applications made between 2016 and 2018 with one of the allegations.

Last year a penalty of $15m was imposed on National Australia Bank Ltd (ASX: NAB) for contravening National Consumer Credit Protection laws relating to its introducer program.

ANZ share price snapshot

ANZ shares are up 0.3% and it has gone up by 17.6% over the last year.

The post ANZ (ASX:ANZ) share price shrugs off ASIC lawsuit appeared first on The Motley Fool Australia.

More reading

• Analysts name 2 ASX dividend shares to buy
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• ANZ (ASX:ANZ) share price history: What caused the biggest ups and downs?
• Here are the top 10 ASX shares today
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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 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 Damstra Holdings Ltd (ASX: DTC) share price is falling today and is now down 10.68% at 46 cents.

Shares in the enterprise protection software business took a hit from the open following the release of Damstra’s AGM presentation this morning.

Language at the AGM acknowledged “the market appears to have lost short-term confidence in the company” and that Damstra is focused on sharing “the disappointment in [its] share price performance with other investors”.

Not only that, the company reduced its forecasts for FY22 after a series of challenges across the year.

Here are the key takeouts.

What’s happening with the Damstra share price?

It’s been a difficult year for Damstra shareholders. Since this time in 2020, the Damstra share price has wobbled down from a high of $1.71 and is now at 52-week lows.

Alas, management acknowledged Damstra has faced challenges in 2020/21 that have contributed to the current investor sentiment.

The first major issue related to a contractual dispute with a client acquired through the Vault Intelligence Ltd acquisition. The second came down to “descoping and reduction of service from a global mining client as they internalised their hardware and site access requirements”.

Both were “extremely disappointing and adversely impacted [the company’s] near-term organic growth outlook”. This resulted in adjustments to FY22 guidance.

Damstra downgraded its FY22 revenue guidance and now has its sights on $30 million to $34 million, down from $35.9–$38.9 million.

It also sees an earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin of 15%–20% after downgrading from 22.5%–25%.

As noted by the company, these changes reflect the minimal contribution from its Newmont business and the UK business for the remainder of FY22. At the lower end of the guidance range, it assumes minimal new client acquisition for the remainder of the financial year.

Damstra also notes that even with its new guidance, FY22 revenue is still expected to grow by 10%–24% and, if Newmont was excluded entirely, underlying revenue growth rate would be expected at 21%–37%.

Despite these headwinds, Damstra reiterated its FY21 results, where it increased sales by 40% to $27.4 million, with 87% of total revenues now annually recurring (ARR). The Damstra share price also fell on the release of these results in August.

As for Q1 FY22, unaudited revenue was $6.2 million, with 87.3% of that ARR. Cash receipts were unaudited $7.7 million and the number of paying users grew to 746,000.

What did management say?

The company also appointed a new CFO today. Andrew Ford will take over as Damstra’s chief of finance. He has more than 20 years of experience in similar roles.

Speaking on the announcement, Damstra’s executive chairman Johannes Risseeuw said:

Today we have also announced the appointment of Andrew Ford as chief financial officer, commencing in February 2022 based in Melbourne. Andrew has spent the majority of his 20-year career in CFO and senior finance roles, most recently as CFO/finance director for Infrabuild Ltd/GFG Alliance. Prior to this, he was the CFO of ASX-listed Godfreys Group Ltd. Andrew has also held finance positions with Cleanaway Ltd, Skilled Group Ltd, BlueScope Ltd, and professional services firm Deloitte. Andrew graduated with a commerce degree from the University of Melbourne.

The Damstra share price has performed well under the market’s expectations these past 12 months, posting a loss of 72% in that time. That’s been spurred on by a 71% loss this year to date. Shares are also down 51% in the past month.

The post Damstra (ASX:DTC) share price tumbles 11% as guidance downgraded appeared first on The Motley Fool Australia.

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The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Damstra Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Damstra Holdings 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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