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It’s a massive week for ASX listings this week, as Friday will see the second billion-dollar company debut.

In fact, APM Human Services International Limited (ASX: APM) will start its public life with a $3.26 billion market capitalisation. That dwarfs Siteminder Limited (ASX: SDR)’s $1.36 billion valuation at the time of its listing on Monday.

The initial public offer (IPO) alone will have raised $982 million for APM Human Services.

APM is a disability services provider with headquarters in Perth. The business was established in 1994 by executive chair Megan Wynne, who will become a billionaire on Friday with her 34.2% stake.

“I started my career as an occupational therapist and it is our allied health and rehabilitation foundations that shape the way we approach working with our clients,” she said in a letter to investors.

“Regardless of their circumstances, age, or stage of life, our evidence-based practice supports people to live a fulfilling life, recover from injury or illness, gain sustainable employment, or maintain their quality of life as they age.”

APM shares were issued during the IPO at $3.55 each. They start trading on a conditional and deferred settlement basis on Friday, while general trading will commence Wednesday.

APM is profitable, but reliant on government programs

Although broadly labelled as a disability services provider, the company also lists “sole parents, youth, aged workers, ex-offenders, and people from culturally or linguistically diverse backgrounds” as beneficiaries of its services.

Technically, the customers are institutions, mainly government employment agencies.

The prospectus indicates the main reasons for raising $982 million are to pay off debts and provide existing investors with a liquid market to trade their shares.

APM has business spread across 10 countries, with 52.2% of its revenue coming from Australia. Europe raked in 26.8% of the 2021 financial year revenue, while North America brought in 12.5% and Asia-Pacific 8.5%.

The last financial year saw $1.03 billion of revenue come in, resulting in a net profit after tax and amortisation of $48.9 million.

“For FY22, the directors forecast that APM will generate pro forma revenue of $1.3 billion, pro forma EBITDA of $295 million and pro forma NPATA of $155 million, representing growth of 31%, 26% and 21% respectively over FY21-FY22,” said Wynne.

Fund managers have reportedly been cautious about APM’s float, as its business is heavily dependent on the federal government’s Disability Employment Services scheme.

That program has been under fire for the underwhelming results realised in return for increasing annual costs, as detailed in a Boston Consulting Group report last year.

The post Another billion-dollar baby lists on ASX this Friday appeared first on The Motley Fool Australia.

More reading

• 2 buy-rated ASX shares with growing dividends
• 5 things to watch on the ASX 200 on Thursday
• 2 ASX healthcare shares rated as buys
• The Novonix (ASX:NVX) share price tumbled 14% today. What’s going on?
• Myer (ASX:MYR) share price holds the fort amid news of Vicinity lawsuit

Motley Fool contributor Tony Yoo 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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Are you looking to add some dividend shares to your portfolio in the near future? Then take a look at the ones listed below.

Both dividend shares have been tipped to grow their distributions over the coming years by analysts. Here’s what you need to know about them:

Bapcor Ltd (ASX: BAP)

The first ASX dividend share to look at is Bapcor. It is the Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions.

Thanks to its strong market position, growing store footprint, a favourable redirection in consumer spending, and robust demand for used cars, Bapcor was a very positive performer in FY 2021. This led to elevated sales across all its brands and underpinned strong group sales and profit growth.

The good news is that Citi believes Bapcor is well-placed to continue its growth over the long term. This is due to its store rollout plans, supply chain optimisation initiatives, and private label penetration.

Citi expects this to allow Bapcor to grow its fully franked dividend to 23 cents per share in FY 2022, 25 cents per share in FY 2023, and then 32 cents per share in FY 2024. Based on the current Bapcor share price of $8.29, this will mean yields of 2.8%, 3%, and 3.9%, respectively.

Citi has a buy rating and $8.75 price target on the company’s shares.

South32 Ltd (ASX: S32)

Another ASX dividend share to look at is this mining giant. Unlike Fortescue Metals Group Limited (ASX: FMG), which has exposure to just a single commodity, South32 has operations across a number of commodities.

South32 has exposure to a range of commodities including alumina, aluminium, coal, manganese ore, nickel, silver, and very shortly, copper. The latter follows the recent earnings accretive agreement to acquire 45% of the Sierra Gorda copper mine for US$1.55 billion.

All in all, the team at Goldman Sachs believe that these operations and current commodity prices and forecasts leave South32 well-placed to pay huge dividends over the coming years. In fact, the broker is forecasting growing fully franked dividend yields greater than 11% from FY 2022 through to FY 2026.

Goldman has a conviction buy rating and $4.50 price target on the company’s shares.

The post 2 buy-rated ASX shares with growing dividends appeared first on The Motley Fool Australia.

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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 owns shares of and has recommended Bapcor. 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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On Wednesday the S&P/ASX 200 Index (ASX: XJO) was out of form again and dropped lower. The benchmark index fell 0.15% to 7,423.9 points.

Will the market be able to bounce back from this on Thursday? Here are five things to watch:

ASX 200 expected to fall again

The Australian share market looks set to fall on Thursday. According to the latest SPI futures, the ASX 200 is expected to open the day 6 points or 0.1% lower this morning. This follows a poor night on Wall Street, which in late trade sees the Dow Jones down 0.55%, the S&P 500 down 0.75%, and the Nasdaq down 1.6%. The highest US inflation reading in 30 years appears to have spooked investors and caused a spike in bond yields.

Oil prices sink

Energy shares including Oil Search Ltd (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) could come under pressure today after oil prices tumbled overnight. According to Bloomberg, the WTI crude oil price is down 2.9% to US$81.72 a barrel and the Brent crude oil price has fallen 2.2% to US$82.91 a barrel. Traders were selling oil after U.S. crude inventories rose by 1 million barrels in the most recent week.

Xero’s half year results

The Xero Limited (ASX: XRO) share price will be one to watch on Thursday when it releases its half year results. According to a note out of Goldman Sachs, it is expecting the cloud accounting platform provider to deliver revenue growth of 33% in FY 2022. Its analysts will therefore be looking for a first half growth rate that positions the company to achieve this.

Gold price rises

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a good day after the gold price pushed higher. According to CNBC, the spot gold price is up 1% to US$1,848.2 an ounce. Traders were buying gold despite the higher than expected US inflation reading and rising bond yields.

AGMs being held

A number of ASX 200 companies are holding their annual general meetings today and could provide updates on their performances. Among the companies holding their meetings are BHP Group Ltd (ASX: BHP) (after market), Breville Group Ltd (ASX: BRG), Nearmap Ltd (ASX: NEA), and Nine Entertainment Co Holdings Ltd (ASX: NEC).

The post 5 things to watch on the ASX 200 on Thursday appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• CSL (ASX:CSL) share price is the latest to be upgraded by a top broker
• Investors are buying up ARB (ASX:ARB) shares this month, but the company chair has been selling
• Why are ASX 200 mining shares having such a lousy day?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Nearmap Ltd. and Xero. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. 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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The healthcare sector is home to a number of companies with the potential to grow strongly in the future.

Two that investors might want to get better acquainted with are listed below. Here’s why they are highly rated:

Australian Clinical Labs Ltd (ASX: ACL)

The first healthcare share to look at is Australian Clinical Labs. It is a leading Australian private provider of pathology services through 86 NATA accredited laboratories.

From these sites, the company performs a diverse range of pathology tests each year for a range of clients. These include doctors, specialists, patients, hospitals and corporate clients.

The team at Goldman Sachs is very positive on the company. It recently reiterated its buy rating and lifted its price target on the company’s shares to $5.90. Its analysts note that the company has upgraded its half year earnings guidance for the third time in two months. This has been driven partly by continued strong demand for COVID-19 testing.

Volpara Health Technologies Ltd (ASX: VHT)

Another ASX healthcare share to look at is Volpara Health Technologies. It is a healthcare technology company with a focus on the early detection of breast cancer by improving quality of screening using artificial intelligence.

Volpara’s exciting technology, which was developed at Oxford University, has been designed to provide objective data on breast tissue density. The company highlights that this is a key risk marker for breast cancer.

The company has been growing its market share in the United States at a strong rate and appears well-placed to continue this trend in the future. This is thanks to the quality of its technology, recent acquisitions, and the increasing awareness of the importance of breast tissue density. In addition, thanks to a series of bolt-on acquisitions, Volpara looks to be well-placed to continue growing its average revenue per user metric.

The team at Bell Potter are positive on Volpara. The currently has a buy rating and $1.50 price target on the company’s shares.

The post 2 ASX healthcare shares rated as buys appeared first on The Motley Fool Australia.

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• Volpara (ASX:VHT) share price pushes higher on record quarterly update
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended Australian Clinical Labs 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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The Novonix Ltd (ASX: NVX) share price took a dive from the outset of the opening bell on Wednesday. Unfortunately for shareholders, the trend continued throughout the entire session.

By the end of the day, shares in the battery materials and technology company were down 14.1% to $8.17. It is difficult to tell what exactly led to this capitulation in the share price given there were no announcements from the company.

On the other hand, Novonix was not alone in its whimpering Wednesday performance. Many other companies with exposure to commodities, such as lithium, were caught out of step. However, the Novonix share price was by far the worst among those in the S&P/ASX 200 Index (ASX: XJO).

Is the Novonix share price taking a breather?

The past year has been phenomenal for the Novonix share price. In the space of 12 months, the battery-focused company has gone from a missable speck to a $4.6 billion ASX icon. During that time, the company’s price has boomed nearly 630% — making it the third-highest returning share in the benchmark index.

Outside of the immediate hype for electric vehicles, which has helped along with the value of just about any company with exposure to lithium, Novonix has had a couple of exciting items propel its value higher.

For instance, the company announced its expansion into 400,000 square foot facility in the United States back in June. The site will accommodate a planned 8,000 tonnes per year production operation of its anode materials. Additionally, Novonix gained the financial backing of US energy titan, Phillips 66 in August.

These announcements along with general positive sentiment for the sector have fuelled a tremendous 276% rally in the last 6 months alone.

All things considered, it is possible investors are taking some profits from the recent strength in the Novonix share price.

The next big line item for the company will be its annual general meeting. This is scheduled for 30 November 2021 at 8am (AEST).

The post The Novonix (ASX:NVX) share price tumbled 14% today. What’s going on? appeared first on The Motley Fool Australia.

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• Up 64% in a month, here’s why the Novonix (ASX:NVX) share price is supercharging right now
• Here are the top 10 ASX shares today
• The market had a lousy day. So why did the Novonix (ASX: NVX) share price leap 4%?
• Why has the Novonix (ASX:NVX) share price rallied 32% in 3 weeks?
• Here are the top 10 ASX shares today

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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Shares in department store group Myer Holdings Ltd (ASX: MYR) held the fort today and finished flat at 52 cents.

Myer shares spent a good portion of the session in the red but managed to claw back some territory in the final hour of trade.

This trading activity comes amid news the group is facing legal action from shopping centre landlord Vicinity Centres.

Here is what we know on the matter.

What is going down with Myer and Vicinity?

Back-tracking to 2020, when the coronavirus first infiltrated the global economy, shopping centres and department stores alike were sent into lockdown.

If it weren’t for online sales, then a good portion of retailers would be out of business indefinitely this year. Especially considering the exorbitant rent prices across major cities in Australia, as well as other factors like debt serving and staff payments.

There have been numerous controversies on the dynamics between landlord and lessee in basically all property domains across 2020–2021. This comes as both sides seek protection from the economic fallout of COVID-19.

Such is the case in Myer’s situation, where Vicinity claims that the department store giant has failed to pay over $4 million in outstanding rent this year.

According to reporting from The Australian, Vicinity claims that Myer is behind on rent from the months of May to October and is in arrears by $4.2 million.

And given Myer recorded a substantial growth in operating gross profit in FY21 to 39.7% – up from 38.9% in FY19 before COVID – and recorded over $50 million in net profit after tax, it comes as little surprise why Vicinity is playing hardball.

The news follows on from a previous legal battle Myer was embroiled in, although this time with large shareholder Premier Investments Limited (ASX: PMV) in July.

Back then Premier instructed its lawyers to immediately request a copy of Myer’s shareholder registry, advocating that Myer’s “three remaining Non-Executive Directors should for once put its shareholders first and resign immediately”.

Hence, the additional legal pressure could be a costly one to Myer, given it now faces a multi-pronged challenge from both Vicinity and Premier.

The market didn’t reacted poorly to the news today, which isn’t considered price-sensitive at this stage. However, it is still unclear if this will have any material impact on Myer’s share price.

Myer share price snapshot

In spite of the pandemic’s effects to the retail market, Myer’s share price has soared over 96% in the last 12 months.

This is after rallying another 79% since January 1. Both of these results are well ahead of the benchmark S&P/ASX 200 index (ASX: XJO)’s gain of around 17% in the last year.

The post Myer (ASX:MYR) share price holds the fort amid news of Vicinity lawsuit appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares that could be buys for both growth and dividends

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 Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Might the Telstra Corporation Ltd (ASX: TLS) share price be a leading blue chip opportunity in 2022?

Telstra shareholders have been suffering for a long time. Since the start of this century, the Telstra share price has fallen more than 50%. Over the last five years it has dropped 17%.

The company has seen its profit decline substantially over the last few years.

In FY17, it made net profit from continuing operations of $3.9 billion, with earnings per share (EPS) of 32.5 cents. In that year, it paid a total dividend of 31 cents per share.

Compare that to FY21. Net profit was $1.9 billion. EPS was 15.6 cents. The dividend was $0.16 per share. Those figures have roughly halved.

Telstra plans a return to growth

The telco is expecting a return to full year growth in FY22 after a sustained period of challenges due to the shift of broadband to the NBN, which is taking a substantial amount of the margin now, rather than Telstra.

But that transition has essentially finished.

In FY22, Telstra is now expecting total income to come in between $21.6 billion to $23.6 billion. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be between $7 billion to $7.3 billion. Free cashflow after lease payments is expected to come between $3.5 billion to $3.9 billion.

The company is just finishing its T22 strategy, which looked to monetise some of its assets (like its towers), reduce costs and become more efficient. Telstra was able to launch a $1.35 billion share buyback after selling a stake in its InfraCo Towers business.

But it has already launched its T25 strategy, which could have an impact on the Telstra share price.

T25 targets

With this new strategy, Telstra is looking to extend its 5G coverage to 95% of the population, with expanded regional coverage of new 4G and 5G coverage.

The telco is looking to grow its Telstra Plus members to 6 million by FY25.

Income-seekers may be pleased to know that Telstra is looking to maximise its fully franked dividends for shareholders and look to grow the dividend over time.

Despite already finding $2.7 billion of costs to cut in the T22 strategy, it’s looking to deliver another $500 million of costs reductions to FY25.

Those cost reductions will help Telstra aim for a compound annual growth rate (CAGR) of mid-single digit for underlying EBITDA and high-teens of underlying EPS to FY25.

Diversification

Telstra has made a couple of acquisitions in recent months that looks to diversify and grow its earnings.

One was the US$1.6 billion acquisition of Digicel in partnership with the Australian Government. Digicel is described as a leading provider of communication services across PNG, Fiji, Nauru, Samoa, Tonga and Vanuatu. This business generated EBITDA of US$233 million for the year to 31 March 2021, with a “strong” margin.

Digicel will become part of a fourth subsidiary of Telstra – Telstra International.

Telstra also has a vision for ‘Telstra Health’ to be a leading partner for the health and aged care sectors. It recently announced it was buying leading GP clinical and practice management software company MedicalDirector for an enterprise value of $350 million. Its software as a solution (SaaS) offering supports approximately 23,000 medical practitioners and is used to deliver more than 80 million consultations a year.

Is the Telstra share price good value?

Morgans thinks so. It rates Telstra as a buy, with a price target of $4.55. Another broker, Ord Minnett, rates Telstra shares as a buy, with a price target of $4.60. Each of these targets suggest an upside of around 15% over the next year, if the brokers end up being right.

The post Is the Telstra (ASX:TLS) share price the best blue chip bet for 2022? appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts on Wednesday
• Here’s why the Telstra (ASX:TLS) share price is up 33% so far in 2021
• Here are the 3 most heavily traded ASX 200 shares this Friday
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Here’s what happened to the Telstra (ASX:TLS) share price in October

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns 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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Today was yet another day of bad news for the Magellan Financial Group Ltd (ASX: MFG) share price. Magellan shares have closed at $34.27 a share today, down a nasty 2.8%. That puts this fund manager pretty close to its 52-week low of $31.34.

It also means that Magellan shares are now down around 35.4% year to date in 2021 so far, more than 45% over the past 12 months, and a depressing 53.5% off of the all-time high this company hit back in early 2020. Indeed, Magellan is now down close to 40% only since July.

Magellan used to be a much-beloved growth share, rising from around $23 a share in late 2018 to the all-time high of almost $74, back in February 2020. So what’s gone so wrong for this company?

Why is the Magellan share price on struggle street?

Well, it could be a number of factors. Firstly, ASX brokers haven’t exactly been showering this company with love lately. As my Fool colleague James probed last week, broker UBS has recently retained its ‘sell’ rating on Magellan, giving the fund manager a 12-month share price target of $29.50. UBS doesn’t like the outflow of funds that the company has been experiencing in recent months, which puts pressure on the fees it can collect. It also cited the “ongoing underperformance of its global fund”.

So that brings us to our second possible factor here. Magellan runs a stable of managed funds and actively-managed exchange-traded funds (ETFs). Some of these, such as the Magellan Global Fund (ASX: MGF) are some of the largest in the Australian market. However, many of Magellans’s funds have indeed been struggling lately.

Let’s look at the Magellan Global Fund. Its unlisted iteration has returned 8.48% over the past 12 months. In contrast, its benchmark MSCI World Net Total Return Index has returned 31.29% over the same period. It is also trailing this index’s returns over the past 3, 5 and 7 years. Over the past 10, the Global Fund has returned an average of 16.67% per annum against the index’s 16.14%.

Magellan’s unlisted High Conviction Fund, which has an ASX-listed form in Magellan High Conviction Trust (ASX: MHHT), has delivered an average of 15.06% per annum since its inception in July 2013.

Investors know that if Magellan fails to deliver meaningful benchmark outperformance over a significant period, its investors might decide that a cheaper index-tracking ETF is a better bet. So this also might be weighing on investors minds as they send the Magellan share price towards its 52-week low.

Unless these performance metrics improve, it’s possible that the Magellan share price could continue to struggle.

At today’s closing Magellan share price, this company has a market capitalisation of $6.52 billion, with a dividend yield of 6.16%.

The post The Magellan (ASX:MFG) share price is now down 40% since July appeared first on The Motley Fool Australia.

More reading

• 2 ASX 200 shares that could be top buys for dividends
• Top brokers name 3 ASX shares to sell today
• 2 beaten-up ASX shares that could be buys in November
• 3 reasons why the Magellan (ASX:MFG) share price could be a buy
• Why did the Magellan (ASX:MFG) share price smash the ASX 200 today?

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

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Investing in the small side of the share market carries more risk than other areas. However, if your risk tolerance allows for it, having a bit of exposure to this side of the market could be a good thing for a balanced portfolio given the potential returns on offer.

With that in mind, here are three small cap ASX shares that could be worth watching closely:

Ai-Media Technologies Ltd (ASX: AIM)

The first small cap to watch is Ai-Media Technologies. It is a global media access provider with operations across the ANZ, North American, EMEA and Asia markets. The company’s cloud-based technology platform provides live and recorded captioning, transcription, subtitles, translation and speech analytics. Bell Potter is positive on the company. It currently has a buy rating and $1.50 price target Ai-Media Technologies’ shares.

Mydeal.Com Au Ltd (ASX: MYD)

Another small cap to watch is MyDeal. It is an online retail marketplace focused on home and lifestyle goods. MyDeal currently has more than 1,800 sellers on its platform with over 6 million products listed across over 2,000 categories. Thanks to this strong offering, its growing active customer base, and the shift online, MyDeal reported a 111% increase in gross sales to $218.1 million and a 119% jump in gross profit to $33.3 million in FY 2021. It has since built on this, reporting a 49% quarter-on-quarter increase in gross sales to $68.5 million during the first quarter. Also continuing to grow were its customer numbers, which had reached ~930,000 at the end of the period. The team at Morgans is positive on the company’s long term outlook and has an add rating and 90 cents price target on its shares.

Serko Ltd (ASX: SKO)

A final small cap to watch is Serko. It is an online travel booking and expense management provider behind the Zeno Travel and Zeno Expense platforms. Serko’s Zeno Travel platform provides AI-powered end-to-end travel itineraries, cost control, and travel policy compliance to corporate customers. Whereas Zeno Expense allows businesses to automate and streamline their expense administration function, identify out-of-policy expense claims, and prevent fraud. With travel markets rebounding and a major deal with travel giant Booking.com recently commencing, Serko appears well-placed for growth in the coming years. Macquarie currently has an outperform rating and NZ$8.31 (A$8.02) price target on its shares.

The post 3 exciting small cap ASX shares for your watchlist appeared first on The Motley Fool Australia.

More reading

• Why MyDeal, Senex, Superloop, and Vulcan shares are surging higher
• MyDeal (ASX:MYD) share price jumps 11% on record first quarter update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Serko Ltd. The Motley Fool Australia has recommended Serko 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 Douugh Ltd (ASX: DOU) share price raced to a 5-month high following major gains over the last two days.

At Wednesday’s closing bell, the financial wellness app provider’s shares finished the day up 42.8% to 11 cents apiece. This means that in the past week alone, the Dough share price has accelerated more than 50% higher.

Record growth in October

In the hours before yesterday’s market open, Douugh released a positive trading update to the ASX.

The company highlighted record growth across its key platform metrics for the month of October. This was underpinned by targeted marketing activities and the launch of its in-app member-get-member-service (MGM).

As a result, the United States customer base increased by 42% month-on-month, with US revenue up 53% month-on-month. The introduction of the company’s new monthly subscription fee for new users helped boost revenue. Douugh said it was focused on continuing new app improvements to achieve higher activation rates and expand the share of wallet feature.

Total customers on the Douugh platform jumped to 63,162 users, which represents a lift of 26% on the prior month.

In addition, accumulated customer deposits rose to $15.5 million, up 25% month-on-month.

Total debit card spend on the platform leaped to $6.6 million, a 26% jump on September’s figures.

Douugh founder and CEO, Andy Taylor commented:

Our focus continues to be on improving activation rates and the winning of salary deposits to dramatically increase ARPU.

The paycheck is the catalyst of our flywheel and maximising the revenue opportunity in front of us. Therefore, investing in the brand and building trust with the user base is essential.

About the Douugh share price

Despite today’s gains, the Douugh share price has fallen by more than 60% over the past 12 months. Year-to-date, its shares are hovering around 35% below the January 1 level.

Based on the current share price, Douugh commands a market capitalisation of roughly $47.64 million.

The post Dough (ASX:DOU) share price surges another 43% on Wednesday. Here’s why appeared first on The Motley Fool Australia.

More reading

• Douugh (ASX:DOU) share price rises 16% on soaring number of US users
• Douugh (ASX:DOU) share price rockets 18% on crypto update
• Here’s why the Douugh (ASX:DOU) share price is rocketing 18% 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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