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The Talga Group Ltd (ASX: TLG) share price is off to the races today, up more than 10% in late afternoon trading.

Below, we take a look at what’s driving ASX investor interest in the battery anode and advanced materials company.

Digesting the quarterly report

The Talga share price has been in focus since the company released its quarterly activities report on Friday, after market close. Since Friday’s close, shares are up 13%.

Among the highlights over the past quarter, the company noted its battery anode product, Talnode-C was certified as the greenest graphite anode in the world. The independent Life Cycle Assessment was carried out by Hitachi ABB Power Grids. According to the release, Talnode-C produces “96% less greenhouse gas than incumbent EV battery anode produced in China”.

The company also reported that construction of its Electric Vehicle Anode qualification plant in Sweden is proceeding on track. Meanwhile the development of its anode and graphene products from its existing facilities in Germany, Japan and the United Kingdom are continuing as planned.

On the mining side, Talga commenced trial mining during the quarter at its Vittangi Graphite Project in Sweden. It plans to use the feed ore for expanded testing of Talnode-C.

Commenting on the company’s progress, Talga’s managing director, Mark Thompson said:

During the quarter we made strides in achieving key long term strategic goals, focusing on financing our first commercial anode project and toward future expansions to become the largest anode producer outside of Asia.

We have also been successful in our exploration and trial mining of what is already Europe’s largest natural graphite resource, towards securing the critical raw material needed to produce the world’s greenest anode for more sustainable batteries.

As at 30 September, Talga had a cash balance of $46 million.

Talga share price snapshot

The Talga share price has gained 54% over the past 12 months. That’s more than twice the 23% gains posted by the All Ordinaries Index (ASX: XAO) during that same period.

Over the past month, Talga shares are up 21%.

The post Why the Talga (ASX:TLG) share price is charging 10% higher today appeared first on The Motley Fool Australia.

More reading

• Talga (ASX:TLG) share price edges lower on Vittangi graphite project 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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Oh, what a ride it has been for Insurance Australia Group Ltd (ASX: IAG) over the past month or so.

Its share price chart looks as if it was drawn by a four year old trying to colour between the lines when zooming out and scoping out the last few weeks.

IAG shares have come off a high of $5.35 since mid-October, after first regaining some steam in the first half of the month.

Now, the IAG share price is swimming in a sea of red across all time frames from today up until 12 months of negative returns.

What’s led us to this point?

IAG the company has been marred by a series of controversies that in all fairness have been drawn out over the last three years.

Central to the IAG’s share price downfall in recent times is a set of shock weather events, in the form of severe storms and hail activity, that will hurt its earnings potential for FY22.

These events, which have caused widespread damage in South Australia and Victoria late last month, will go on to have a direct impact on IAG’s net natural peril costs for FY22, according to the company.

Despite a robust quarterly update, where IAG shone in its performance, the company then had to bump up its claim cost estimates by almost 36% to $1.045 billion from $765 million following the freak weather.

Consequently, the insurance giant now forecasts an FY22 reported insurance margin of 10% to 12% – a significant down-step from previous guidance of 13.5% to 15.5%.

News of the downgraded guidance sent IAG shares plummeting towards the floor in an almost vertical fashion after it had already perished another 4% from other controversies.

The IAG share price has shown no signs of recovering and is currently down a further 13% since the guidance update.

What do brokers have to say about IAG shares?

With all of this activity surrounding the insurance giant, the analyst teams of several leading brokers have chimed in with their outlook on IAG’s share price.

Analysts at Morgans are adamant that IAG shares look cheap with this recent pullback, and believe there are gains to be made ‘for the patient investor’.

Whilst the broker trimmed its price target by 5% to $5.36 on IAG shares, it maintained its add recommendation in a recent note, as it expects insurance premiums and a profitability boost beyond FY22 for the insurer.

The team at fellow broker Credit Suisse hold the same mantra, also cutting its price target by 5% to $5.60, but maintaining its outperform rating on the share.

It reckons that IAG will certainly absorb the net peril cost increase in FY22, but likes the share’s current valuation and also the current cycle we are in with interest rates.

Meanwhile, Morgan Stanley doesn’t hold as rosy of an outlook for IAG investors.

The broker notes that “over the past 10 years, IAG has tilted its business model towards short-trail lines, which tend to be more catastrophe risk prone”.

It reckons these challenges will add pressure to IAG’s reinsurance renewals, which could bode in poorly for its share price.

This is compounded by an expected La Nina summer, it says. Therefore, Morgan Stanley expects further downgrades for the company.

Fellow broker UBS also agrees, retaining its neutral rating on the company in a recent note. It sees “downside risk to earnings, given limited sideways reinsurance cover remaining” if perils activity remains high.

IAG’s downgrade was far worse than the broker was expecting, and is cautious on regulatory proceedings the company is currently embroiled in.

Collectively, the opinion appears to be balanced amongst this group of brokers, with 50% advocating IAG could be a good buy, whereas the rest feel there are too many risks embedded into the investment debate.

IAG shares have slumped 7.5% into the red in the last 12 months after sliding a further 5.5% this year to date.

The post These top brokers weigh in on the IAG (ASX:IAG) share price appeared first on The Motley Fool Australia.

More reading

• Why Bubs, Dalrymple Bay, IAG, and Redbubble shares are dropping
• Top brokers name 3 ASX shares to buy today
• Why Ingenia, IAG, Vulcan, and Westpac shares are dropping
• ASX 200 (ASX:XJO) midday update: Netwealth’s merger proposal, IAG sinks
• IAG (ASX:IAG) share price sinks 6% on guidance downgrade

The author Zach Bristow has no positions 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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The S&P/ASX 200 Index (ASX: XJO) is having a reasonably strong day of trading this Wednesday. At the time of writing, the ASX 200 is up a healthy 0.9% to 7,390 points. But let’s dig into these gains a bit and see which ASX 200 shares are currently topping the trading volume charts so far today, according to investing.com.

3 most active ASX 200 shares by volume on Wednesday

Whitehaven Coal Ltd (ASX: WHC)

ASX 200 coal miner Whitehaven is our first share experiencing elevated trading volume today. So far, this company has seen a sizeable 16.02 million shares traded on the markets. This appears to be the result of a meaningful jump in the Whitehaven share price thus far.

As it stands at the time of writing, Whitehaven shares are up a healthy 3.8% to $2.46 a share this Wednesday. With no other news or developments out of Whitehaven, this is probably behind the elevated volumes we are seeing today.

AMP Ltd (ASX: AMP)

ASX 200 wealth manager AMP is our next share up. This embattled company has seen an impressive 16.4 million of its shares swap hands so far on Wednesday. This appears to be a consequence of AMP’s big announcement this morning.

The company announced that it is unloading its remaining 19.13% stake in Resolution Life Australasia for $524 million. This has resulted in the AMP share price exploding higher today – it’s currently up 9.77% at $1.18 a share. This announcement and share price move are almost certainly behind this elevated trading volume.

Pilbara Minerals Ltd (ASX: PLS)

Our final and most traded ASX 200 share so far today is none other than lithium producer Pilbara Minerals. Pilbara has seen a hefty 19.5 million of its shares bought and sold so far this Wednesday.

This appears to be the result of the pleasing jump the Pilbara share price has experienced today. The lithium company is presently up 5.2% to $2.32 a share. The entire ASX lithium sector is enjoying some healthy gains today, with Pilbara a major beneficiary. It’s this jump that has likely resulted in so many Pilbara shares flying around the share market today.

The post These 3 ASX 200 shares are topping the volume charts this Wednesday appeared first on The Motley Fool Australia.

More reading

• Why AMP, Eclipx, Paradigm, and Praemium shares are surging higher
• Why has the BetaShares Global Cybersecurity ETF (ASX:HACK) share price leapt 7% in a month?
• Why did the Zip (ASX:Z1P) share price have such a lousy month in October?
• AMP (ASX:AMP) share price leaps 9% on life insurance sale
• ASX 200 (ASX:XJO) midday update: CBA enters crypto market, AMP jumps

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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October wasn’t the prettiest month for the AGL Energy Limited (ASX: AGL) share price. While the energy retailer wasn’t the worst performer on the S&P/ASX 200 Index (ASX: XJO) – that honour went to Whitehaven Coal Ltd (ASX: WHC), falling 22.3% – it also didn’t do shareholders any favours with a 1.2% decline.

At the start of the month, AGL shares were commanding a $5.79 price tag. Yet, after a month of events and news, the company’s valuation finished 1.2% lower.

Shareholders are likely not happy with this wealth diminution. Though, it sure beats the diabolical 1-month performance of October 2020, which witnessed the AGL share price plunge 8%.

Nevertheless, today we recap the month that has been for the embattled energy retailer.

What happened in October?

While there weren’t many announcements from AGL directly, it was a busy month for energy-related news more broadly. But before we jump the gun, let’s take a look at what the company shared with the market in October.

The first significant event was Macquarie Group Ltd (ASX: MQG) and its controlled bodies ceasing to be a substantial shareholder. This comes as the investment bank continues to plough a significant amount of capital into renewable energy. As my Fool colleague Tristan Harrison covered, Macquarie has deployed A$6.64 in renewable energy for every A$1 invested in ‘conventional’ energy.

Beyond this, the month was also peppered with industry-specific news that might have skewed AGL investors. For instance, my colleague Brooke Cooper covered an energy expert’s predictions of the demise of coal. This may have potentially weighed on the AGL share price.

In short, Energy Security Board chair Dr Kerry Schott revealed an expectation for coal-fired electricity to be removed from the grid by 2040. This cessation would be more than 10 years ahead of the current schedule.

Additionally, Capgemini’s 23rd edition of the World Energy Markets Observatory pointed out the utilities sector. To be precise, the report’s number 1 priority is, “Utilities transformation roadmaps must be reconsidered in a post-COVID world” for the transition to carbon neutrality.

While AGL is taking on the challenge to an extent, investors might be worried about the costs. In FY21, bottom-line earnings came in at a loss of $2.06 billion. During the period, AGL forked out $357.6 million to gain a 20% stake in Tilt Renewables’ Australian operations.

Analysts take on the AGL share price

Contrary to the current trajectory, analysts at Ord Minnett have forecast a brighter future for the AGL share price. According to its assessment, the company looks appealing at its current valuation, so much so that it could make for a potential takeover target.

As such, the broker has assigned AGL with a share price target of $7.55 and a buy rating.

The post How did the AGL (ASX:AGL) share price perform in October? appeared first on The Motley Fool Australia.

More reading

• Is the AGL Energy (ASX:AGL) share price a value trap?
• Why is the AGL (ASX:AGL) share price having such a good start to the week?
• These are the 5 highest yielding dividend stocks in the ASX 200
• Why has the AGL (ASX:AGL) share price climbed 14% in a month?
• Own AGL shares? Here are the World Energy Markets Observatory’s future priorities

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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As it turns out, the Australian share market didn’t exactly have a fantastic month over October. The S&P/ASX 200 Index (ASX: XJO) ended up losing roughly 0.1% over the month that was. Yawn. But one ASX 200 blue chip share managed a far more impressive performance. That would be the Wesfarmers Ltd (ASX: WES) share price.

Wesfarmers shares had quite the month, as it turns out. This industrial conglomerate started October at $55.75 a share, and finished up last Friday at $57.58. That’s a healthy gain of 3.3% – and a vast outperformance of the broader ASX 200.

So what went so right for Wesfarmers over the month just gone?

Why did the Wesfarmers share price have such a strong October?

Well, we didn’t really see many meaningful updates or news from Wesfarmers over October. The company did release the Chairman and Managing Director addresses from its annual general meeting AGM) on 21 October, which my Fool colleague Mitchell dug a little deeper into last month. But there was not much in the way of new developments there.

Possibly, the largest piece of news out of Wesfarmers over October was the announcement that the company acquired a 19.3% stake in Australian Pharmaceutical Industries Ltd (ASX: API) from Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

Wesfarmers has been pursuing a full acquisition of API for a while now. It currently has an offer of $1.55 per share on the table for the company, which has yet to be formally accepted or rejected by API. Even though Wesfarmers has said it will use this new stake in API to block a rival bid from Sigma Healthcare Ltd (ASX: SIG), this news didn’t seem to provoke much of a reaction from investors at the time.

Broker sentiment could also have played a role in Wesfarmers’ lucrative October. As my Fool colleague Tristan covered earlier in that month, broker UBS had rated Wesfarmers as a ‘buy’, with a 12-month share price target of $62. That implies a further upside of 5.9% on today’s share price of $58.56 (at the time of writing). Perhaps this too played a role in Wesfarmers’ strong month.

Whatever the real reason is as to why Wesfarmers shares enjoyed such pleasing gains in October, no doubt it has left a lot of shareholders very pleased by Halloween.

At the current Wesfarmers share price of $58.56, this company has a market capitalisation of $66.35 billion, a price to earnings (P/E) ratio of 27.8 and a dividend yield of 3.11%.

The post Why did the Wesfarmers (ASX:WES) share price have such a great month in October? appeared first on The Motley Fool Australia.

More reading

• What were the best performing ASX real estate shares to hold in October?
• What’s going on with the Wesfarmers (ASX:WES) API takeover bid?
• JB Hi-Fi (ASX:JBH) share price jumps on broker upgrade
• Why has the Wesfarmers (ASX:WES) share price leapt 7% in 2 weeks?
• Why Citi has a sell rating on the Wesfarmers (ASX:WES) share price

Motley Fool contributor Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company 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 Washington H. Soul Pattinson and Company Limited and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 300 (ASX: XKO) struggled in October. The index of the top 300 listed Aussie shares only barely managed to close the month in the green, finishing up 0.1%.

But not all stocks struggled last month.

In fact, the top 3 performing ASX real estate shares each returned more than 60 times the gains posted by the index.

We take a look at those outperformers below.

How did the top 3 ASX real estate shares perform in October?

Coming in with the top gains among the ASX real estate shares is…drum roll please…Arena REIT (ASX: ARF). The real estate investment trust (REIT) gained 6.6% in October, closing the month at $4.50 per share.

There was no price sensitive news released by the company, which invests mostly in childcare, healthcare and government tenanted properties. Although this isn’t the first time Arena has made it onto our top performers list. The REIT also counted amongst the top 5 share price gainers for ASX real estate shares during the 2021 financial year.

Arena pays a 3.36% trailing dividend yield, unfranked.

And number 2…

Coming in at a close number 2, with an October share price gain of 6.5%, is Aventus Retail Property Fund (ASX: AVN). The ASX real estate share owns, manages and develops large-format retail centres in Australia.

The Aventus share price got a big lift on 18 October when the company reported on its intentions to merge with Home Consortium Ltd (ASX: HMC) and HomeCo Daily Needs REIT (ASX: HDN).

At the time, Aventus’ chairman Bruce Carter said:

The merger is attractive for Aventus securityholders, both because of the potential offered by being part of the larger merged groups and because the offer reflects a material premium to Aventus’ trading price and its NTA [net tangible assets].

Aventus pays a 5.25% trailing dividend yield, unfranked.

The third best ASX real estate share performer in October

Rounding off our list of top ASX real estate shares to hold in October is another REIT, BWP Trust (ASX: BWP), which finished October up 6.0%. BWP invests in and manages commercial properties across Australia, notably including warehouses leased to the Wesfarmers Ltd (ASX: WES) hardware giant Bunnings.

Atop potential share price gains, BWP pays a 4.31% trailing dividend yield, unfranked.

The post What were the best performing ASX real estate shares to hold in October? appeared first on The Motley Fool Australia.

More reading

• What’s going on with the Wesfarmers (ASX:WES) API takeover bid?
• JB Hi-Fi (ASX:JBH) share price jumps on broker upgrade
• Why has the Wesfarmers (ASX:WES) share price leapt 7% in 2 weeks?
• Why Citi has a sell rating on the Wesfarmers (ASX:WES) share price
• Top brokers name 3 ASX shares to sell next week

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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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If you’re a fan of small cap shares, then you’re in luck! At present there are a number on the local share market that have been tipped to grow strongly in the future.

Two in the tech sector that could be worth getting acquainted with are listed below. Here’s what you need to know about them:

Bigtincan Holdings Ltd (ASX: BTH)

The first small cap tech share to look at is Bigtincan. It is a fast-growing provider of enterprise mobility software. This software allows sales and service organisations to increase their sales win rates, reduce expenditures, and improve customer satisfaction through improved mobile worker productivity.

Bigtincan has been growing at a strong rate over the last few years thanks to increasing demand for its quality platform. Pleasingly, this positive form has continued in FY 2022. Last month the company revealed a huge jump in cash receipts during the first quarter. Management also confirmed that it remains on track to meet or exceed its annualised recurring revenue (ARR) guidance of $119 million. This includes the benefits of the recent Brainshark acquisition and implies annual growth of at least 124%.

In response, Morgan Stanley retained its overweight rating and $2.10 price target on Bigtincan’s shares.

Nitro Software Ltd (ASX: NTO)

Another small cap tech share that is rated highly is Nitro. It is a fast-growing global document productivity software company aiming to accelerate digital transformation in a world that demands the ability to work from anywhere, anytime, on any device.

Nitro’s cloud-based software allows organisations to drive better business outcomes through 100% digital document processes and fast, efficient workflows. This includes through the increasingly popular Nitro Productivity Platform, which offers comprehensive business solutions, including powerful PDF productivity, unlimited eSigning, and industry-leading analytics.

At the last count, the company had over 2.8 million licensed users and 12,000+ business customers in 155 countries. This includes over 68% of the Fortune 500 and three of the Fortune 10.

Last month the company released its third quarter update and revealed a 50% increase in its ARR. This puts it on course to achieve its ARR guidance of US$39 million to US$42 million in FY 2021. Pleasingly, this is still only a fraction of its estimated total addressable market of $28 billion.

In response to its update, Bell Potter retained its buy rating and lifted its price target to $4.50.

The post 2 exciting small cap ASX tech shares analysts love appeared first on The Motley Fool Australia.

More reading

• Why Life360, Nitro, Reliance Worldwide, and Uniti shares are charging higher
• Bigtincan (ASX:BTH) share price steady amid 218% cash receipts increase
• Why is the Nitro Software (ASX:NTO) share price on the rise on Wednesday?
• 3 stellar ASX tech shares to buy right now
• 2 excellent ASX tech shares tipped for big things

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 BIGTINCAN FPO. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO. The Motley Fool Australia has recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Austral Resources Australia Limited (ASX: AR1) share price is plunging lower on the company’s initial public offering (IPO).

The copper producer’s stock hit the ASX for the first time at midday today. Sadly, it promptly dropped 15%.

At the time of writing, the Austral Resources share price is 17 cents, 3 cents a share down from its prospectus‘ offer price of 20 cents.

The dip follows not only the company’s float but also media speculation that Austral is soon to be hit with legal action.

Let’s take a closer look at Austral Resources’ dramatic first day on the ASX.

Austral share price starts out in the red

The Austral Resources share price is tumbling out of the gates amid media reports Austral’s former 51%-owner, Nathan Tinkler, plans to sue the company and its executive director.

Austral Resources responded to the speculation from an unnamed media source 2 hours before its IPO.

The company has confirmed claims Tinkler has threatened legal action against it and its executive director Dan Jauncey.

However, Austral Resources said neither it nor Jauncey has received “substantive documentation or information” on Tinkler’s claims. Additionally, the company believes Tinkler doesn’t have a feasible case against either party.

The company hasn’t disclosed which media outlet its response is aimed at. However, The Australian carried reports of Tinkler’s legal threat yesterday.

According to the publication, Tinkler sold his stake in Austral to Jauncey when copper prices dropped amid the global pandemic. He is now reportedly planning to sue for “shareholder oppression”.   

Whether Tinkler’s potential legal bid is weighing on the Austral share price is impossible to say.

Today’s float represents the end of an oversubscribed $30 million IPO process that, at its offer price of 20 cents, left the company valued at $89 million.

The funds raised will be put towards Austral’s new Anthill Mine and its Mt Kelly processing plant. It will also help fund exploration activities and pay off debt.

Austral expects to be producing 10,000 tonnes of copper anode each year from the middle of 2022.

The post Austral Resources (ASX:AR1) share price tumbles 15% on IPO appeared first on The Motley Fool Australia.

More reading

• Why Bubs, Dalrymple Bay, IAG, and Redbubble shares are dropping
• Here’s why Praemium (ASX:PPS) shares are up 10% on Wednesday
• Top brokers name 3 ASX shares to buy today
• Why AMP, Eclipx, Paradigm, and Praemium shares are surging higher
• Predictive Discovery (ASX:PDI) launches 8% on gold update

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

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is back on form and charging higher. At the time of writing, the benchmark index is up 0.8% to 7,385.4 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Bubs Australia Ltd (ASX: BUB)

The Bubs share price is down 6% to 54.5 cents. Investors have been selling this infant formula company’s shares despite it announcing a key appointment in China. A few investors may be taking profit off the table after some very strong gains in recent weeks.

Dalrymple Bay Infrastructure Ltd (ASX: DBI)

The Dalrymple Bay Infrastructure share price is down 1% to $2.22. This morning the infrastructure company announced a A$514 million private US placement. According to the release, Dalrymple Bay is raising the funds via fixed rate senior secured notes. The notes will be issued in three tranches of approximately A$185 million, A$215 million and A$114 million, with tenors of 10, 12 and 15 years, respectively.

Insurance Australia Group Ltd (ASX: IAG)

The IAG share price has continued its slide and is down a further 1% to $4.45. Investors have been selling this insurance giant’s shares since it downgraded its margin guidance for FY 2022 following a surge in claims. This was driven by recent severe storm across parts of Australia.

Redbubble Ltd (ASX: RBL)

The Redbubble share price is down 4.5% to $3.70. This is despite there being no news out of the ecommerce company. However, it is worth noting that short sellers have been targeting Redbubble. So much so, it is now one of the most shorted shares on the Australian share market. At the last count, over 10% of Redbubble’s shares were in the hands of short sellers.

The post Why Bubs, Dalrymple Bay, IAG, and Redbubble shares are dropping appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
• Bubs (ASX:BUB) share price dips amid China MD appointment
• 2 ASX shares that could be buys in November 2021
• Why Ingenia, IAG, Vulcan, and Westpac shares are dropping
• ASX 200 (ASX:XJO) midday update: Netwealth’s merger proposal, IAG sinks

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 Insurance Australia Group Limited. The Motley Fool Australia has recommended BUBS AUST FPO. 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 investment and financial services company Preamium Ltd (ASX: PPS) are having another splendid day in the green, currently trading 9.82% higher at $1.57.

Whilst there’s been no market-sensitive information out of Praemium’s camp today, it is still in the thick of an acquisition saga that surfaced yesterday.

Read on for more details.

What is Netwealth offering for Praemium?

Today’s gains in the Praemium share price appear to be linked to an announcement the company made yesterday regarding a takeover proposal it had received from Netwealth Group Ltd (ASX: NWL).

Netwealth made the offer as it sees many synergies and benefits both companies can lend to each other.

A merger of the two ASX-listed names would create the largest independent wealth manager in Australia by net flows and be a leading platform for advisors across all segments.

Netwealth had proposed an all scrip deal that would see Praemium shareholders receive one new Netwealth share for every 11.96 shares they held in Praemium’s register.

The deal implies a valuation of $1.50 per share for Praemium’s equity, or an Enterprise Value/EBITDA multiple of 55x, – 15% lower than the company’s current EV/EBITDA multiple of 65x.

Based on these numbers, Netwealth values Praemium as a company at around $785 million, a slight premium to its current non-diluted enterprise value of $774 million.

To put that into further context, on a fully-diluted basis, Praemium’s market capitalisation is currently $718 million, meaning its fully-diluted enterprise value is $707 million at the time of writing.

So why is the Praemium share price charging higher today?

Praemium’s board immediately rejected the offer, as it undervalued the company’s operations, and advised its shareholders to adopt the same mantra.

The board feels the deal is not in the best interests of its shareholders, nor does it appropriately value the company’s market-leading position and superior technology.

It was quoted as saying that the deal fails to consider the “significant valuation upside available to shareholders, given Praemium is valued at a discount to industry peers Hub24 and Netwealth” in some measures.

On news of the rejection, Praemium shares turned sharply to close almost 15% higher yesterday, as investors were quick to pile into positions perhaps in hope of a sweetened deal from Netwealth.

Praemium’s decision to reject the offer based on valuation grounds also is a vote of confidence for the market, as it implies the company reckons there is more value to be created for its shareholders looking ahead.

In contrast, Netwealth shares fell quickly yesterday, and have carried the losses over into today’s session, where they are currently trading at $17 and change.

Praemium share price snapshot

The Praemium share price has continued to climb into the green these past 12 months, having gained 129% in that time after rallying a further 136% this year to date.

Prameium shares have rallied 46% this last month alone, whilst climbing another 31% in the past week.

These return profiles have outpaced the benchmark S&P/ASX 200 Index (ASX: XJO) across each of the time frames.

The post Here’s why Praemium (ASX:PPS) shares are up 10% on Wednesday appeared first on The Motley Fool Australia.

More reading

• Why AMP, Eclipx, Paradigm, and Praemium shares are surging higher
• Why is the Praemium (ASX:PPS) share price 15% higher on Tuesday?
• Why Goodman, Praemium, Step One, and Telix shares are charging higher
• ASX 200 (ASX:XJO) midday update: Netwealth’s merger proposal, IAG sinks
• Netwealth (ASX:NWL) share price drops on Praemium merger proposal

The author Zach Bristow 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 Netwealth and Praemium Limited. The Motley Fool Australia owns shares of and has recommended Netwealth. The Motley Fool Australia has recommended Praemium 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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