Tag: Motley Fool

  • Why the Santos (ASX:STO) share price is edging lower today

    worker in hard hat at an oil refinery

    The Santos Ltd (ASX: STO) share price is heading south on Monday morning. This comes after the energy giant provided an update on its proposed merger with Oil Search Ltd (ASX: OSH).

    At the time of writing, Santos shares are swapping hands for $6.17, down 1.28%.

    What’s sending the Santos share price lower?

    In today’s release, Santos advised it has agreed with Oil Search to extend the due diligence period for another week.

    Early last month, Santos increased its offer to acquire Oil Search shares under a revised merger proposal.

    The offer put forward for Oil Search shareholders to receive 0.6275 new Santos shares for each Oil Search share held. This is a slight increase from the earlier rejected proposal that presented 0.589 per Santos share for every Oil Search share owned.

    As a result, Oil Search shareholders will own roughly 38.5% of the merged group, as opposed to 36.9% in the original offer. Santos shareholders will control the remaining 61.5%.

    In monetary terms, the transaction translates to a price of $4.29 for each Oil Search share based on the closing price of Santos and Oil Search shares on July 19 (the day prior to disclosure of the first proposal).

    While exclusive mutual due diligence is being conducted, both companies have until 13 September to proceed on the deal.

    If successful, the Oil Search board will recommend its shareholders to vote in favour of the revised merger proposal.

    Both Santos and Oil Search are pushing to become the ASX’s largest oil and gas company and a top 20 global player.

    The super-company would effectively hold a diversified portfolio of long-life and low-cost assets with significant growth options.

    No doubt this could have a positive effect on the Santos share price in the future.

    About the Santos share price

    The Santos share price has been moving in circles in 2021, slipping 4% over the last 9 months. While generally flat for the period, when looking from this time last year, the company’s shares have gained almost 18%.

    On valuation metrics, Santos commands a market capitalisation of roughly $13 billion, with more than 2 billion shares outstanding.

    The post Why the Santos (ASX:STO) share price is edging lower today appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Santos right now?

    Before you consider Santos, you’ll want to hear this.

    Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Santos wasn’t one of them.

    The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

    *Returns as of August 16th 2021

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

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  • Hansen (ASX:HSN) share price sinks 13% after withdrawn acquisition proposal

    A child in full business suit holds a falling, zigzagged red arrow pointing downwards while sitting at a desk that holds cash and an old-fashioned adding machine with paper spooling.

    The Hansen Technologies Ltd (ASX: HSN) share price is taking a dive to the downside today.

    This follows news that private equity firm BGH Capital has withdrawn its previous acquisition proposal for the billing technology company.

    In early morning trade, the Hansen share price is trading 13.13% lower to $5.36.

    Why is the Hansen share price on the move today?

    Investors have decided to jump the Hansen ship on Monday morning after the company notified shareholders that its previous acquisition proposal from BGH Capital has been withdrawn.

    According to the release, BGH Capital has informed Hansen that it has decided to withdraw its unsolicited proposal to acquire the billing company. As a result, all discussions pertaining to the proposal have ceased.

    This decision has followed the conclusion of BGH’s extensive due diligence. Interestingly, the private equity firm did not specify any specific details as to why it has withdrawn from the proposal.

    In fact, BGH appeared to remain positive on the company. The release stated, “BGH Capital has advised the company that it continues to see Hansen as a highly effective organisation with an outstanding management team and strong prospects.”

    Additionally, BGH reported no issues that Hansen considers material in its current operations and strategy.

    Despite this news, it looks as though investors are concerned about the latest announcement, sending the Hansen share price lower. There seems to be a lingering worry: why has the offer been withdrawn if there isn’t a material issue?

    Furthermore, Hansen Chairman David Trude responded to the news, stating:

    The Hansen business continues to go from strength to strength. We were particularly pleased with the strategic customer wins during the year including Telefonica, DISH, Western Power and Nautilus Solar. Significant new business wins, coupled with a continued focus on our aggregation strategy, reinforce our commitment to, and confidence in, our long-term revenue target of $500 million in FY25.

    Original acquisition proposal

    Originally, BGH Capital put forward a conditional non-binding proposal for 100% of Hansen at a price of $6.50 cash per share. This offer was made on 7 June 2021 which sent the Hansen share price skyrocketing by 22%.

    At the time, all the directors of Hansen intended to unanimously recommend the proposal except for CEO Andrew Hansen. For reference, Mr Hansen holds ~17.5% of the Hansen shares on issue, amounting to approximately $216.3 million in value.

    Finally, based on the Hansen share price, the company commands a $1.2 billion market capitalisation.

    The post Hansen (ASX:HSN) share price sinks 13% after withdrawn acquisition proposal appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Hansen Technologies right now?

    Before you consider Hansen Technologies, you’ll want to hear this.

    Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Hansen Technologies wasn’t one of them.

    The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

    *Returns as of August 16th 2021

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    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. owns shares of and has recommended Hansen Technologies. 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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  • Will ASX 200 shares be rocked by RBA taper talk tomorrow?

    ASX 200 shares RBA taper quantitative easing represented by letters QE sitting on piles of cash

    If the wall or worry wasn’t already high enough for S&P/ASX 200 Index shares, speculation about what the Reserve Bank of Australia (RBA) will say about tapering is adding to the angst.

    The RBA indicated in previous meetings that it will scale down its purchases of government bonds.

    Economists are divided on whether our central bank will follow through at a time when the COVID-19 delta strain is playing havoc with the economy.

    Risk of taper tantrum to hit ASX 200 shares

    The purchase of government bonds is part of the RBA’s quantitative easing (QE) program. QE has injected massive liquidity into the financial system and pushed ASX 200 shares to record highs.

    Any talk of tapering the bond purchases could heighten any bouts of volatility on the market.

    And it appears the RBA will be forced to say something about its QE program when the board meets tomorrow for their monthly meeting to decide on interest rates. The RBA has essentially reached its target to buy $200 billion in federal and state bonds.

    Economists divided on QE tapering

    RBA Governor Philip Lowe explicated said in previous monthly meetings that the central bank will lower bond purchases to $4 billion a week from $5 billion.

    The economists at three of the big four ASX banks believe the RBA will defer the taper, at a minimum, reported the Australian Financial Review.

    These banks as the Australia and New Zealand Banking GrpLtd (ASX: ANZ), Westpac Banking Corp (ASX: WBC) and Commonwealth Bank of Australia (ASX: CBA).

    ASX 200 shares to get $1bn booster shot: Westpac

    Westpac is going a step further. It reckons QE could be increased to $6 billion a week as delta shuts down two of our biggest states.

    Nearly all experts are bracing for a contraction in the Australian economy for the September quarter. This complicates the RBA’s task of striking the right balance in deciding how much support is too much.

    Balancing act

    National Australia Bank Ltd. (ASX: NAB) is the only one of the big ASX banks that believes the RBA will keep to its earlier promise.

    If the country reopens as we close in to the 80% vaccination rate, Australia’s GDP will probably stage a strong rebound in the December quarter.

    “If they delay then it will be about managing downside risks,” the AFR quoted ANZ head of Australian economics David Plank as saying.

    “If they don’t it will be because of the positive forecast for 2022. Of course, historically relying on their forecasts to guide policy hasn’t gone well for the RBA – which is why they have shifted to looking at what is actually happening for the cash rate moves at least.”

    Tomorrow’s RBA meeting might be that much more exciting for ASX investors.

    The post Will ASX 200 shares be rocked by RBA taper talk tomorrow? appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

    *Returns as of August 16th 2021

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    Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and Westpac Banking Corporation. 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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  • Why the Fortescue (ASX:FMG) share price is crashing 11% today

    share price plummeting down

    The Fortescue Metals Group Limited (ASX: FMG) share price is the worst performer on the S&P/ASX 200 Index (ASX: XJO) on Monday by some distance.

    At the time of writing, the iron ore giant’s shares are down a sizeable 11% to $18.59.

    This latest decline means that the Fortescue share price is now down 30% from the record high of $26.58 it reached at the end of July.

    Why is the Fortescue share price crashing lower?

    The good news for shareholders is that the weakness in the Fortescue share price on Monday has nothing to do with its operations or the iron ore price. In fact, the latter rose 3.8% on Friday night.

    Rather, this sizeable decline has been driven by the company’s shares going ex-dividend this morning for its upcoming final dividend payment.

    When a share trades ex-dividend, it means it is trading without the rights to an impending dividend payment. As a result, a share price will usually drop in line with the dividend amount to reflect the fact that new buyers of the shares will not be receiving it.

    The Fortescue dividend

    In the case of Fortescue, last month the mining giant released its full year results for FY 2021 and declared a massive fully franked $2.11 per share final dividend.

    This huge payout is reflective of its strong shipments, low costs, and sky high iron ore prices, which underpinned bumper free cash flows during the 12 months.

    Based on the Fortescue share price at Friday’s close, this final dividend represented a 10% dividend yield. Which explains why its shares are falling so heavily today.

    Eligible shareholders can now look forward to receiving this dividend in their bank accounts in a touch over three weeks on 30 September. Unless of course they are taking advantage of the company’s dividend reinvestment plan.

    The post Why the Fortescue (ASX:FMG) share price is crashing 11% today appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Fortescue right now?

    Before you consider Fortescue, you’ll want to hear this.

    Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Fortescue wasn’t one of them.

    The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

    *Returns as of August 16th 2021

    More reading

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

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  • Why the Pilbara Minerals (ASX:PLS) share price is sinking 7% on Monday

    ASX shares skills shortage downgrade arrow causing the ground to crack symbolising a recession

    The Pilbara Minerals Ltd (ASX: PLS) share price is dropping on Monday morning.

    At the time of writing, the lithium miner’s shares are down 7% to $2.10.

    Why is the Plibara Minerals share price dropping?

    The weakness in the Pilbara Minerals share price on Monday has been driven by news that one of its major shareholders has sold its stake.

    According to an announcement out of Mineral Resources Limited (ASX: MIN), the mining and mining services company has decided to exit its shareholding. It held a 5.4% stake prior to selling its holding via a fully underwritten accelerated block trade offered to institutional investors.

    The release explains that Mineral Resources raised gross pre-tax proceeds of approximately $328 million from the sale.

    Why is Mineral Resources selling its stake?

    Mineral Resources was very pleased with the Pilbara Minerals share price performance since its investment in 2016 but felt now was the time to cash in and use these funds internally.

    It explained: “MRL is delighted with the share price value delivered by Pilbara Minerals’ development of Pilgangoora but believes it is time to redirect this investment into the Company’s own growth projects, including in the hard-rock lithium and iron ore sectors.”

    Mineral Resources became a substantial shareholder in the company as part of an agreement to relinquish offtake rights and a royalty that the company held over Pilbara Minerals’ Pilgangoora project.

    What now for Pilbara Minerals’ shares?

    Given how Mineral Resources knows the lithium industry extremely well, investors may be concerned that this sale signifies the top for the Pilbara Minerals share price. At least in the near term.

    While that may prove to be the case, one leading broker still sees decent upside for its shares.

    A note out of Macquarie from late last month reveals that its analysts have an outperform rating and $2.70 price target on the company’s shares.

    Based on where Pilbara Minerals’ shares are trading now, this implies potential upside of 35% over the next 12 months.

    The post Why the Pilbara Minerals (ASX:PLS) share price is sinking 7% on Monday appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Pilbara Minerals right now?

    Before you consider Pilbara Minerals, you’ll want to hear this.

    Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Pilbara Minerals wasn’t one of them.

    The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

    *Returns as of August 16th 2021

    More reading

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

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  • Pro Medicus (ASX:PME) share price down 5% on broker downgrade

    a person in a business suit wipes his forehead with his handkerchief while a red, falling arrow zigzags downwards behind him

    The Pro Medicus Limited (ASX: PME) share price is under pressure on Monday.

    At the time of writing, the healthcare technology company’s shares are down 5% to $59.00.

    Despite this, Pro Medicus’ shares are still up 68% in 2021.

    Why is the Pro Medicus share price tumbling?

    The weakness in the Pro Medicus share price today appears to have been caused by a broker note out of Goldman Sachs.

    According to the note, the broker has downgraded the company’s shares to a sell rating with a slightly reduced price target of $54.00.

    Based on the current Pro Medicus share price, this represents further potential downside of 8.5% over the next 12 months.

    Why did the broker downgrade its shares?

    Goldman Sachs made the move on valuation grounds, believing it is hard to justify the premium the Pro Medicus share price is trading on.

    Goldman explained: “Whilst we saw nothing in the FY21 result to discourage an existing positive view, we also failed to see sufficient positive surprise to justify such a strong share price reaction (+15% vs. ASX200 -1%). If valuation were no consideration, we would still be Buy-rated, reflective of a market-leading product and strong, frequent validation from a stellar customer list.”

    “However, in our sector-relative framework, we do not have sufficient visibility that recent win-rates can be sustained (we believe there are fewer, large opportunities addressable in the near-term), and, if growth tapers beyond FY22E (as currently forecast), we believe the market will increasingly struggle to justify current levels (63x NTM sales; +14% CAGR FY22-25E),” it added.

    In addition, the broker notes that momentum from competitors has been improving.

    The broker explained: “Whilst primarily a call on valuation, we note that recent momentum from competitors has been improving, and also that, after an extended period of success, the natural runway of top-tier institutions is shortening (now in 9 of top 20 hospitals, the channel in which Visage 7 is most beneficial).”

    The post Pro Medicus (ASX:PME) share price down 5% on broker downgrade appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Pro Medicus right now?

    Before you consider Pro Medicus, you’ll want to hear this.

    Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Pro Medicus wasn’t one of them.

    The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

    *Returns as of August 16th 2021

    More reading

    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 Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus 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 Core Lithium (ASX:CXO) share price has gained 8% in a week

    A lithium battery with blue power background, indicating positive share price movement for clean ASX lithium miners

    Shares in Core Lithium Ltd (ASX: CXO) have been soaring over the last 7 days, despite no news from the company.

    The Core Lithium share price has surged 7.8% since last Monday. Right now, Core Lithium’s shares are swapping hands for 34.5 cents apiece.

    Let’s take a look at what has the market so enthused about the lithium exploration company.

    What’s been happening lately?

    The Core Lithium share price has performed well over the past 7 days despite the company’s silence.

    The last time we heard news from Core Lithium was on 13 August, when it announced the details of a $15 million share purchase plan.

    The funds raised will go towards exploration, development, and construction at the company’s Finniss Lithium Project.

    The share purchase plan follows from Core Lithium’s $91 million institutional placement, which it announced was successful on 11 August.

    Under the share purchase plan, Core Lithium shareholders can increase their holdings in the company for 31 cents per additional share.

    The share purchase plan was set to close last Thursday. However, the company hasn’t confirmed if that was still the case.

    Additionally, Core Lithium had pencilled in its plans to release the share purchase plan’s results tomorrow. Only time will tell if it does.

    The Core Lithium share price isn’t alone in enjoying gains recently. Many of its lithium peers’ stock has soared over the last 7 days.

    The Pilbara Minerals Ltd (ASX: PLS) share price has gained 5% since this time last week, as has that of Piedmont Lithium Inc (ASX: PLL). While Orocobre Limited (ASX: ORE) is 12% higher.

    Core Lithium share price snapshot

    Core Lithium’s shares are currently trading for 102% more than they were at the start of 2021. They’ve also gained a whopping 762% since this time last year.

    The post The Core Lithium (ASX:CXO) share price has gained 8% in a week appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Core Lithium right now?

    Before you consider Core Lithium, you’ll want to hear this.

    Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Core Lithium wasn’t one of them.

    The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

    *Returns as of August 16th 2021

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    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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  • BlueBet (ASX:BBT) share price drops 14% on US blow

    Man puts hand over face as he loses online bet at stadium with flags behind him

    The BlueBet Holdings Ltd (ASX: BBT) share price is under significant pressure on Monday morning.

    At the time of writing, the mobile sports betting company’s shares are down 14.5% to $2.11.

    Why is the BlueBet share price falling?

    Investors have been selling down the BlueBet share price after the company was dealt another blow with its US expansion plans.

    According to the release, on advice from the regulator, Virginia Lottery, BlueBet has withdrawn its application for a Sports Betting Permit in the US State of Virginia. All application fees will be refunded.

    The release advises that this decision follows an exhaustive licence application process comprising 18 applications for only five available permits.

    One positive is that the Virginia Lottery has formally notified BlueBet that it was not deemed ineligible for a permit. As a result, the withdrawal of BlueBet’s application at this stage will not prevent it from applying again in the future.

    Management advised that during the application process the BlueBet Board received advice from the regulator that licenses would, at this stage, be granted to operators which had experience in other states and have equity interest owned by minority individuals or minority-owned businesses.

    This is the second time in the space of a week that BlueBet has missed out on a licence. Last week it revealed that it wasn’t selected for one of the ten licences being made available in the state of Arizona.

    What now?

    This isn’t the end of the road for BlueBet in the US by any means. As part of its two stage US entry strategy, BlueBet identified up to five priority states for licences.

    Following its recent success in Iowa, the Board’s current targets remain Colorado, Tennessee and Maryland.

    It also notes that there are ten states where sports betting is legal but not yet operational and these are all being reviewed and assessed against BlueBet’s entry criteria.

    Furthermore, it highlights that industry commentators see up to 40 states legalising sports betting by 2023. This compares to the current 21 states where it is live and operational.

    In light of this, BlueBet sees considerable scope to complement its licence in Iowa.

    The post BlueBet (ASX:BBT) share price drops 14% on US blow appeared first on The Motley Fool Australia.

    Should you invest $1,000 in BlueBet right now?

    Before you consider BlueBet, you’ll want to hear this.

    Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and BlueBet wasn’t one of them.

    The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

    *Returns as of August 16th 2021

    More reading

    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BlueBet 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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  • How do you value the Webjet (ASX:WEB) share price?

    A young woman makes an online travel booking as she sits on some steps with her suitcase next to her.

    The Webjet Limited (ASX: WEB) share price has been on the move during 2021, reaching near 52-week highs last week. This comes despite the online travel agent facing severe trading disruptions caused by COVID-19.

    Nonetheless, investors appear to have mixed feelings about the value of Webjet shares in the current climate.

    At Friday’s market close, Webjet shares finished up 3.66% to $5.95.

    How do you value Webjet shares?

    The most common way to value an ASX share is to calculate the company’s price-to-earnings (P/E) ratio. Traditionally, this metric is used to provide more clarity if a company is overvalued or undervalued.

    A P/E ratio can be broken down as the relationship between a company’s share price and its earnings per share (EPS).

    Currently, Webjet has a negative P/E ratio of 4.66. The formula to work out the P/E ratio is the current share price divided by EPS.

    Essentially, this means that the company is losing money and is not making any profit over the last 12 months.

    Government-mandated lockdowns and restrictions on international and domestic travel have significantly weighed on the company’s revenue streams. As such, Webjet continues to operate in hibernation to preserve cash and ensure its survival post-pandemic.

    Fortunately, Webjet still has substantial cash reserves to survive the ongoing crisis that has put the travel industry in a tailspin.

    In its FY21 results released on 19 May, the company had a strong capital position at hand. Pro forma cash stood at $431 million, with an average cash burn rate of around $5.5 million per month. This allows the company to weather the unpredictable nature of COVID-19 for the next 6.5 years without raising additional capital.

    However, a trading update released last Tuesday revealed that Webjet will become cash-flow positive for the first half of FY22. This excludes investing and debt repayments.

    In addition, the company highlighted that its WebBeds business has been profitable since July 2021. A positive sign that recovery is not far off, particularly given Australia’s accelerated vaccination program.

    Of course, macroeconomics will always play a part in the company’s share price. With Webjet shares down 40% from pre-pandemic levels, you could argue the company still has some runway left.

    All eyes will be on Webjet’s H1 FY22 results, which will be released on 25 November 2021.

    Webjet share price snapshot

    Over the last 12 months, Webjet shares have accelerated almost 60% since hitting near COVID-19 lows.

    Currently, the company’s share price is around the upper end of its 52-week range of $3.44 to $6.33.

    Based on valuation grounds, Webjet has a market capitalisation of around $2.25 billion, with approximately 379 million shares on issue.

    The post How do you value the Webjet (ASX:WEB) share price? appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Webjet right now?

    Before you consider Webjet, you’ll want to hear this.

    Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Webjet wasn’t one of them.

    The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

    *Returns as of August 16th 2021

    More reading

    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 owns shares of and has recommended 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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  • What experts are saying about the Redbubble (ASX:RBL) share price

    share price bubble burst represented by girl with popped bubblegum on her face

    The Redbubble Ltd (ASX: RBL) share price rebounded strongly off 1-year lows following the company’s FY21 full-year results announcement on 19 August.

    Shares in the e-commerce marketplace closed at a 5-month high of $4.24 last Friday but are still down about 23% year-to-date.

    Redbubble’s year-to-date performance reflects the company’s mixed performance overall.

    At face value, its FY21 results highlight a rapidly growing company with a 58% increase in marketplace revenue to $533 million and 930% jump in earnings before interest, tax, depreciation, and amortisation (EBITDA) to $53 million. This translated to a massive swing in net profit from a loss of $9 million in FY20 to a profit of $31 million.

    However, its fast growth comes at a cost.

    Back in April, Redbubble said its short-term EBITDA as a percentage of marketplace revenue is expected to be in the mid-single digit range as the company executes on targeted investments at the gross margin, marketing and operational expenditure lines.

    The Redbubble share price sold off sharply in the wake of its weaker near-term margins, sliding 23% to $4.24 on the day of the update.

    In an article featured on Livewire, Chris Stott from 1851 Capital and James Gerrish from Market Matters take a closer look as to whether the Redbubble share price is a buy, hold or sell.

    What do experts think about the Redbubble share price?

    Gerrish looks past the company’s volatile performance in FY21 and rates it as a buy.

    “The marketplace seems to be working. So it’s working because it’s getting more customers on it and that’s attracting more merchants, which gives more variety and that’s leading to more multiple purchases.”

    “So after a tough ’21, I think ’22 looks better. So it’s a buy,” he said.

    The Redbubble share price has, in fact, started FY22 on a more positive note, up 17.45%.

    Stott on the other hand flags the company’s expensive price tag and rising expenses.

    “79 times PE is too expensive for us. We think there’s better value elsewhere.”

    They missed their earnings more recently and the guidance underwhelmed to an extent, being a re-investment year on the cost side of things. So it’s a sell for us,” he said.

    The post What experts are saying about the Redbubble (ASX:RBL) share price appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Redbubble right now?

    Before you consider Redbubble, you’ll want to hear this.

    Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Redbubble wasn’t one of them.

    The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

    *Returns as of August 16th 2021

    More reading

    Motley Fool contributor Kerry Sun 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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