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The Mesoblast limited (ASX: MSB) share price is under pressure on Thursday following the release of its third quarter update.

In early trade, the allogeneic cellular medicines company’s shares are down 2.5% to $1.87.

How did Mesoblast perform in the third quarter?

For the three months ended 31 March, Mesoblast reported revenue of US$1.9 million. This was down 84% on the prior corresponding period due to significant one-off milestone revenue a year earlier. This means that year to date revenue now stands at US$5.46 million, down almost 83% on the same period last year.

This ultimately led to Mesoblast reporting a loss after tax of US$26.5 million for the quarter, which brought its financial year to date loss to US$76.75 million.

Fortunately, Mesoblast was able to raise US$110 million via a private placement in March. As a result, it was able to absorb these losses and finished the period with a cash balance of US$158.3 million. Management believes this is sufficient to meet its short-term goals, commitments, and ongoing operations during the next twelve months.

What else happened during the quarter?

Mesoblast was very busy during the quarter with its remestemcel-L therapy. It is seeking to use remestemcel-L to treat steroid-refractory acute graft versus host disease (SR-aGVHD) in children, and COVID-19 ARDS in adults. It is also seeking to gain approval to treat chronic low back pain with rexlemestrocel-L.

In respect to SR-aGVHD in children, Mesoblast continues to be in discussion with the United States Food & Drug Administration (FDA) through a well-established regulatory process. This may include a resubmission with a six-month review with the aim of achieving approval.

As for COVID-19 ARDS in adults, results from the randomised controlled trial of remestemcel-L in ventilator-dependent COVID19 patients with moderate/severe acute respiratory distress syndrome (ARDS) indicated that in the pre-specified population under 65 years old (n=123), those who received remestemcel-L had a significantly reduced mortality through to 60 days.

However, the trial was halted after the third interim analysis and 222 enrolled patients since the 30-day primary endpoint would not be attained. Management notes that in patients under 65 years, the benefit was further increased when remestemcel-L was used with dexamethasone as part of standard of care.

The trial also indicated that the mortality reduction by remestemcel-L in those under 65 years was accompanied by increased days alive off mechanical ventilation and reduced days in hospital

Finally, its rexlemestrocel-L trial in the treatment of chronic low back pain indicated that a single injection of rexlemestrocel-L plus a hyaluronic acid carrier may provide at least two years of pain reduction, with opioid sparing activity in patients using opioids at baseline.

Mesoblast’s Chief Executive, Silviu Itescu, commented: “We are pleased with the recent clinical outcomes regarding our lead product candidate remestemcel-L and continue to progress our regulatory discussions with the aim of achieving approval. Our focus and top priority remains on successfully bringing remestemcel-L to children with the devastating complication of steroid-refractory acute graft versus host disease and adults fighting COVID-19 acute respiratory distress syndrome.”

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The Dubber Corp Ltd (ASX: DUB) share price has been a very positive performer on Thursday.

In morning trade, the unified call recording service provider’s shares are up 8.5% to $2.92.

Why is the Dubber share price charging higher?

Investors have been bidding the Dubber share price higher this morning following the release of a positive announcement.

According to the release, Cisco Webex Calling and Cisco Unified Communications Manager Cloud (UCM) will now include Dubber call recording as part of all Cisco Webex and UCM services at no additional cost to users.

If a user or business requires additional features, such as extended storage, video recording, transcription, sentiment analysis or AI-enriched insights, they can then upgrade their Dubber plan from within Cisco’s Control Hub with immediate access and effect.

The company notes that a major concern for businesses is meeting compliance obligations, regardless of the employee work location. Dubber’s technology can help business users achieve this.

Dubber’s COO, James Slaney, explained: “Business and Government require more than personal call recording. They need conversations to be captured in a way that is compliant and converted to data for revenue intelligence, dispute resolution, proactive compliance and customer service. Today’s announcement is proof not only of the scalability of Dubber, but the potential we and Cisco see in tapping voice data to improve the performance of businesses and governments worldwide.”

Foundation partner

In addition to the above, Cisco will become Dubber’s first major Foundation Partner. The Dubber Foundation Partner Program utilises the scale and native cloud capability of the Dubber platform.

This enables a service provider to embed Dubber within their core service and make basic call recording available for every user as a standard feature. After which, Dubber and its Foundation Partners are then able to cross and upsell richer functionality for compliance, AI services, additional storage, insights and more.

Dubber’s CEO, Steve McGovern, spoke positively about the deal.

He said: “Cisco and Dubber share a common vision of the way that voice data will become a critical resource for all businesses and users in the future. This marks a major milestone in increasing the ubiquity of Dubber as the Unified Call Recording and voice data layer for the world’s leading collaboration platforms.”

The Dubber share price is now up 67% in 2021.

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It’s been a rather successful year for the S&P/ASX 200 Index (ASX: XJO) so far (touch wood). The ASX 200 has now gained 9.5% year to date and has made a series of fresh new all-time highs, the latest of which was just yesterday. However, not all ASX 200 shares have joined the party. Here’s a look at three of these shares, which are currently down 50% or more in 2021 so far:

A2 Milk Company Ltd (ASX: A2M)

It didn’t take too long for A2 Milk to go from hero to, well, not quite zero, but a definite loser for many ASX 200 investors. In August last year, A2 Milk was at a fresh all-time high of $20.05 per share, having climbed more than 900% over the preceding 4 years. But today, this company is sitting at $5.72, down 71% from those highs. That includes a 50.04% drop in 2021 alone.

The COVID-19 pandemic, a halt in the daigou trade, deteriorating diplomatic relations between China and Australia, and inventory issues have all contributed to a series of earnings guidance downgrades at the company over the past few months. And the results have not been pretty for A2 shareholders. On the bright side, A2 shares are now up by around 11% since mid-May, so perhaps things have turned a corner. We’ll have to wait and see.

Nuix Ltd (ASX: NXL)

Another disappointing ASX 200 share in 2021 so far has been the new kid on the ASX block, Nuix. Nuix made its ASX debut back in December last year. Initially, it was quite a successful initial public offering (IPO), with Nuix shares running up by around 40% during the following 6 weeks to a 52-week high of $11.86, but things were all downhill from there.

At the time of writing, Nuix shares are sitting at $2.69, down by around 67% year to date, and around 80% from February’s highs. The company’s share price also lost 30% in May alone. A series of media reports alleging poor governance and financial disclosure issues appears to be the primary catalyst here. A recent earnings guidance downgrade also didn’t help.

Perenti Global Ltd (ASX: PRN)

Mining services company Perenti is another ASX 200 share that hasn’t had a great start to the year. Perenti shares were trading at $1.41 apiece at the dawn of 2021 but, today, they are going for just 68 cents. That’s a drop of a bit over 50%.

Perenti is another company that has been forced to downgrade its earnings in recent months, much to the chagrin of investors. The company has been hit hard by the pandemic, as well as both a rising Australian dollar and an increased wage bill.

The post These 3 ASX 200 shares have dropped 50% or more in 2021 so far appeared first on The Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) closed 1.05% higher at 7,217.80 points on a big Wednesday of trade. That means the index comprising all ASX 200 shares is sitting at a 100-day high right now.

What’s driving ASX 200 shares higher?

There were some big movers yesterday as strong economic data helped propel a number of shares higher. Inghams Group Ltd (ASX: ING) shares led the pack with a 6.6% gain while Santos Ltd (ASX: STO) shares closed up 6.5%.

It was also a good day for ASX 200 energy shares with Origin Energy Ltd (ASX: ORG) and Worley Ltd (ASX: WOR) also surging. That was largely thanks to surging commodities prices that underpinned solid gross domestic product (GDP) growth.

First-quarter (Q1) real GDP climbed 1.8%, beating many economists’ earlier forecasts. Notably, the Aussie economy was also up 1.1% from where it started the pandemic — highlighting a remarkable recovery despite ongoing restrictions.

That saw investors pile into ASX 200 shares on Wednesday. The benchmark Aussie index has now recorded a 5-day gain of 1.77% thanks largely to its energy constituents.

It wasn’t all good news on Wednesday though, with several shares falling lower. Nuix Ltd (ASX: NXL) shares fell a further 2.5% after Tuesday’s guidance cut. The Aussie technology company’s shares have now slumped more than 75% since closing at $11.15 per share on 25 January.

Megaport Ltd (ASX: MP1) shares also struggled on Wednesday, tumbling 4.7% lower to close at $14.72 per share as tech shares were hit hard.

Foolish takeaway

The benchmark Aussie index surged to a new 100-day high yesterday. That was fuelled by surging commodities prices which helped propel many of the big-name shares higher.

Investors will be watching closely for further signals of potential market movements given the current highs.

The post Why ASX 200 shares are at a 100-day high appeared first on The Motley Fool Australia.

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Ask A Fund Manager

In part 1 of our interview, Monash Investors co-founder and director Simon Shields showed us 2 quality ASX stocks with still-low PE ratios. Now in part 2, he reveals the fintech share that he’s proud to have bought at $5 then exited at $153.

Overrated and underrated shares

The Motley Fool: What’s your most underrated stock at the moment?

Simon Shields: People Infrastructure Ltd (ASX: PPE) is the most underrated stock. [Shields discusses People Infrastructure in part 1 of the interview].

MF: What do you think is the most overrated stock at the moment?

SS: Now the most overrated stock is, sadly, I’m going to say, Flight Centre Travel Group Ltd (ASX: FLT) — because everybody loves Flight Centre as a business. It’s been around for a long time. In fact, it was a store rollout story in its day. It’s a great Australian business, it’s a global company. 

But that drag it’s got from having those bricks-and-mortar stores, it’s just been a huge loser. From COVID it’s already had to do a couple of capital risings. With the lag that we’re seeing in the recovery, I dare say, it’s probably going to have to do another one.

Capable people are giving it the benefit of doubt because, of course, when travel starts back, there’ll be a huge boom in travel, no question about that. But it keeps receding and that’s the problem.

MF: Did you once hold it then exited, or have you never held it?

SS: We’ve long and shorted the stock — and we’re currently short.

MF: If the market closed tomorrow for 5 years, which stock would you want to hold?

SS: Electro Optic Systems Holdings Ltd (ASX: EOS). It’s Australia’s probably major defence stock, and fantastic technology in laser targeting for use in space communications, tracking satellites, space junk, and by the military. 

And it’s just got a very long pipeline of contracts that it’s going to be bidding on and almost certainly likely to win a very large percentage of those, given its leadership in those areas.

MF: It’s been around for a while, hasn’t it?

SS: It has. And so if you think, ‘Why might the market be closed for five years?’, well, I think a defence stock in that circumstance would go pretty well.

Looking back

MF: Which stock are you most proud of from a past purchase?

SS: Afterpay Ltd (ASX: APT). We didn’t buy Afterpay in the IPO because we were concerned about this new product and the bad debts it could have. So we didn’t get into it until it got to $5.

Of course, it listed at $1, so at $5 you’d think, ‘we’ve missed it’. But our valuation was much, much higher. And what was driving our valuation was, first of all, how we could see it was such an easy sell for the company. They had the metrics because it was all about online sales. They could increase the [merchant]’s online sales by 10% or 15%, and so it was such an easy thing for a merchant to adopt it.

The second thing, we could see the behaviour by the customers that they would maybe use it once every 3 months in the first year, but in the second year they’d be using twice every 3 months. And by the time it got to the fourth year, they were using it over 20 times a year.

Although we’d been buying and selling all the way through — we actually sold out our last shares at $153.

What was really pleasing about that, we were very clear in what we thought each geographic region was worth. So Australia, we thought was worth $7, the United States we thought was worth $70, for example. 

It was putting all those geographic regions together, got us to our price target. And when our price target was met, then we sold out.

Just on the reason for that, it’s the great thing about doing that assessed valuation. When we sold at $150, we were getting paid for everything we thought Afterpay was going to do for the next 8 or 9 years. So there’s no point hanging around waiting for the next 8 or 9 years to see if it was going to do it because we’re getting paid for it.

And that’s why we sold. That’s the whole theory behind the assessed valuation.

MF: Is there a move that you regret from the past? For example, a missed opportunity or buying a stock at the wrong timing or price.

SS: I regret not making a lot of money from Altium Limited (ASX: ALU).

Altium was a stock that I first came across in the tech boom, in the late 1990s and knew the business really, really well then. It sort of drifted, actually, after the tech wreck and didn’t do all that well. 

They remembered me too. I did a company visit with them and they were asking me what I thought of their business strategy. And I said, ‘Well, I think you should go to subscription rather than just sell upfront‘. And unbeknownst to me, they did that, and then the next thing I know, the stock’s taken off and I felt like I’d missed it. 

And of course, I hadn’t missed it and it kept going. So that was my big regret.

MF: How do you feel about Altium at the moment? It’s discounted from the highs of the past couple of years?

SS: Yeah. So, I mean, look, it was interesting, during COVID they found that the sales fell back, and I just wondered to what extent the issues around China and Australia might be hampering their sales at the moment, it’s hard to tell. 

Also, they’ve had to do a fair bit of discounting to try and meet their targets and that’s always a real red flag, so we’re wary of it at the moment.

MF: Last thoughts?

SS: Look, as investors, we’re dealing with uncertainty. And all we can try and do is secure the odds in our favour as much as possible. Even then, sometimes we won’t have good periods because it’s a question of ‘Are the opportunities there?’ 

Generally, there’s always going to be some opportunities out there. [But] the other thing is, can we find them? Sometimes they’re easier to find, but other times there are less opportunities and they’re harder to find. 

All I’d say is that nobody, I don’t think, is consistently just finding them all the time — but generally over time, you can see if somebody does a good job or not.

The post Little-known ASX share you should hold for 5 years: analyst appeared first on The Motley Fool Australia.

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

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

Amazon (NASDAQ: AMZN) recently confirmed to advertising trade publication Digiday that it plans to launch its own third-party cookie tracker. The move could prove to be a significant boon for the company’s fast-growing digital advertising platform and comes after Alphabet‘s (NASDAQ: GOOG)(NASDAQ: GOOGL) decision to change the way that user data can be collected through its Chrome web browser. 

Amazon’s upcoming identifier technology will be limited to the company’s advertising ecosystem, so it won’t be able to replace the breadth of tracking functionality being lost with Chrome. But the e-commerce and cloud computing company is rapidly gaining market share in the digital ad space, and supplying useful new tools should help it continue to gain ground. It’s unclear when Amazon’s advertising identifier might launch.  

Alphabet’s leading positions in the browser, search, and mobile operating spaces have made the company a powerhouse in the digital ads market. But these strengths have also raised antitrust concerns, and the company is facing regulatory pressure in the U.S., the European Union, and other markets. It is changing its approach to cookie tracking in response to these conditions, and the shift could create opportunities for Amazon despite also creating some initial hurdles to clear. 

Amazon’s advertising business still trails far behind Alphabet’s and Facebook‘s respective ventures, but the e-commerce giant is rapidly gaining ground in the territory and already ranks as the third-largest digital ads platform in the U.S. Advertising is shaping up to be a substantial growth driver for Amazon through the next decade and beyond, and the company’s market-leading e-commerce platform and analytics expertise have it in good position to continue quickly gaining market share. 

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

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Tesserent Ltd (ASX: TNT) is the largest pure-play cybersecurity company listed on the ASX, but the Tesserent share price has been in decline of late. It’s shares have slumped from a 52-week high of 44 cents in January to today’s price of 21 cents. 

This amounts to a drop of more than 50% and while the fall can’t be attributed to one factor, it is worth taking a closer look at the recent activities of the company.

Acquisitions R Us

In a 2020 interview with the Australian Financial Review (AFR), Tesserent chairman Geoff Lord believed the company would be able to generate 25% of the growth needed organically, while the remaining 75% would come through acquisitions. Previously, Lord was the founder of the successful tech business, UXC.

True to his word, by December 2020, Tesserent had made five acquisitions including Ludus, Airloom, Seer, iQ3 and New Zealand’s Lateral Security. Additionally, Tesserent spent about $22 million on purchasing the managed security services business of Secure Logic.

Last month, Tesserent made further investments in cybersecurity startups TrustGrid and AttackBound. The purchase marks Tesserent’s intention to enter into a software-as-a-service (SaaS) based technology offering. According to the company’s announcement, the purchase was executed through a mix of $1.5 million in cash and $1.5 million in shares at a purchase price of $0.2345 per share.  

In most instances, debt is the price for growth, especially via an acquisition strategy. Consequently, as at the end of December 2020, Tesserent had $9.91 million of debt, up from$3.45 million a year ago.

Acquisitions are known to spook some investors. As with Tesserent, the nature of an acquisition transaction, is that the acquiring firm either pays in cash, and or issues equity, this dilutes the value of the existing shares.

…but everything is tracking nicely

Despite the drop in the Tesserent share price, the company’s latest quarterly report highlights an increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to $1.7 million for the quarter. It also reported a 21.4% EBITDA increase quarter on quarter. The report has Tesserent targeting a $150 million turnover by 30 June. 

According to the business, it’s well placed to deliver on its acquisition strategy growth plans, with $7.7 million in available cash at the end of March. The report also states that it plans to increase its market cap from $200 million to $300 million-plus and become profitable by next year. 

Government and corporate tailwinds

Tesserent is also riding some government and corporate tailwinds.

Cyber ransomware attacks have become the grim reaper of Australian business. In March this year, the AFR reported more than half of Australian businesses were hit by attacks on their computer systems. Apart from disruption and repair costs to systems, 54% of businesses paid their attackers, but a quarter of those did not get their data returned.

In May 2021, ANZ institutional banking boss Mark Whelan told an annual banking summit (as quoted by the AFR): “The number of attacks had escalated during the pandemic to the point where it was receiving 8 to 10 million attacks a month”.

Tailwinds are coming from the government as well. In the recent 2021 budget, Prime Minister Scott Morrison announced $1.67 billion in existing defence funding would be spent over the next decade to boost cybersecurity capabilities.

It is also now mandatory for enterprises with $3 million of revenue or more to report cybersecurity breaches. The Australian Cyber Security Centre is projecting the cybersecurity industry to grow from $5.1 billion in 2019 to $7.6 billion in 2024. 

Additionally, a recent PWC survey found that 40% of Australian businesses plan to increase their cybersecurity resources over the next year.

According to Tesserent, it currently partners with 43 out of the top 100 companies on the ASX.

Tesserent share price snapshot

The Tesserent share price has dropped, but investors will no doubt be hoping it is on track to deliver on growth projections.

In the last 12 months, the Tesserent share price has increased by 215%, outperforming the S&P/ASX 200 Index (ASX: XJO) which delivered a 21.5% increase.

The post Why has the Tesserent (ASX:TNT) share price dropped more than 50% in 2021? appeared first on The Motley Fool Australia.

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The CSL Limited (ASX: CSL) share price hasn’t been getting much love from investors over the last 12 months.

During this time, the biotherapeutics giant’s shares are trading broadly flat. This compares to a 21% gain by the S&P/ASX 200 Index (ASX: XJO).

Is this a buying opportunity?

CSL has been operating for over a century. It was founded in 1916 with the aim of servicing the needs of a nation isolated by war. Today, the company is a global giant with a portfolio of therapies and vaccines saving countless lives across the world.

One of the keys to its success has been the company’s high level of investment in research and development. Every year CSL invests approximately 10% to 12% of its sales revenue back into its these activities. This has helped ensure that CSL is at the forefront of innovation and has a pipeline of potentially lucrative products.

Unfortunately, the company has been struggling with plasma collections during the pandemic. This is because lockdowns, social distancing, and government stimulus payments have all had negative impacts on donations.

Given that plasma is a core ingredient in many of its therapies, lower collections is bad news for CSL and is expected to drive costs higher. However, the good news here is that this headwind is only expected to be short-lived. In fact, recent data reveals that collections are already rebounding strongly and have been tipped to reach pre-COVID levels later this year.

In light of this, with the CSL share price still trading notably lower than its 52-week high, now could be an opportune time to make a long term investment.

Who rates the CSL share price as a buy?

One broker that thinks the CSL share price is in the buy zone is Citi.

It recently retained its buy rating and $310.00 price target. The broker believes that recent industry trends are looking favourable for the company.

Citi explained: “Over the last few weeks, most of CSL’s listed competitors have reported results. When we look at the data overall, it points to an improvement in the rate of plasma collection in April, which has been the main impediment to growth throughout the pandemic.”

“It also points to continued strong demand for the end-product, in particular IG. Overall this gives us confidence in our Buy call on CSL, although we are yet to see the earnings trough for the company which will occur in FY22 given the long lead times from plasma collection to sale.”

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If you are interested in investing in some promising mid cap shares, then you may want to take a look at the two listed below.

Both are growing at a strong rate and have a lot of potential. Here’s what you need to know about these ASX shares:

Collins Foods Ltd (ASX: CKF)

Collins Foods is a leading quick service restaurant operator with a focus on KFC restaurants.

At present, the company operates 251 KFC restaurants throughout Australia. These are predominantly in the Queensland market, with 158 restaurants in the state. Collins Foods also has a growing European footprint, with 17 KFC restaurants in Germany and 28 in the Netherlands, and 16 Taco Bell restaurants throughout Australia.

It has been a positive performer during the pandemic. During the first half of FY 2021, Collins Foods reported an 11.3% increase in revenue to $499.6 million. And thanks to margin expansion, the company’s underlying net profit after tax came in 15.1% higher at $27.5 million.

Pleasingly, Collins Foods appears well-placed for growth in the future thanks to its store expansion opportunities. This is particularly the case for its KFC restaurants in the underpenetrated European market. It also has the option of adding to its portfolio of brands through acquisitions, developments, or agreements. 

Hipages Group Holdings Ltd (ASX: HPG)

Another mid cap ASX share to take a look at is Hipages. It is a leading Australia-based online platform and software as a service (SaaS) provider.

Hipages’ focus is on connecting tradies with residential and commercial consumers. At the last count, over three million Australians had used its popular platform. This provided work to over 34,000 tradie businesses that are subscribed to the platform.

But there’s more to the company than that. It also provides businesses with its Call of Service job management software. This has been designed to improve tradies’ productivity by streamlining their workflow and taking away the stress of admin.

At present the company is capturing approximately 5% of total industry advertising spend, but has been tipped to grow its market share materially in the future. For example, a recent note out of Goldman Sachs reveals that its analysts see scope for Hipages to capture upwards of 40% to 60% in the future as its builds out its ecosystem. 

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