Tag: Motley Fool

The Carbon Revolution Ltd (ASX: CBR) is careening to a 14-month low this morning after it issued a profit downgrade.

The irony is that the surge in car sales is leaving the composite wheel maker behind in the dust, and you can thank COVID-19 for that.

The Carbon Revolution share price crashed 13.5% to $1.34 at the time of writing. The fall is on top of yesterday’s 5.5% tumble – all of which came right at the market close.

Cardon Revolution share price is a wreck

This is because management released the disappointing news a few minutes before 4pm. It revealed that one of its major customers have suspended vehicle production due to the shortage of computer chips.

As a result, Carbon Revolution believes it will sell around 1,800 fewer wheels this financial year compared to FY20.

Management had previously forecast selling around the same number of wheels in FY21 as last year.

The customer in question is expected to restart its production line in late June.

Carbon Revolution share price in the slow land

The world-wide shortage of semi-conductor chips is driving up the price of vehicles around the world, including Australia.

The shortage of new vehicles has been met head-on with strong demand for cars. Consumers who can’t travel and have limited alternative uses for their savings are spending big on new wheels.

The federal government is also pumping fuel into the tank. The extension of the instant tax write-off is also adding to demand for new vehicles.

ASX shares benefiting from car shortages

This is great news for the likes of the Eagers Automotive Ltd (ASX: APE) share price and Autosports Group Ltd (ASX: ASG) share price.

The lack of supply means car dealers do not have to offer discounts on new vehicles and can charge more for second hand vehicles that are ready for immediate delivery.

Auto parts makers are also smiling. The Bapcor Ltd (ASX: BAP) share price and ARB Corporation Limited (ASX: ARB) share price have also been outperforming over the past year.

Foolish takeaway

The supply chain dislocation is creating winners and losers in the auto industry. New car manufacturers and their suppliers are suffering, while dealers are revving up their engines.

But at least the headwind is temporary. It’s a question of “when” and not “if” supply chains normalise to give the Carbon Revolution share price a chance to play catch-up.

On the other hand, the road to recovery could be a winding one. Just look at the ongoing impact of COVID-19 even when vaccines are being rolled out. Ask anyone in Victoria.

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• The ASX shares poised to benefit from new spending in the 2021 federal budget

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The BPH Energy Ltd (ASX:BPH) share price is rising this morning after the company released more news of the Baleen gas prospect.

The BPH Energy share price is up 7.78% to 9.7 cents at the time of writing.

What did BPH Energy announce today?

BPH Energy advised that its investee company, Advent Energy Ltd, has appointed Xodus Group to prepare a submission for the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA).

BPH Energy holds a 26% stake in Advent Energy. Advent Energy’s major shareholders also include MEC Resources Limited (ASX: MMR) and the de-listed Grandbridge Limited.

Xodus will prepare an environmental plan for activities at the Baleen prospect to be presented to NOPSEMA.

Let’s take a closer look at today’s news.

Next step forward

Before the Baleen prospect can begin, it must receive the go-ahead from NOPSEMA.

NOPSEMA must assess a company’s health, safety, and environmental plans before any offshore petroleum or greenhouse gas storage activities can begin.

Last week, the BPH Energy share price soared when the company announced there’s a high likelihood of striking gas at the Baleen prospect.

The company also hopes to use the site for carbon capture and storage, which could see it receiving Federal Government incentives.

The Baleen prospect is found within offshore licence PEP-11 ­– located off the coast of Newcastle.

PEP-11 is to be developed as a joint venture between Advent Energy and Bounty Oil & Gas NL (ASX: BUY). Advent holds 85% of the licence, while 15% is held by Bounty.

Xodus has been appointed under a lump sum contract. The cost that Advent Energy will pay Xodus to prepare the environmental plan is yet to be disclosed.

BPH Energy share price snapshot

The BPH Energy share price is having a fantastic 2021 on the ASX.

Currently, it is up 142% year to date. It has also gained 870% since this time last year.

The company has a market capitalisation of around $59 million, with approximately 664 million shares outstanding.

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The Viva Leisure Ltd (ASX: VVA) share price is climbing today following an update on its trading performance and FY21 outlook.

At the time of writing, health club operator’s shares are swapping hands for $1.94, up 0.52%.

Let’s take a closer look and see what the company updated the ASX with.

Performance update

Investors are pushing Viva Leisure shares higher after the company released a positive update.

In its presentation, Viva Leisure announced an improvement across the business due to the gradual recovery from the COVID-19 pandemic.

As a result, the business noted that all comparisons made below are against its December half-year result. This is because comparing against 12 months ago is not an accurate reflection on business growth.

For the period until April 2021 (first 4 months of 2021), monthly revenue run rate (RRR) jumped to $8.1 million. This represents a 11.4% increase on its December half-year results. All of Viva Leisure’s facilities were re-opened as of January 2021, highlighting a return of members.

In addition, the company managed to also grow its member base to 295,808 members, a lift of 8% on H1 FY20. Viva Leisure’s continued expansion into new locations increased to 306. This figure is up from 296, which contributed to the improved result.

Revenue surged above $8 million. This is a 58% jump when comparing this month against March 2020, before COVID-19 hit. Particularly, the ACT region was the biggest contributor to the overall scorecard, accounting for roughly 45%.

FY21 outlook

Looking ahead, Viva Leisure stated that it is targeting revenue to range from $81 million to $83 million. Over H1 FY21, this is a 25.6% to 31.2% growth.

Furthermore, earnings before interest, tax, depreciation and amortisation (EBITDA) is estimated to come between $13 million to $13.5 million. This reflects a 32.1% to 41.1% increase on the December half-year result. EBITDA margin is also set to jump around 16.5% to 17.5%.

About the Viva Leisure share price

The Viva Leisure share price is down close to 20% over the past 12 months. It’s worth noting that its shares plunged to a low of 1.825 due to market slump this month.

Based on the current share price, Viva Leisure commands a market capitalisation of roughly $158 million.

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The CSL Limited (ASX: CSL) share price is pushing higher on Tuesday morning.

At the time of writing, the biotherapeutics giant’s shares are up 1% to $292.00.

Why is the CSL share price rising today?

The CSL share price was given a boost by a broker note out of the Macquarie Group Ltd (ASX: MQG) equities desk this morning.

According to the note, the broker has retained its outperform rating and $312.00 price target on the company’s shares.

This price target implies potential upside of approximately 7% over the next 12 months.

What did Macquarie say?

Macquarie has been leveraging Google data to track foot traffic at the company’s network of plasma collection centres during the pandemic.

Positively, the latest data indicates that foot traffic has now risen to the highest level since Macquarie began tracking it. This coincides with a reduction in new COVID-19 cases in the US and the successful rollout of vaccines across the country.

Macquarie’s analysts believe this improving collections data is supportive of its immunoglobulin revenue and earnings growth forecasts.

In addition to this, the broker notes that CSL’s new plasmapheresis platform, which is being developed with Terumo Blood and Cell Technologies, has the potential to lift yields meaningfully.

The broker believes the innovative plasma collection platform could increase yields by 10% per donation in the future, which would give its gross profit a big boost if granted regulatory approval.

Who else is bullish?

Macquarie isn’t the only broker that is positive on the CSL share price. A number of other brokers also have the equivalent of buy ratings on its shares.

For example, Credit Suisse has an outperform rating and $315.00 price target on its shares and UBS has a buy rating and $330.00 price target.

The latter implies potential upside of 13% for the CSL share price over the next 12 months.

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Do you have some money to invest into some ASX shares? This article is about two ideas that could be interesting options.

Businesses that are seeing underlying growth of demand might be able to produce profit growth over the longer-term.

Kogan.com Ltd (ASX: KGN)

Kogan is a leading e-commerce ASX share that sells a wide variety of items and products.

Its website sells things like TVs, computers, phones, drones, appliances, heating and cooling, home and garden items, furniture, office supplies, toys, video games, clothes, sports gear, tools, books, alcohol and grocery items.

Kogan also offers a number of services including mobile, internet, energy, credit cards, insurance, pet insurance, life insurance, travel, cars, superannuation and home loans.

The business has a growing number of customers, including Kogan First members. Those members get free shipping, discounts and priority customer service.

The Kogan share price has declined by around a third over the last three months.

Kogan has been telling the market about its inventory problems and that its rapid growth has led to near-term supply chain inefficiencies.

To sort out its excess inventory, the ASX share is spending more on marketing and increasing its promotional activity. However, the demurrage issue that it has been facing has been resolved.

Customer demand in April 2021 remained consistent with the levels seen in the three months to March 2021, and below the levels seen in the nine months to December 2020. The quarter ending 31 March 2021 saw gross sales growth of 47% with gross profit increasing 54%.

Kogan says the longer-term fundamentals remain very attractive with online sales only accounting for a small percentage of total retail sales in Australia and New Zealand.

According to Commsec, the Kogan share price is valued at 17x FY23’s estimated earnings.

Betashares Global Cybersecurity ETF (ASX: HACK)

This ASX share is an exchange-traded fund (ETF) that is focused on the world’s leading cybersecurity companies.

As BetaShares points out, governments, companies and households around the world are facing a tougher fight against cyber criminals who want to steal information or disrupt their IT related activities. Cybersecurity is increasingly important as more of the global economy heads online.

There are more devices online and it’s an arms race for cybersecurity businesses.

Global spending on cybersecurity has increased at an annual rate of around 8% since 2011. Major public and private organisations continue to spend more on cybersecurity. The global cybersecurity market is expected to be worth $203 billion in 2021 and $248 billion in 2023.

Most of the portfolio is invested in US shares, though there is a weighting of just over 3% to Israel and the UK.

The ASX share has around 40 holdings, with the current biggest 10 being: Cisco Systems, Accenture, Crowdstrike, Zscaler, Splunk, Proofpoint, Fortinet, Akamai Technologies, Fireeye, Juniper Networks.

Despite the annual management fee of 0.67% per annum, Betashares Global Cybersecurity ETF has delivered an average return per annum of 19.5% since inception in August 2016.

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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.

What happened

Shares of electric car company Tesla (NASDAQ: TSLA) surged higher on Monday. Shares were up about 5.7% as of 3:30 p.m. EDT.

The growth stock’s gain was fueled both by a bullish day in the stock market and news that Tesla has reportedly entered into an agreement with Luminar Technologies (NASDAQ: LAZR) for testing and development of Luminar’s laser-sensor technology.

So what

Highlighting why the overall market likely helped Tesla stock’s gain on Monday, the Nasdaq Composite was up more than 1.6% as of this writing – and many growth stocks like Tesla were up several percentage points or more.

Meanwhile, news that Tesla is reportedly open to testing the laser-sensor technologies for autonomous driving that CEO Elon Musk has previously heavily criticized may have investors more confident in the company’s long-term self-driving technology roadmap.

Though Tesla stock is up today, it’s still down about 14% year to date and 32% below its 52-week high.

Now what

Given the stock’s enormous run-up last year and its recent sharp decline, there’s likely plenty of volatility ahead for Tesla stock.

Investors, however, should remain focused on the company’s underlying business. Though Tesla’s sales are growing rapidly, the company is still heavily dependent on sales of zero-emission vehicle credits for much of its profitability. But management believes Tesla is on a path to eventually achieve industry-leading operating margins.

 

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

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

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The Aroa Biosurgery Ltd (ASX: ARX) share price is on the move on Tuesday morning.

At the time of writing, the soft-tissue regeneration company’s shares are up 1.5% to $1.20.

Why is the Aroa Biosurgery share price rising?

Investors have been buying the company’s shares this morning following the release of a better than expected full year result.

For the 12 months ended 31 March, Aroa reported product sales of NZ$21.6 million. While this was down 2% year on year, it exceeds the company’s guidance of NZ$21 million.

Things were better on a constant currency basis, with product sales coming in at NZ$23.1 million. This would have been a 5% increase on the prior corresponding period.

On the bottom line, Aroa reported a normalised loss before income tax of NZ$7.4 million. This compares to a loss of NZ$3.9 million in FY 2020.

Management was pleased with the result, particularly given how COVID-19 headwinds in the US significantly impacted procedure volumes.

Outlook

Pleasingly, management believes the company is well-placed as it enters into FY 2022.

In light of this, the company expects its FY 2022 product sales to grow 39% to 53% to between NZ$30 million and NZ$33 million.

This is based on a NZD/USD exchange rate of US$0.72 and is subject to no resurgence of COVID-19 in the United States, its US sales and marketing distributor TELA Bio delivering strong growth, and continued improvement in US medical procedure numbers.

However, as a result of an increased investment into its sales force, its operating earnings will be negative.

Aroa’s Founder and CEO, Brian Ward, said: “We believe that supported by our newly expanded fully dedicated sales team, Aroa is poised to continue to grow strongly this year by ramping up Myriad sales and penetrating into further accounts.”

“With the growing body of evidence to validate the clinical efficacy of Myriad, we expect Myriad will not only help deliver strong growth in FY22, but it will also underpin growth in the medium term. We anticipate FY22 will be a set-up year for Symphony, which will ramp up in FY23 to deliver a further wave of growth. Symphony has the potential to significantly add to our existing Endoform business in the outpatient wound centre setting.”

“We are pleased to have completed the recent sales transition from Appulse and with an expanded product portfolio, we consider Aroa is well placed to grow in the emerging post-COVID-19 healthcare environment, where clinical performance and value will come under increasing scrutiny. Aroa’s products are designed to improve clinical outcomes at a cost that improves patients’ access to the benefits of biologics, and to drive better healing. We are focused on unlocking regenerative healing for everybody,” he concluded.

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The RAIZ Invest Ltd (ASX: RZI) share price is edging lower on Tuesday.

At the time of writing, the mobile-first financial services platform provider’s shares are down 1% to $1.31.

Why is the Raiz share price edging lower?

The Raiz share price is on the move today after the company announced the completion of its share purchase plan (SPP).

This SPP was part of a wider capital raising announced in April that was aiming to raise a total of $13.2 million from investors. This comprised $10.2 million via an institutional placement and $3 million from the SPP.

While the company successfully raised the $10.2 million at $1.50 per share last month, things weren’t quite as positive for the SPP.

According to today’s release, just 37 retail shareholders took part in the SPP. This led to the company raising just $218,700, bringing its total to just over $10.4 million, which was well short of target.

However, this wasn’t overly surprising given the company’s decision to undertake the SPP at the same price as the institutional placement.

Since announcing the capital raising on 28 April, the Raiz share price has lost approximately 20% of its value. This left the Raiz share price trading 11% lower than the offer price at $1.33 at the close of play on Monday. This means it would have been cheaper to buy shares on-market than take part in the SPP.

Why is the company raising funds?

The company intends to use the proceeds to accelerate customer growth, develop new products and services, and expand into new geographies.

Some of the funds are likely to be used to support the growth plans of the recently acquired Superestate business. Superestate is a niche integrated superannuation and Australian residential property investment platform.

Commenting on the acquisition, CEO George Lucas said: “This acquisition, the first in our five-year history, marks an important milestone for the group by demonstrating organic growth is not our only option to increase funds under management (FUM) and Active Customers. Other acquisitions are on our radar as we actively look for opportunities in the Asia Pacific region.”

“The acquisition provides tangible benefits to the customers of both financial services groups. Raiz secures the capability to offer residential property as an asset class in and outside superannuation in much the same way that we successfully introduced Bitcoin to our customers, giving them a means of investing in cryptocurrency.”

Despite this recent weakness, the Raiz share price is still up over 30% year to date.

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Last week, we discussed how the ethical investing trend is taking off in the ASX exchange-traded fund (ETF) sector. ESG (environmental, social and corporate governance) investing has grown in scope and scale as more and more investors want to put their money where their values lie. Of course, you can sniff out individual companies that might align with your values. But many investors are using ETFs to do this legwork for them, as well as taking advantage of the diversification and passivity that an ETF can offer.

Breaking down an ESG ETF

When it comes to ethical ESG ETFs, there are normally two classes that a fund will fall into. There are funds that follow a broad market index, such as the S&P/ASX 200 Index (ASX: XJO), but then ‘filter’ out any unsavoury companies from the index. And then there are those that invest in a particular ESG-aligned industry, such as renewable energy. There is a big difference between these two approaches.

Let’s first look at the index funds. The BetaShares Australian Sustainability Leaders ETF (ASX: FAIR) is one such fund. This ETF tracks an index that screens ASX companies based on ESG criteria such as fossil fuel production, gambling, tobacco, alcohol, environmental destruction and animal cruelty. It holds 80 ASX shares, which includes some big names like Telstra Corporation Ltd (ASX: TLS), CSL Limited (ASX: CSL) and Xero Limited (ASX: XRO). As such, you are still getting some of the diversification benefits a simple ASX 200 index fund might provide, but without the companies that have been identified as not possessing ESG characteristics.

There are other ASX ESG ETFs that follow a similar methodology. The Vanguard Ethically Conscious Australian Shares ETF (ASX: VETH) is one. The VanEck Vectors MSCI Australian Sustainable Equity ETF (ASX: GRNV) is another. There are even funds available that take this approach and apply it to overseas shares instead of ASX companies. Such funds include the VanEck Vectors MSCI International Sustainable Equity ETF (ASX: ESGI) and the BetaShares Global Sustainability Leaders ETF (ASX: ETHI).

What about sector-specific ETFs?

That’s only one side of the ASX ethical ESG ETF coin though. There are also a number of funds out there that chase specific ESG sectors. Take the ETFS Battery Tech & Lithium ETF (ASX: ACDC). This fund aims to give exposure to “the energy storage and production megatrend, including companies involved in the supply chain and production for battery technology and lithium mining.”

Whilst this fund does not have a specific ESG mandate, it is still focused on an industry with ‘green’ credentials in aiming to reduce greenhouse gas pollution. However, a fund like this arguably provides less diversification than one of the funds named above. That’s because all of the holdings in this ETF are companies that operate in a very specific sector.

The same can be said of the VanEck Vectors Global Clean Energy ETF (ASX: CLNE) or the BetaShares Climate Change Innovation ETF (ASX: ERTH).

Whilst there is nothing wrong with this approach, it’s worth pointing out that there is a lot more concentration on one particular section of the ESG market. This carries its own set of risks compared to a more diversified fund.

Foolish takeaway

Ethical ESG investing looks as though it’s here to stay as an investing trend. But if you are seeking out ESG funds to invest in, make sure you know what kind of exposure you are looking for. Not all ethical ETFs are equal — some of these funds might be offering a portfolio that’s too concentrated for your goals, or risk profile. Just because something has ‘ESG’ or ‘ethical’ doesn’t mean it’s automatically a good investment.

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• Why is the AMP (ASX:AMP) share price falling again today?

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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.

Cryptocurrency has always been volatile, but it’s experienced quite the wild ride over the past few months. After shattering records and reaching staggeringly high prices, cryptocurrencies have taken a sharp turn for the worse.

Bitcoin (CRYPTO: BTC), which reached a high of around $65,000 per token last month, has fallen by more than 30% over the past 10 days, as of this writing. Other popular cryptocurrencies Ethereum (CRYPTO: ETH) and Dogecoin (CRYPTO: DOGE) are also down around 30% over the same time period.

Sometimes, market crashes are beneficial to investors because they’re an opportunity to buy stocks at bargain prices. If you’ve been eager to invest in cryptocurrencies but are hesitant about the sky-high prices, a crypto crash could make them more affordable. But does that mean you should invest?

Consider your tolerance for risk

The latest crypto crash is further proof of this sector’s volatility. Considering cryptocurrency’s history, a 30% drop is fairly mild. Bitcoin, for example, has fallen by more than 80% on three separate occasions since 2012, according to data from Visual Capitalist. 

This year alone, Bitcoin has already experienced several steep drops. So this recent crash is par for the course — and there will likely be many more crashes like this in the future.

Bitcoin Price data by YCharts

Before you invest in cryptocurrency, think about whether you can tolerate this level of risk. Although Bitcoin has always managed to bounce back from its slumps, there’s no guarantee it will always recover.

If you know you’re going to lose sleep when your investments plummet overnight, crypto may not be the best investment for you. But if you have the stomach for this type of turbulence, you may have the right personality for investing in crypto.

Choose your crypto carefully

If you decide to invest in cryptocurrency, buying when prices are lower may be a wise move. Especially if you’re investing in a higher-priced currency like Bitcoin, you can get more for your money when buying during a downturn.

Just be sure you’ve done your research before you invest. The fact that a cryptocurrency is more affordable doesn’t necessarily mean it’s a smart investment, so consider all your options before you buy. The goal is to buy investments you can hold for the long term, so make sure you’re choosing the right cryptocurrency for you.

Bitcoin is the biggest name in the crypto space, and it’s also the oldest cryptocurrency. This gives it a leg up on the competition. However, it’s an energy-intensive cryptocurrency, which poses environmental concerns. In fact, Tesla CEO Elon Musk recently announced that the company would no longer accept Bitcoin as a form of payment because of its environmental impact.

Ether is the second-most popular cryptocurrency, and it uses the popular blockchain Ethereum — which is also the blockchain behind non-fungible tokens (NFTs) and decentralized finance. Because the Ethereum blockchain has a variety of uses, that gives it an advantage. In addition, developers are currently working on Ethereum 2.0, which will be more energy-efficient and environmentally friendly.

Dogecoin is one of the riskiest cryptocurrencies, and buying this particular token is more similar to gambling than true investing. If you do choose to go this route, be sure you make this decision carefully.

Regardless of which option you choose, only invest money you can afford to lose. Crypto is still a high-risk investment, even if it is more affordable right now. While cryptocurrency isn’t right for everyone, if you’ve decided to invest, you can save some money by investing when prices are lower.

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

More reading

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• Would you pay 10% more for a ‘green Bitcoin’?
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• ASX 200 Weekly Wrap: ASX whipsaws in volatile week
• Ethereum vs. Bitcoin: Which is the better buy?

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

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