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The Immuron Ltd (ASX: IMC) share price is a strong performer on the ASX today. This follows the biotechnology company’s update on the anti-viral activity of its drug candidate, IMM124E.

At the time of writing, Immuron shares are swapping hands for 18.5 cents, up 8.8%

What did Immuron announce?

Investors are buying up Immuron shares after the company provided a positive result on its SARS-CoV-2 (COVID-19) program.

According to its release, Immuron advised that Monash University scientists have conducted two tests using IMM124E against SARS-CoV-2. The immunologically-based assays were developed with two recombinant reagents, the SARS-CoV-2 spike protein and a receptor protein. The latter was obtained from Melbourne’s Peter Doherty Institute for Infection and Immunity.

Initial findings indicate that IMM124E neutralises activity in which the SARS-CoV-2 virus does not bind with the spike protein or receptor. Essentially, this means that when the virus comes into contact with IMM124E, it cannot latch and infect cells.

Pleasingly, the research team will now look into identifying the inhibitory molecule in IMM124E which causes the reaction.

Deputy director of the Monash Biomedicine Discovery Institute, Professor Lyras commented:

Our initial results suggest the inhibitory substance/s in the products are binding to other antigens present on the SARS-CoV-2 virus which interfere with the mechanism the virus uses to gain entry and infect human cells. We do not yet know which compound/s in the products are responsible for this interference. However, we are excited to try and identify them.

He went on to say, “it does not matter whether antagonists to the SARS-CoV-2 virus block the binding of the spike protein directly or indirectly as long as they can prevent or reduce infection”

In addition to the encouraging announcement, Immuron will appoint Dr Dan Peres as its chief medical officer. Dr Peres will oversee the company’s clinical development programs, predominately focusing on COVID-19.

Immuron share price snapshot

Since the beginning of the year, Immuron shares have recorded a loss of almost 20%, despite clinical progress. Over the last 12 months, however, the company’s shares have soared to register a gain of more than 110%.

Immuron has a market capitalisation of roughly $42 million, with approximately 227 million shares on issue.

More reading

• 3 reasons why the Xero (ASX:XRO) share price selloff could be an opportunity
• Five essential lessons for ASX investors from the year gone by
• Lynas (ASX:LYC) share price slides following Malaysian update
• Pure Foods (ASX:PFT) share price surges on major revenue deal
• The Perenti (ASX:PRN) share price is collapsing 29%. Here’s why

Motley Fool contributor Aaron Teboneras 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.

The post Why the Immuron (ASX:IMC) share price is surging 8% higher appeared first on The Motley Fool Australia.

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Lynas Rare Earths Ltd (ASX: LYC) shares are slumping today after the company provided an update to investors on its Malaysia operations. At the time of writing, the Lynas share price is trading 1.38% lower at $5.70.   

Lynas is the world’s second-largest producer of rare earths and the only significant producer outside China. Rare earth materials are key components in the production of renewable energy technologies. 

Lynas Malaysian operations 

Lynas operates the Lynas Advanced Materials Plant in Pahang, Malaysia. It first built the facility in 2012 to process rare earth material at a lower cost than it could in its home of Western Australia.

Late yesterday, the company provided an update on how the latest coronavirus lockdown regulations in Malaysia are likely to affect its rare earth processing plant there. The Malaysian Government also announced yesterday that the movement control order (MCO) it had implemented last year in response to the pandemic is being extended until early next month. An MCO is a national governmental restriction on public and business behaviour to help curtail the spread of the virus.

The country is currently experiencing a third wave of infections and has placed restrictions on social gatherings as well businesses and the education system. 

While Lynas was quick to provide some reassurance to investors regarding its operation in Malaysia, judging by today’s share price movements, it seems some investors are a little concerned. 

In a market update yesterday, the company insisted that the plant will continue to operate with “standard procedures”:

The MCO, which is in effect for the period from 12 May 2021 until 7 June 2021, permits all economic sectors to continue to operate during the period of the MCO. Consistent with the MCO and previous updates, the Lynas Malaysia plant continues to operate with Standard Operating Procedures (SOPs) in place.

Lynas Malaysia has already implemented strict health and hygiene protocols that meet and exceed the Ministry of Health’s requirements. Products produced at the Lynas Malaysia plant are essential to the manufacturing supply chains for critical industries including automotive, medical devices, oil refining and machinery & equipment.

Lynas share price snapshot

The Lynas share price has lost around 8% over the past month and also fell by 11% in April. Lynas shares are, however, still up by around by more than 40% year to date and over 200% in the past year. 

More reading

• Why has the Lynas (ASX:LYC) share price fallen 11% in April?
• Why is Australian Strategic Materials (ASX:ASM) share price higher today?
• Province Resources and Zip were among the most traded ASX shares last week
• Why some of your favourite ASX growth shares are free-falling this week
• How the Lynas share price (ASX:LYC) sunk 90% last time this happened 

Motley Fool contributor Lucas Radbourne-Pugh 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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The Pure Foods Tasmania Ltd (ASX: PFT) share price went nuts earlier today after the company released a sterling customer update.

After reaching an intraday high of 72 cents in mid-afternoon trade, the Pure Foods share price lost its beans and has since retreated to 65 cents apiece, up 3.17%.

Let’s see why the smoked salmon and trout producer is performing so well today.

Pure Foods’ new distribution deal

Pure Foods advised its subsidiary Woodbridge Smokehouse has just signed a new distribution deal with international food distribution company Monde Nissin Australia. 

The distribution deal makes Woodbridge the sole supplier of trout and salmon products for Monde Nissin, which sells its foodstuffs to independent grocers in 45 countries.

Pure Foods reports that the deal is expected to increase Woodbridge’s total revenue by 50% in FY22 against the previous year, and increase Pure Foods’ total group revenue by 15%. 

The deal will include four new Woodbridge products the company recently brought to market. Monde Nissin is currently also in the process of expanding its market into Queensland, which has the potential to further increase revenue from the deal.

Management comments

Pure Foods managing director Michael Cooper said:

We are very excited to be further strengthening our relationship with Monde Nissin Australia. MNA has strong customer relationships covering the Australian FMCG network. The position of PFT as the sole supplier of Atlantic Salmon and Trout products to the Monde Nissan distribution network will provide significant growth opportunities for our Woodbridge Smokehouse brand.

The agreement with MNA further supports the large growth that WBSH has been able to deliver over recent quarters. With forecasted growth for WBSH of over 50% versus last year, it is great to see continued demand and increased availability of our premium brands nationally.

Pure Foods share price snapshot

The Pure Foods share price rose significantly in 2020 – up 220% for the past 12 months – but hasn’t performed nearly as well this year-to-date, down 32%.

It has, however, been bolstered with its diversifying news of plant-based food brand acquisitions, such as its buyout of Cashew Creamery in March.

More reading

• The Perenti (ASX:PRN) share price is collapsing 29%. Here’s why
• Is the NAB (ASX:NAB) share price a buy at $26?
• Why the Harmoney (ASX:HMY) share price is storming 10% higher today
• Why American Pacific Borates, NAB, Perenti, & Xero are tumbling lower
• Why AMP Capital’s chief economist is optimistic on the Federal Budget

Motley Fool contributor Lucas Radbourne-Pugh 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.

The post Pure Foods (ASX:PFT) share price surges on major revenue deal appeared first on The Motley Fool Australia.

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The Perenti Global Ltd (ASX: PRN) share price is taking a shellacking on the trading floor today. At the time of writing, shares in the diversified mining company are down an astonishing 28.72% to 69.5 cents each.

The Perenti freefall comes after the company downgraded revenue and earnings guidance for the rest of this financial year and into the next.

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

Perenti share price plunges

In a statement to the ASX, Perenti Global said it expects revenue and earnings for the second half of this financial year and into FY22 to be lower than anticipated. No specific percentages or figures were provided in terms of the scale of the lower revision.

The company said the reason for its financial difficulties are threefold: the ongoing impacts of COVID-19, a tightening labour market, and a strengthening Aussie dollar. Investors are not taking the news well, judging by today’s Perenti share price sell-off.

Perenti also said today its underground operations will be more significantly impacted by these factors than its surface operations. The company’s investment outlook, while affected by the changing labour market, remains the same as it was in its half-year update.

COVID-19

In its update, Perenti says restrictions resulting from the pandemic have had an adverse impact on productivity. Specifically, quarantining rules, travel restrictions, and an operational shut-down due to an outbreak at a worksite, were all cited as factors dragging on the company’s productivity. Direct costs related to the pandemic, however, were recoverable from clients.

Tighter labour market

Perenti claims it has become apparent to the business that demand for domestic labour is increasing at a faster rate than supply. As a result, wages are increasing and this is affecting the company’s bottom line, according to the statement.

Stronger Aussie dollar

Between its half-year update and today, Perenti says the value of the Australian dollar against the US dollar has increased by an average of 1 cent to 77 US cents. The miner believes this small increase will result in a $1.4 million hit to earnings before interest and taxes (EBIT) per year.

Positive update

Surprisingly, given the devastation of the Perenti share price today, there were some positive announcements in today’s statement.

Since 31 December 2020, $700 million of contracts have been awarded to Perenti. Furthermore, there is around $320 million worth of letters of intent in the pipeline. Perenti also says it increased the growth pipeline for the business by 20%, mostly related to gold and nickel opportunities in Australia and North America.

Risks to its African surface operations have improved “significantly”, according to the company. It believes there is some potential for the surface business to also improve further from the last estimate.

Finally, Perenti received a $7 million payment from the finalisation of work at one of the African projects. Total funds received from the sale of two African projects has totalled $87 million.

Perenti share price snapshot

Over the past 12 months, the Perenti share price has fallen by around 30% – most of that occurring today. Today’s losses have also resulted in the company’s shares trading almost 50% lower year to date. 

Given today’s current market price and 704.3 million shares outstanding, Perenti has a market capitalisation of $496.5 million. Yesterday this was $686.7 million.

More reading

• Why American Pacific Borates, NAB, Perenti, & Xero are tumbling lower
• ASX 200 dips, NIB soars, Perenti rises
• ASX 200 flat: NIB update impresses, Altium upgraded
• Perenti (ASX:PRN) share price climbs on North American expansion plans

Motley Fool contributor Marc Sidarous 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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The National Australia Bank Ltd (ASX: NAB) share price is bouncing around today. At one point, it was up, at another, down. At the time of writing, NAB shares are trading at $25.90. That’s down more than 2% from where it was trading yesterday at close. But as my Fool colleague James Mickleboro pointed out this morning, this probably has more to do with NAB shares trading ex-dividend this morning than anything else. Shareholders will be receiving NAB’s 60 cents per share, fully franked, on 2 July. Well, shareholders who owned NAB shares yesterday or earlier. Any late entrants today will have to wait for the next dividend. Hence the share price drop.

But this ex-dividend dip could mask some deeper weakness in the NAB share price. Just last week, the ASX bank was hitting a new 52-week high of $27.84, the highest level NAB shares have traversed since late 2019. Investors were initially buoyed by the bank’s half-year earnings report that was released a week ago. And fair enough too. This report detailed a 94.8% increase in cash earnings for the bank to $3.34 billion, with rises spread across all divisions. NAB also doubled its dividend. All of the other major banks have also recently reported well-received earnings (or quarterly updates), with the possible exception of Australia and New Zealand Banking GrpLtd (ASX: ANZ). But all of this has seemingly been forgotten. On today’s pricing, NAB is now down around 5.3% from its high from last Wednesday

But perhaps this dip is a buying opportunity for NAB. After all, lower share prices are cheaper share prices. And NAB is still a long way from its glory days. Remember, back in 2015 this bank was a $37, $38 share. And way back in 2007, NAB saw upwards of $42 at one point.

Is the NAB share price a buy today?

Well, one commentator who does indeed see some further upside for NAB is Goldman Sachs. According to CommSec, Goldman still has a ‘buy’ rating on NAB after its earnings report, with a price target of $29.97. That implies an upside of more than 15% on the current price, as well as some dividend returns on top. Goldman likes the look of NAB’s cost management initiatives, its dominance of the business banking market, and its well-capitalised capital base.

More reading

• Why American Pacific Borates, NAB, Perenti, & Xero are tumbling lower
• The real reason the NAB (ASX:NAB) share price is under pressure today
• What do the CEOs of the Big Four banks think of the Federal Budget?
• Which ASX bank share is the cheapest after earnings?
• Does the NAB (ASX:NAB) share price offer a 7% dividend yield?

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in Harmoney Corp Ltd (ASX: HMY) are shooting up today following the release of a business update on the company’s robust performance for April.

The Harmoney share price is up 10.7% during afternoon trade, swapping hands for $1.75.

The consumer credit company provides online direct personal lending services in Australia and New Zealand. Let’s take a closer look.

What did Harmoney announce?

In its release, Harmoney reported total group originations for the month grew to NZ$37.8 million. This represents an 800% increase on the NZ$4.2 million achieved over the prior corresponding period.

The record results saw a surge in customer numbers after suffering a heavy impact from COVID-19 during 2020. In New Zealand particularly, loan originations stood at NZ$25.3 million, reflecting a 1,388% jump over the same time last year. Across the Tasman, Australia delivered NZ$11.5 million, a lift of 379% from the previous comparable period.

In addition, the company highlighted its Libra 1.7 technology in doubling the conversion of new customer loans in Australia. Cumulative origination volumes are forecasted to exceed $300 million by FY20, signalling a compound annual growth rate (CAGR) of 180%.

A new updated version, Libra 1.8, is slated for launch in New Zealand around early July this year. Harmoney is predicting that the newer technology will have a similar effect by boosting new lending in New Zealand.

Group receivables at the end of April came to NZ$490 million, slightly above the $485 million attained the month before. Harmoney stated that this metric is forecasted to grow considerably during the second half of 2021.

Lastly, the company also expanded its Australian bank warehouse facility to $177 million and extended it until January 2023. This brings undrawn warehouse capacity to more than $247 million.

Harmoney CEO, David Stevens commented:

Harmoney has accelerated its data-driven marketing program following our listing last November, significantly increasing new customer originations.

…The business is building strong momentum in Australia and has a clear and immediate plan in place for New Zealand originations growth.

About the Harmoney share price

Since listing in late November, Harmoney shares have failed to take off, down almost 50%. Year-to-date performance has fared no better, also sinking roughly 40% for investors.

Harmoney presides a market capitalisation of around $184 million, with approximately 100 million shares on issue.

More reading

• The Perenti (ASX:PRN) share price is collapsing 29%. Here’s why
• Is the NAB (ASX:NAB) share price a buy at $26?
• Why American Pacific Borates, NAB, Perenti, & Xero are tumbling lower
• Why AMP Capital’s chief economist is optimistic on the Federal Budget
• Top brokers name 3 ASX shares to sell today

Motley Fool contributor Aaron Teboneras 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.

The post Why the Harmoney (ASX:HMY) share price is storming 10% higher today appeared first on The Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) looks set to continue its poor run on Thursday. In afternoon trade, the benchmark index is down 0.6% to 7,000.8 points.

Four ASX shares that have fallen more than most today are listed below. Here’s why they are tumbling lower:

American Pacific Borates Ltd (ASX: ABR)

The American Pacific Borates share price has sunk 15% to $1.45. This mineral exploration company’s shares have come under significant pressure this week after announcing that it would defer its Phase 1A plans for the Fort Cady Borate Mine. Instead, the company intends to shift its focus to a larger borate operation and production of borate specialties combined with sales of boric acid.

National Australia Bank Ltd (ASX: NAB)

The NAB share price is down 2.5% to $25.90. Almost all of this decline is attributable to the banking giant’s shares going ex-dividend this morning for its fully franked 60 cents per share interim dividend. This dividend will now be paid to eligible shareholders in just over seven weeks on 2 July.

Perenti Global Ltd (ASX: PRN)

The Perenti Global share price has crashed 28% lower to 70.5 cents. This follows the release of an operational update this morning by the mining services company. That update reveals that Perenti will no longer be delivering on its guidance for second half revenue and margins in line with what it reported in the first half. Instead, due to the combined impact of COVID-19, Australian labour market shortages, and the stronger Australian dollar, it is expecting softer earnings in the second half. It also expects these headwinds to continue for the next 12 to 18 months.

Xero Limited (ASX: XRO)

The Xero share price has sunk 12% to $118.87. Investors have been selling the cloud-based business and accounting platform provider’s shares following the release of its full year results. Although Xero delivered strong growth on both the top and bottom lines, it was still short of the market’s expectations. In addition to this, weakness in the tech sector is adding to the selling pressure.

More reading

• Is the 11% drop in the Xero (ASX:XRO) share price a buying opportunity?
• Why are ASX tech shares like Afterpay (ASX:APT) crashing today?
• ASX 200 down 0.4%: Xero sinks, Telstra hit with $50m fine
• Here’s why the ABR (ASX:ABR) share price has dived 9%
• The real reason the NAB (ASX:NAB) share price is under pressure today

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 Xero. 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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Now the dust has settled, the Federal Budget has been unmasked. And there’s a little something in it for everyone.

As AMP Capital head of investment strategy and chief economist Shane Oliver says, it’s a “have your cake and eat too” budget.

Speaking at AMP Capital’s Webinar yesterday, Oliver only listed 2 real losers in the Federal Budget. Namely foreign aid recipients and the future generation of taxpayers.

Core highlights of the Federal Budget

Some core highlights of the Federal Budget include:

• $17.7 billion in aged care spending over 5 years 
• An additional $1.7 billion for child-care subsidies over 4 years
• $15 billion more funding for the $110 billion 10-year infrastructure program 
• A $1.2 billion package to support the digital economy

The Federal Budget also flags an increase in spending on preschools, mental health, and additional assistance for first home buyers and single-parent home buyers. Tax cuts are also on the agenda.

According to AMP Capital, the total direct stimulus to the economy (spent and projected) since the early onset of the pandemic has now reached approximately $350 billion.

With that kind of spending the budget deficit is expected to reach 7.8% of Australia gross domestic product (GDP). That’s the highest share of GDP since 1946. Though, as Oliver notes, “At least it’s well down from the 11% projected in last October’s budget.”

Oliver said the government eschewing fiscal austerity and instead focusing its efforts on growing the economy “is the right thing to do at present”.

As for the Aussie dollar, AMP Capital forecasts it will likely top 80 US cents by the end of the year. That’s largely due to strong commodity prices lifting the Aussie dollar at a time of expected weakness for the greenback.

Reasons for optimism

According to the government’s own estimates, the Federal Budget won’t see a return to surplus for 10 years. Economic growth should help reduce the debt burden. But population growth of 0.1% this financial year, the lowest since 1917, will see less money flow into government coffers.

Oliver offered a slightly more optimistic timeline, saying we might see a return to surplus in the Federal Budget in 8 years.

He pointed to the high price of iron ore as supporting corporate income – and the government’s tax take. And he believes the government’s estimate that iron ore will fall to US$55 per tonne by March next year is pessimistic.

I reckon the government is being a bit conservative here. Iron ore’s currently running at US$228 per tonne. And if it stays around US$200 it will add almost $20 billion to government revenue.

Oliver also pointed to the stronger than forecast rebound in the Aussie economy, which has seen JobKeeper eliminated and JobSeeker outlays reduced.

In fact, he said, Australia was one of the very few developed countries where employment is now higher than it was pre-COVID, thanks to the government’s stimulus measures and focus on workers with JobKeeper.

“When we needed it, it was there,” Oliver said. He contrasted Australia with the United States where, despite the US economy running hot, employment is still 5% down from where it was before the pandemic.

Another reason for optimism are the rock bottom interest rates Down Under.

“The rate of interest is below the rate of nominal growth in this country. Historically that tells you that the debt level can be sustained,” he said, adding, “The risk there is if interest rates and bond yields rise dramatically.”

However, Oliver said he wasn’t too concerned about a sustained spike in inflation. Instead, he sees this as a short term (1-year) issue, caused by distortions in supply and demand as the world emerges from the pandemic.

Overall, Australia should also benefit from broader global growth. Oliver said he’s optimistic on 4 fronts: “massive fiscal stimulus and ultra-easy monetary policy”; pent up demand; very high savings rates; and the COVID vaccines are working.

More on Oliver’s take on the Federal Budget’s likely impact on the All Ordinaries Index (ASX: XAO) to come…

More reading

• Top brokers name 3 ASX shares to sell today
• Codan (ASX:CDA) share price wobbles on news of a completed acquisition
• Why GrainCorp, Pro Medicus, Redcape, & Treasury Wine are pushing higher
• Why it might be time to give the TPG (ASX:TPG) and Telstra (ASX:TLS) share price a second look
• Australia eyes Moderna (NASDAQ:MRNA) COVID-19 vaccine delivery

Motley Fool contributor Bernd Struben 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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On Wednesday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three ASX shares that have just been given sell ratings by brokers are listed below. Here’s why these brokers are bearish on them:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of Macquarie, its analysts have downgraded this infant formula company’s shares to an underperform rating and cut the price target on them to $5.60. The broker made the move after a2 Milk downgraded its guidance for FY 2021 a fourth time. Looking ahead, the broker has concerns over its uncertain future. Particularly given the increasing competition in the China market from domestic producers. The a2 Milk share price has fallen heavily in recent days and is now trading in line with this price target at $5.60.

Commonwealth Bank of Australia (ASX: CBA)

Analysts at Morgans have retained their reduce rating but lifted their price target on this banking giant’s shares slightly to $73.00. According to the note, Commonwealth Bank delivered a third quarter update ahead of its expectations earlier this week. And while the broker acknowledges that the bank is of a very high quality, it isn’t enough to justify the premium its shares trade at. As a result, it believes its shares are overvalued and has held firm with its reduce rating. The CBA share price is trading at $96.32 this afternoon.

DEXUS Property Group (ASX: DXS)

A note out of Citi reveals that its analysts have retained their sell rating but lifted their price target on this property company’s shares to $8.34. This follows the announcement of an agreement to acquire APN Property Group (ASX: APD). Although the acquisition is expected to boost its earnings, it isn’t enough for a change of rating. Particularly given the company’s significant exposure to offices. Citi fears office rents could suffer due to the working from home trend. The DEXUS share price is fetching $10.90 today.

More reading

• Is the high-flying CBA (ASX:CBA) share price a buy?
• 5 things to watch on the ASX 200 on Thursday
• Goldman says sell Commonwealth Bank (ASX:CBA) shares
• What do the CEOs of the Big Four banks think of the Federal Budget?
• Which ASX bank share is the cheapest after earnings?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in Codan Ltd (ASX: CDA) have spent most of the morning in the red today on news the company has completed its acquisition of Domo Tactical Communications.

The Codan share price has changed direction this afternoon, however, and is currently trading at $16.90, up 0.33%.

Codan is a communications and technology company that works to create technologies for use in harsh conditions. It produces radios, metal detectors, and mining automation systems which it provides to a number of users including Five-Eyes’ militaries and intelligence agencies.

Let’s take a closer look at the technology company’s latest acquisition.

New acquisition

In today’s release, Codan advised it now owns all shares in United States-based tech company, Domo Tactical Communications.

Codan said the acquisition cost US$88 million in cash, adding it may need to pay another US$16 million if Domo Tactical reached specified earn-out targets before the end of this year.

The US business appears to fit well with Codan’s other communications and technology business ventures.

Domo Tactical is a technology company specialising in high bandwidth wireless communications and MIMO Mesh networks. It also works to create overt and covert surveillance systems, and also builds technological communications systems in challenging environments including public spaces, border control, large sporting events, and war zones.

Codan first announced it was acquiring Domo Tactical in February this year. When the news was announced, the Codan share price hit what was then an all-time high of $13.64 in intraday trade.

Codan purchased Domo Tactical Communications from DTC Management Topco, an entity of Marlin Equity Partners.

Codan Ltd share price snapshot

The Codan share price has wobbled after today’s acquisition news. Long-term shareholders needn’t worry yet though.

The Codan share price is currently up 49% year to date and has gained 152% since this time last year.

Codan has a market capitalisation of around $3 billion, with approximately 180 million shares outstanding.

More reading

• These 3 ASX shares have just hit 52-week highs or better
• The War in Afghanistan is ending. Which ASX companies supply our military?

Motley Fool contributor Brooke Cooper 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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