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Harvest Technology Group Ltd (ASX: HTG) shares are on watch today after the company released news of an acquisition this morning. The industrial communications group said the acquisition would mark the start of its expansion into the United States and international markets.

The Harvest Technology share price closed yesterday’s session at 33 cents.

Let’s take a closer look at the company’s announcement. 

Acquisition underway 

Harvest Technology announced today it has signed a binding term sheet to acquire US-based SnapSupport Inc., a software as a service (SaaS) provider.  

The company also said it will accelerate its strategic swing towards a SaaS business model.

SnapSupport works to help remote field workers during equipment failures. It provides real-time visual and augmented-reality-enabled support to help fix issues quickly.

According to Harvest Technology’s release, SnapSupport’s business model fits well with its own. Harvest Technology provides connectivity solutions for the energy, resources and renewable sectors. 

The deal on the table is for the company to pay approximately $2.59 million worth of Harvest Technology shares, paid over two instalments, to acquire SnapSupport. Half will be paid on completion of the acquisition, the other half will be due 12 months later.

The acquisition deal hangs on some key terms – due diligence, a purchase agreement, and an employment agreement for a key employee.

Commentary from management

Harvest Technology’s managing director Paul Guilfoyle commented on the potential acquisition, saying:

The acquisition of SnapSupport, who have commercially viable solutions that are already supporting largescale global customers with over 900 active users at any one time, will provide us with a fast and cost-effective pathway to speed-up the global rollout of our SaaS business model.

The SnapSupport mobile platform is proven, fit-for-purpose and can quickly and efficiently harness the advantages of our own Industrial Grade Connectivity capability.

Harvest Technology share price snapshot

The Harvest Technology share price has been performing well on the ASX lately.

Currently, it is up 6% year to date. It’s also up by 175% over the last 12 months.

Harvest Technology has a market capitalisation of around $162 million, with approximately 493 million shares outstanding.

More reading

• Why the Perpetual (ASX:PPT) share price is in focus
• 3 Reasons Cathie Wood has invested $580 million in Coinbase’s IPO
• Why the Carbon Revolution (ASX:CBR) share price is frozen
• Accent (ASX:AX1) share price on watch after announcing Glue acquisition
• Why the Limeade (ASX:LME) share price is on watch

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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The Perpetual Limited (ASX: PPT) share price is one to watch after the Aussie investment manager’s latest quarterly update.

Why is the Perpetual share price in focus?

Perpetual this morning provided a business update for the period ended 31 March 2021 (Q3 2021). The Aussie investment group reported total assets under management (AUM) of A$95.3 billion, up 6.8% from the previous quarter. 

Australia AUM climbed 4.4% to $23.7 million while Perpetual Asset Management International AUM climbed 7.7% to $71.6 million.

Fixed income saw the only positive net flows across asset classes on a combined basis during the quarter but still edged lower to $20.6 million in AUM. The asset class was the worst performing segment for the quarter given strong gains across equities.

Net outflows were A$892 million which were offset by A$5.3 billion in asset growth thanks to a strong market. A positive currency impact of A$783 million also helped boost overall performance for the quarter.

The Perpetual share price is one to watch in early trade following this morning’s update. Total combined equities experienced A$1.4 billion in net outflows for the quarter but also saw the strongest gains. That was particularly the case for US equities which gained A$4.9 billion in value as well as $0.5 billion in favourable currency movements.

Perpetual Corporate Trust’s Funds under Administration (FUA) grew by 1% to A$942.9 billion during the quarter. The Aussie fund manager cited “continued momentum” from its adviser growth strategy in Perpetual Private. That included a 4% gain in Funds Under Advice to A$16.1 billion with A$0.2 billion of positive net inflows.

Foolish takeaway

The Perpetual share price is one to watch given its strong recent gains. Shares in the investment manager are up 25.1% since the start of November to $33.80 per share.

Today’s quarterly update reflected the bullish equities markets seen in the first quarter which more than offset the net outflows from institutional accounts.

More reading

• The Harvest Technology (ASX:HTG) share price is on watch. Here’s why
• 3 Reasons Cathie Wood has invested $580 million in Coinbase’s IPO
• Why the Carbon Revolution (ASX:CBR) share price is frozen
• Accent (ASX:AX1) share price on watch after announcing Glue acquisition
• Why the Limeade (ASX:LME) share price is on watch

Motley Fool contributor Ken Hall 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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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.

Cathie Wood has become something of an investing phenomenon over the past year. The founder and CEO of ARK Investment Management made a name for herself in 2020 when her five flagship exchange-traded funds (ETFs) crushed the returns of the broader market, each notching gains of more than 100%, by focusing on emerging technologies and disruptive high-growth stocks.

Wood made headlines again last week when she invested in Coinbase Global (NASDAQ: COIN) on the day it went public. ARK hasn’t stopped there, buying more Coinbase stock each day since its direct listing. ARK Invest now owns almost 1.9 million Coinbase shares — worth roughly $580 million at Thursday’s prices — in three of the firm’s ETFs: ARK Fintech Innovation (NYSEARCA: ARKF), ARK Innovation (NYSEARCA: ARKK), and ARK Next Generation Internet (NYSEARCA: ARKW). 

Let’s look at three reasons Wood was so quick to add Coinbase shares to ARK Invest’s coffers.

1. A breakout year for Coinbase

The ongoing boom in cryptocurrency has attracted the attention of novice and experienced investors alike. Coinbase Global is the leading cryptocurrency exchange in the U.S., allowing enthusiasts to buy and sell a wide range of popular digital currencies. The company makes the majority of its revenue from the transaction fees it charges for each sale.

The platform has more than 56 million individual users, 7,000 institutions, and 115,000 partners in over 100 countries. Its growing user base gives the company an unmatched ecosystem that has something for everyone, from the beginning cryptocurrency enthusiast to the more experienced buyer. 

2020 was a breakout year for Coinbase, so it isn’t surprising that it caught Wood’s attention. Coinbase reported that revenue grew 139% year over year to $1.14 billion. At the same time, profits turned positive with a net income of $322 million, pivoting from a loss of $30 million in 2019. As a result, the company’s adjusted EBITDA surged more than 2,000% to $527 million. 

Preliminary results show that growth accelerated during the first quarter of this year. Revenue surged to $1.8 billion, a ninefold increase from $191 million in the prior-year quarter. For context, revenue tripled compared to the fourth quarter, while exceeding Coinbase’s revenue for all of last year. While the final numbers haven’t been released, net income is expected to be in a range of $730 million to $800 million, soaring nearly 2,300% year over year, at the midpoint of its range. 

Given the eye-catching results, Coinbase would have certainly been on Wood’s radar.

2. A longtime believer in cryptocurrency

Wood has long been a proponent of digital assets, buying Bitcoin back in 2015 — before it entered the zeitgeist. She was particularly intrigued by the potential for blockchain, the digital ledger technology that underpins cryptocurrency. Wood has even gone so far as to say that Bitcoin’s price could eventually top $500,000 — nine times its current price, which is around $55,000 at this writing. 

A quick look at ARK’s funds shows that Wood continues to bet big on the potential for cryptocurrency and blockchain. ARK Next Generation Internet holds more than 5% of its $6.9 billion in funds under management in Grayscale Bitcoin Trust — the first publicly traded security investing solely in Bitcoin.

That’s not all. Square is the No. 1, 2, or 3 holding of three ARK funds and was among the first to offer users more widespread cryptocurrency accessibility. The point-of-sale and digital payments provider first tested buying and selling Bitcoin on its platform in late 2017, before expanding access to all users in early 2018. Rival PayPal Holdings also debuted a service late last year that enables users to buy, hold, and sell cryptocurrency. The digital payments pioneer is another significant holding in two of ARK’s funds. 

3. Cryptocurrency is still in its infancy

While it may seem like cryptocurrency is finally entering the mainstream, it’s actually still early days for the digital payment method. Hester Peirce, a commissioner with the Securities and Exchange Commission, says cryptocurrency is still in its infancy, but interest is growing.

“We’re seeing more interest coming from institutional quarters than we have in the past,” Peirce said during a live-stream financial conference. “As people are more comfortable working in a virtual world in every industry now, I think people are likely to turn more interest to the crypto space. And as people are looking to diversify their portfolios, I think people are also likely to look more to the crypto space.” 

A recent study of 30,000 Americans found that roughly 57% say they understand cryptocurrency, about 14% say they are currently invested in crypto and another 15% are planning to invest, according to a nationwide poll conducted by Piplsay Research. 

Meanwhile, 43% of respondents said they either didn’t understand or hadn’t even heard of cryptocurrencies. This shows that cryptocurrency has a long way to go before it reaches maturity, with plenty of growth potential.

A bit of context

It’s important to put Wood’s purchase of Coinbase Global into context. After buying more than a million shares and spending hundreds of millions of dollars, Coinbase only amounts to a little more than 1% of funds under management for each of the three ARK funds that hold the stock.

By adding Coinbase into the mix, however, Wood is increasing her bet on the overall potential for cryptocurrency, without putting too many eggs in one basket.

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

More reading

• Aussie investors snapped up Coinbase (NASDAQ:COIN) shares last week
• Forget the Bitcoin price, the Dogecoin price is on fire!
• Cathie Wood ARK funds buy 750,000 Coinbase shares after IPO

Danny Vena owns shares of Bitcoin, PayPal Holdings, and Square and has the following options: long January 2021 $85.0 calls on PayPal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Bitcoin, PayPal Holdings, and Square and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia has recommended PayPal Holdings. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Carbon Revolution Ltd (ASX: CBR) share price will start the day halted after a capital raising announcement from the Aussie manufacturer. Carbon Revolution this morning requested a trading halt from the ASX before a major capital raising announcement to fund its latest growth plans.

Why is the Carbon Revolution share price in focus?

Carbon Revolution provided an update on its pro-rata, accelerated, non-renounceable entitlement offer and institutional placement. It comes as the company has decided to commence construction of phase 1 of its first “Mega-line”.

The company has secured formal agreements to initiate detailed design and engineering relating to four new OEM (original equipment manufacturer) programs. A “significant proportion” of those relate to electric vehicles, with Carbon Revolution expecting a required 75,000 wheels per annum of additional capacity to meet demand.

That’s a significant increase in the company’s current production. To date, Carbon Revolution has sold ~40,000 wheels with 6 awarded programs announced by OEMs and in the market.

The Carbon Revolution share price will be one to watch when it resumes trading following the significant update from the Aussie manufacturer. CEO Jake Dingle said, “The award of these new OEM formal agreements validates Carbon Revolution’s strategy and our world-class products and technology”.

Carbon Revolution’s capital requirement to build phase 1 of the Mega-line is ~$47 million. The fully underwritten $95 million equity raise will raise ~$53.5 million, with the institutional placement to raise a further ~$41.6 million.

The equity raising, combined with additional working finance arrangements, should help Carbon Revolution to reach breakeven cash flow.

The Carbon Revolution share price could be on the move when it returns to the boards after the company’s news of the raise at $1.60 per share. That represents a 31.9% discount to the last closing price of $2.35 per share on Thursday 22 April.

Carbon Revolution will issue 26.0 million new shares under the placement component. A further 59.4 million new shares will be issued under the equity raising (or 40.6% of Carbon Revolution’s existing issued capital).

More reading

• 3 exciting small cap ASX shares to watch closely

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Carbon Revolution Limited. The Motley Fool Australia has recommended Carbon Revolution Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Accent Group Ltd (ASX: AX1) share price will be one to watch on Friday.

This follows news that the footwear-focused retailer is adding to its collection of store brands with a new acquisition.

What is Accent acquiring?

This morning Accent confirmed reports that it has signed an agreement to acquire the Glue Store retail business and the wholesale and distribution brands business of Next Athleisure for a cash consideration of $13 million.

Glue Store is a leading Australian youth apparel, shoe and accessory retailer offering a range spanning global street, fashion, and sport cultures.

According to the release, Glue Store operates a network of 21 stores and an integrated online site, with around 500,000 loyalty program members. It currently generates annual sales of approximately $90 million, including $16.6 million of online sales.

As part of the acquisition, Accent revealed that it will acquire all of Next Athleisure’s exclusive owned vertical brands. This includes Nude Lucy, Beyond Her, Lulu & Rosem and Article One, which collectively drive more than 25% of total sales.

Next Athleisure also has distribution rights for a strong portfolio of global brands, including Superga, Ellesse, le coq sportif, Kappa, K-Way, Sebago and Napapijri. These rights will be transferred to Accent, subject to usual brand owner consent. 

Management advised that the Next Athleisure business will become a new division within Accent named Accent Lifestyle. The  current CEO of Next Athleisure, Darren Todd, will join Accent as the Group General Manager of Accent Lifestyle.

The acquisition is expected to complete in May. But due to its timing, it is not expected to have a material impact on Accent’s FY 2021 financial performance.

“Perfectly aligned”

Accent’s CEO, Daniel Agostinelli, commented “The NAL acquisition is perfectly aligned to our strategy to grow our leadership position in the lifestyle and youth apparel market in Australia and New Zealand. Glue Store, along with the NAL wholesale and distribution business, provides an established and complementary platform to accelerate our growing apparel business. It also comes with several exciting vertical owned brands, including Nude Lucy and Beyond Her, and a strong portfolio of global distributed brands.”

“We see significant opportunity to leverage Accent’s retail expertise to improve the Glue Store customer experience and store profitability. The youth apparel market is highly fragmented with significant opportunity to grow the store network and capture market share over time,” he added.

More reading

• 2 growing ASX dividend shares for income investors
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• Why Accent, Bank of Queensland, Freelancer, & Zip shares are pushing higher
• 2 ASX dividend shares with generous yields in 2021
• Rates could be on hold for years so buy these excellent ASX dividend shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group. 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 Limeade Inc (ASX: LME) share price is on watch after an early morning announcement from the US-based software company.

Why is the Limeade share price on watch?

Limeade is a Bellevue, Washington USA based employee software solutions group that currently boasts a $204.9 million market capitalisation on the ASX.

The Limeade share price will be one to watch after the software group’s latest quarterly update for the period ended 31 March 2021 (Q1 2021). Limeade said “pent up demand” remains for employee experience (EX) software following the coronavirus pandemic.

Limeade reported quarterly cash receipts from customers of $23.6 million – a record result for the growing company. Net cash receipts after adjusting for payments to the sale of third-party products and services was down 8% in Q1 2020 to $17.1 million.

Third-party payments were down 6% in Q1 2020 to $6.4 million. However, that figure remains a 177% increase over December quarter figures posted by Limeade.

Limeade said headcount continued to track at a lower rate than prospectus forecasts due to efficiencies and a hiring reduction due to uncertainty during the COVID-19 pandemic.

The Limeade share price will be one to watch this morning with the company’s valuation already falling 46.8% in 2021. 

Limeade reported a quarterly operating cash flow of $0.6 million, down 69% on Q1 2020 numbers. Overall year to date Net Revenue Retention was 98% as of 31 March 2021 according to the release.

On the balance sheet side, Limeade reported a $31.3 million cash balance while remaining debt-free during the quarter. One notable update for the quarter was the company reporting strong attendance for its fifth annual Limeade Engage conference. 

The conference was virtually held due to COVID-19 and attracted 275% more registrations compared to 2020. New customer prospects jumped 268% on the prior corresponding period to 545 registrants.

Limeade’s total sales and marketing pipeline fell 19% versus Q4 2020 to $182.4 million as early stage qualifying leads declined.

FY2021 guidance

The Limeade share price is one to watch this morning after an update on guidance from the software solutions group. Limeade has maintained full-year guidance of US$50 million to US$53 million revenue with forecast earnings before interest, tax, depreciation and amortisation (EBITDA) loss of US$5 million to US$8 million.

More reading

• Telstra (ASX:TLS) share price on watch after 5G update
• Why the Chalice (ASX:CHN) share price hit an all-time high
• Why this ASX share bull market could run for longer
• Could a dual listing drive the Afterpay (ASX:APT) share price higher? 
• 2 exciting ASX tech shares that are highly rated by analysts

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Limeade, Inc. 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 Telstra Corporation Ltd (ASX: TLS) share price will be one for investors to watch this morning.

This follows the release of an announcement relating to its 5G leadership position.

What did Telstra announce?

This morning the telco giant announced that it has secured 1000 MHz in the 26 GHz spectrum auction.

According to the release, Telstra is investing $277 million for this additional spectrum, which it expects to further extend its leadership in 5G now and into the future. The company advised that it will be paying for the spectrum in five equal annual instalments.

Positively, Telstra revealed that it secured the spectrum in all major capital cities and regional areas where it was sold.

The company’s CEO, Andrew Penn, believes the new mmWave spectrum will dramatically increase capacity and speeds for customers, building on the “already superior 5G experience Telstra provides across the country.”

Mr Penn said: “High speed connectivity is critical to Australia’s future prosperity and our aspirations to be a world leading digital economy. It has become central to all of our lives – the way we live, work, keep ourselves entertained and stay connected, and more and more 5G will be at the heart of that.”

What is mmWave spectrum?

Mr Penn explained that mmWave spectrum is particularly good at providing high-speed mobile broadband in high-density areas. This includes built up cities and towns, train stations, sport stadiums and other locations with a high concentration of people using their mobile devices.

He added: “Imagine watching the Grand Final at the Melbourne Cricket Ground, with your 5G-powered augmented reality goggles overlaying real time player stats, all at the same time as thousands of others are enjoying the game alongside you – that’s the immense bandwidth and speed that mmWave can offer.”

Telstra has already been testing the technology and reported excellent results.

“Telstra has been testing mmWave at a number of sites for some time, achieving a record peak download speed of 5 Gbps in a test earlier this year. We launched our first mmWave-compatible device in May 2020 and we are working closely with global device manufacturers to bring more mmWave-capable devices to market this calendar year,” Mr Penn commented.

The release explains that Telstra’s 5G network now covers almost two-thirds of the Australian population and is on track to reach 75% by the end of June.

Furthermore, there are now more than 3,200 Telstra 5G sites on-air in more than 160 cities and towns, and 5G coverage is available in more than 2,450 suburbs across the country.

The Telstra share price is up 13% in 2021. Investors will no doubt be hoping this announcement take it even higher.

More reading

• Why I love Telstra (ASX:TLS) shares right now: fundie
• Can 5G boost the Telstra (ASX:TLS) share price?
• 2 ASX dividend shares with fully franked yields of almost 5%
• Why the Telstra (ASX:TLS) share price is a buy today
• ASX 200 Weekly Wrap: ASX 200 hits new post-COVID high

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

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Chalice Mining Ltd (ASX: CHN) shares were on fire yesterday. At one point during intraday trade, shares in the mining company were trading at a record $6.73. By the market’s close, however, the Chalice Mining share price had retreated to $6.65 — still up 8.13% on the prior session.

By comparison, the S&P/ASX 200 Index (ASX: XJO) closed Thursday’s session 0.83% higher.

Yesterday’s record-breaking day came after the company reported “significant new results” from one of its mines.

Let’s take a closer look at the news.

What boosted the Chalice share price?

In a statement to the ASX, Chalice Mining advised it has made further major finds at its Julimar Nickel-Copper, Platinum Group Element (PGE) Project in Western Australia. In the release, the company said it intersected 165 new, high-grade mineralised areas with at least 1 gram of palladium per tonne. The most prominent highlights included:

• A 13.4m wide ore with 6.3g per tonne of palladium, 1.1g per tonne of platinum, 1.3% nickel, 0.7% copper, and 0.07% cobalt.
• A 13m wide ore with 4.7g per tonne of palladium, 1.0g per tonne of platinum, 0.4g per tonne of gold, 0.2% nickel, 2.2% copper, and 0.02% cobalt.
• A 12m wide ore with 2.6g per tonne of palladium, 1.4g per tonne of platinum, 0.8g per tonne of gold, 0.2% nickel, 0.9% copper, and 0.01% cobalt.

Investors seemed to agree with the significance of the results, judging by the Chalice share price moves.

Management commentary

Chalice managing director Alex Dorsch called the discoveries “world-class”, saying:

Even after 87,000m over more than 13 months of continuous drilling, we continue to expand of the footprint of our major Julimar discovery; a quite remarkable result that demonstrates the potential world-class nature of the discovery.

He went on to add:

Given the continued expansion of the Gonneville deposit [located within the project], in particular the growth of the high-grade zones, the quantum of drilling required to define the maiden Mineral Resource is likely to grow. We are now anticipating resource definition drilling will continue into Q3 2021 and the maiden Mineral Resource will be released in late Q3 2021.

Copper, gold, and PGE commodity prices

According to the website Trading Economics, at the time of writing, copper is selling on the open market for US$4.27 per pound. Gold is trading at US$1,791.13 per troy ounce, platinum is US$1,210.19 per troy ounce, and palladium is US$2,871.20 per troy ounce.

Respectively, these metals have changed in value by 21.2%, -5.54%, 13.5%, and 17.31% since the beginning of this year. These mostly positive trends seem to be good news for the Chalice share price, which is up almost 55% over the same period.

Copper is expected to continue rising into the future as the economy improves and demand for renewable energy rises. Many expect PGE metals to follow, as they are also essential to renewable technology. Gold, on the other hand, generally has an inverse relationship to the economy. As GDP grows, in theory, gold prices should fall.

Smaller amounts of cobalt were also highlighted in this week’s announcement from Chalice. Cobalt is currently trading for US$49,750.00 per tonne and is up 54.55% in 2021.

Chalice share price snapshot

Over the past 12 months, the Chalice share price has increased by around 530%. An announcement regarding the expansion of the company’s Julimar mine on Monday also saw its share price increase.

Chalice Mining has a market capitalisation of $2.3 billion.

More reading

• Why has the Lithium Australia (ASX:LIT) share price plunged 7% today?
• Chalice (ASX:CHN) share price rises after latest update
• Why the Chalice Mining (ASX:CHN) share price has grown 51% in a month

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 fund manager Ben Griffiths believes that the ASX share bull market we’re currently seeing could go on longer than some investors are expecting.

Mr Griffiths published an article on Livewire Markets discussing his latest thoughts and some of the recent moves by the fund.

Why could the bull market go on longer for ASX shares?

The fund manager pointed out that cheap money and lots of liquidity are key reasons why the ASX share market is generating so much growth. But he commented that there are quite a few late cycle markers beginning to emerge. He pointed to the GameStop situation and the growth of special purpose acquisition companies (SPAC) as markers.

Those SPACs, which are outlawed in Australia, raised US$100 billion in the three months to March 2021 in the US, which was roughly equivalent to what was raised in the whole of 2020.

Discussing which phase of the market the ASX share market is in right now, Mr Griffiths said:

Stocks have shifted to Sir John Templeton’s 4th quadrant market stage-Euphoria (Pessimism-Scepticism-Optimism-Euphoria). Problematic? Eventually but I contend that markets can remain this way for some time. It should be noted that credit markets (including CDS pricing) remain benign and the VIX futures curve remains in clear contango.

He went on to comment on the smaller end of the ASX share market:

Investors need to appreciate that the Small resources subset of stocks is at the early stages of an unfolding rally whilst their industrial brethren appear unstoppable and about 7% shy of their all-time highs.

Which ASX shares have the Eley Griffiths funds been buying and selling?

Pro Medicus Ltd (ASX: PME)

The healthcare technology business has been a recent addition to the portfolio.

Mr Griffiths acknowledged that it’s an expensive stock but with a 20% compound annual growth rate of revenue over the next five years and earnings before interest and tax (EBIT) margins of around 60%, it was worth it to buy the business according to the fund manager.

Pentanet Ltd (ASX: 5GG)

Pentanet is a newly-listed Perth telecommunications business where Eley Griffiths participated in the IPO. The former iiNet CEO is the current chair.

Eley Griffiths pointed out that it’s winning market share with high bandwidth fixed wireless technology called Terragraph. Capital is only employed when customers sign up. It also has a gaming opportunity with a partnership with NVIDIA, which will allow for multiple use of bandwidth within a single household and delivering high processing power to any laptop or standard PC.

Betmakers Technology Group Ltd (ASX: BET)

The fund manager sees a similar opportunity in Betmakers as Pointsbet Holdings Ltd (ASX: PBH).

Eley Griffiths believes that Betmakers has secured the perfect entry to sell the bookmaker and racing operator technology to US operators.

SportsTech is a business it acquired late last year, which has increased its presence to 36 states in the US and Mr Griffiths said that it’s the pre-eminent operational partner for US racing bodies.

Netwealth Group Ltd (ASX: NWL)

The fintech ASX share is a business that the fund has sold out of. It still thinks the thesis is compelling with growing market share and dissatisfied customers at legacy rivals who have been underinvesting in their products.

However, the fintech is looking to reprice its back book and it’s also looking to renegotiate its next deposit arrangement.

The fund manager wants to sit on the sidelines until there’s clarity on the above issues. Eley Griffiths is hoping for a better entry point in the future.

More reading

• Why brokers think these 3 top performing ASX 200 shares can beat the market
• The Betmakers (ASX:BET) share price is sliding today
• What happened with the Betmakers (ASX:BET) share price this week?
• What’s happening with the Pentanet (ASX:5GG) share price today?
• Why Ampol, Netwealth, Orocobre, & Race Oncology shares are storming higher

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Pointsbet Holdings Ltd and Pro Medicus Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Betmakers Technology Group Ltd. The Motley Fool Australia owns shares of Netwealth. The Motley Fool Australia has recommended Betmakers Technology Group Ltd, Pointsbet Holdings Ltd, and 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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A dual listing could potentially be on the horizon for Afterpay Ltd (ASX: APT). Could this act as a catalyst to drive further gains for the Afterpay share price? 

What are the benefits of a dual listing? 

The main advantage of a dual listing is access to additional capital. This is why cash-hungry businesses such as Mesoblast Limited (ASX: MSB) and Piedmont Lithium Ltd (ASX: PLL) have successfully listed on both exchanges.

A dual listing also makes sense for companies that have operations in, or derive a significant proportion of their revenue from, the United States. In the case of Aussie biotech Mesoblast, the company’s treatments must be reviewed by the US Food and Drug Administration (FDA) for approval. And for Piedmont Lithium, its flagship lithium project is located in North Carolina with initial offtake agreements signed with local companies such as Tesla.

With that in mind, it does make sense for Afterpay to explore the potential for a dual listing since the US market has become the largest contributor to its business. Furthermore, additional funding may be required to help fuel Afterpay’s continued global growth. 

What about Zip’s dual listing rumours?

If this is all sounding somewhat familiar, that’s because a similar story was surrounding fellow buy now, pay later (BNPL) provider Zip Co Ltd (ASX: Z1P) earlier in the year. You may recall that Zip shares surged by as much as 20% on 8 February after rumours the company was exploring a potential dual listing in the US surfaced.

But the rise in the Zip share price has arguably been just a partial catch up against Afterpay’s monster valuation. Zip shares trade at approximately 29 times FY20 revenue, while Afterpay’s revenue multiple has ballooned to approximately 67. 

On 21 January, Zip co-founder Peter Gray told the Australian Financial Review that “even if you looked at us as a direct comparison to Sezzle, we would appear undervalued, and I think that one of the opportunities for us as we go to market this year is to bridge that valuation gap.”

Why a dual listing might not appear as glossy as it seems 

It might be worth taking a closer look at an already listed US BNPL share to gain an understanding of the sentiment for and performance of the sector in a different market. 

Affirm Holdings Inc (NASDAQ: AFRM), for example, is one of the top three largest BNPL players in the United States. Affirm listed on the Nasdaq on 13 January 2021 at a listing price of US$39 with a market capitalisation of approximately US$10 billion. 

It was then off to the races, with Affirm shares surging as high as US$146.90 by mid-February for a 277% return.

But following a tech-led selloff in late February, Affirm shares have never been able to fully recover, let alone keep up with the Nasdaq. Its shares breached the $100 level by late February, then slid back to the $80 mark by early March and briefly touched a record low of $63.02 on Tuesday this week. At these levels, Affirm trades at an FY20 revenue multiple of approximately 33. 

As Affirm continues to grind around record lows, one could argue that the US market is not particularly excited about its own born and bred BNPL player. What this means for the Afterpay share price should the company’s dual listing eventuate remains to be seen.

More reading

• Why Zip (ASX:Z1P) and this ASX growth share are rated highly
• Why your ASX 200 shares aren’t going up with the market 
• Is the Afterpay (ASX:APT) share price fully valued?
• Why Megaport, Pointerra, Regis Resources, & Zip are charging higher
• Top brokers name 3 ASX shares to sell today

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. 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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