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March was not a good month for ASX growth shares, as it turns out. Over the month, the ASX followed the US markets’ lead in re-rating growth shares across the board in response to rising government bond yields.

But this might just have given ASX investors a chance to review some of the growth names out there as we start April. Lower prices mean cheaper shares, after all. And remember, before 2021, ASX growth shares had not had a major pullback since the coronavirus-induced market crash last year.

So here are two ASX growth shares to consider for April

A2 Milk Company Ltd (ASX: A2M)

A2 Milk had an absolute shocker in March. As my Fool colleague reported today, the A2 Milk share price fell almost every day over the month. At the time of writing, it stands at just $7.75, which is the lowest level this company has seen since early 2018. It’s also down more than 60% from the all-time high of more than $20 a share that we saw last year.

The catalyst for this downgrade are concerns over the company’s formerly lucrative daigou suitcase-shipping channels to China. These have all but friend up in the wake of the coronavirus pandemic, and management is not indicating that they will return anytime soon. But perhaps this is an overreaction from investors. A2 has a long history of delivering knockout growth across multiple markets. As such, a 60% drop might be worth digging deeper into.

Domino’s Pizza Enterprises Ltd. (ASX: DMP)

Unlike A2 Milk, Dominos actually had a decent month in March, rising roughly 6% over the month. Still, Dominos remains more than 11% off of its all-time high that it hit back in February. This company was an undisputed winner from the pandemic last year. It seems that when Aussies are locked up for weeks or months at a time, pizza consumption rises. Who would have thought!

This positive momentum appears to be continuing as well. In February, Dominos reported that for the six months ending 31 December 2020, it managed to grow revenues by a whopping 16.5% and profits by 32.8%. It’s hard to bet against the future growth prospects of pizza. As such, Dominos is another ASX growth share to check to this April. Especially at 14% off of its recent highs.

More reading

• These were the worst performing ASX 200 shares in March
• The A2 Milk (ASX:A2M) share price was down almost every day in March
• Over 1 in 4 Australians are investing in the ASX: report
• ASX 200 dips lower, Webjet drops, REA bids for Mortgage Choice
• 2 highly-rated ASX growth shares to buy

Motley Fool contributor Sebastian Bowen owns shares of A2 Milk. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia has recommended Dominos Pizza Enterprises 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 Urbanise.Com Ltd (ASX: UBN) share price soared in the first 30 minutes of opening trade, reaching 17% higher. Its meteoric rise came after the company announced a major new customer win.

During the day, however, the company’s shares have backtracked after some profit-taking by investors. At the close of trade, the cloud-based software solutions company’s shares swapped hands for 8.6 cents, up 6.17%.

A quick take on Urbanise

Established in 2001, Urbanise leverages cloud technology and the Internet of Things (IoT) to manage infrastructure, buildings, housing estates and local government structures.

It enables building operators to streamline workflow processes as they manage properties. The various functions include community and property management, asset maintenance, mobile workforce, asset monitoring, utility reporting, and more.

Milestone win

Investors are boosting the Urbanise share price today after the company revealed a milestone customer win.

In today’s release, Urbanise advised it has secured a 3-year contract with leading Dubai-based property developer, Nakheel.

The deal will see Urbanise deliver to Nakheel a fully integrated facilities management and strata solution platform.

Urbanise’s end-to-end product will provide the developer with the ability to manage several properties across its extensive portfolio. This includes customers in the residential developments, hotels and resorts, malls and corporate office premises space.

Urbanise expects the contract to generate roughly $760,000 in annual recurring revenue (ARR).

Management said this would be reflected “across both the facilities management and strata divisions and will form part of the backlog until go-live”.

Furthermore, the company will move both systems (facilities and strata management software) into a single integrated solution.

About the Urbanise share price

The Urbanise share price has gained more than 110% in the past 12 months and is up around 13% year-to-date. The company’s shares reached a multi-year high of 12 cents in late September before stabilising thereafter.

Urbanise commands a market capitalisation of just over $70 million at the current share price, with 834.3 million shares on issue.

More reading

• 2 ASX growth shares to buy in April
• 2 ASX dividend shares to buy this April
• Commonwealth Bank (ASX:CBA) share price and weekly news wrap
• Peel Mining (ASX:PEX) share price lifts on high-grade copper hits
• Why the Strike Energy (ASX:STX) share price powered up 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.

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March is gone and April is here. That means autumn, jokes and Easter. But as April dawns, the Reserve Bank of Australia (RBA) is set to keep interest rates at the record low of 0.1% when it meets next Tuesday. Of course, we don’t know this for sure. But seeing as RBA governor Dr Philip Lowe has indicated rates won’t be rising until at least 2024, it’s about the surest thing we are going to get from the world of investing this month.

So with interest rates t these lows, we are once again reminded of the fact that any cash we have in the bank is not going to be making anyone wealthy. These days, you’re lucky to get an interest rate above 1% on a savings account.

Luckily, ASX dividend shares are not so held down by interest rates. So here are two high-yielding dividend shares to consider this April:

Macquarie Group Ltd (ASX: MQG)

Macquarie has perhaps the unfortunate tag of being the ASX’s ‘fifth bank’. However, unlike Commonwealth Bank of Australia (ASX: CBA) or Westpac Banking Corp (ASX: WBC), Macquarie isn’t your typical ASX bank. It does offer loans, mortgages and bank accounts. But these form a very small portion of Macquarie’s earnings base. Instead, Macquarie’s crown jewels are its funds management business, as well as its investment banking divisions. So if you’re thinking Macquarie is ‘just another ASX bank’, you might want to think again.

In terms of dividends, Macquarie shares have a trailing dividend yield of 2.08%. That reflects the $1.80 and $1.35 per share dividends Macquarie paid out last year. However, 2019 saw this bank pay out $3.60 and $2.50 in dividends respectively. This indicates that Macquarie could increase its dividends back to these levels in 2021 and beyond as the pandemic heads into the rearview mirror.

Rural Funds Group (ASX: RFF)

Another ASX dividend share to consider today is Rural Funds Group. Rural Funds is an agriculturally focused real estate investment trust (REIT). It holds a portfolio of farmland across Australia, which includes cattle farms, vineyards, as well as macadamia and almond orchards.

Farmland is a pretty stable kind of investment, and this is reflected in Rural Funds’ dividend distributions. Last year, the company managed to pay out four distributions, two worth 2.82 cents each and two worth 2.71 cents each. That in itself was an improvement on the four distributions of 2.71 cents and 2.61 cents each the previous year.

Those distributions give Rural Funds’ units a trailing yield of 4.08% on current pricing. Being a REIT, Rural Funds; distributions, unfortunately, don’t come with franking credits though.

More reading

• Commonwealth Bank (ASX:CBA) share price and weekly news wrap
• Why Computershare, Macquarie, Race Oncology, & Webjet are tumbling lower
• Why the CSL (ASX:CSL) share price is going around in circles
• Top brokers name 3 ASX shares to sell today
• Macquarie (ASX:MQG) share price lower after APRA crackdown

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and RURALFUNDS STAPLED. 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 Commonwealth Bank of Australia (ASX: CBA) share price is slipping late afternoon trading, down 0.5%. The fall comes despite a the S&P/ASX 200 Index (ASX: XJO) edging higher, up 0.3% at time of writing.

With the ASX closed tomorrow (and Monday) for the long Easter weekend, we take a look at how and why Commonwealth Bank shares moved this week.

How the Commonwealth share price moved this week

Yesterday, 31 March, was the only day this week that Commonwealth Bank shares gained, closing the day up 0.8%. With a loss of 0.5% on Monday and closing down 0.2% on Tuesday, it looks like CBA will close the shortened trading week down some 0.3%.

Still, Commonwealth Bank shares remain up 35% since 1 October, handily outpacing the 17% gain posted by the ASX 200 over that same time.

Another round of legal woes for CBA

Last week on Monday, March 29, Commonwealth Bank, along with Australia and New Zealand Banking Grp Ltd (ASX: ANZ), settled a lawsuit in the United States that was initiated way back in 2016. CBA shares gained 0.4% following the news.

No sooner was that settled than the Finance Sector Union accused CBA of owing thousands of workers a total of $45 million. The workers have allegedly been unable to take their contractually allowed 10-minute paid tea breaks. CBA has denied the allegations.

This week a new and potentially more damaging legal headache emerged.

The Australian Securities and Investment Commission (ASIC) has commenced legal action against CBA, accusing the big 4 bank of misleading or deceptive conduct as well as alleging CBA violated its Australian financial services licence requirements.

With Commonwealth Bank shares down more than twice as much as the other 3 banks in the big 4 mix today, investors may be taking note.

Why this asset manager prefers Commonwealth Bank shares

With all of the big 4 banks posting hefty share price gains as part of the recovery trade over the past half year, ASX investors are beginning to wonder how much higher, if any, they can go.

Looking ahead, Jason Teh, chief investment officer at Vertium Asset Management, says (quoted by the Australian Financial Review), “The banks may trade sideways. Now it’s all about the relative attractiveness.”

Teh isn’t selling his bank holdings though. And he prefers Commonwealth Bank and Westpac Banking Corp (ASX: WBC) to National Australia Bank Ltd (ASX: NAB) and ANZ.

That’s because he believes CBA’s earnings have “more to go from a mean reversion point”.

Teh added, “Given how fast the bad debt profile is rolling off, there’s probably one more result before everything normalises for the banks. I think that’s as good as it’s going to get.”

More reading

• Here’s why the ANZ (ASX:ANZ) share price jumped 8% in March
• Top brokers name 3 ASX shares to sell today
• ASX 200 up 0.25%: AMP names new CEO, Boral’s buyback, Webjet sinks
• Commonwealth Bank (ASX:CBA) sued over ‘misleading’ conduct
• AMP (ASX:AMP) share price on watch after announcing CEO change

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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The Peel Mining Ltd (ASX: PEX) share price lifted today after the company discovered more high-grade copper hits in its Wirlong mine in western New South Wales.

At the close of trade, the Peel Mining share price was up 2% at 25.5 cents per share.

Based in NSW, Peel Mining explores and develops precious, base, and specialty metals resources. In addition to its Peel segments, which bring in the vast majority of the company’s revenue, it also has a farm-in agreement with the Japan Oil, Gas and Metals National Corporation (JOGMEC). 

The company’s drilling update today revealed that resource definition drilling at its 100%-owned Wirlong deposit had returned further broad and high-grade copper-mineralised intercepts. Wirlong is part of Peel’s South Cobar Project, centred around 100km south of Cobar in western NSW.

Peel Mining results 

The company’s latest drilling assays show significant zones of chalcopyrite dominant mineralisation in drilling. Four out of its five zones are operated at depths less than 300 metres, with intercepts ranging up to 25g/t up to 165 metres deep.

The company was originally planning to complete its drilling results using reverse circulation (RC) drilling. However, it has now switched to diamond drilling due to significant drillhole deviation since commencement.

Mineralisation returned from the resource definition drilling is generally consistent with the position of electromagnetic conductor plates, supporting the company’s initial modelling on the mine.

What Peel management said

Peel Mining managing director Rob Tyson said the switch to diamond drilling was having a positive impact on Peel’s discoveries.

Wirlong keeps producing excellent copper hits and, encouragingly, is indicating good vertical spatial continuity between intercepts. Underlining this is drillhole WLRC083 which is positioned 90m above from WLRC073 and has returned a broad interval of copper mineralisation to end of hole including a significant very high-grade interval.

The recent switch to diamond drilling provides additional valuable information to assist with our structural and geological modeling as well as material for metallurgical testwork. Once again, these results, coupled with the visuals and XRF analyses for drillholes still to be reported, assist in our goal of defining a high-grade maiden copper resource at Wirlong.

Peel Mining share price snapshot

The Peel Mining share price is up 128% this past year, but today’s gains are against losses of 1.9% this week, 15% this month and 8.9% this year to date.

Despite this, the Peel Mining share price continues to beat its basic materials sector by 80% this year. The gains are likely a result of strong copper prices, which have surged more than US$1 per pound over the past 12 months, to their current price of US$3.98 per pound.

More reading

• Commonwealth Bank (ASX:CBA) share price and weekly news wrap
• Why the Strike Energy (ASX:STX) share price powered up today
• Why the JB Hi-Fi (ASX:JBH) share price surged 19% in March
• Here’s why the ANZ (ASX:ANZ) share price jumped 8% in March
• Why the Kangaroo Island Plantation (ASX:KPT) share price is rising today

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 Strike Energy Ltd (ASX: STX) share price has been rising today. The positive movement comes after the company announced it would enter the renewable energy market.

At the time of writing, shares in the oil and gas explorer are trading for 33 cents each – up 4.76%. By comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) is up 0.56%.

Let’s take a closer look at Strike Energy’s announcement.

What did Strike Energy announce?

In a statement to the ASX, Strike Energy announced it had signed a “nonbinding term sheet to acquire 100% of the existing geothermal rights of the Perth Basin via the acquisition of Mid-West Geothermal Power Pty Ltd (MWGP).”

The deal, if executed, will involve Strike issuing $2 million worth of shares to MWGP. If the permit to explore for geothermal energy is approved, Strike will issue a further $1 million worth of shares to MWGP – subject to shareholder approval.

Strike, which already operates several gas fields in the Perth Basin, claims there is “strong” geothermal energy potential in the area.

The company listed five attributes of the area it believes indicate the high potential for geothermal energy:

1. Extensive and thick sandstone across a wide area
2. Static measured temperature of 150C to 200C
3. A high level of absorbency in deeper regions
4. Evidence of “extremely hot” water where gas is not present
5. Very high reservoir pressures.

Strike Energy believes, should the transaction proceed, it will drive down well costs and generate longer term cash flows through improved economies of scale. The company states this to be so as it believes geothermal and gas operations are “highly complementary” of each other.

Strike Energy management commentary

Strike Energy managing director and CEO Stuart Nicholls said:

Between Strike’s gas resources and potential future geothermal power, the Perth Basin could be a supplier of low cost and low to zero carbon energy into WA for more than 50 years.

As one of the leading experts of the Perth Basin’s Permian sandstones Strike has recognised the renewable energy potential of the area which it believes could be a unique nationally significant geothermal resource.

This geothermal resource is 100% complementary to Strike’s existing gas business and has the potential to generate meaningful operational and subsurface synergies with Strike’s substantial gas interests.

MWGP Director, Mark Ballesteros, commented:

We believe the North Perth Basin contains one of the most prospective geothermal resources in Australia and has the potential to supply enough zero-emission, baseload power to make a significant contribution to reducing carbon emissions in Western Australia. We are excited to be consolidating with Strike and recognise that their technical and operational expertise offers immense synergies that will facilitate realising the substantial geothermal potential of the area.

Integrating gas, energy, and manufacturing operations

Strike also announced its belief that the geothermal energy could be used to power its fertiliser plant, which it says would  involve zero emissions.

The company also believes it can sell potential excess energy into the WA electrical grid.

The Strike share price is currently up more than 13%, year to date, and the company has a market capitalisation of $560 million.

More reading

• Why the Strike Energy (ASX:STX) share price opened 3% higher today
• Warrego Energy (ASX:WGO) share price rises despite losses increasing

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 JB Hi-Fi Limited (ASX: JBH) share price was on fire in March. Shares in the Aussie electronics retailer soared 19.3% higher to close the month at $51.10

Why the JB Hi-Fi share price soared higher in March

The S&P/ASX 200 Index (ASX: XJO) finished the month on a strong note as JB Hi-Fi announced a new partnership with Zip Co Ltd (ASX: Z1P). Zip will provide a fully integrated payments solution for both JB Hi-Fi and The Good Guys stores.

The JB Hi-Fi share price managed to surge higher throughout the month as a strong corporate earnings season continued the momentum into March. 

JB Hi-Fi itself had a strong half-year results release on February 15. For the six months ended 31 December 2020, JB Hi-Fi reported a 23.7% jump in sales to $4.9 billion. Online sales surged a whopping 161.7% to $678.8 million as Aussies spent big despite lockdowns in parts of the country.

JB Hi-Fi Australia reported a 23.3% increase in sales to $3.36 billion. That, coupled with strong results in New Zealand and The Good Guys segments, boosted overall sales and profit.

Earnings before interest and tax (EBIT) climbed 76% to $462.8 million with an 86.2% increase in net profit to $317.7 million.

The JB Hi-Fi share price actually slid 17.2% in the two weeks following the result. However, a large portion of that can be attributed to shares trading ex-dividend on 25 February. That $1.80 per share interim dividend pushed the shares lower to end the month.

Stronger investor sentiment, however, pushed ASX 200 shares like JB Hi-Fi higher in March. That included fellow ASX retail share Super Retail Group Ltd (ASX: SUL) climbing 7.0% higher in March.

It wasn’t all good news for investors in Aussie retailers last month as electronics retailer and JB Hi-Fi competitor Kogan.com Ltd (ASX: KGN) shed 7.6% last month.

Foolish takeaway

The JB Hi-Fi share price surged higher last month despite no new ASX announcements from the ASX 200 retailer. Stronger investor optimism and a significant earnings boost helped propel the Aussie electronics retailer’s shares higher to close out the month.

More reading

• Here’s why ASX cannabis shares are lighting up today
• Are ASX 200 value shares still good value? Why these experts are at loggerheads
• Why the Telstra (ASX:TLS) share price rose 11% in March
• ASX 200 boom as Joe Biden unveils massive infrastructure, tax package?
• ASX 200 up 0.25%: AMP names new CEO, Boral’s buyback, Webjet sinks

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 Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. The Motley Fool Australia has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price was a strong performer again in March.

The banking giant’s shares climbed 7.7% over the period compared to a 1.8% gain by the ASX 200 index.

This meant that the ANZ share price recorded an impressive first quarter gain of 22%.

Why did the ANZ share price storm higher?

Investors have been buying ANZ’s shares since the release of its first quarter update in February.

That update revealed that for the three months ended 31 December, ANZ achieved an unaudited statutory profit after tax of $1,624 million. This was a 59% increase on the average profit it achieved during the final two quarters of FY 2020.

Unaudited cash earnings from continuing operations rose at a similarly strong rate of 54% to $1,810 million.

Also catching the eye of investors was news that ANZ has reversed some of its COVID-19 related provisions. For the quarter, ANZ’s provision result was a net release of $150 million. This comprises a collective provision release of $173 million, which was partially offset by an individually assessed provision charge of $23 million.

Broker response

Also giving the ANZ share price a boost was a broker note out of Goldman Sachs at the start of the month.

According to the note, the broker upgraded its shares to a buy rating with a $29.00 price target.

Goldman Sachs explained the move: “We upgrade ANZ to Buy given: (i) still solid balance sheet momentum, (ii) its 1Q21 trading update highlighted it was well positioned for the current NIM environment,( iii) we think the update on its cost targets expected at its 1H21 result could provide a further catalyst for re-rating, and (iv) our revised A$29.01 TP offers 14% TSR [at the time] and the stock is trading at a 21% discount to peers (9% historic average).”

Positively, with the ANZ share price fetching $28.24 today, the gains may not be over just yet.

More reading

• ASX 200 up 0.25%: AMP names new CEO, Boral’s buyback, Webjet sinks
• AMP (ASX:AMP) share price on watch after announcing CEO change
• 2 high yield ASX dividend shares to buy right now
• ASX banks are facing millions of cyber attacks each day
• ASX 200 Weekly Wrap: ASX 200 gets its mojo back

Motley Fool contributor James Mickleboro 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 Kangaroo Island Plantation Timbers Ltd (ASX: KPT) share price has risen today after the company’s board rejected a $20 million offer to buy its land on Kangaroo Island.

The Kangaroo Island Plantation share price has risen 4.9% to $1.07 at the time of writing. 

Kangaroo Island Plantation is a forestry company and timber producer on Kangaroo Island, off the coast of South Australia. It manages a wholly-owned portfolio of hardwood and softwood forestry plantations, growing on former agricultural land. 

The land it owns is strategically located in high rainfall areas that are highly suitable for growing, allowing the company to potentially capitalise on increasing land values. 

Kangaroo Island Plantation refuses low-ball offer

The $20 million offer from KI Phoenix was for all of Kangaroo Island Plantation’s land assets on Kangaroo Island. This has sparked uncertainty in the Kangaroo Island Plantation share price recently.

Kangaroo Island was decimated by bushfires in January last year that wiped out up to 95% of its animal habitats. According to the company, this has led to “an increase in interest by those seeking to opportunistically acquire land at distressed prices”. 

Kangaroo Island Plantation lost a huge portion of its logging plantations in the bushfire and has since received more than $62 million in insurance payouts.

What management said

The company’s managing director Keith Lamb said land values on the island far exceeded the offers the board was receiving:

While the company is open-minded to approaches it receives, the board is squarely focussed on maximising shareholder wealth and with this in mind, offers are considered on merit. This resolve has not altered since the tragic fires of 2019-20.

The land value recorded on KPT’s balance sheet is $59.28 million, based on independent expert advice provided by leading rural valuers. The latest valuation was set at June 2020, following the fires of 2019-20 and is benchmarked below equivalent land value on mainland South Australia. Since June 2020 land values around the country have risen.

Kangaroo Island Plantation share price snapshot

The Kangaroo Island Plantation share price is today recovering after falling 1% yesterday and 4.9% on Tuesday. Overall, it’s now up more than 7% this week and 9.18% higher over the past 12 months. However, shares in the forestry company have fallen 14% since the start of 2021.

More reading

• Why the JB Hi-Fi (ASX:JBH) share price surged 19% in April
• Here’s why the ANZ (ASX:ANZ) share price jumped 8% in March
• The Airtasker (ASX:ART) share price finished 77% higher in March
• Why the Acrow (ASX:ACF) share price is running higher today
• Universal Biosensors (ASX:UBI) share price is lifting today. Here’s why

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 Airtasker Ltd (ASX: ART) share price finished March 77% higher than its listing price of 65 cents per share. But there’s more to this than meets the eye. 

Let’s take a closer look at what is going on with the Airtasker share price. 

Short-lived hype for the Airtasker share price? 

Airtasker made its ASX debut last Thursday where its shares opened 55% higher at $1.01.

Its shares would surge as high as $1.965 the next day, before a $1.750 close. It took just two days for its shares to rally almost 170% higher than its listing price. 

However, it took just two days for the Airtasker share price to lose momentum and come crashing back to earth.

From its Friday close of $1.750, its shares would slump 36% to finish March at $1.170, or just 15% higher than its opening price. 

While a 77% increase from its listing price is impressive, the main winners are those that managed to participate in the heavily oversubscribed initial public offering (IPO) or those that managed to get in early. 

This isn’t the first time 

This isn’t the first time an IPO has gone from boom to bust. As a matter of fact, there’s a long list of recent IPOs that slumped days or weeks after listing. And, similar to Airtasker, the main winners were those that managed to participate in the IPO or got in early. 

Respiratory protection equipment manufacturer, CleanSpace Ltd (ASX: CSX) had a listing price of $4.41 per share. On 23 October, its shares would close 80% higher on its first day at $7.415. After a number of attempts at breaking above its debut high, a weak half-year results announcement in February and a poor sales update this week has crashed the CleanSpace share price to just $1.920. 

Perhaps a better example is Douugh Ltd (ASX: DOU), a financial wellness platform with various budgeting, banking, and investment features. Its shares had a listing price of 3 cents and surged as much as 1,500% to 49 cents in just two weeks. In the following months,  its shares would halve. Currently, they are trading around the 20 cent mark. 

Other notable examples include 4DMedical Ltd (ASX: 4DX), Credit Clear Ltd (ASX: CCR), DC Two Ltd (ASX: DC2) and Doctor Care Anywhere Group PLC (ASX: DOC).

Should investors be worried?

Airtasker is one of Australia’s leading marketplaces for local services. In 2020, Airtasker established marketplaces in New Zealand, Singapore, and Ireland. As well as existing operations in the United Kingdom and a planned launch in the United States in 2021.

While approximately 99% of its revenues are derived from Australia, the company intends to implement growth marketing initiatives to scale internationally. 

The company clearly has a runway for growth, but at the same time, its shares are already very richly valued. 

In FY20, Airtasker generated a pro forma revenue of $19.3 million and a net loss of $5.2 million. At its current market capitalisation of approximately $500 million, its shares are trading at approximately 26 times FY20 revenue. 

More reading

• Why it’s turning into a bad week for Airtasker (ASX:ART) shares
• Airtasker and Zip were among the most traded ASX shares last week
• A review on the meteoric rise of the Airtasker (ASX:ART) share price
• Airtasker (ASX:ART) share price insanity: Is this the ASX’s GameStop?
• Airtasker (ASX:ART) share price sinks 17% after explosive IPO

Motley Fool contributor Kerry Sun 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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