Tag: Motley Fool

In afternoon trade the S&P/ASX 200 Index (ASX: XJO) has defied weakness on Wall Street and is on course to record a solid gain. At the time of writing, the benchmark index is up 0.7% to 6,791.9 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are tumbling lower:

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas share price is down 9% to $5.64. This is despite there being no news out of the rare earth producer today. However, this morning, one of its rivals announced a major capital raising. Australian Strategic Materials Ltd (ASX: ASM) hasn’t revealed what it is raising the money for, but it could be to fund its Dubbo Project in New South Wales. The company has previously stated its ambition to develop the Dubbo Project to supply globally significant quantities of zirconium and rare earth materials.

Oil Search Ltd (ASX: OSH)

The Oil Search share price has fallen 3% to $4.13. Investors have been selling Oil Search and other energy producer shares on Wednesday following a sizeable pullback in oil prices overnight. Both WTI and Brent crude oil dropped 6% amid concerns over demand for oil following further lockdowns in Europe.

Pushpay Holdings Ltd (ASX: PPH)

The Pushpay share price is down 3% to $1.80. This appears to have been driven by profit taking following a sharp rise on Tuesday. The Pushpay share price jumped 11% yesterday after announcing a new cornerstone investor. US investment company Sixth Street has purchased the Huljich family’s remaining stake in the donation and engagement platform company. Sixth Street will have a 17.8% interest in Pushpay once the deal completes next week.

Webjet Limited (ASX: WEB)

The Webjet share price has dropped 4% to $5.70. A number of travel stocks are trading lower again on Wednesday. This may be due to concerns over the floods in New South Wales and Queensland and further lockdowns in Europe to combat a third wave of COVID-19.

More reading

• ASX 200 up 0.45%: Premier Investments results, Xero acquisition, Computershare halted
• ASX 200 dips, travel shares drop, Pushpay soars
• Why ASX 200 energy shares should outshine as inflation picks up
• Why Kathmandu, Pushpay, Sigma, & Vulcan shares are storming higher
• Here’s why the Pushpay (ASX:PPH) share price could surge higher 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 PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended PUSHPAY FPO NZX. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why Lynas, Oil Search, Pushpay, & Webjet shares are tumbling lower appeared first on The Motley Fool Australia.

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One of the worst tropes of modern politics is the ‘Everything is terrible and I’m the only one who can fix it’ approach to campaigning. Yes, things can always be better, but give me a bloody break. The average Australian is luckier and better off than probably 98% of the world’s population. And, frankly, while I’m not an Australian exceptionalist, if you can find a country you’d prefer to live in, you’d be doing pretty well.

Our pollies are like the apocryphal father who, when his daughter gets 99% in an exam, asks ‘What happened to the other 1%?’. They sow seeds of discontent, reminding us of our problems — caused by the other guy, of course — as a way to try to grab our votes.

Talk about miserable.

How about ‘It’s great, but I want you to vote for me so I can make it better!’? Our wealth, life expectancy, safety nets, medical and education systems, geological stability, climate, and democracy aren’t perfect… but I wouldn’t swap what we have for any other. So next time you think you’re ‘unlucky’, remember the odds of you living in Australia are about 1 in 300. 

That’s pretty lucky.

And something to celebrate, I reckon. By all means, make the place even better, but don’t lose sight of the fact that we’re starting the 100 metre sprint at the 90m mark!

Speaking of luck, though, I got lucky this time last year.

Those of you who were invested then might disagree — yesterday was the 12 month anniversary of the ASX 200’s COVID-induced low.

Lucky? Really?

March 23, 2020, was the bottom of the crash that started one month and four days earlier — and was the fastest bear market in history. The luck I’m referring to, though, was that I happened to write an article that day. It was, to be fair, only a midpoint in my full-court-press efforts to keep our members and readers calm during a very volatile time.

I wrote a lot of similarly-themed articles. Judging by the feedback at the time, and since, we helped some people, which I’m immensely proud of. When I wrote that article, on March 23, 2020, I had no idea it was to be the low point for the ASX in 2020. I ‘fessed up to some mistakes. I made no predictions. But I did recommend that our members and readers keep buying. Or, at the very least, not sell. And while, as I’ve said many times, I don’t do victory laps, I have a simple question for you:

How many other experts were telling you to buy, that day?

Here’s an excerpt of what I wrote:

———————

I have no idea how much further shares may — or may not — fall from here. I have no idea how long the economic and financial pain lasts. There is no shortage of ‘experts’ out there, telling you what’s going to happen in the short term.

Do you really think they know? Or are they presenting opinion as fact?

How could they know? We’ve never been here before. And if they don’t know, why would you act on their advice? For the record, I have the same instinctive evolutionary response to the doom-and-gloomers as you do: ‘But what if they’re right? I mean, it’s possible.’

Is it likely, though?

You could be hit by the proverbial bus. It’s possible. You could be struck by lightning. It’s possible. Can you see why our brains are drawn to those spouting doom? It was an evolutionary advantage, when the choice was between ‘run’ or ‘wait and see if it’s a lion’.

You can’t diversify your life and death decisions. We’re not on the savannah any more, though. We don’t have to guess which short-term prognosticator might be right. Over the long term, things come into clearer focus.

For example:

— The ASX has always gone on to hit new highs.

— Dollar-cost-averaging has always worked — financially and emotionally.

— Diversification is the only free lunch in investing.

Those are long term approaches.

Yes, maybe it’s different this time. I can’t rule it out.

All I can do is look at more than a century of market data — through wars, panics, a depression and a GFC — as a guide.
The health news will get worse. The economic news will get worse. We will have a recession. Some small and large businesses will fail.

Here’s the thing, though — I fully expect that those that survive will likely go on to thrive, as a group.

So if those same businesses are selling for cheap prices, today, and you have both a diversified portfolio and the stomach to ride out the storm… Doesn’t it seem likely that current prices might be a buying opportunity (or, at least, that quality shares are worth holding rather than selling)?

I’m still investing. Not because it’s guaranteed, but because history suggests that, done well, it’s a wonderful way to build wealth, despite the volatility.

———————

I hope that was persuasive for you, at the time. I doubly hope that, with the benefit of hindsight, it’s doubly persuasive! Because we can’t go back and relive 2020 (thank goodness), but we can prepare — mentally, emotionally and financially — for the next time the market crashes.

And when (not if) it does, how will you respond?

I hope these two messages, 366 days apart, will serve as a guide.

More reading

• Genex (ASX:GNX) share price frozen on hydro project fund raising
• Where to reinvest your Fortescue (ASX:FMG) dividends
• 2 ASX 200 shares impacted by the daigou channel
• Stock market rally: Is the stock market bubble set to burst?
• Top brokers name 3 ASX shares to buy today

Motley Fool contributor Scott Phillips 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 They weren’t telling you to buy? Ouch. appeared first on The Motley Fool Australia.

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The Genex Power Ltd (ASX: GNX) share price isn’t going anywhere after the renewable power generation company announced the final capital raising puzzle piece to fund its Kidston Pumped Storage Hydro Project (K2-Hydro).

The Genex share price is currently in a trading halt, frozen at 27.5 cents a share. The company has outperformed the S&P/ASX 200 Index (ASX: XJO) over the last year, with a staggering 175% share price gain.

Further funds enable full ownership

Genex announced today that it had secured the final funding needed for the 250MW Kidston Pumped Storage Hydro Project (K2-Hydro). As a result, the full $777 million of financing required for the project has been sourced.

The final piece comes from the launch of a fully underwritten $90 million placement. This allows Genex to construct and operate the project with full ownership. Furthermore, the placement will involve the issuing of 170.1 million new fully paid ordinary shares in Genex. These new Genex shares will be issued at a share price of 20 cents per ordinary share.

The company has also signed an amendment with J-POWER for a further $25 million equity investment in Genex. The remaining funds have already been sourced with a $610 million debt facility from the Northern Australian Infrastructure Facility and a $47 million grant from the Australian Renewable Energy Agency.

Next step

Once all the funds are accounted for, Genex will aim to start construction in April/May 2021.

Genex chief executive officer James Harding commented on today’s milestone:

Today’s announcement, securing the balance of funding required to take the Kidston Pumped Storage Hydro Project to financial close, is a significant achievement for the Company.

More importantly, to be in a position to finance the project on a 100% equity basis and retain full ownership and control of the asset is a favourable outcome for Genex and its shareholders.

We are now in the final stages of closing out the financing and commencing construction and look forward to updating the market as we complete these milestones over the coming weeks.

Notably, Genex plans for a third stage development for the Kidston clean energy hub. The final chapter entails an additional 150MW wind and solar expansion. Although, we likely won’t hear details on it until the completion of stage 2.

Will Genex’s share price rise with renewables?

The Genex share price has certainly had a good run over the last year. In fact, much of the renewable space has gained attention in the 12 months gone. Companies like Tilt Renewables Ltd (ASX: TLT) have experienced a surge in share price as private equity floods capital into the sector.

Meanwhile, energy companies like AGL Energy Ltd (ASX: AGL) and Origin Energy Ltd (ASX: ORG) continue to add renewable assets. Even AGL’s CEO Markus Brokhof recently stated that batteries would be crucial to Australia’s energy grid in the near-term. Those comments were in the context of AGL recently proposing a 200MW battery at its Loy Yang Power Station. 

If the company can cater to the growing renewable demand, the Genex share price has the potential to grow with it.

More reading

• ASX 200 up 0.45%: Premier Investments results, Xero acquisition, Computershare halted
• 2 leading ASX 200 dividend shares to buy for income
• 5 things to watch on the ASX 200 on Wednesday
• What experts are saying about Telstra’s (ASX:TLS) big restructuring plans
• ASX 200 dips, travel shares drop, Pushpay soars

Motley Fool contributor Mitchell Lawler 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 Genex (ASX:GNX) share price frozen on hydro project fund raising appeared first on The Motley Fool Australia.

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Today is payday for eligible shareholders of mining giant Fortescue Metals Group Limited (ASX: FMG). This morning the company paid shareholders a fully franked interim dividend of $1.47 per share. Based on the latest Fortescue share price of $19.22, this represents a very generous 7.6% yield.

While some shareholders will be using this as a source of income, others may wish to invest it into the share market. If you’re in the latter group, then you might want to consider one of these ASX shares. Here’s why they are rated highly:

Altium Limited (ASX: ALU)

The first share to look at is Altium. It is a printed circuit board design software provider which has a leadership position in a market exposed to the Internet of Things and artificial intelligence. These two technologies are underpinning the proliferation of electronic devices globally, which is expected to lead to increasing demand for printed circuit board design software over the next decade.

Analysts at Morgan Stanley are positive on the company. So much so, they have an overweight rating and $37.00 price target on its shares. This compares to the latest Altium share price of $26.94.

Cochlear Limited (ASX: COH)

Another ASX share to consider investing these dividends into is Cochlear. It is one of the world’s leading hearing solutions companies and has a very long track record of delivering solid earnings growth. And while the pandemic has been weighing on its performance, its strong first half result appears to show that the situation is easing. In light of this, the ageing populations tailwind, and its industry leading products, the future looks very bright for Cochlear.

Macquarie is a fan of the company. Last month its analysts put an outperform rating and $245.00 price target on its shares. This compares favourably to the current Cochlear share price of $213.15.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Why the Xero (ASX:XRO) share price is outperforming today
• The Fortescue (ASX:FMG) share price is down 20% in March
• How to counter the ASX 200’s Achilles heel
• An important lesson from today’s Fortescue (ASX:FMG) share price

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 Cochlear Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Altium. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Cochlear Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Where to reinvest your Fortescue (ASX:FMG) dividends appeared first on The Motley Fool Australia.

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If you’ve been living under an investor-shaped rock for the past few years, you may not know much about which S&P/ASX 200 Index (ASX: XJO) shares are influenced by the daigou channel.

The daigou channel is a term used to describe Chinese expats living in Australia who are buying and selling Australian consumer goods to send back to the Chinese mainland, where many of these products are unavailable.

This practice is bigger than you may think. Many Chinese students studying in Australia make a living from reselling these items, with full-time resellers in China who buy and then on-sell a whole range of products.

Unsurprisingly, among the big earners from this practice are companies within Australia’s adult nutrition and care (ANC) and baby nutrition and care (BNC) sectors. These companies produce products with the marketability of Australia’s clean, organic image that strongly resonates with Chinese consumers.

This industry took a towelling in 2020 as COVID-19 slammed borders shut and backlogged international freight. But with vaccinations rolling out and many industries ticking off the days until borders can reopen, it’s worth knowing which companies are significantly impacted by the daigou channel status.

2 ASX 200 shares that rely on the daigou channel

Blackmores Limited (ASX: BKL)

Natural health product manufacturer Blackmores has suffered greatly from the halt of the daigou channel and market uncertainty in China. In 2016, the Blackmore share price reached a high of more than $200, before bottoming at $60 in September last year. 

Those figures help highlight the degree to which significant Chinese market exposure can wreak havoc on a company’s share price. The company’s FY20 full-year results showed a 16% drop in sales for the first half of 2020 that hasn’t fully recovered.

The Blackmores share price is currently down 0.44% this week, but market sentiment around the company already appears to be changing. Blackmores shares have increased 5.44% this month following a 3% increase in half-year revenue to end 2020.

A2 Milk Company Ltd (ASX: A2M)

The A1-protein free milk producer has been one of the more volatile (and keenly watched) companies on the ASX 200 in recent months. The A2 Milk share price has fallen by more than 48% over the past 12 months. The company’s shares reached their 52-week high of around $20 in late July 2020 but have fallen dramatically since then, now sitting at $8.33.

In addition to the impacts of a declining daigou channel, A2 Milk has also been hit with a myriad of other headwinds. Its chair and previous CEO have been engaged in a war-of-words in the media over the past fortnight, executives dumped millions of shares in the midst of the pandemic, and the company’s reinvestment in the daigou channel hasn’t sparked much confidence.

In positive news, however, A2 Milk has recently been focusing on expanding its penetration of the US market. At the current A2 Milk share price, the company has a price-to-earnings (P/E) ratio of 17.

More reading

• The A2 Milk (ASX:A2M) share price is at a 3-year low and could go lower
• Fund managers have been buying Blackmores (ASX:BKL) and this ASX share
• A2 Milk (ASX:A2M) shares and one other slapped with sell ratings
• Leading brokers name 3 ASX shares to sell today
• Which ASX 200 shares haven’t recovered from the COVID-19 crash?

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

The post 2 ASX 200 shares impacted by the daigou channel appeared first on The Motley Fool Australia.

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A stock market bubble is by no means a new phenomenon. Looking back at the track record of global equity markets shows that there has always been a cycle that includes periods of growth and periods of decline.

The recent stock market rally could cause investors to consider whether a crash is now imminent. However, such events can be very difficult to predict.

As such, a strategy that aims to buy undervalued shares for the long run where they are available could be a logical approach. It may allow for strong growth in the long run, as well as some relative protection from a potential market crash.

Predicting if a stock market bubble will burst

Despite the recent stock market rally, identifying a stock market bubble that is ready to burst can be a challenging task. After all, there appear to be some companies that continue to trade at low prices even after the recent recovery.

For example, sectors such as financial services, retail and resources could contain companies that have low valuations as a result of weak investor sentiment and an uncertain economic outlook. This could mean there are still buying opportunities on offer.

Furthermore, the stock market’s performance is very difficult to accurately predict. Certainly, it has a long track record of delivering high single-digit annual total returns.

However, those returns are very unlikely to be linear. They include periods of growth and decline that themselves are dependent on a wide spectrum of factors that are tough to forecast on a consistent basis. This could mean that a stock market bubble increases in size, or bursts, in future.

A logical approach after a stock market rally

Given the difficulties in predicting whether a stock market bubble will burst or not, it may be prudent to instead focus on purchasing undervalued shares. They may offer a combination of low prices and high-quality fundamentals, such as strong balance sheets and resilient cash flow.

Not only may they be less impacted by a stock market crash because they are priced at low levels, but they could also outperform their sector peers in a bull market or bear market.

For example, a high-quality business with a wide economic moat may have more resilient sales in a downturn. Equally, it may be able to generate higher margins and profit growth that is reflected in a faster-rising share price during a period of stock market gains.

A long-term view

Clearly, no company is guaranteed to escape the bursting of a stock market bubble. Falling share prices can lead to deteriorating investor sentiment that pulls down even the most attractive stocks.

However, stronger businesses purchased at appealing prices can be a sound means of generating impressive total returns. When held for the long run, they could offer relatively strong performance compared to sector peers and the wider stock market.

More reading

• Top brokers name 3 ASX shares to buy today
• The ANZ (ASX:ANZ) share price is Macquarie’s top big four bank pick
• The Nanosonics (ASX:NAN) share price is down 25% this year
• Airtasker (ASX:ART) share price surges a further 86% higher
• Why Bank of America is worried about the rising Bitcoin (CRYPTO:BTC) price

Motley Fool contributor Peter Stephens 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

According to a note out of Macquarie, its analysts have retained their outperform rating and lifted their price target on this banking giant’s shares to $30.00. Although the ANZ share price has performed strongly in recent months, the broker believes it can still go higher. This is due partly to its expectation that ANZ will deliver a better result than its big four rivals. The ANZ share price is fetching $27.89 this afternoon.

CSL Limited (ASX: CSL)

A note out of Credit Suisse reveals that its analysts have upgraded this biotherapeutics giant’s shares to an outperform rating with a slightly reduced price target of $315.00. According to the note, the broker acknowledges that trading conditions are somewhat tough and that CSL’s earnings could fall short of analyst expectations. However, it appears to believe this is understood by the market based on its share price performance. And while it sees potential threats in the global plasma market, it believes demand for CSL’s products would still be strong enough to underpin solid growth. The CSL share price is trading at $266.87 on Wednesday.

WiseTech Global Ltd (ASX: WTC)

Another note out of Macquarie reveals that its analysts have upgraded this logistics solutions company’s shares to an outperform rating with a $33.00 price target. According to the note, the broker believes the worst of the pandemic is now behind the company and has upgraded its earnings forecasts to reflect this. And while Macquarie is forecasting a moderation in its revenue growth in the coming years due partly to fewer acquisitions, it expects this to result in higher quality earnings. The WiseTech share price is trading at $28.05 this afternoon.

More reading

• The ANZ (ASX:ANZ) share price is Macquarie’s top big four bank pick
• Down 18%: Is the CSL (ASX:CSL) share price a buy?
• Why the Xero (ASX:XRO) share price is outperforming today
• Is now the time to invest into the CSL (ASX:CSL) share price?
• How to counter the ASX 200’s Achilles heel

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 CSL Ltd. and WiseTech Global. 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 Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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Macquarie Group Ltd (ASX: MQG) has run the ruler over the big four banks and believes the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price represents the best upside relative to its big four peers. 

Big banks lifting the ASX 200 

The resurgence of the big four banks in 2021 has helped offset the weakness in other sectors including healthcare, materials and information technology. Without the support of the big four heavyweights, the ASX 200 would find itself in negative year-to-date returns. 

A significant decline in bad debt and impairment coupled with a strong property market has helped propel banks to near pre-COVID highs. 

The Commonwealth Bank of Australia (ASX: CBA) share price has been the weakest performer among its peers, up ~3% year to date and within ~6% of its February 2020 highs. 

The National Australia Bank Ltd (ASX: NAB) share price is up ~13% year to date and also within ~6% of where it was a year ago. 

The Westpac Banking Corp (ASX: WBC) share price has surged the most, running ~23% this year, and ~7% shy of its February 2020 levels. 

The ANZ share price is the first big four bank to top its pre-COVID highs and has run ~21% higher year to date. 

The ANZ share price to outperform 

Macquarie notes that the ANZ share price has re-rated since the beginning of the year, but offers more upside than its peers on a relative basis. Moving forward, the broker expects the bank to continue to perform better than its counterparts and deliver comparably better results. 

Macquarie retained an outperform rating for ANZ shares on Wednesday and raised its target price from $28.50 to $30.00. This represents an upside of ~7.50% from the current ANZ share price of $27.90. 

What about the other banks? 

On the same day, Macquarie commented that stretched valuations and longer-term headwinds have made it difficult to be bullish on banks. The broker has pivoted its preference from major banks to regional banks with the exception of ANZ. 

It viewed the CBA share price as neutral with an $81.50 target price, or downside of ~5% from its current price of $86.00. While the Westpac share price was also neutral rated with a $25.75 target price or an upside of ~6.5%.

More reading

• Macquarie sees near-term pain for the Afterpay (ASX:APT) share price
• Westpac (ASX:WBC) share price on watch after NZ update
• 8 ASX 200 shares rated as ‘outperform’ by brokers
• Fund managers have been buying Blackmores (ASX:BKL) and this ASX share
• A2 Milk (ASX:A2M) shares and one other slapped with sell ratings

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group 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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It has been a frustrating few months for shareholders of ASX healthcare company Nanosonics Ltd. (ASX: NAN), with the ongoing effects of the COVID-19 pandemic continuing to drive volatility in the Nanosonics share price.

After surging to a record high price of $8.25 in early January, the Nanosonic share price has slid 25% lower to just $6.16 as at the time of writing. Even some promising first-half FY21 results haven’t been enough to pull Nanosonic shares out of their nosedive.

Company background

Nanosonics is a healthcare company specialising in hospital-grade disinfection technologies for ultrasound devices. Its technology aims to reduce the number of outbreaks of preventable infections that occur in medical institutions.

The company’s flagship product is called trophon. It is a device that works by using high-frequency sonic vibrations to create a hydrogen peroxide mist that deep-cleans ultrasound probes. This “sonically activated” mist is more effective than disinfectant wipes or other similar cleaning products. This is because the droplets in the mist are small enough to get into tiny crevices and other openings in the ultrasound probe – killing bacteria, fungi and other nasties.

What’s moving the Nanosonics share price?

Nanosonics was initially quite heavily impacted by the COVID-19 pandemic. Despite reporting a resilient result for FY20 – with revenues up 19% year-on-year to $100.1 million – the company admitted to a significant slowdown in growth during the last quarter of FY20.

Across the world, the focus of most hospitals switched to the management of COVID-19 outbreaks. Combined with bans on elective surgeries in many jurisdictions, this meant that demand for ultrasound cleaning devices dropped off significantly during the pandemic.

However, over the last few months of 2020, Nanosonics shares surged higher as the company reported early signs of a recovery from the worst impacts of the COVID-19 pandemic. In a November business update, Nanosonics stated that there had been a 16% rise in the number of trophon units installed during the first four months of FY21 versus the last four months of FY20.

After pushing the Nanosonics share price to a new high of $8.25, investors deserted the company in early January. Though without any news reported by the company at the time, it’s difficult to speculate as to why investors were so turned off.

Recent financial results

In the company’s first-half FY21 results, announced to the market in late February, the company stated that it was continuing to show signs of recovery from the worst of the pandemic. Revenues for the second quarter FY21 were up 48% over the previous quarter, driven by a 38% increase in the number of new trophon units installed.

Despite these positive signs of increasing business momentum, the overall result was predictably low when compared to the prior corresponding period. Total revenues of $43.1 million for the first-half FY21 were 11% lower than the first-half FY20, while operating profit before tax also declined significantly, from $6.7 million for the first-half FY20 to just $0.2 million for the first-half FY21.

Outlook

While not committing to a specific revenue target, Nanosonics CEO and President Michael Kavanagh stated that he was “optimistic” about market opportunities for the second half of the year. He commented that “the positive growth trend and improving market conditions experienced across the half are expected to continue, subject of course to the inherent risks and uncertainties associated with the COVID-19 pandemic.”

More reading

• 5 of the best ASX shares to buy next week
• Top brokers name 3 ASX shares to sell next week
• Here are 4 ASX shares that insiders have been buying recently
• The Nanosonics (ASX:NAN) share price is down 25% in 2021: Time to buy?
• Why Flight Centre, Life360, Nanosonics, & Universal Store are racing higher

Rhys Brock owns shares of Nanosonics Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The Nanosonics (ASX:NAN) share price is down 25% this year appeared first on The Motley Fool Australia.

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The Airtasker Limited (ASX: ART) share price is on fire again on Wednesday following its incredibly successful IPO on Tuesday.

Australia’s leading marketplace for local services saw its shares rocket a massive 86% earlier today to reach a new high of $1.95.

When the Airtasker share price hit that level, it meant it was up a whopping 200% from its IPO listing price of 65 cents.

At the time of writing, the company’s shares have eased back a touch but remain up 59% to $1.67.

What is Airtasker?

Airtasker operates Australia’s leading marketplace for local services. It also has operations in Ireland, New Zealand, Singapore, the United Kingdom, and the United States. As of its listing, there were more than 4.3 million registered users on Airtasker’s marketplace.

From its platform, consumers are able to search for relevant independent workers to handle everyday tasks. These include handyman jobs, domestic cleaning, removals, gardening, and furniture assembly.

The company estimates that the total addressable market for local services in Australia is currently $52 billion and growing. Whereas including all its international operations, its aggregated total addressable market is worth $591 billion in 2019.

As a comparison, the company is currently on course to meet or exceed its prospectus forecasts. This will mean gross marketplace volume (GMV) of $143.7 and revenue of $24.5 million in FY 2021.

Clearly, it has a long runway for growth ahead of it.

Valuation

While Airtasker looks to have a very bright future, it is worth noting that a significant amount of growth is already being built into its shares.

Based on the current Airtasker share price and its 420.6 million shares outstanding, the company has a market capitalisation of just over $700 million.

That means its shares are currently changing hands for approximately 28.5x estimated FY 2021 sales.

Given this lofty valuation, Airtasker shares are certainly a high risk commodity right now.

More reading

• How does Airtasker (ASX:ART) stack up against its peers?
• ASX 200 dips, travel shares drop, Pushpay soars
• Airtasker (ASX:ART) share price cools after explosive IPO
• Airtasker (ASX:ART) share price rockets 78% after IPO
• Airtasker’s ASX debut happens tomorrow, after 24-hour delay

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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