Tag: Motley Fool

Most weeks, the Commonwealth Bank of Australia (ASX: CBA) CommSec brokering platform tells us the shares, both ASX and international, that have been the most popular with its Aussie customers.

Since CommSec is one of the largest online brokers in the country, this data can be a useful indicator of general investing trends in the Aussie market, and what investors shave been chasing.

So here are the top 10 United States shares CommSec customers were buying last week. This week’s data covers 18-22 January. 

Most traded US shares on the ASX

1. Tesla Inc (NASDAQ: TSLA) – representing 4.5% of total trades with a 77%/23% buy-to-sell ratio.
2. Nio Inc (NYSE: NIO) – representing 3.2% of total trades with an 80%/20% buy-to-sell ratio.
3. Apple Inc (NASDAQ: AAPL) – representing 2.7% of total trades with a 71%/29% buy-to-sell ratio.
4. Nova Royalty Corp (OTCMKTS: NOVRF) – representing 1.9% of total trades with a 100%/0% buy-to-sell ratio.
5. ARK Genomic Revolution ETF (BATS: ARKG) – representing 1.4% of total trades with a 94%/6% buy-to-sell ratio.
6. BioNano Genomics Inc (NASDAQ: BNGO)
7. Churchill Capital Corp IV(NYSE: CCIV)
8. ARK Innovation ETF (NYSE: ARKK)
9. Microsoft Corporation (NASDAQ: MSFT)
10. Social Capital Hedosophia Holdings Corp V (NYSE: IPOE)

What can we learn from these trades?

Another interesting week of statistics to dissect here. First up though, and (at risk of sounding like a broken record) Tesla and Nio once again show their dominance of investor sentiment this week. Although the concentration of these 2 companies in the overall trend has fallen from last week (where Tesla represented 7.3% of all trades), it is still a force to be reckoned with.

The fact that both companies have hit new all-time highs in the past month clearly isn’t hurting either.

Apple and the ARK Invest exchange-traded funds (ETFs) are also continuing to prove resilient. Interestingly though, the proportion of investors selling Apple is inching higher, up to 29% from last week’s 25%.

But this week, we have a few debutants as well. Nova Royalty can be described as something of a penny stock, especially given its status as an ‘over the counter’ share. Even so, it’s found its way onto the list this week. This company has experienced some extreme volatility over the past week, which might explain why Aussie investors have taken note.

Social Capital is another new entrant this week. This company is a SPAC (special purpose acquisition company) vehicle affiliated with the famous American investor Chamath Palihapitiya. This gentleman has a series of SPACs in this space, all with a corresponding number and letter.

This one is ‘V’ (or 5), hence the ‘E’ on the ticker. Yes, IPOA, IPOB, IPOC and IPOD also exist. According to our Fool colleagues over in the ‘States, this SPAC is set to merge with a fintech company called SoFi Finance. Clearly, ASX investors are rather enchanted with this proposition.

More reading

• 3 reasons to sell a share
• 5 things to watch on the ASX 200 on Wednesday
• Will the blue sweep boost Tesla? Don’t count on it
• These 2 Nasdaq Giants Are at All-Time Record Highs — and They’re Not Slowing Down
• Amazon’s ad business will dominate the 2020s

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple, Microsoft, and Tesla. The Motley Fool Australia has recommended Apple. 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 Genetic Signatures Ltd (ASX: GSS) share price is edging higher today. This comes after the company announced that it received CE-IVD registration for its 3base EasyScreen sexually transmitted infection (STI) Genital Pathogen Detection Kit.

CE-IVD refers to an approved CE Marking from the European Union for an in vitro diagnostic (IVD) device. This allows the product to be commercially sold within Europe.

What’s driving the Genetic Signatures share price higher

The Genetic Signatures share price is back positive territory as investors jump on the company’s latest news. Originally, the company’s shares were sliding lower on the back of overall weak market sentiment.

According to its release, Genetic Signatures advised its STI test kit will be marketed towards Europe and the United Kingdom. This follows the recent granting of the CE-IND mark on the 3base EasyScreen detection device.

The company noted that its product can identify 10 of the most common STI’s on the one device.

It’s estimated that around 1 million STI’s are contracted daily world wide, having a detrimental effect on sexual and reproductive health. Four of the most common infections (Chlamydia, Gonorrhoea, Syphilis, and Trichomoniasis) account for over 376 million cases each year.

Genetic Signatures stated that the addressable market opportunity for Chlamydia and Gonorrhoea alone is worth US$420 million per annum. This number is predicted to grow at a rate of 7% every year, reflecting a lucrative sector.

What did the CEO say?

Genetic Signatures CEO, Mr. John Melki, hailed the favourable outcome, saying:

This is the 5th 3base EasyScreen Detection Kit to attain CE-IVD registration, a significant achievement as we continue to execute on our global expansion strategy. Sexually transmitted infections (STI’s) are a large and growing problem globally, and we are pleased to be able to provide a high throughput and accurate diagnostic solution to improve patient outcomes.

Our Company continues to work on new products and enhancing current product offerings even while we meet the substantial demand for our EasyScreen SARS-CoV-2 Detection Kits.

About the Genetic Signatures share price

Over the past 12 months, the Genetic Signature share price has doubled in value, gaining 104% for investors.

The company’s shares hit a low of 90 cents in March after COVID-19 sent economic shockwaves across the world. In the following months, the Genetic Signatures share price rose to an all-time high of $2.94 in July.

More reading

• Why the Genetic Signatures (ASX:GSS) share price surged 6% higher 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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The AMA Group Ltd (ASX: AMA) share price has been among the worst performers on the All Ordinaries index on Wednesday.

The smash repair company’s shares crashed as much as 25.5% lower to 55 cents at one stage today.

The AMA share price has recovered a touch since then but is still down a sizeable 15% to 63.2 cents.

Why is the AMA share price crashing lower?

Investors have been selling AMA’s shares on Wednesday following the release of an announcement by the company’s board this morning in relation to its Chief Executive Officer and Executive Director, Mr Andrew Hopkins.

According to the release, in late September, the AMA board received a protected disclosure from an individual employed by the company. Allegations have been made, but no details have been provided on what they consist of.

On receipt of these allegations, the company engaged specialist advisory firm McGrath Nicol to undertake an independent forensic investigation. This forensic investigation has recently been completed.

Yesterday evening (26 January 2021), the company’s Chief Executive Officer, Mr Hopkins, made an urgent application to the Federal Court of Australia alleging that he is being oppressed as a minority shareholder.

Following this application, the Court made a temporary order that AMA may not dismiss Mr Hopkins from his employment prior to a further hearing. The date of this hearing is yet to be finalised but is expected to be fixed for some time next week.

The AMA board advised that the company is defending the legal proceedings and will not be able to comment further on the matter as it is before the Courts.

Trading update

In addition to the above, the AMA board took this opportunity to provide an update on how the company is performing.

The release explains that the company’s three core business units continue to “rebound well from the disruptions associated with the COVID-19 Pandemic under the capable leadership of the respective division heads.”

AMA will provide a full update on its performance with the release of its first half results next month.

More reading

• ASX 200 drops 1.4%

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 Renergen Limited (ASX: RLT) share price is on a tear today, up 24.58% at $1.50 in early afternoon trading.

The All Ordinaries Index (ASX: XAO), meanwhile, is heading the other way, down 0.8% at time of writing.

Why is the Renergen share price shooting higher?

The emerging helium and natural gas company’s share price is soaring today following an update on its phase 2 Virginia Gas Project.

Located in Free State, South Africa, the Virginia Gas Project contains one of the richest helium concentrations recorded around the world, with readings of up to 12%.

The company reported it has contracted with 3 companies for the engineering studies of the project.

Saipem SpA was granted the front-end engineering design (FEED) contract to develop the liquid natural gas and liquid helium processing facilities. EPCM Holdings – currently constructing Renergen’s Phase 1 gas gathering pipeline – was awarded the FEED contract to develop Renergen’s Phase 2 gas gathering pipeline. And Sproule has been contracted to evaluate and certify the reserves.

Renergen reported that these 3 contracts will finalise the feasibility studies for the Virginia Gas Project’s phase 2 development. It expects this to be complete in the second quarter 2021, after which the board will take its financial investment decision.

Commenting on the contract awards, CEO Stefano Marani said:

This is a significant step forward in the planning of Phase 2, as it not only defines the total capital expenditure required but will clearly help define the project’s financial parameters.

Working with organisations like Saipem, EPCM and Sproule brings a wealth of knowledge, experience and technical capability to the overall project, which we believe will be of great benefit to our stakeholders and the long-term value of the Virginia Gas Project.

EPCM managing director Tom Cowan added:

EPCM looks forward to our continued partnership with Renergen to further develop the Virginia Gas Project. Having been involved since the very early stages of the development, we are proud of the progress thus far and are optimistic for what is to come from Phase 2.

Renergen share price snapshot

Following on today’s gains, the Renergen share price is up 37% so far in 2021. That compares to a 1.5% gain from the All Ords.

Though still down from its February 2020 peaks, the Renergen share price is up more than 34% over the past 12 months.

More reading

• Why the Damstra (ASX:DTC) share price is racing higher today
• Amazon Prime membership is growing at a record pace
• The AWN Holdings (ASX:AWN) share price is up 36% today. Here’s why
• Why Beach, Fortescue, Iluka, & Temple & Webster shares are dropping lower
• Chamath Palihapitiya jumps on the GameStop bandwagon

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 market may be tumbling lower on Wednesday, but that hasn’t stopped the Damstra Holdings Ltd (ASX: DTC) share price from charging higher.

At one stage today the integrated workplace management solutions provider’s shares were up over 8% to $1.57.

The Damstra share price has since given back some of these gains but remains 4% higher at $1.51 at the time of writing.

Why is the Damstra share price racing higher?

Investors have been buying Damstra’s shares today following the release of its second quarter update.

According to the release, for the three months ending 31 December, Damstra delivered a record quarter for revenue and cash receipts. Management believes this validates its recent acquisitions.

Unaudited revenue for the quarter came in at $6.9 million, representing growth of 33% on the previous quarter. Whereas operating cash receipts came in at $7.4 million for the quarter, up 59% on the prior corresponding period.

In respect to earnings, Damstra recorded earnings before interest, tax, depreciation and amortisation (EBITDA) (excluding other income) of $1.4 million for the quarter. Management notes that this demonstrates the positive impact of increased scale and the successful extraction of acquisition synergies.

It also pointed out that its EBITDA margin (excluding other income) for the quarter was 21%, which it feels validates and proves the attractive unit economics of its business model.

Key drivers of its growth during the quarter were a 49% jump in user numbers to 623,000, the doubling of its client numbers to 670, and its low churn level of <0.5%.

Another positive is that Damstra has achieved $5.2 million of synergies from recent acquisitions, which was higher than its original target of $4 million. Though, management isn’t resting on its laurels and is busy assessing if further synergies can be extracted.

Management commentary

Damstra’s CEO, Christian Damstra, was pleased with the company’s performance in the second quarter.

He said: “We are seeing growth accelerating in the second quarter and we expect our revenue run rate to increase in the remaining months of FY21. The Q2 performance was pleasing despite cycling off a comparable period in which there were strong contributions from Newmont and NBN contracts and the delayed conclusion of a small number of promising new client engagements.”

“We are especially pleased with our operating cash flow and EBITDA considering we have just completed the Vault transaction, and this demonstrates how quickly we have integrated the business into Damstra from both a product and people perspective. It also reflects the advantages of the greater scale that these acquisitions have provided,” he added.

Damstra expects to release its half year results on 26 February 2021.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Damstra Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Damstra Holdings 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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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.

With more people doing their shopping online these days, it’s no surprise that Amazon.com Inc (NASDAQ: AMZN) Prime membership continues to climb, even in the highly saturated United States market. As of the end of 2020, 142 million domestic consumers had access to a Prime membership, according to Consumer Intelligence Research Partners.

What’s surprising about the numbers is just how fast Amazon added Prime memberships last quarter. “After several quarters of slower growth, consumers joined Prime at a rate last seen more than four years ago,” said CIRP co-founder Josh Lowitz. For the full year, Amazon added 30 million Prime members. What’s more, more people are signing up for the full-year membership instead of the monthly option.

A big reversal in the trend

The 2020 holiday season saw a reversal of a pattern that Amazon had experienced for several years. After it introduced its monthly Prime membership option in December 2016, the e-commerce powerhouse typically saw an influx of monthly memberships around the holiday season. After those shoppers got the benefit of free shipping on all their gifts, many would drop their memberships early in the following year.

But in the fourth quarter of 2020, more people signed up for its annual plan. The share of Prime members paying annually grew to 53% as of the end of the year from 49% three months earlier.

One reason for that shift may have been Amazon’s decision to hold Prime Day in October, kicking off an extended holiday shopping period. Consumers faced with choice between subscribing for October, November, and December, or just getting the full-year membership may have decided that for $80 more, the 12-month option was the better deal. If Amazon’s internal data supports that thesis, the company may adopt strategies designed to extend the holiday shopping season into October in future years, which would also help it prevent its logistics network from getting overloaded by surges closer to the holidays.

Amazon will have a huge 2021

The long-term commitment to Prime from Amazon shoppers bodes well for its continued revenue growth in 2021.

For one, the new sign-ups should produce elevated growth in subscription revenue for Amazon throughout the full year. While Amazon has multiple subscription services, Prime is its biggest. Subscription services’ revenue growth accelerated in each of the last two quarters, but growth was still slower than in 2019.

Additionally, Prime members spend more on Amazon than non-members. And that fact has held true throughout the years as the number of members has ballooned. This indicates that it’s not just that people who are already frequent Amazon shoppers decide to sign up for Prime, but rather that being a Prime member makes people more likely to do more of their shopping on Amazon. In fact, the gap between average member and non-member spending has widened over the years.

Prime members are also more likely to begin their online product searches on Amazon versus other websites. According to a Civic Science survey conducted last spring, 74% of Prime members start their searches on Amazon.com versus just 29% for non-members. The recent influx of new Prime members should ensure Amazon’s sales grow faster than the rest of the e-commerce industry in 2021. Analysts at eMarketer expect e-commerce sales to grow another 14% this year after a huge spike in growth in 2020.

Prime members also bolster Amazon’s advertising business. All of those product searches provide it with more opportunities to display its lucrative marketplace ads. Additionally, Prime members are more likely to use other Amazon devices like Fire TV, which is a big source of video display advertising for the company.

There are a lot of ways for Amazon to capitalize on growing Prime memberships. Considering the huge influx of new members last quarter and the shift from monthly sign-ups to full-year commitments, this FAANG stock should see strong revenue growth in 2021.

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

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Adam Levy owns shares of Amazon. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon. 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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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.

Social Capital co-founder and CEO, Chamath Palihapitiya, has made a name for himself identifying excellent high-growth companies and taking them public using special purpose acquisition companies (SPACs).

Now, the noted investor is looking to profit from the recent gyrations of GameStop (NYSE: GME) stock. In a post on Twitter (NYSE: TWTR) Tuesday, Palihapitiya said:

“Lots of [GameStop] talk, soooooo …. We bought Feb $115 calls on [GameStop] this morning. Let’s gooooooo!!!!!!!!” 

Buying calls is an options strategy investors can use when they believe a stock will rise.

Palihapitiya’s position suggests that he believes the stock could gain as much as 50% from Monday’s close — and do it in less than a month.

The post was a follow up to one on Monday in which Palihapitiya said:

“Tell me what to buy tomorrow and if you convince me I’ll throw a few 100ks at it to start. Ride or die.”

GameStop has been a battleground stock in recent weeks. Shares were selling for as little as $17.25 earlier this month, but several catalysts conspired to send them soaring.

News broke on January 11 that activist investor and Chewy (NYSE: CHWY) co-founder, Ryan Cohen. and two of his associates had gained seats on GameStop’s board.

Cohen’s firm, RC Ventures, had amassed a 13% stake in GameStop last year, making it the company’s second-largest shareholder. Cohen’s success with online retailer, Chewy, has given investors hope that he could help steer GameStop toward similar e-commerce results. 

The drama took another turn late last week when a tug-of-war broke out between noted short-seller Citron Research and a group of investors on the subreddit r/WallStreetBets. Citron Editor, Andrew Left, eventually threw in the towel on Friday as the short squeeze that the online group had sparked continued.

GameStop has gained more than 375% so far this year and was recently trading above $100 as investors bet on a turnaround for the company. Palihapitiya has now joined the fray.

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

More reading

• Here’s why the Sezzle (ASX:SZL) share price is up over 5% today

Danny Vena 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 Twitter. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Chewy, 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The AWN Holdings Ltd (ASX: AWN) share price is having a spectacular day today.

AWN shares shot up 36.27% this morning to $1.39 a share. This gain comes after AWN was trading at just $1.02 on Monday, then opened at $1.23 a share this morning and rocketed up from there.

This morning’s high saw AWN Holdings up more than 85% year to date, and up more than 1,600% over the past 7 or so months. However, the AWN share price has since slipped back to $1.30, up 27.45% at the time of writing.

So what’s going on here?

What is this company?

AWN, also known commercially as ‘Arowana’, is a funds management business. It was founded in 2007 and has grown from a single office in Sydney to a truly global presence. Today, the company has offices in London, Singapore, Manila and Tel Aviv.

AWN can be best described as a ‘venture capitalist’ company, rather than a traditional fund manager. AWN “directly invests and operates” in individual businesses at the ground level as “true partners”. Some of AWN’s current businesses include VivoPower, EdventureCo and Alicorn.

Why are AWN shares going to the moon today?

Today’s dramatic move in the AWN share price appears to be the result of a single market release the company made this morning before market open.

In this release, AWN told investors that its subsidiary VivoPower has “signed a definitive agreement” with the GB Auto Group (a private company). VivoPower is a solar energy company that was founded by AWN in 2014.

Vivopower’s new agreement will “expand GB Auto’s position as Australia’s exclusive distributor of the Tembo electric Toyota Land Cruiser, electric Toyota Hilux, and Tembo electric vehicle conversion kits”.  Apparently, the “collaboration will focus primarily on the next‐generation 72-kilowatt-hour battery kit for Toyota’s Landcruiser and Hilux models, as well as the application of other Tembo products in the mining industry”.

AWN tells us that “[the agreement] is believed to be the most valuable deal for electric vehicles in the Australasian region to date and will initiate close technical collaboration over a seven‐year term”. The company estimates that the orders stemming from this deal will be worth “an estimated US$250 million in revenues over the four-year period”. The first of the deliveries are scheduled for “mid-2021”.

Perhaps the magic topic of ‘electric vehicles has something to do with today’s moves. Electric vehicles and batteries are hot property at the moment, with many famous companies in the space (such as Tesla Inc (NASDAQ: TSLA) soaring in value recently. Regardless of the reasons, investors have evidently shown up a big green light of endorsement, judging by the AWN share price rise today.

More reading

• Why Beach, Fortescue, Iluka, & Temple & Webster shares are dropping lower
• Why the Reliance (ASX:RWC) share price is storming 7% higher today
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Sebastian Bowen owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. 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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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on track to record a sizeable decline. The benchmark index is currently down 0.8% to 6,771.6 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping lower:

Beach Energy Ltd (ASX: BPT)

The Beach share price is down 4% to $1.78 following the release of its second quarter update. The energy producer reported production of 6.2 MMboe for the quarter, which was down 8% from the prior quarter and 3% from the prior corresponding period. This, together with a decline in oil prices over the last 12 months, led to Beach reporting a 25.5% decline in sales revenue to $344 million.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price is down 6% to $23.78. Investors have been selling the mining giant’s shares after the price of iron ore pulled back. According to CommSec, the iron ore price fell by 2.3% or US$3.85 to US$164.65 a tonne after Chinese steel mill profitability weakened.

Iluka Resources Limited (ASX: ILU)

The Iluka share price has fallen 5% to $6.69. This morning the mineral sands producer released a production update which revealed zircon, rutile and synthetic rutile (Z/R/SR) production of 585,000 tonnes in 2020. This was down from 702,000 tonnes in 2019. The company also revealed that it will suspend Synthetic Rutile Kiln 2 production for three to six months from February in order to reduce stocks of synthetic rutile. A contractual dispute has left the company with elevated stock levels.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price has sunk 11% lower to $12.00 despite there being no news out of the online furniture and homewares retailer. This decline could be due to profit taking ahead of its half year update next week. Prior to today, the Temple & Webster share price was up 340% since this time last year.

More reading

• ASX 200 down 0.7%: BHP & Fortescue tumble, Reliance rockets, CSL downgraded
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• ASX 200 rises 0.4%
• Why the Fortescue (ASX:FMG) share price is storming 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 Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group 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 Reliance Worldwide Corporation Ltd (ASX: RWC) share price is surging more than 7% higher after the company announced its trading update for the first half of FY21.

In the opening minutes of trade, the Reliance share price shot up to an intraday high of $4.59. However, its shares have since retreated to $4.40, up 7.2% at the time of writing.

How did Reliance perform?

The Reliance share price is firmly in positive territory after the plumbing parts company reported strong growth across all regions of the business.

For the period ending December 31, Reliance delivered total net sales of $642 million. This represented a 13% lift on the same time last year, and a 17% increase on a constant currency basis.

Looking at the segment performance, repair and remodel markets experienced robust demand through retail and hardware channels in the United States. This reflected a 16% jump on the prior corresponding period (PCP).

Across Asia Pacific, sales rose 10%, underpinned by new Australian housing construction and remodel sectors. Inter‐company sales inched 13% higher on the back of continued demand from the Americas region.

As a collective, Europe, Middle East, and Africa saw their sales advance 9% following the relaxation of the United Kingdom’s government COVID-19 restrictions.

Earnings before interest, tax, depreciation and amortisation (EBITDA) is forecast to be in the range of $164 million and $167 million. The anticipated result will come in above 30% above the EBITDA achieved on PCP.

Reliance noted that cost reduction measures implemented over the first-half have resulted in improved margins. It highlighted that on a run-rate basis, it expects $25 million in annual savings for FY21.

In addition, net debt also decreased by $76 million with the company focused on paying back its existing loans. In-turn, Reliance’s leverage ratio fell to 0.88 times from the recorded 1.57 times at the end of December 2020.

The group advised that it will release its half-year financial results on February 22, 2021.

Management commentary

Reliance group CEO Heath Sharp welcomed the positive result, saying:

The first half of the 2021 financial year has undoubtedly been a strong period for RWC and we are pleased with how the group has performed in demanding circumstances.

Given the continuing uncertainties in all our markets because of COVID‐19 we would caution against extrapolating the first half sales performance for the full year. We note that copper cost increases will negatively impact earnings in the second half and currency translation impacts may also adversely impact reported earnings.

A year in review for the Reliance share price

The Reliance share price took a steep dive in the March COVID-19-related crash last year, falling to as low as $1.63. Since then, its shares have been in recovery, moving upwards to close in on its 52-week high of $4.86 last January.

In comparison to this time last year, the Reliance share price has recovered last year’s losses and is up 0.3%.

More reading

• ASX 200 down 0.7%: BHP & Fortescue tumble, Reliance rockets, CSL downgraded
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Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Reliance Worldwide Limited. The Motley Fool Australia has recommended Reliance Worldwide Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Reliance (ASX:RWC) share price is storming 7% higher today appeared first on The Motley Fool Australia.

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