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At lunch on Monday the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a gain. The benchmark index is currently up 0.35% to 6,823.9 points.

Here’s what has been happening on the market today:

Tech shares push higher

It has been a positive day of trade for the tech sector. The likes of Afterpay Ltd (ASX: APT) and Appen Ltd (ASX: APX) are helping to drive the S&P/ASX All Technology Index (ASX: XTX) higher on Monday. At the time of writing, the All Technology Index is up 0.65%. This follows a positive night of trade on Friday on Wall Street for tech stocks, which saw the Nasdaq index climb to a record high.

Big four banks rise

The big four banks are pushing higher today and doing a lot of the heavy lifting on the ASX 200. At the time of writing, all the major banks are up at least 0.5% for the day. The best performer in the group has been the Commonwealth Bank of Australia (ASX: CBA) share price with a gain of just over 0.6%. This is despite there being no news out of the sector today.

Ampol completes buyback

The Ampol Ltd (ASX: ALD) share price is tumbling lower today after announcing the completion of its $300 million off-market buyback. The fuel retailer bought the shares back at $26.34, which represents a 14% discount. Ampol expects $24.33 of the buyback price to be treated as a fully franked dividend for Australian capital gains tax purposes.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Monday has been the Nearmap Ltd (ASX: NEA) share price with a 4% gain. Investors appear to have been buying the aerial imagery technology and location data company’s shares amid positive sentiment in the tech sector. The worst performer has been the Lynas Rare Earths Ltd (ASX: LYC) share price with a 5% decline. This appears to be due to profit taking after some very strong gains last week.

More reading

• Why Tesla (NASDAQ:TSLA) shares were last year’s worst short bet
• ASX 200 Weekly Wrap: Change in America spurs ASX 200 higher
• 2 outstanding ASX tech shares to buy today
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to buy next week

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 Appen Ltd and Nearmap Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Nearmap 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to start the week on a positive note. At the time of writing, the benchmark index is up 0.2% to 6,815.5 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are shooting higher:

IDP Education Ltd (ASX: IEL)

The IDP Education share price is up 2.5% to $20.92. Investors have been buying the student placement and language testing company’s shares following the release of a broker note out of UBS. According to the note, its analysts have retained their buy rating and lifted the price target on the company’s shares to $23.00. UBS believes that trading conditions are continuing to improve and expects IDP Education to deliver strong earnings growth over the medium term.

Lake Resources N.L. (ASX: LKE)

The Lake Resources share price is up over 14% to 24 cents. This morning the clean lithium developer announced a $20.6 million placement to global institutional investors. This means Lake’s flagship Kachi Lithium Brine Project is now fully funded through to the construction phase in 2022. This allows the company to speed up the development of sustainable, high purity lithium. Lake Resources raised the funds at 16.5 cents per new share.

Mach7 Technologies Ltd (ASX: M7T)

The Mach7 share price has jumped 9% to $1.45. Investors have been buying the enterprise imaging platform provider’s shares after it announced a contract expansion. According to the release, Adventist Health has now signed a license for the Mach7 PACS solution and associated services. This is on top of its existing deal to provide its eUnity Diagnostic Viewer and Mach7 Universal Worklist to Adventist Health Tulare. The new contract is valued at over $7.9 million, including migration services and five years of support and maintenance.

Tyro Payments Ltd (ASX: TYR)

The Tyro share price has risen 2% to $2.59. This follows the release of its weekly transactions update. According to the release, despite the well-documented outages some of its customers have been facing, Tyro reported that its transaction value is up 6% month to date to $1.408 billion.

More reading

• Here’s why the Lake Resources (ASX:LKE) share price is rocketing 24% today
• Why Tesla (NASDAQ:TSLA) shares were last year’s worst short bet
• Why the Mach7 (ASX:M7T) share price is surging 8% higher today
• Why Frontier Digital Ventures, JB Hi-Fi, Regis, & Tyro are dropping lower
• Kogan (ASX:KGN) pays price for illegal emails

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 and recommends MACH7 FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Idp Education Pty Ltd and Tyro Payments. The Motley Fool Australia has recommended MACH7 FPO. 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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National Tyre & Wheel Ltd (ASX: NTD) shares soared nearly 20% to $1.13 at today’s open after a strong trading update from the Aussie company. At the time of writing, the National Tyre share price has retreated slightly and is trading at $1.09, up 14.7%. 

Why is the National Tyre share price surging?

The Aussie motor vehicle product distributor released a half-year trading update after the market close on Friday. Trading in the first half of 2021 (1H 2021) has “exceeded expectations” with all business units performing better than expected.

National Tyre said it had achieved record sales of agricultural tyres and 4-wheel drive wheels. That has contributed to a pick up in expected half-year earnings for the period ended 31 December 2020. Margins have also improved with less discounting and favourable foreign exchange rate movements.

The National Tyre share price has surged higher following the update and upgraded earnings before interest, tax, depreciation and amortisation (EBITDA) guidance. National Tyre is forecasting $15.0 million and $15.5 million of operating EBITDA for 1H 2021. That figure excludes $1.4 million of non-recurring and abnormal costs from the company’s Tyres4U acquisition. It also excludes AASB16 adjustments and the five months of contributions from Tyres4U.

Shares in the Aussie motor vehicle distributor had previously surged back in November 2020. That came after another earnings guidance upgrade in which operating EBITDA was forecast to total $11.5 million and $12.5 million. That means today’s upgraded figures represent a 24% to 30% increase on previous figures from the company.

On the balance sheet side, National Tyre said the group’s financial position remains strong. The group reported $22.4 million of cash on hand and $18.0 million of net debt. Despite the positive update, management noted that it’s “too difficult to say” if the first half results will be more indicative of second-half performance compared to prior guidance. 

National Tyre is expecting to announce interim results (including any dividends) on or about 24 February 2021.

Today’s jump means the National Tyre share price has now surged more than 150% in the twelve months since 28 January 2020. 

More reading

• Does Netflix have a competitive advantage?
• Here’s why the Lake Resources (ASX:LKE) share price rocketed 24% higher today
• Why are people watching the oil price right now?
• Why the Telix (ASX:TLX) share price is dropping lower today
• Why the Youfoodz (ASX:YFZ) share price is pushing higher

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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

Netflix Inc (NASDAQ: NFLX) shares touched an all-time high on Wednesday after the company delivered another impressive earnings report. It added 8.5 million subscribers in the period and said it would no longer need to take on debt.

Despite record subscriber growth in 2020, which was aided by the coronavirus pandemic, Netflix bears continue to roar about the onslaught of competition the streamer is facing.

Over the last year or so, Disney+, Apple TV+, Peacock, HBOMax, and Discovery+ have all joined the streaming fray, and ViacomCBS’s Paramount+ is set to launch in March. 

Streaming clearly reached a tipping point last year and the coronavirus pandemic has only accelerated the transition from linear TV to streaming TV that co-CEO Reed Hastings predicted several years ago. For Netflix, the question of whether the company has a sustainable competitive advantage with all the new competition entering the streaming arena bears asking, but after the latest report, there are a number of clear signs that Netflix does have an economic moat. Even better, it is widening.

Pricing power

Netflix said it would raise prices in the US in the fourth quarter, from $13 a month to $14 a month for its standard subscription. With that move, Netflix is now significantly more expensive than all of its competitors except HBOMax.

Service	Owner	Standard Price
Netflix	Netflix Inc	$14/month
HBOMax	AT&T Inc (NYSE: T)	$15/month
Disney+	Walt Disney Co (NYSE: DIS)	$8/month
Hulu	Disney	$5.99/month with ads, $11.99/month without
ESPN+	Disney	$5.99/month
Amazon Prime	Amazon.com Inc (NASDAQ: AMZN)	$119/year with Prime
Peacock	Comcast Corporation (NASDAQ: CMCSA)	Several tiers ranging from free to $10/month
Discovery+	Discovery Communications Inc (NASDAQ: DISCA)	$4.99/month with ads, $6.99/month without
Paramout+	Viacom CBS Corporation (NASDAQ: VIAC)	Pricing yet to be announced
Apple TV+	Apple Inc (NASDAQ: AAPL)	$4.99/month

Data source: Company websites. Table: Author’s own.

As you can see, most competing services are just about half the price of Netflix, and the only one in Netflix’s range is HBOMax, though ad-free Hulu comes close. That’s because, like Netflix, HBOMax has also earned pricing power as HBO has built a powerful brand in premium television over the last 40 years, and the network regularly brings home the most Emmy awards among networks. Netflix has managed to do something similar over its shorter history as its aggressive content spending strategy and efforts to offer something for everyone has paid off. 

Asked about pricing power in the recent earnings call, COO Greg Peters said, “We do think we’re an incredible entertainment value, and we want to remain incredible entertainment value.” He also explained how the company thinks about price hikes, saying: “OK, we’ve added more value in the service. Now it’s the right time to go back to those members and ask them to pay a little bit more so that we can reinvest it and keep adding it.”

Netflix prices its service to optimize its content spend, and that strategy and the quality of its content has allowed it to charge more than its peers, giving it a competitive advantage. It’s worth noting also that Netflix as the streaming pioneer has a much larger subscriber base than any of its rivals, giving it another advantage as it can allocate its content spend across more members.

Increasing profitability

Cash burn has long been a problem for Netflix, but the company just told investors that it was very close to being sustainably free cash flow positive, forecasting break-even free cash flow for 2021.

Though cash flow has long been a challenge for the company as the nature of its business demands high upfront costs, on a generally accepted accounting principles (GAAP) basis, Netflix’s profitability has significantly expanded in recent years. The company posted an operating margin of 18% in 2020 and expects to deliver a 20% operating margin this year. From there, it gets better as management projects an improvement of three percentage points each year going forward, giving the company a margin of 29% by 2024.

That along with its pricing power also indicates an economic moat in streaming. The debutantes are still trying to figure out a way to build out audience and generate a profit. Netflix, with the help of a long first-mover advantage, has been there for a while, and is pressing its foot on the gas pedal at will.

In addition to those strengths, the company’s local content focus and global strategy also separates it from the streaming wannabes as it already has a large library of original foreign language content that drives international growth.

Video entertainment is a huge industry and it won’t be monopolized. There’s room for more than one winner in streaming, especially as the cable ecosystem continues to weaken, but Netflix remains the leader, setting the pace in the industry. Its competitive advantages are clear.

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

More reading

• Why Tesla (NASDAQ:TSLA) shares were last year’s worst short bet
• Why Amazon.com stock just popped
• Why Netflix stock jumped to an all-time high today
• Here are the US shares ASX investors are buying
• Netflix is considering a stock-buyback program

Jeremy Bowman owns shares of Amazon, Netflix, and Walt Disney. 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, Apple, Netflix, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Comcast 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, Apple, Netflix, and Walt Disney. 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 Lake Resources N.L. (ASX: LKE) share price has been an outstanding performer on Monday morning.

At the time of writing, the clean lithium developer’s shares are up a massive 24% to a multi-year high of 26 cents.

Why is the Lake Resources share price rocketing higher?

Investors have been fighting to get hold of Lake Resources shares this morning after it raised A$20.6 million from global institutional investors via a placement.

According to the release, the company raised the funds at a price of 16.5 cents per new share, which represents a 21.5% discount to its last close price of 21 cents.

The institutional investors will also receive one attached option for every two shares they acquired in the placement. The options will have an exercise price of A$0.30 and a two-year expiry. Though, they remain subject to shareholder approval.

If the 62.5 million options are ultimately exercised, it will inject a further ~A$19 million of cash into the company. 

Why is Lake Resources raising funds?

Management advised that the company intends to use the net proceeds from the placement for a number of activities.

One of those is to operate the lithium chloride direct extraction pilot plant in California.

It will also use the funds to commission the demonstration plant on site at Kachi to produce larger samples for off-takers, complete the Definitive Feasibility Study (DFS) at Kachi, and complete the Environmental and Social Impact Study (ESIA) at the Kachi Project.

This means Lake’s flagship Kachi Lithium Brine Project is now fully funded through to the construction phase in 2022. This allows the company to speed up the development of sustainable, high purity lithium.

Lake Resources’ Chairman, Stu Crow, believes this placement is a transformational moment for the lithium developer. He commented:

“This is a transformational moment for Lake and its shareholders. We are excited to secure this support from North American, European and Australian institutional investors at this defining moment of the company’s development. Roth Capital has introduced a number of new investors to Lake who follow the rapidly growing clean tech battery materials sector and will broaden our exposure to international financial markets.”

This sentiment was echoed by Lake Resources’ Managing Director, Steve Promnitz. He said:

“Securing these funds delivers certainty to deliver the flagship Kachi project through the Definitive Feasibility Study amid the rapid growth of the clean energy sector. This transaction places the company in its strongest financial position ever. Lake will hold in excess of A$25 million following this placement and anticipates a further $6m to be added by July as existing options convert.”

More reading

• Why the Lake Resources (ASX:LKE) share price jumped 16% to a 52-week high

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 price of Brent crude oil finished off last Friday at $55.41, says Bloomberg, down 1.23% for the day. This means the oil price has dipped for two straight sessions and is an indication, according to the Wall Street Journal, that investors have ongoing concerns about the impact of COVID-19 on travel restrictions and general economic activity.

Let’s consider two of the bigger ASX listed oil businesses and how they’ve been navigating fluctuations of the oil price. 

Oil Search Ltd (ASX: OSH)

The Oil Search share price surged earlier this month. This followed release of the company’s FY20 interim result. As stated in the results, Oil Search produced 14.7 million barrels of oil equivalent (mmboe) for the half year ended 30 June 2020.

The Oil Search share price jumped more than 5% following this announcement to trade around $4.10 a share that day. Last week, Oil Search finished off at $4.35 

Back in November, the company announced that it has started the search for a new chief financial officer (CFO). The current CFO, Stephen Gardiner, will continue in the role until 31 May 2021.

For the previous 12-month period, the Oil search share price has dropped more than 42%.

Santos Ltd (ASX: STO)

Santos was downgraded by Citi a week ago from ‘buy’ to ‘neutral’ based on a bouncy share price and lack of catalysts. If the analysts feel like they’re not getting enough information from a company, this is what can happen. Potentially impacting the Santos share price.

Back in December, the Australian Financial Review mentioned that Santos was preparing to kick off $8.5 billion worth of oil and gas projects. This includes the $US2 billion Dorado oil project in Western Australia. 

Credit Suisse analyst Saul Kavonic said that the company’s approach to growth “seems sensible”. 

The Santos share prices has dropped more than 18% over the past 12-month period.

Will US politics and COVID-19 swing the oil price?

US president Joe Biden didn’t waste any time signing executive orders that bring very different positions to effect than what we saw from his predecessor Donald Trump. The Australian Financial Review reported that Mr Biden cancelled the Keystone XL pipeline and implemented a 60-day suspension of new oil and gas leasing permits.

As countries continue being ravaged by COVID-19, the impacts continue to hit the travel industry. According to this weekend’s Australian, the lack of international visitor’s is currently costing Australia’s tourism industry about $4 billion a month.

Regardless of these influences, one Credit Suisse analyst believes that oil can hit $US196 a barrel. Credit Suisse’s impression is that the current business environment could present a buying opportunity, and it predicts the price is on the way up.

More reading

• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• These ASX energy stocks just got zapped by a broker downgrade

Motley Fool contributor Gretchen Kennedy 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 Telix Pharmaceuticals Ltd (ASX: TLX) share price has come under pressure on Monday morning and is dropping lower.

At the time of writing, the clinical stage biopharmaceutical company’s shares are down 0.5% to $4.51.

Why is the Telix share price edging lower today?

Investors have been selling Telix shares despite the release of a positive update on its phase 3 Zircon clinical trial.

The Zircon (Zirconium Imaging in Renal Cancer Oncology) trial is an international multi-centre phase 3 study across 36 sites in Europe, Australia, Turkey, Canada, and the United States.

It is a prospective imaging trial in approximately 250 renal cancer patients undergoing kidney surgery, to determine the sensitivity and specificity of TLX250-CDx PET imaging to detect clear cell renal cell cancer (ccRCC). This is in comparison with histologic “ground truth” determined from surgical resection specimens.

Management has previously noted that renal cancer patients are often mis-staged and that TLX250-CDx has a niche US$250 million opportunity with no real competition.

What was today’s update?

According to today’s update, the first patients from the trial were dosed with TLX250-CDx in the United States on Friday (US time). This was undertaken at the University of California, Los Angeles (UCLA) and Seattle Cancer Care Alliance, University of Washington, Seattle (SCCA).

Management advised that the remaining seven U.S. sites and three sites in Canada are expected to commence patient recruitment progressively over the next month.

Telix’s Chief Medical Officer, Dr. Colin Hayward, commented: “We are pleased to have commenced the Phase III ZIRCON clinical trial in North America and wish to express our gratitude to Prof. Allan Pantuck and Dr. Delphine Chen, principal investigators at UCLA and SCCA, respectively, as well as their clinical research teams and patients, who have made this important milestone possible.”

Despite today’s softness, the Telix share price is still up more than 200% since this time last year.

More reading

• How the Telix (ASX:TLX) share price roared over 150% in a year

Motley Fool contributor James Mickleboro owns shares of TELIXPHARM DEF SET. 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 Youfoodz Holdings Ltd (ASX: YFZ) share price has been a positive performer on Monday morning.

In early trade, the readymade meals company’s shares are up 2.5% to $1.02.

Despite this, the Youfoodz share price is still down 32% from its December IPO price of $1.50.

Why is the Youfoodz share price pushing higher today?

Investors have been buying the company’s shares this morning following the release of its second quarter update.

According to the release, Youfoodz has reported strong growth and performance across its key operating metrics during the quarter.

For the three months ended 25 December, Youfoodz prepared over 4.8 million meals across both its B2C and B2B channels. This was up 28% on the prior corresponding period.

The key driver of its growth was the B2C channel, which reported a 45.8% increase in home deliveries to 339,893. This was underpinned by a 49.8% increase in active B2C customers to 125,112.

Supporting this growth was the B2B channel, which reported a 30.2% increase in physical stores to 3,406. Managements notes that revenues in this channel will soon be boosted by the recent addition of a large wholesale customer.

All in all, this led to the company reporting a 26.8% increase in gross revenue to $50.6 million for the quarter and a 16.5% lift in half year gross revenue to $100 million.

Despite the strong jump in revenue, Youfoodz wasn’t profitable during the quarter and recorded an operating cash outflow of $0.9 million. However, it has a very strong balance sheet, ending the quarter with cash of $39 million.

Outlook

Management notes that the company has delivered significant revenue growth in the first half compared to the prior corresponding period. Pleasingly, based on its performance so far in the second half, it believes this momentum is continuing and that it is well positioned to deliver on its IPO objectives.

In light of this, Youfoodz remains confident of achieving its FY 2021 prospectus forecasts. This will mean a 17.8% increase in revenue to $149.9 million and an improved net loss of $0.6 million.

Youfoodz CEO, Lance Giles, commented, “In this first quarterly update since our IPO, Youfoodz is very pleased to report continued strong growth for the business. These results, including record growth in certain key areas, is even more pleasing given the quarter included the Youfoodz IPO and ongoing uncertainty associated with the COVID-19 pandemic.”

“The remainder of FY2021 will be a busy time for Youfoodz as we continue to deliver on our IPO objectives for the business, including continued development of the subscription offering to further improve retention, the launch of new products as part of strategy to broaden menu choice, the launch of the airline frequent flyer partnership and achieving significant milestones towards delivery of Youfoodz’ new facility,” he added.

More reading

• Why the Telix (ASX:TLX) share price is dropping lower today
• Why the PointsBet (ASX:PBH) share price jumped to a record high today
• What has the Buddy (ASX:BUD) share price been up to lately?
• 2 rapidly growing small cap ASX shares
• Here are the 10 most shorted shares on the ASX

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 PointsBet Holdings Ltd (ASX: PBH) share price is on form and has jumped to a record high on Monday.

At the time of writing, the sports betting company’s shares are up 2.5% to $16.40.

This means the PointsBet share price is now up 39% since the start of 2021.

Why is the PointsBet share price pushing higher?

Investors have been buying PointsBet shares following the release of a positive announcement this morning.

According to the release, the company has appointed professional basketball champion and three-time MVP, Shaquille O’Neal, as its Australian brand ambassador.

Under the agreement, O’Neal will headline the company’s new 2021 Australian brand campaign, which will roll out across television, digital, mobile, and social media.

The company’s Co-Founder and Chief Marketing Officer, Andrew Fahey, believes Shaquille O’Neal will be a big boost to its marketing. He also notes that the 15-time NBA All-Star will be receiving shares as part of his compensation.

Mr Fahey commented: “Shaq is an iconic figure in the worlds of sports and entertainment and was our clear number one pick to represent the PointsBet brand in Australia. U.S. sports, particularly professional basketball, continue to be the fastest-growing betting sport in Australia, and we are very excited to align with such a transcendent athlete.”

“Further, we are delighted that Mr. O’Neal has agreed to take part of his consideration in the form of equity in PointsBet, which underscores the alignment and trust across our teams and our shared belief in the opportunities ahead for PointsBet,” he added.

Mr O’Neal spoke very positively about the partnership.

The NBA legend commented: “The rise of responsible sports betting is really exciting, and I am so excited to join forces with PointsBet, the best-in-class partner in Australia when it comes to online sportsbooks.”

More reading

• Why these ASX shares just stormed to 52-week highs or better
• Why Megaport, Netwealth, PointsBet, & Zip shares are racing higher
• Here’s why the PointsBet (ASX:PBH) share price will be on watch today
• Why the PointsBet (ASX:PBH) share price is hitting record highs
• The Pointsbet (ASX:PBH) share price is up 10% this year

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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet 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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Buddy Technologies Ltd (ASX: BUD) shares shed more than 9% of their value during Friday’s session. By the market’s close, the Buddy share price was trading at 5.8 cents after closing the previous day’s trade at 6.2 cents. 

Looking at the last twelve months, however, Buddy shares have delivered gains of over 90%. Based on the current share price, the company commands a market capitalisation of around $170 million and has around 2.9 billion shares outstanding.

Here we take a closer look at what’s been happening with the Buddy share price over the past couple of months but first, a snapshot of the company. 

What does Buddy do?

Buddy Technologies was established in 2006 and develops cloud-based technologies designed to help customers’ work and living spaces operate smarter. It does this by offering a range of internet-of-things (IOT) connected devices.

Buddy is a leading provider of smart, Wi-Fi enabled lighting solutions which the company offers under its LIFX brand. The products are distributed to over 100 countries worldwide and, according to Buddy, are already used in over one million homes.

The company also provides a range of monitoring and analytics platforms designed to help commercial and industrial customers improve the energy efficiency of their operations.

Buddy share price dips amongst legal woes

The Buddy share price took a 10% hit back in November after the company advised it was facing legal action from CST Capital. CST Capital had brought the proceedings against Buddy after an equity financing agreement between the two companies turned sour. Buddy maintains that the claim brought against it by CST Capital was misconceived and it does not believe any damages are owed.

In Buddy’s latest update regarding the dispute released on 15 December 2020, the company advised that the proceedings are ongoing. However, Buddy was also pleased to report that the default judgement has now been set aside pending future direction.

The next hearing will occur on 25 February 2021 in the District Court of Western Australia.

Manufacturing agreement to grow scale

In Buddy’s most recent announcement released 13 January, the company advised it had executed a new manufacturing agreement with Nanchang Innotech Homesmart Co. Ltd. (Innotech).

According to Buddy, Innotech is a “world class manufacturer of consumer electronics, specialising in smart home products and in particular, smart lighting”. It operates two manufacturing sites spanning over 45,000 square meters and has a production capacity of 4.2 million pieces per month. 

Buddy had advised the new partnership will increase both its manufacturing scale and product range while also reducing some of the overall costs involved with producing its LIFX products.

Orders have already been received that will be fulfilled via the new agreement with delivery expected to occur mid-2021.

It seems news of the agreement has been well received by the market. Since the announcement, the Buddy share price has marched up from 4.7 cents on 13 January to today’s current position of nearly 6 cents (at the time of writing).

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Motley Fool contributor Gretchen Kennedy 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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