Tag: Motley Fool

On the ASX this week, much is being made of S&P Global Inc’s quarterly index rebalancing that takes place today. Indexes work by constantly updating their inclusions and weightings to reflect the status of the broader market of the time. Take the S&P/ASX 200 Index (ASX: XJO) for instance.

This index’s purpose is to measure the performance of the 200 largest companies in the ASX. These 200 companies obviously change over time, so the index needs to be on top of that for it to work effectively. Hence why it is adjusted and rebalanced every quarter. Growing companies might join the index, replacing those that might be out of favour or stagnating.

As an example, this week sees Afterpay Ltd (ASX: APT) join both the ASX 20 and the ASX 50 indexes in place of Insurance Australia Group Ltd (ASX: IAG) for the former and Oil Search Ltd (ASX: OSH) for the latter.

The ASX 200 will itself be welcoming Kogan.com Ltd (ASX: KGN) and Reece Ltd (ASX: REH) in place of Avita Therapeutics Inc (ASX: AVH) and Cooper Energy Ltd (ASX: COE).

But as our ASX indexes are being adjusted, so are those around the world. Most dramatically this week is the US S&P 500 Index (SP: .INX).

The S&P 500 is perhaps the most popular and widely tracked index in the world. It houses 500 of the USA’s largest companies, including Apple Inc (NASDAQ: AAPL), Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) and Berkshire Hathaway Inc (NYSE: BRK.A) (NYSE: BRK.B). Now the S&P 500 is a little more strict than other indexes. Not only does a company’s market capitalisation have to be among the top 500 in America, but it also needs to satisfy other requirements, such as consistent profitability and ample liquidity.

Tesla to make blockbuster index debut

Those conditions have prevented one of the US’s now-largest companies – Elon Musk’s electric car and battery manufacturer Telsa Inc (NASDAQ: TSLA) – from being a part of the S&P 500 Index. Until now that is. Back in September, we learnt that Tesla had finally received the green light for S&P 500 inclusion. And tonight (our time), Tesla will officially join the S&P 500 for the first time.

But this is a rather special inclusion. Normally, a company tends to join the S&P 500 at the ‘bottom of the table’ and grow into the index over time if it is successful. But Tesla’s meteoric rise over the past year or so has meant that it is now the largest company to ever join the index.

Recent reporting from CNBC tells us that Tesla, with a current market cap of US$659 billion, will carry an approximate weighting of 1.69% when it joins tonight. That would make it the fifth-largest stock in the index (or sixth if you include Alphabet’s two share classes as one). This inclusion means that the scores of fund managers and exchange-traded funds (ETFs) that track the S&P 500 all have to buy shares of Tesla to meet the new weightings. That’s likely a factor in the recent Tesla share price performance: Tesla shares are up more than 33% over the past month alone.

More reading

• Under attack! Why the WiseTech Global (ASX:WTC) share price is down 9%
• The most crazy ASX chart of 2020
• ASX 200 down 0.4%: NIB jumps, a2 Milk rebounds, WiseTech sinks lower
• Why the Cimic Group (ASX:CIM) share price is on watch today
• Forecast double-digit surge in Aussie dollar could put brakes on ASX rally in 2021

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares) and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Apple, Berkshire Hathaway (B shares), and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Avita Medical Limited and Kogan.com ltd and recommends the following options: short January 2021 $200 puts on Berkshire Hathaway (B shares) and long January 2021 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Alphabet (A shares), Apple, Avita Medical Limited, Berkshire Hathaway (B shares), and Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post What will happen when Tesla (NASDAQ:TSLA) joins the S&P 500 today? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3reniEf

Skin Elements Ltd (ASX: SKN) shares are surging higher today following the company’s announcement it has entered into a distribution agreement that would see its products sold and marketed online. At the time of writing, the Skin Elements share price is trading 8.57% higher at 7.6 cents.

In earlier trade, Skin Elements shares climbed by as much as 10% before retreating to their current level.

What’s moving the Skin Elements share price?

The Skin Elements share price is on the move after the company reported it has entered into an agreement with West Coast Naturals Pty Ltd. The agreement relates to the online sales of Skin Elements’ SE Formula range of organic health care and beauty products.

According to the release, West Coast Naturals is an Australasian business specialising in the sale of natural and organic health brands through its e-commerce platform, https://ift.tt/3p9nenb. 

The platform specialises in a range of curated all-Australian natural health and beauty products sold directly to consumers globally, with a particular focus on South East Asia.

West Coast Naturals will offer Skin Elements an end-to-end e-commerce solution and access to West Coast Naturals’ digital platform currently in development.

The aim is to build meaningful scale for Skin Elements’ SE Formula brand portfolio across Australia and Asia. The collaboration will initially target three priority markets of Australia, Singapore and Hong Kong.

The agreement is for an initial term of three years, with no minimum sales commitment in the first twelve months. Skin Elements and West Coast Naturals will negotiate and agree minimum sales commitments for the second and third 12-month period.

New e-commerce platform

Skin Elements notes that West Coast Naturals has only recently been established, and has not yet achieved sales through its e-commerce platform which is currently in development.

The company says investors should be aware there can be no guarantee Skin Elements will achieve increased sales through this agreement.

Skin Elements executive chairman Mr Peter Malone remains optimistic, saying, “The distribution agreement with West Coast Naturals provides Skin Elements with further opportunity to expand our presence in Australia and Asia, which show strong demand for organic and toxin free health and beauty products.”

About the Skin Elements share price

The skincare company has been making progress recently. Two weeks ago, it acquired 40% of Sambora for $850,000. 

Sambora owns BeachToes, which is an Australian-made range of cruelty-free, natural nail polishes formulated to maintain quality and colour.

The Skin Elements share price has shot up by over 650% in 2020, having started the year at 1 cent. It is however, still a long way off from its 52-week high of 12.5 cents.

The company commands a market capitalisation of $23 million.

More reading

• Why the Allegra (ASX:AMT) share price is rocketing 20% higher today
• Star Entertainment (ASX:SGR) share price drops on new restrictions
• Under attack! Why the WiseTech Global (ASX:WTC) share price is down 9%
• Here’s why the Kogan.com (ASX:KGN) share price jumped over 7% higher today
• The most crazy ASX chart of 2020

Motley Fool contributor Eddy Sunarto 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 Skin Elements (ASX:SKN) share price climbs 9% today. Here’s why appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2WEDZKJ

The Allegra Orthopaedics Ltd (ASX: AMT) share price is surging today as investors are fighting to snap up its shares. This comes after the company announced an update on its flagship innovation project, the Sr–HT–Gahnite Spinal Cage Device (Spinal Cage).

During morning trade, the Allegra share price reached as high as 46.5 cents. However, after some profit taking, the company’s shares have settled back to 37.5 cents at the time of writing, up 20.9%.

What did Allegra announce today?

Allegra advised that it conducted additional testing on its Spinal Cage, following earlier test results disclosed on 4 December. The additional round involved dynamic torsion and dynamic compression shear tests designed to examine the Spinal Cage’s durability. 

Torsional tests involve applying a twisting stress to an implant, which measures its ability to withstand twisting motions. Shear tests involve applying a sliding stress to the implant, which measures the ability of the implant’s internal layers to resist fracture in any one direction.

The outcome of the assessment saw Allegra’s key product pass its tests without any signs of stress fractures or failure. In light of the combination of positive tests achieved, Allegra stated it on track to commence a pilot animal study. The trial will use the new spinal cage design on animals from next month in Australia.

Once completed, the study will follow a much larger animal trial which will seek to meet United States Food and Drug Administration requirements. This is needed to launch the Spinal Cage into the United States market.

What did the CEO say?

Allegra CEO Ms Jenny Swain commented on the achievement:

We are extremely encouraged by the results achieved from the complement of compressive testing. These results validated the enhancements made to the spinal fusion cage design have been effective. We are looking forward to the pilot animal study commencing late January, followed by the progression to a large animal study.

How has the Allegra share price performed?

The Allegra share price has been on tear over the last 12 months, rising 114%. Amid the solid gains, investors have witnessed sharp and sudden spikes, with the Allegra share price reaching a low of 8.7 cents in June, before shooting up to an all-time high of 84 cents the following month. This surge was based on the news that Allegra would acquire Sr-HT-Gahnite patents from the University of Sydney.

More reading

• Why the Allegra (ASX:AMT) share price rocketed up 137% 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.

The post Why the Allegra (ASX:AMT) share price is rocketing 20% higher today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2WzJ0o8

Star Entertainment Group Ltd (ASX: SGR) shares are dropping lower today after the casino announced it will reimpose capacity limits at its Sydney property from today. At the time of writing, the Star Entertainment share price has fallen 3.7% to $3.68.

What did Star Entertainment announce?

In a short statement to the ASX, the casino said that from today, it will revert to operating with the one person per 4 square-metres rule (previously one person per 2 square-metres). Star Entertainment said the 300 patron capacity per area will also be reinstated.

The casino operator reported there will now be 7 zones across the casino area, including 3 zones on the main gaming floor.

The company says it made the decision following the New South Wales Government’s announcement on 20 December in relation to COVID-19 related restrictions. Those restrictions applied to the whole Greater Sydney area in light of the growing COVID-19 cluster centred on the northern beaches.

Encroaching competition

The Star Casino in Sydney is the company’s core asset which, as the city’s only casino, generates approximately 70% of its earnings.

However, The Star’s exclusivity in Sydney has come to an end with a second Sydney casino licence issued to Crown Resorts Ltd (ASX: CWN).

Crown Sydney is due to open in February 2021, pending the outcome of an inquiry into its dealings. The upcoming presence of Crown Resorts in Sydney is a major blow to the Star Casino, ending its long-standing monopoly in Sydney.

In response to Crown Sydney’s opening, the Star Casino has spent around $500 million improving and expanding its Sydney facilities, including the premium ‘Sovereign Room’.

The Star Casino’s licence in Sydney expires in 2093, and the firm has retained casino electronic gaming machine (EGM) exclusivity in the NSW casino market. Crown Sydney will therefore operate with a restricted licence and without EGMs.

Star Entertainment has also made moves to protect its exclusive position in Queensland, with its recent $2.6 billion Queen’s Wharf joint venture development in Brisbane.

About the Star Entertainment share price

Star Entertainment shares have been out of favour with investors in 2020, as lockdown restrictions hampered the gaming industry.

As a result, the Star Entertainment share price has dropped by over 21% on a year-to-date basis, with a 52-week high of $4.81.

Similarly, the Crown Resorts share price has also dropped by nearly 20% this year.

Star Entertainment commands a market capitalisation of $3.5 billion.

More reading

• Why the Crown (ASX:CWN) share price on watch this morning
• 5 things to watch on the ASX 200 on Thursday
• Crown Resorts (ASX:CWN) woes continue with latest lawsuit
• Crown Resorts (ASX:CWN) share price falls as Austrac calls junkets high risk
• Here’s why the Crown (ASX:CWN) share price is pushing higher today

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

The post Star Entertainment (ASX:SGR) share price drops on new restrictions appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/38mqk0n

Among all the shares on the S&P/ASX 200 Index (ASX: XJO), WiseTech Global Ltd (ASX: WTC) is leading the losses today. At the time of writing, the WiseTech share price is down 8.38% to $30.19 a share.

On Friday last week, WiseTech shares closed at $32.40, but opened at $30.98 this morning and have been trending lower all day. Even after this drop, however, WiseTech shares are still up a hefty 57% since 12 August. So why this dramatic fall for WiseTech today?

Why WiseTech shares are plummeting today?

WiseTech is known for its volatility, but also for its status as one of the ASX’s WAAAX stocks, the name given to the group of some of the ASX’s highest-flying tech shares.

Today’s moves seem to be the result of a new short-seller attack on the company. The Sydney Morning Herald (SMH) revealed today a short-seller firm named Viceroy Research has published an analysis alleging that “many” of 37 listed acquisitions made by WiseTech in the past 4 years “are from distressed sales or bankrupt companies with revenues falling post-acquisition”.

The analysis apparently shows that “revenues in a majority of these businesses have flatlined or are in decline, margins are substantially below WiseTech’s consolidated group margins and many of the businesses do exactly the same thing in different countries”.

The SMH reports that Viceroy Research also claims WiseTech “created ‘fake value’ through dozens of non-material acquisitions, effectively buying revenue at a lower multiple than what it trades at in a strategy known as a ‘roll-up’”.

If these allegations were true, it would obviously indicate WiseTech is not as valuable as its recent market capitalisation and share price would suggest.

The report quotes Viceory analyst Gabriel Bernard as stating, “We cannot see how WiseTech has an out-of-the-box solution while continuously requiring acquisitions of small-time customs clearance players in obscure geographies”.

Right of reply

However, WiseTech has come out swinging against the charges. WiseTech’s chief financial officer Andrew Cartledge told the SMH in response that he had “serious concerns” over the claims, which he says “lacked understanding of the firm’s acquisition strategy and the risk, cost and time involved in developing technology internally versus acquiring it”.

He went on to state:

WiseTech has been clear that its acquisition strategy has not been about revenue roll-up… It is about bringing in talented and knowledgeable people and critical IP, converging this IP with WiseTech’s own technology to optimise our development pipeline, accessing new markets and customer bases, accelerating our geographic expansion and solidifying CargoWise as the leading integrated global logistics software solution of choice for the major players in the market.

This is not WiseTech’s first rodeo when it comes to short-seller attacks. In October last year, the company faced similar charges from another short-selling firm called J Capital. That report also alleged WiseTech was overstating profits and organic growth rates.

More reading

• The most crazy ASX chart of 2020
• Why Elixinol Global, Flight Centre, Mesoblast, & WiseTech shares are dropping lower
• ASX 200 down 0.4%: NIB jumps, a2 Milk rebounds, WiseTech sinks lower
• Why the Cimic Group (ASX:CIM) share price is on watch today
• Forecast double-digit surge in Aussie dollar could put brakes on ASX rally in 2021

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

The post Under attack! Why the WiseTech Global (ASX:WTC) share price is down 9% appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3arEEHK

The market may be dropping lower on Monday, but that hasn’t stopped the Kogan.com Ltd (ASX: KGN) share price from charging higher.

At one stage today, the ecommerce company’s shares were up as much as 7.5% to $19.40.

The Kogan share price has since given back some of these gains but is still up over 4% to $18.81 at the time of writing.

Why is the Kogan share price charging higher?

There appears to have been a couple of catalysts for Kogan’s positive share price performance on Monday.

The first is concerns over the outbreak of COVID-19 in New South Wales, which has led to tighter restrictions and concerns that further lockdowns could occur.

This could be a big boost to online retailers such as Kogan, especially at such an important time of the year for the retail industry.

For the same reason, the Temple & Webster Group Ltd (ASX: TPW) share price is pushing higher this afternoon.

What else is driving the Kogan share price higher?

Another catalyst could be the company’s addition to the benchmark S&P/ASX 200 Index (ASX: XJO) this morning following the December rebalance. Kogan joined the illustrious index along with plumbing parts company Reece Ltd (ASX: REH) at the commencement of trade today.

They have replaced Avita Therapeutics Inc (ASX: AVH), Cooper Energy Ltd (ASX: COE), and Western Areas Ltd (ASX: WSA).

You may have noticed that the index is welcoming two shares and dumping three. That’s because the ASX 200 index was home to 201 shares in the last quarter following the Deterra Royalties Ltd (ASX: DRR) demerger from Iluka Resources Limited (ASX: ILU).

With Kogan now part of the ASX 200, index-tracking funds will have to buy its shares in order to reflect the change. In addition to this, some fund managers have mandates that only allow them to buy shares on certain indices.

This could mean that some fund managers are adding the company to their portfolios today and are bidding its shares higher.

More reading

• Why City Chic, Kogan, Next Science, & NIB shares are charging higher
• 3 fantastic ASX growth shares to buy in 2021
• These are the 7 best ASX retail shares in 2020
• 3 reasons why Kogan (ASX:KGN) shares could be a buy
• 3 exciting ASX tech shares to buy in 2021

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 Avita Medical Limited, Kogan.com ltd, and Temple & Webster Group Ltd. The Motley Fool Australia has recommended Avita Medical Limited, Kogan.com ltd, and 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.

The post Here’s why the Kogan.com (ASX:KGN) share price jumped over 7% higher today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2WzjZta

If there is one chart that shows just how crazy it was to be an investor in 2020 it is the one below; the S&P/ASX All Technology Index (INDEXASX: XTX):

To truly appreciate how magnificent this chart is let’s keep in mind that the All Technology Index was only launched on 24 February this year.

The data can be back-dated further, which you can have a look at on the S&P Global website here, but it only officially started to track ASX technology-oriented companies in earnest this year.

Source: Google search. Google and the Google logo are registered trademarks of Google LLC, used with permission.

The index is designed to be a comprehensive measure of technology-oriented companies listed on the ASX, but its top five constituents have dominated with absolute blinding returns in 2020:

• Xero Limited (ASX: XRO) +89%
• Afterpay Ltd (ASX: APT) +313%
• SEEK Limited (ASX: SEK) +21%
• REA Group Limited (ASX: REA) +37%

ASX tech shares had the ‘Fred Smith’ of comebacks in 2020

There are two things in particular that make this chart a wonder. The first is the degree to which markets have moved in such a short period.

After plunging by more than one third in February and March, the All Technology Index has made a phenomenal comeback. The pivot from a decline of -42% to a gain of +46% (at 17 December, 2020) represents a trough-to-peak bounce of almost +145%. It’s the Fred Smith of comebacks and something unthinkable just nine months ago.

The second remarkable point is the chasm that has formed between the tech index, which has exploded back, and the relatively ambling recovery of the broader S&P/ASX 200 Index (ASX: XJO).

It’s hard to be derogatory about a 48% recovery for the ASX200 index from its low point on 23 March this year. But the tech index fell deeper, and has recovered far stronger, than the broader index as investors swooned over tech companies.

One standout ASX share still floating high 

A true standout of the All Technology Index this year is Redbubble Ltd (ASX: RBL). Redbubble is a marketplace where people can sell prints of their art and graphic designs, but it’s worthy of a special mention because of it’s incredible 456% return in 2020.

In fact, the Redbubble share price fell as low as 40 cents per share in the COVID-19-led market meltdown, before roaring back with the growth in online shopping.

The company reported a juicy 36% increase in total revenue in the 2020 financial year and at least one analyst remains bullish on the company’s prospects going forward.

What can we learn from this 2020 tech explosion?

There is a lot of takeaway from this. First, investing is hard. It is unpredictable and surprising.

That is why an important part of investing is putting money to work for long periods. Long periods of time means we remain invested for the good times and have the resilience to ride out the bad times.

Secondly, we should recognise that the global response to COVID-19 has seen the acceleration of a trend that has been growing for the last decade; software is still eating the world. Lower interest rates and a wave of stimulus has no-doubt added fuel to that fire.

As we head into 2021, a lot of investors will now be watching to see whether this fire is brought quietly under control as vaccines get rolled out. As the chart shows however, we should be prepared for anything.

More reading

• ASX 200 down 0.4%: NIB jumps, a2 Milk rebounds, WiseTech sinks lower
• Here’s how rich Afterpay (ASX:APT) shares have made shareholders
• Why the Cimic Group (ASX:CIM) share price is on watch today
• Forecast double-digit surge in Aussie dollar could put brakes on ASX rally in 2021
• ASX 200 Weekly Wrap: ASX hits new post-March high

Regan Pearson owns shares of Xero. You can follow him on Twitter @Regan_Invests.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended REA Group Limited and SEEK 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 most crazy ASX chart of 2020 appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3mA1grN

Vmoto Ltd (ASX: VMT) shares were soaring in morning trade today. This comes after the company announced positive profit guidance for the 2020 financial year. In early trade, the Vmoto share price rocketed by 11.8% to 42.5 cents before partially retracing. At the time of writing, Vmoto shares are up 5.3% to 40 cents.

In comparison, the All Ordinaries Index (ASX: XAO) is down 0.3% to 6,900 points.

Quick take on Vmoto

Vmoto is a leading global scooter manufacturer and distribution group specialising in electric powered, two-wheel vehicles. According to the company, its products have chic European design and German engineering.

Vmoto is also involved in the manufacture and distribution of petrol scooters and four-wheel all-terrain vehicles.

During the year, Vmoto undertook an extensive strategic review of operations with the intention of simplifying the company’s structure. This allowed management to focus on international sales and marketing of its electric two-wheel vehicle products.

What’s driving the Vmoto share price?

The Vmoto share price is today surging higher after the company advised that, despite challenging market conditions, it has sped up execution of its international strategy. In light of this, Vmoto is projecting to record a net profit after tax between $3.2 million to $3.4 million. The forecast FY20 result will significantly eclipse FY19’s net profit after tax of $1.3 million.

Vmoto highlighted a number of milestone accomplishments throughout the year that will contribute to the underlying financial performance. These included:

• Receiving committed orders of 4,300 units from strategic ride-share customer, Go Sharing.
• Securing additional international distributors to a total of 50 international B2C distributors across 62 countries.
• Achieving strong growth across B2B operations, through the use of increased popularity in delivery and ride-sharing services.

Managing director commentary

Mr Charles Chen, Vmoto’s managing director, commented on the company’s financial performance, saying:

I am delighted to announce we will deliver a significant increase in NPAT for this financial year when compared to 2019. The COVID-19 outbreak has provided great uncertainty and disruption for businesses globally but we are agile and responded quickly by making small changes to our international strategy, which has proven to be incredibly fruitful.

We look forward to continuing this growth trajectory in 2021.

Vmoto share price summary

The Vmoto share price has fallen more than 40% since reaching its all-time high of 67 cents in September. Although when looking at the beginning of the year before COVID-19 struck, the company’s share price is up more than 66%.

Vmoto has a market capitalisation of $115.8 million and a price-to-earnings (P/E) ratio of 30.

More reading

• Why the Think Childcare (ASX:TNK) share price is up 2% today
• Here’s why the Electro Optic (ASX:EOS) share price is down 7% today
• Why Elixinol Global, Flight Centre, Mesoblast, & WiseTech shares are dropping lower
• iCandy (ASX:ICI) share price falls 4% despite positive update
• Why the Elixinol Global (ASX:EXL) share price is getting smoked 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.

The post Why the Vmoto (ASX:VMT) share price just soared 12% higher appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3pbSd25

The Think Childcare Ltd (ASX: TNK) share price is climbing today after a positive earnings update for the 2020 calendar year (CY20).

At the time of writing, the Think Childcare share price is trading 2.2% higher at $1.62.

Why is the Think Childcare share price higher today?

In this morning’s ASX release, Think Childcare upgraded its guidance for its earnings before interest, tax, depreciation and amortisation (EBITDA).

The company had forecast underlying CY20 EBITDA of $22–23 million in its guidance provided on 2 November. This came as COVID restrictions eased and Victoria emerged from strict lockdown measures.

However, due to better than expected trading in November – driven by a strong recovery in headline revenue and continued roster management and cost controls – EBITDA for the year through 30 November came in ahead of expectations.

Think Childcare now expects that with the overall improvement in business conditions in December, underlying EBITDA for the full 2020 calendar year will come in at $24–25 million.

The company advised its cash position and facility headroom are strong, with a closing cash position as at 30 November of $22.1 million.

Think Care also provided an update on the 23 November buyout proposal from Busy Bees Early Learning Australia for an all cash consideration of $1.75 per share. (At time of writing the stock is trading for $1.62 per share.)

The company noted that Alceon Private Equity, which had proposed $1.35 per share on 16 November for its own buyout plan, hasn’t submitted a counter proposal and doesn’t intend to submit a binding proposal. Think Care is still in discussion with Busy Bees, but notes there is no certainty that the proposal will eventuate into a binding transaction.

Think Childcare share price and company snapshot

Think Childcare Group owns, operates, and manages childcare centres in Australia.

When much of Australia went into lockdown and some childcare centres were forced to close earlier this year due to the coronavirus pandemic, Think Childcare’s share price plummeted 54% from 27 February through to 25 March.

Shares reached a 12-month high of $1.66 on 27 November before retracing slightly to the current $1.62 per share.

Year-to-date the Think Childcare share price is up 14%. By comparison the broader All Ordinaries Index (ASX: XAO) is up 2% in 2020.

More reading

• The Pensana (ASX:PM8) share price shot up 14% higher today. Here’s why
• ASX 200 Weekly Wrap: ASX hits new post-March high
• Why the CleanSpace (ASX:CSX) share price is climbing today
• Recent development sends the Antisense (ASX:ANP) share price soaring 45%
• With the Archer Materials (ASX:AXE) share price up 222% this year, what’s next?

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.

The post Why the Think Childcare (ASX:TNK) share price is up 2% today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2WvGor5

Electro Optic Systems Holding Ltd (ASX: EOS) shares are falling lower today after the company announced short-term impacts will cause it to miss its previous FY20 earnings guidance. At the time of writing, the Electro Optic share price is down 6.79% to $5.90.

What’s pushing the Electro Optic share price lower?

In October, the defence, space, and communications company had announced that underlying earnings before tax (EBIT) for the full FY20 would come in the range of $20 to $30 million.

Today, the Electro Optic share price is plummeting lower after the company reported, on 18 December, it was advised around 12 days of December shipments would not be received by its foreign customer before 31 December 2020. This is the cut off date to enable Electro Optic to recognise the revenue in FY20.

The company says the specific causes of the disruption are international air freight bottlenecks, and a fall in import license activity in the offices of the customer’s foreign government.

Electro Optic says that in a normal year, this event would be unremarkable, but this year the December shipments exceeded any other month as delivery momentum increases.

The heavy skew of revenue and profits to quarter four, and specifically December, has made the outcome for the full year unusually dependent on activity in the final weeks of the year. 

The affected revenue, for which all costs have already been incurred in 2020, may exceed $20 million. This revenue will now be shifted into quarter one of 2021 along with associated profit.

However, the deferral of revenue recognition into FY21 will not affect any prior cash flow assumptions by the company.

The company also said that the recent strengthening of the Australian dollar to 76 cents, compared to 72 cents at the time of the last guidance update, meant there would be an impact to EBIT. This is because its manufacturing costs are largely Australian dollar denominated, versus revenue which is largely in US dollars. 

Recent activities

Last week, the company announced it was awarded a $34.4 million contract by the Commonwealth of Australia. The release said the government will use its C4 EDGE solution to provide combat radios, satellite terminals, cryptography, networking middleware, command applications, batteries, and power management into a coherent system.

In November, Electro Optic also advised it would build and operate a medium earth orbit (MEO) satellite constellation, which it expected to launch and operate in 2024 – producing a positive operating cash flow. The company advised this satellite communications system will be optimised for defence and government customers.

About the Electro Optic share price

Electro Optic is a leading Australian technology company operating in the space and defence markets. Formed in 1983, it became a publicly-traded company on the Australian Stock Exchange in 2002.

The Electro Optic share price has lost around 20% in 2020, after dropping by as much as 60% in March. At the current level, the Electro Optic share price has a mountain to climb to reach its 52-week high of $10.80.

The company commands a market capitalisation of $947 million.

More reading

• Electro Optic Systems (ASX:EOS) share price climbs on government contract win
• Why the Electro Optic Systems (ASX:EOS) share price is shooting higher today

Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Electro Optic Systems Holdings Limited. The Motley Fool Australia has recommended Electro Optic Systems Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Here’s why the Electro Optic (ASX:EOS) share price is down 7% today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3aHjNAv