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The Whispir Ltd (ASX: WSP) share price has been a positive performer on Monday.

In afternoon trade the leading workflow communications platform provider’s shares are up 5% to $3.37.

Why is the Whispir share price charging higher?

Investors have been buying the company’s shares following the release of its annual general meeting presentation.

At the event, the company’s chairman, Brendan Fleiter, spoke positively about its performance in FY 2020 and its outlook.

In respect to the latter, Mr Fleiter believes Whispir is well-positioned to benefit from favourable industry tailwinds.

He explained: “Our Company is also well-placed to capitalise on long-term macro communications trends with the pandemic fast-tracking the digitisation of operations and stakeholder communications.”

“This has increased organisational adoption of cloud-based systems and accelerated digital transformation projects to automate processes and increase productivity. As Whispir’s cloud-based platform enables organisations to quickly implement tools that facilitate these trends, digital transformation offers short and long-term growth opportunities for the business,” he added.

What is Whispir targeting in FY 2021?

Also at the event, management reiterated its guidance for FY 2021.

It continues to target annualised recurring revenue (ARR) of $51.1 million to $55.3 million. This represents growth of 21% to 30% on FY 2020’s ARR.

In respect to earnings, Whispir is expecting to post another operating loss in FY 2021. It has provided guidance for an EBITDA loss of between -$6.23 million to ~$4.76 million. This represents a 14% to 35% improvement on its FY 2020 result.

Whispir also reiterated its research and development investment guidance of $9.2 million to $9.8 million. This will be a year on year increase of 8% to 15%. Some of these funds are being used for its five-year platform development strategy, which is focused on significantly increasing its AI and machine learning capability.

Mr Fleiter concluded: “We enter FY21 with momentum in the business and multiple growth drivers to achieve our FY21 targets and deliver sustained value creation.”

More reading

• These ASX shares have more than doubled in value in 2020
• The Whispir Ltd (ASX:WSP) share price is now 35% off its 52-week high. Time to buy?
• 2 ASX tech shares growing strongly in 2020
• 3 exciting small cap ASX tech shares to watch
• 3 growing small cap ASX shares

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 Whispir Ltd. The Motley Fool Australia has recommended Whispir Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Orica Ltd (ASX: ORI) share price is outperforming on Monday after a leading broker upgraded the stock.

The Orica share price jumped 1.4% to $16.50 when the S&P/ASX 200 Index (Index:^AXJO) gained 0.5%.

Optimism about a COVID‐19 vaccine is fuelling the market rally and the good times are likely to roll into early 2021.

Why Orica scored a broker upgrade

There’s also good upside for the ORI share price, according to Morgans which lifted its recommendation on the stock to “add” from “hold”.

The decision came after Orica posted its FY20 results with second half earnings looking particularly weak.

The explosives maker’s operating net profit crashed 20% to $299.3 million, which was 9% below Morgan’s forecasts and 7% under consensus.

Headwinds not enough to stop the Orica share price

This is largely due to one-off factors while COVID disruption had the greatest impact on Orica’s second half volumes in developing markets, like Latin America and Asia.

Operating cash flow was also weaker than expected as that more than halved to just $277.4 million from $746.4 million in the previous corresponding period.

But these negatives aren’t enough to worry Morgans.

Valuation upgrade

“While a weak 1H21 result was flagged given persisting COVID-19 headwinds in emerging economies, strong growth is expected from the 2H21 onwards as COVID-19 is cycled and underpinned by ORI’s five strategic growth priorities,” said the broker.

“This has seen us upgrade our FY22/23 forecasts.”

Orica is expecting an improved FY21 earnings before interest and tax (EBIT) figure as its weak first half is more than offset by the recovery in the latter half.

Orica’s earnings growth drivers

The key growth levers include a $40 million to $50 million boost from Orica’s portfolio and IT system optimisation programs.

It will also get a further $20 million EBIT boost from 12 months of production from Burrup and an extra $20 million from its Exsa acquisition.

“While not quantified, further earnings growth is expected from Minova and GroundProbe in FY21,” said Morgans.

“Overall, group AN [ammonia nitrate] volumes (ex. Exsa) are expected to rise by c1%.

“Driven by an easing of COVID-19 related volume and cost headwinds and ongoing incremental contribution from its strategic priorities, management expects a further improvement in FY22 EBIT to cA$720-730m with clear drivers in place to deliver growth out to FY24.”

Morgans upgraded its 12-month price target on the Orica share price to $18.95 from $15.55 a share.

More reading

• Is the US heading for a ‘double-dip’ recession?
• G8 Education (ASX:GEM) share price rebounds after lawsuit news
• ASX 200 up 0.7%; Zip trading update, Ampol buyback, IAG sinks
• ASX 200 events this week that could move the market
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Clime Capital Ltd (ASX: CAM) is a listed investment company (LIC) that runs a portfolio that largely targets both large ASX shares and small ASX shares.

Within its top holdings are some growth-focused names such as A2 Milk Company Ltd (ASX: A2M), Altium Limited (ASX: ALU), Bravura Solutions Ltd (ASX: BVS), City Chic Collective Ltd (ASX: CCX), CSL Limited (ASX: CSL) and Macquarie Telecom Group Ltd. (ASX: MAQ) and RPMGlobal Holdings Ltd (ASX: RUL).

Clime is bullish about the following ASX shares:

Macquarie Group Ltd (ASX: MQG)

Macquarie is a global investment bank, it earns around a third of its net income in Australia.

Clime said that the highly stimulatory Australian federal budget and declining COVID-19 case numbers improved the outlook for credit impairment charges and the domestic economy in general.

The fund manager still likes the ASX share with the relatively high returns on capital from the business which generates and the multiple avenues for long term growth, including multiple avenues for long term growth, including recurring asset management income.

Sonic Healthcare Ltd (ASX: SHL)

Sonic is a global pathology business which is involved in diagnosing COVID-19 cases. The ASX share achieved positive growth in the base laboratory business compared to last year, with the exception of the USA and UK. COVID-19 testing growth is on top of that. Total revenue was up 29% in the first quarter of FY21. Cost savings helped Sonic achieve earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 71% for the quarter.

Clime pointed out that COVID-19 testing is likely to remain particularly strong because of the northern winter in the US and Europe.

Audinate Group Ltd (ASX: AD8)

Clime said it benefited from Audinate’s FY21 first quarter trading update. Monthly revenue trended upward over the quarter, reaching pre-COVID levels in September. The fund manager said this was better than expected.

Recent sales resilience reflect the company’s diverse customer base, with stronger demand from corporate and higher education customers offsetting weakness from live music. Industry unit volumes are expected to rise significantly in the coming years, with the company likely to capture a lot of this demand, with an adoption rate that’s eight times higher than the nearest competitor.

Jumbo Interactive Ltd (ASX: JIN)

This ASX share is a digital lottery business.

The company said that first quarter jackpot activity was soft compared to the year before. However, Clime thinks that Jumbo is well positioned should jackpot activity improve over the remainder of FY21.

The fund manager said that the company has over $60 million of net cash and trades at 24 times Clime’s FY21 earnings forecast. Clime thinks this is a reasonable for a business with ongoing growth supported by the continued shift in Australian lottery ticket sales to online from around 28% at the moment.

Jumbo also has the potential international growth option from its early-stage lotteries management software as a service business, ‘Powered by Jumbo’.

Mach7 Technologies Ltd (ASX: M7T)

Clime said that Mach7’s cash flow is significantly affected by the size and timing of contract payments which include one-off license and professional service fees and recurring maintenance fees. The latest quarter update didn’t impress the market. 

The fund manager remains positive about Mach7 Technologies’ prospects because of its market-leading product and adoption from leading hospital systems in the US and Hong Kong.

Although the deal flow has slowed due to COVID-19, the ASX has approximately $40 million in active tenders including two significant hospital systems in the US. The company is guiding that it will be cash flow positive in FY21.

More reading

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• 2 very reliable ASX dividend shares to buy
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• What would it take for the ASX 200 to hit 7,000 again?
• Can Magellan (ASX:MFG) prosper in a market dominated by Macquarie (ASX:MQG)?

Tristan Harrison 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 Altium and MACH7 FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO, CSL Ltd., and RPMGlobal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended A2 Milk, Bravura Solutions Ltd, Jumbo Interactive Limited, and Macquarie Group Limited. The Motley Fool Australia has recommended AUDINATEGL FPO, MACH7 FPO, RPMGlobal Holdings, and Sonic Healthcare Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The HomeCo Daily Needs REIT (ASX: HDN) today debuted on the ASX at a 1.5% premium to its initial public offering (IPO) price. The real estate investment trust (REIT) raised $300 million at $1.33 a share. Soon after the float, the HomeCo share price moved to $1.35 but has retreated back to $1.33 at the time of writing.

What assets are included in the HomeCo REIT fund?

HomeCo has been billed as the largest IPO of the year for the ASX. As part of its effort to bring the fund to IPO, HomeCo had been actively acquiring retail shopping mall properties in New South Wales, Victoria, and Queensland.

Since July, it has purchased three shopping centres from Woolworths Group Ltd (ASX: WOW), along with assets in Western Sydney worth $220 million. Overall, it has seeded the fund with 17 malls worth $844 million.

It’s worth noting that the fund has specifically chosen to anchor these properties with major supermarket tenants – hence the name ‘Daily Needs’. It specifically named supermarkets Woolworths and Coles Group Ltd (ASX: COL) as these anchor tenants. More than a quarter of the trust’s rental income will come from Woolworths and Coles leases, with Super Retail Group Ltd (ASX: SUL), Spotlight, IGA and Amart among its other tenants.

HomeCo Daily Needs REIT’s prospectus also said that the portfolio has a 98% occupancy rate, and 8.4 years average lease expiry. It was pitched to investors with 5.5% yield based on FY21 projections, with a total return story of 10% that includes capital gains. 

What did management say?

Home Consortium Ltd (ASX: HMC) will retain a 27% stake in the Daily Needs REIT. Home Consortium Chief Executive, David Di Pilla, is well pleased with today’s float saying:

This vehicle has been very carefully constructed. A lot of thought went into it. It’s been diversified by retail sub-sectors, tenants and geography so it should perform under all market conditions. Our rent collections were in the mid 90 per cents during the pandemic. The November rent collection is at 94% and we expect that to get up to 98-99% by the end of the month.

More reading

• Why BlueScope, Home Consortium, IAG, & Kogan shares are dropping lower
• Could this HomeCo (ASX:HMC) REIT IPO be the biggest in 2020?

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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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.

If you could get a coronavirus inoculation this afternoon, you probably wouldn’t care if the clinician told you that the shot might feel a bit chilly. But when it comes to hiring employees or judging which vaccine is going to sell better, it pays to know the difference between candidates that don’t need special help to keep their cool and those that need to be beyond ice-cold to have a chance at success. 

Will Moderna Inc‘s (NASDAQ: MRNA) newly proven vaccine outperform its competitor made by Pfizer Inc (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX), which is likely to obtain regulatory approval and subsequently hit the market at roughly the same time? Early signs say yes, but not for the first reason that may come to mind.

You can’t just throw your vaccines into any old fridge

Moderna’s mRNA-1273 isn’t any more effective than Pfizer’s candidate when it comes to preventing infection. Both are protective at around 95% effectiveness. The pair also seem to have similarly mild side effect profiles, so with all else being equal, there’s no clear favorite. There is one small difference that probably will make mRNA-1273 capture a larger market share and deliver better returns for investors, though. Its advantage is that it doesn’t need to be stored at super-cold temperatures.

Many vaccines need to be stored in a cool environment to avoid spoilage. For mRNA-1273, a standard refrigerator is cold enough to preserve it for up to 30 days. If it needs to be kept for longer, it’ll require storage in a standard freezer instead. Then, clinicians will thaw doses and move them to the refrigerator shortly before people get vaccinated. It’s clear that most healthcare facilities in the United States have the right equipment to meet these requirements without buying or doing anything new.

In contrast, the Pfizer inoculation needs to be shipped and stored at a brisk -94 degrees Fahrenheit to remain stable for longer than five days. It isn’t possible to reach temperatures that low in a normal freezer, which means that special ultra-cold freezers are necessary. While many hospitals have access to these colder freezers, they cost upwards of $10,000 each, which poses a major challenge to any smaller sites hoping to distribute the vaccine.

In my firsthand experience, these ultra-cold freezers are also significantly more prone to disastrous malfunctions than the type you have at home. Plus, you won’t find that kind of equipment in many of the most likely distribution points, like doctors’ offices or clinics — they’re typically very large, and they consume a ton of energy to stay chilly. Finally, transporting doses from site to site while keeping them at the right temperature might also pose a problem, even for larger healthcare systems.

Can Pfizer and BioNTech bring their vaccine in from the cold?

Pfizer has a plan to keep its doses chilled to the appropriate temperature during transportation and storage. After designing a special cold shipping container, it has also developed a complex new distribution system for just-in-time delivery to clinical sites. If it works, it will reduce most of the barriers to procuring the inoculation. Nonetheless, the system is untested, and it wasn’t developed in conjunction with the company’s traditional logistics partner companies like McKesson Corporation (NYSE: MCK). It’s also unclear how expensive it will be for Pfizer to operate. Management has hinted that future formulations of its candidate might even be tolerant to the balmy temperatures of a standard freezer.

For the moment, Moderna’s vaccine has none of these problems to overcome. So, when faced with procuring Moderna’s easily stored vaccine or Pfizer’s more cumbersome one, it’s hard to see why a customer in a healthcare system would pick the latter. Pfizer and BioNTech will probably still sell millions and millions of doses, but unless they can definitively solve their issues with frostiness, Moderna will have a clear path toward a much larger market share.

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

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• Macquarie (ASX:MQG) picks best ASX stocks to buy for 2021 post-COVID recovery

Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends McKesson. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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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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Investors all around the world would probably be a fairly happy bunch right now. Our own S&P/ASX 200 Index (ASX: XJO) is currently hitting the highest level since late February this year. That was when the ASX 200 was in the midst of the coronavirus market crash. It’s also up more than 10% since the start of this month.

Over in the United States, it’s a similar story. The flagship Dow Jones Industrial Average (INDEXDJX: .DJI) index is sitting pretty close to an all-time high after gaining more than 57% since 23 March. And again, more than 10% since the start of November. That’s some confidence-boosting statistics, to be sure.

We can point to the announcement of several promising COVID-19 vaccine candidates as the likely cause for this surge in optimism on the markets.

Double-dip recessions and stimulus

Yet, reporting from the Australian Financial Review (AFR) today isn’t painting such a rosy picture for the future. According to the AFR, advisors to the new US President-elect, Joe Biden, are “planning for the increasing likelihood that the United States economy is headed for a ‘double-dip’ recession early next year”.

The president-elect’s advisors are reportedly concerned over a renewed wave of COVID-19 infections across the US. As well as a looming threat of a cliff edge for jobless benefits that are scheduled to expire in December. That comes “amid a wave of evictions and foreclosures” across the US as well.

The President-elect’s team is purportedly in negotiations with US congressional leaders like Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell for another recession-busting stimulus package.

But these negotiations are reportedly stalling for now, with major differences between the 2 parties on how much money should be spent and where. The Democrats (Mr Biden’s party) are apparently pushing for a large US$2 trillion package. The Republican party is gunning for a much smaller package in the US$500 billion range.

Mr Biden’s team has also reportedly received advice from economists indicating that the US economy will begin to shrink early next year unless the stimulus impasse is broken. This advice flags the possibility of job losses amounting to more than 3 million in the first half of 2021 and a return of an unemployment rate above 10%.

What does this mean for ASX shares?

If there is indeed a ‘double-dip’ recession over in the US next year, it would almost certainly be bad news for the ASX 200 and ASX shares, not to mention the global economy. There is that saying “when America sneezes, the rest of the world catches a cold” for a reason.

More reading

• G8 Education (ASX:GEM) share price rebounds after lawsuit news
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• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Cann Group Ltd (ASX: CAN) share price has started the week in sensational form.

In afternoon trade the cannabis company’s shares are up a sizeable 13% to 35 cents.

Why is the Cann Group share price rocketing higher?

Investors have been buying the company’s shares on Monday after it provided an update on its debt facility.

According to the release, the company has received credit approval from National Australia Bank (ASX: NAB) for a $50 million secured debt facility. Management expects to complete the execution of documentation with the banking giant within the next month.

Why does Cann need a $50 million debt facility?

The release explains that the loan is a construction facility which will be used by Cann to complete the first stage of its state-of-the-art medicinal cannabis production site near Mildura.

Management advised that it is being provided through NAB’s agribusiness division, which it feels represents a strong endorsement of its strategic growth plans.

It notes that the approval clears a path to recommence construction at the Mildura site, with work expected to be underway in February 2021.

The first stage of the Mildura site has an estimated 9 month build time, with first product expected to be processed and released by March 2022. This will come at a total cost of $112 million, with $53 million already spent on site works and the facility superstructure. The balance will be funded by the new bank loan facility and current cash reserves.

Once complete, the first stage of the project will provide annual capacity to produce 12,500 kgs of dry flower equivalent. 

Cann Group’s CEO, Peter Crock, commented: “The commissioning of production at Mildura is an important step in Cann’s plan to produce GMP certified medicinal cannabis at scale. The facility will utilise world-leading technology, providing Cann with a globally competitive unit price based on substantial economies of scale.”

“Securing the support of a tier one bank is a strong validation of our strategic growth plans. Given the building demand for our products, we have the confidence to immediately ramp up production as soon as the facility is ready,” he concluded.

More reading

• Why Ampol, Cann, Fortescue, & Mesoblast shares are surging higher
• Why ASX shares are in awesome shape vs overseas markets
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage
• What would it take for the ASX 200 to hit 7,000 again?
• Why ASX bank share dividends might be surging soon

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Worley Ltd (ASX: WOR) share price received a boost in today’s trading after analysts at Goldman Sachs rated the company a Buy, and raised the 12-month price target by 27% to $15.70. Following the announcement, the Worley share price lifted 2.43% to $12.42.

Why did Goldman rise its target share price

Goldman believes that Worley’s exposure and transition to renewable energy projects will drive earnings growth and reduce its cyclicality. The broker says that Worley is well-positioned to leverage its expertise as the industry transitions from fossil fuel to renewable energy. 

As a result of this industry pivot, Goldman believes that Worley’s sales will grow from an estimated $345 million in the 2020 financial year to $2.5 billion in the 2025 financial year. Worley’s revenue share from renewable energy’s projects will also grow from 5% of total earnings before interest and tax (EBIT) currently, to 22% in 2025, the broker says. 

This forecasted revenue, combined with its exposure to the chemicals industry, will increase Worley’s non-cyclical end-markets from 48% currently to 65% in 2025. 

What else did Goldman say?

Goldman says that its analysis was made on the back of an International Renewables Energy Agency (IRENA) forecast showing that $49 trillion to $78 trillion of investment will be made by the industry globally towards the renewable sector by 2030 across various emissions scenarios. It says that while Worley’s direct exposure only represents a small percentage of these trillions of dollars, it still translates to around $489 billion of the pie over the 10 year period. 

More reading

• Macquarie (ASX:MQG) picks best ASX stocks to buy for 2021 post-COVID recovery

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Recce Pharmaceuticals Ltd (ASX: RCE) share price is shooting up today, after the company announced that it has been granted a patent for its Recce 327 and 529 formulations from the Japanese Patent Office (JPO).

At the time of writing, the Recce share price is up 5% to $1.14. In comparison, the All Ordinaries Index (ASX: XAO) is 0.6% higher to 6,780 points.

What does Recce do?

Recce develops synthetic antibodies that aim to address the global health challenge of antibiotic resistance superbugs. The medical company’s flagship drug, Recce 327, is being developed to treat blood infections and sepsis.

The group operates solely in research and development, and is located in both Australia and the United States.

What’s pushing the Recce share price higher?

The Recce share price is pushing higher today after the JPO granted ‘Patent Family 3’ to Recce’s anti-infectives. Titled ‘Anti-virus Agent and Method for Treatment of Viral Infection’, the patent allows marketing and manufacturing monopolies until February 2037.

According to the release, the patents relate to antibiotic drug Recce 327, and the new anti-viral formulation, Recce 529.

Japan is the second largest pharmaceutical market in the world, only behind the United States. Recce’s Patent Family 3 applications in other major pharmaceutical markets around the world are in their own advanced stages of independent patent reviews.

What did management say?

Recce CEO Mr James Graham commented:

Recce’s intellectual property portfolio continues to grow in-line with our business strategy and the unprecedented global infectious disease crisis before us. At now 31 granted patents across 3 wholly-owned patent families, our market-monopolies reinforce our unique opportunity among a significant range of both bacterial and viral pathogens.

About the Recce share price

The Recce share price has been pushing higher in the last 12 months, with COVID-19 in the backdrop. The company fell to a 52-week low of 21 cents and skyrocketed to an all-time high of $1.87 in September.

Although sitting 39% below its record share price, Recce is continuing to expand its products into new markets and agreements.

The company has a market capitalisation of $197.2 million.

More reading

• ASX 200 Weekly Wrap: ASX continues to climb, despite outage
• The Auroch (ASX:AOU) share price rocketed 11% higher today. Here’s why.
• Look out for the Auscann (ASX:AC8) and Cannpal (ASX:CP1) share prices post trading halt
• Why the Global Health (ASX:GLH) share price is surging up today
• Why the DroneShield (ASX:DRO) share price shot up 10% 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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The G8 Education Ltd (ASX: GEM) is having a rough time today. G8 shares are trading at $1.26 at the time of writing, a 1.21% rise from where they closed at on Friday. That compares to the broader S&P/ASX 200 Index (ASX: XJO), which is up 0.5% today so far.

It’s been a volatile day for G8 shares. They opened at $1.25 this morning, but quickly plummeted by almost 12% soon after, falling as low as $1.10 just before 11am. But as quickly as they fell, G8 shares rebounded spectacularly, rising slightly higher than open to the $1.26 level we see presently. So what’s going on here?

Why the G8 share price is bouncing around today

We can probably put these dramatic moves down to some news that came out about this education company this morning. According to reporting in the Sydney Morning Herald (SMH) today, law firm Slater & Gordon Limited (ASX: SGH) has filed a shareholder class action in the Supreme Court of Victoria. This class action reportedly revolves around G8’s continuous disclosure obligations back in 2017 and early 2018. According to the report, during that time G8 released a profit downgrade which saw the company’s share price crater by 23% in December 2017.

The SMH reports that Slater & Gordon is alleging that the company had forecast earnings for the 2017 year in the “mid to high $170s million” in May 2017. But in early December it was downgraded to “around $160 million”, and then in February turned out to be $156 million. The class action seems to be alleging that G8 did not adequately disclose this situation to the markets as it should have done.

Slater & Gordon practice group leader Andrew Paull is quoted as saying:

We are alleging G8 contravened its continuous disclosure obligations by failing to disclose to the market information relevant to its Full Year 2017 financial performance… We also allege G8 engaged in misleading or deceptive conduct.

G8 hits back

However, G8 has completely denounced these reports. It released a statement this morning which stated the following:

G8 Education… refers to today’s media reports that Slater and Gordon have filed group proceedings in the Supreme Court of Victoria against G8 alleging breaches of G8’s continuous disclosure obligations between 23 May 2017 and 23 February 2018. G8 has not received any correspondence nor service of the proceedings from Slater and Gordon. Any such proceedings, if served, will be vigorously defended.

Judging by the share price performance of G8 shares this morning, it seems as though investors got spooked by the class action news, only to have their concerns assuaged by the G8 release – hence the ‘sharp V’ that we see in the G8 share price today.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post G8 Education (ASX:GEM) share price rebounds after lawsuit news appeared first on Motley Fool Australia.

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