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The Polynovo Ltd (ASX: PNV) share price is soaring higher today. This comes after the company announced an approval of a pivotal trial investigation device exemption (IDE).

During mid-morning trade, shares in the medical device company reached an intra-day high of $2.98. However, the Polynovo share price has since slightly retreated to $2.97, up 6.07% at the time of writing.

Let’s take a look at what Polynovo updated the market with.

FDA approval for clinical trial

Polynovo advised that the United States Food and Drug Administration (FDA) has approved the pivotal trial IDE for NovoSorb BTM. The authorisation allows Polynovo to begin patient recruitment, once various hospital Independent Review Boards grant approval.

Polynovo will seek to utilise 20 sites and enlist 150 patients for the clinical study of NovoSorb BTM. All locations are currently in advanced contractual negotiations, and the company will provide further details when available.

Recruitment is anticipated to start in early 2021 and conclude around the end of 2023. Polynovo advised the program was supported by the Biomedical Advanced Research and Development Authority (BARDA) funding of $150 million.

What did management say?

Polynovo managing director Paul Brennan said this was a “significant milestone” for PolyNovo:

We are excited to begin this trial as it will build significant clinical data and further demonstrate the ability of NovoSorb BTM to enhance clinical outcomes and improve patients’ lives.

Recent developments

Earlier this month, Polynovo also announced that it had entered the Greek market for NovoSorb BTM. The company revealed it had appointed Biogenesys as the distributor in the Mediterranean country.

With more than 20 years of experience, Biogenesys specialises in the area of bone and tissue allograft. It has an established network servicing hospitals and surgeons in Greece.

Speaking on the new entry to market, Mr Brennan added:

Greece is the first of the Mediterranean markets to join the PolyNovo family. With Melbourne having such a close connection to Greece we are pleased that our life-changing NovoSorb BTM is now available to the wider Greek family. Biogenesys brings significant local knowledge and connections to facilitate penetration of this market.

More reading

• Why Elders, Jumbo, Northern Star, & PolyNovo shares are charging higher
• 5 things to watch on the ASX 200 on Friday
• These were the best performing ASX 200 healthcare shares in October
• Grow your wealth with these quality ASX healthcare shares

Aaron Teboneras owns shares of POLYNOVO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of POLYNOVO FPO. 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 Why the Polynovo (ASX:PNV) share price up 6% higher today appeared first on Motley Fool Australia.

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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) looks set to end a very positive week on a disappointing note. The benchmark index is down 0.55% to 6,382.5 points.

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

Orocobre Limited (ASX: ORE)

The Orocobre share price is down 2% to $2.96. This follows the release of its annual general meeting update this morning. At the meeting the company spoke about its tough time in FY 2020 due to difficult lithium market conditions. It notes that COVID-19 made the situation worse with lithium supply remaining resilient while battery and electric vehicle (EV) manufacturing was reduced. Positively, management advised that it is now starting to see increased spot prices for lithium chemicals with increasing demand for EVs.

Ramsay Health Care Limited (ASX: RHC)

The Ramsay share price has fallen 2% to $66.75 following the release of its first quarter update. Although the private hospital operator revealed that its Australian operations delivered a 1.5% increase in revenue, its earnings have suffered. Management advised that its Australian earnings decline is due to restricted surgical activity in Victoria, increased costs, and reduced procurement benefits as a result of operating in a COVID safe environment.

Webjet Limited (ASX: WEB)

The Webjet share price has dropped 2.5% to $4.91. This appears to have been driven by profit taking after strong gains earlier this week amid the COVID-19 vaccine news. It is also worth noting that last week Morgan Stanley put a neutral rating and $3.40 price target on its shares. This is notably lower than where it shares trade at today.

Xero Limited (ASX: XRO)

The Xero share price is giving back some of yesterday’s gains and is down 2.5% to $120.43. This morning analysts at UBS retained their sell rating and lifted the price target on the company’s shares to $77.00. Although Xero delivered a stronger than expected half year result, it isn’t enough for the broker to change its view. It still feels its shares are expensive at the current level.

More reading

• Lithium miner Orocobre (ASX:ORE) share price down after AGM
• ASX 200 down 0.35%: Ramsay Q1 update, NEXTDC’s international expansion, gold miners surge
• Ramsay Health Care (ASX:RHC) share price on watch after Q1 update
• The ASX 200 fell 0.5% on Thursday
• Broker tipping a ~10% jump in the Medibank (ASX:MPL) share price by Tuesday

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 Xero. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Ramsay Health Care 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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Orocobre Limited (ASX: ORE) shares have slipped 1.99% after its annual general meeting (AGM) this morning. Management detailed the struggles the company has faced in 2020 due to costs arising from COVID-19, as well as the persistently low lithium market price. At the time of writing, the Orecobre share price is trading at $2.96.

Highlights from the AGM

Orecobre says that its financial performance reflected the difficult lithium market conditions with persistent oversupply and weak prices. In the second half of FY20, coronavirus impacts made the situation worse by reducing global production in battery and electric vehicles. In response to these external factors, the company reduced production rates, and brought forward planned maintenance activities.

The lithium supplier said productivity advances at its Olaroz mine in Argentina had been overshadowed by the pandemic. It noted that Argentina was one the hardest-hit countries with 2.5% of its population having been infected with COVID-19. New safety measures and protocols meant that new and rising expenses were incurred this year.  

On the bright side, Orecobre achieved growth with the acquisition of Advantage Lithium during the year. This effectively doubled the company’s resource base. The company also remained confident that continued growth in the electric car market and other forms of transport would underpin the company’s long-term growth.

How has Orecobre performed in 2020?

Earlier this year, the company posted a 50% decline in revenue to US$77.1 million, and a US$67.1 million loss after tax for FY2020. This loss includes impairments due to COVID-19 costs. Following the loss, the company raised a $126 million equity placement to fully fund its Olaroz mining project, so that it could navigate through the short-term challenges of COVID-19 and the pricing environments.

The company’s business has been severely hampered in recent years due to the oversupply of lithium in the market. Management has said this supply could be absorbed if the production of electric vehicles increased significantly over the next few years. 

Despite the company’s weak performance in 2020, the Orecobre share price has risen by 5% on a year-to-date basis. At the current share price of $2.96, it commands a market cap of $1 billion.

More reading

• Why Orocobre, Ramsay, Webjet, & Xero shares are dropping lower

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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ASX gold stocks have slumped with the precious metal since news of a promising COVID‐19 vaccine hit, but some experts believe it can still rebound to a record in 2021.

The price of the precious metal tumbled around 4% in the past week to US$1,877 an ounce. This triggered a 4% slide in the Newcrest Mining Limited (ASX: NCM) share price, 6% decline in the Evolution Mining Ltd (ASX: EVN) share price and 11.5% drop in the Northern Star Resources Ltd (ASX: NST) share price.

In contrast, the S&P/ASX 200 Index (Index:^AXJO) climbed around 3% over the same period.

ASX gold stocks losing their glitter

Gold’s lost some of its lustre on growing confidence that the world would soon emerge from the pandemic.

It’s also been on a backfoot since media organisations declared Joe Biden the new US president while the Senate remains in Republican hands.

This means Biden will find it hard to unleash the trillions in stimulus he’s proposing – a move which will weaken the US dollar.

These factors explain why ASX gold stocks have been underperforming.

Why gold could hit new record highs in 2021

Gold may be down, but it’s not out. That’s the view of some experts who’re predicting that the safe haven asset will hit new highs in the new year, reported CNN.

The fact is, gold may have retreated but it’s still well within striking distance of this year’s peak at just over US$2,000 an ounce.

Biden’s difficulty in getting his massive stimulus passed into law may very well force the US Federal Reserve to up their quantitative easing (QE) ante too.

If the Feds pump even more money into the financial system via QE, that will weaken the US dollar and shake confidence in the world’s reserve currency.

Gold is still relevant post COVID

All this is good news for ASX gold shares and the commodity, which investors regard as both an alternative to the US dollar and an inflation hedge.

“All of the reasons for gold strength over the past few months are still in place,” CNN quoted Bryan Slusarchuk, chief executive of Victoria-based Fosterville South Exploration.

“The horse has left the barn. People are looking at gold as an alternative currency.”

Gold a good alternative to bonds

There’s another reason why gold could find renewed favour. Some believe it makes a good substitute for government bonds.

This isn’t normally the case as gold doesn’t have a yield like bonds do. But the rates on Australian and US government bonds are so low, some investors might think having some gold is a good diversification strategy to their government bond portfolio.

What’s more, it’s clear that record low interest rates will be around for years, as will fiscal and monetary stimuli.

Gold price forecast for 2021

“The safe haven trade for gold is not completely gone. We are just a crossroads where volatility is high,” Everett Millman, precious metals specialist with Gainesville Coins told CNN.

“We expect moves on both sides and a lot of headline risk.”

However, Millman is tipping gold to hit a fresh record high of around US$2,100 next year, while Slusarchuk is a lot more bullish with his prediction of US$2,500.

If this comes to pass, ASX gold stocks could outperform in 2021.

More reading

• Why Elders, Jumbo, Northern Star, & PolyNovo shares are charging higher
• ASX 200 down 0.35%: Ramsay Q1 update, NEXTDC’s international expansion, gold miners surge
• 5 things to watch on the ASX 200 on Friday
• The ASX 200 fell 0.5% on Thursday
• After 8 months, ASX 200 shares are finally out of correction territory

Motley Fool contributor Brendon Lau owns shares of Evolution Mining Limited and Newcrest Mining Limited. Connect with me on Twitter @brenlau.

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 Telstra Corporation Ltd (ASX: TLS) share price has had a pretty pleasant few weeks of late. On 30 October, just under 2 weeks ago, Telstra shares were plumbing new depths, drifting as low as $2.66 a share. That price was a new 52-week low and was dangerously close to an all-time low for Telstra.  This means a lot when a company has been on the market for more than 2 decades.

But what a difference 2 weeks can make. Today, the Telstra share price is trading at $3.12 at the time of writing, a good 16% higher than 30 October’s levels. In fact, Telstra shares are up 11.2% over just the past week, and up 4.4% since market close on Wednesday.

No doubt Telstra shareholders will be pleased with this news, but a major broker reckons there’s plenty of petrol left in the tank on this one.

Why is Telstra’s share price rising?

Investors seem to be, in part,  reacting to the news that Telstra released yesterday before market open as part of the company’s ‘annual investor day’ presentation. This news outlined how Telstra plans to split itself into 3 distinct legal entities: InfraCo Fixed, InfraCo Towers and ServeCo. The 2 ‘InfraCo’ divisions will house Telstra’s infrastructure assets like cabling, towers, ducts and data centres. The ‘ServeCo’ entity will house the ‘customer-facing’ and ‘active’ parts of the business, such as spectrum rights.

Its partly this restructuring program that has broker Goldman Sachs bullish on Telstra. Goldman reiterated its ‘buy’ rating on Telstra this morning with a $3.75 target price, citing the potential value creation from this restructuring. Goldman estimates that Telstra has an implied valuation of $3.55-$5.15 per share if the 3 entities are separated. Further, Goldman reckons Telstra will be able to achieve a 7.6% return on investor capital (ROIC) metric by FY2023.

Yesterday, Telstra’s CEO Andy Penn stated that achieving a ROIC of “close to 8%” was the company’s goal by FY2023, which he implied would help sustain Telstra’s 16 cents per share (cps) annual dividend. On the dividend, Goldman is bullish, stating that “the 16cps dividend is sustainable, and could be supplemented by meaningful TowerCo proceeds”.

A Telstra share price of $3.75 (as Goldman Sachs targets), implies a further upside of more than 20% on the current share price (not including any dividend returns). And if Telstra ever reaches the upper price target that Goldman states of $5.15 a share, it would imply upside of another 65%. Telstra hasn’t seen that kind of price in front of its name since way back in 2016.

More reading

• These blue chip ASX dividend shares offer 5%+ yields
• The ASX 200 fell 0.5% on Thursday
• Why InvoCare, Nine, Telstra, & Wesfarmers shares are storming higher
• ASX 200 down 0.1%: Xero hits record high, Telstra and Wesfarmers updates impress
• Telstra (ASX:TLS) share price on watch after major update

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra 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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Since peaking at a 52-week intraday high of $5.24 back in late July, shares in software market darling Whispir Ltd (ASX:WSP) have tumbled 35% lower. At the time of writing, the Whisper share price is trading up 1.47% at $3.45.

Let’s take a look at the factors driving the decline and try to assess whether the company is still a good investment.

What does Whispir do?

Whispir operates a software as a service (SaaS) business model. It develops a centralised platform where its corporate customers can create high quality, customisable templates for email, web and social media communications, as well as manage communications workflows and drive insightful reporting.

Its share price really took off during the early stage of the COVID-19 crisis. Whispir achieved record growth in customer numbers throughout the second half of FY20 and managed to materially outperform most of its revenue and earnings targets.

Use of its platform accelerated during lockdowns, as companies sought greater control over business-critical communications workflows. Whispir even developed a number of standardised templates to assist its clients meet their communications obligations with staff and customers.

Why has the share price declined?

Whispir reported strong results across the board in FY20. Revenues were up almost 26% year-on-year to $39.1 million, beating its prospectus forecast of $37.8 million. Prudent cost management also saw operating expenses come in lower than forecast at $31.7 million. And the company ended the year with a little over $15 million in cash sitting on its balance sheet.

But, despite these numbers, the Whispir share price has trended lower since the results announcement.

Even solid first quarter FY21 results couldn’t do much to stop the decline. Whispir announced that during the three months’ ended September 30, 2020, it had added a record 35 new customers and brought in $10.5 million in cash receipts. But the company’s share price still dropped almost 10% on the day of the release.

What do our Fools say?

Whispir still remains a favourite of our analysts here at Motley who have added it to their list of Extreme Opportunities not once, but twice – most recently back in July. They believe that, while COVID-19 did accelerate the company’s growth, there are still more opportunities on the horizon for this young company.

Our Foolish analysts were particularly impressed by Whispir’s high revenue retention rates, as well as the company’s ability to respond in times of crisis. By quickly developing COVID-19 communications templates, Whispir increased the customer use cases on its platform. As an example of the company’s potential, the Victoria State government’s Department of Health and Human Services has been using the platform to manage its COVID-19 contact tracing communications.

Despite the recent pullback in its share price, Whispir’s versatile, scalable business model means our analysts recommend it as a buy.

More reading

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• Is Temple & Webster Group Ltd (ASX:TPW) still a buy?

Rhys Brock owns shares of Whispir Ltd. 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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In early afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to finish the week on a disappointing note. The benchmark index is currently down 0.5% to 6,386.8 points.

Four shares that have not let that hold them back are listed below. Here’s why they are charging higher:

Elders Ltd (ASX: ELD)

The Elders share price has climbed 2% to $11.61. This appears to have been driven by optimism that the agribusiness company is going to deliver a strong full year result next week. One broker that is tipping Elders to achieve this is Goldman Sachs. This morning its analysts suggested Elders could deliver earnings per share 8% ahead of the Bloomberg consensus estimate. It expects this to be driven partly by the execution of the backward integration strategy and the integration of the AIRR acquisition.

Jumbo Interactive Ltd (ASX: JIN)

The Jumbo share price has jumped 7.5% to $13.76. Investors have been buying the online lottery ticket seller’s shares after it confirmed that it has signed an agreement with the Western Australian state government-owned and operated, Lotterywest. This deal will see the company provide its online software platform and services to Lotterywest for the next 10 years.

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price is up a sizeable 7% to $15.07. Investors have been buying Northern Star and other gold miners following a solid rebound in the gold price overnight. This has led to the S&P/ASX All Ordinaries Gold index surging an impressive 4.3% higher in afternoon trade.

PolyNovo Ltd (ASX: PNV)

The PolyNovo share price is storming 5% higher to $2.95. This morning the medical device company revealed that the US FDA has approved its pivotal trial investigation device exemption. This approval means PolyNovo can begin patient recruitment once the various hospital independent review boards grant approval. It expects recruitment to begin in 2021 and conclude around the end of 2023. The clinical program is supported by BARDA funding of US$15 million.

More reading

• Jumbo (ASX:JIN) share price on watch following signed Lotterywest agreement
• 5 things to watch on the ASX 200 on Friday
• ASX 200 up 1.3%: CBA Q1 update, tech shares rebound, JB Hi-Fi sinks
• 5 things to watch on the ASX 200 on Wednesday
• 2 ASX mid cap shares that are growing strongly

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 POLYNOVO FPO. 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 Jumbo Interactive Limited. The Motley Fool Australia has recommended Elders 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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At lunch on Friday the S&P/ASX 200 Index (ASX: XJO) is on course to end the week with a decline. The benchmark index is currently down 0.35% to 6,395 points.

Here’s what is happening on the market today:

Ramsay Q1 update.

The Ramsay Health Care Limited (ASX: RHC) share price has dropped lower following the release of its first quarter update. That update revealed that Ramsay Australia reported a 1.5% increase in total revenue during the first quarter. This reflects a 1.7% increase in surgical admissions and lower non-surgical activity. However, its earnings have fallen due to restricted surgical activity in Victoria, increased costs, and reduced procurement benefits as a result of operating in a COVID safe environment.

NEXTDC annual general meeting.

The NEXTDC Ltd (ASX: NXT) share price is trading lower following the release of its annual general meeting update. At the meeting, the data centre operator reaffirmed its guidance for FY 2021. NEXTDC expects data centre services revenue of $242 million to $250 million and underlying EBITDA of $125 million to $130 million. This will be up 21% to 25% and 20% to 24% year on year, respectively. Management also revealed that it is looking to expand into Singapore and Japan.

Gold miners surge higher.

Gold miners including Evolution Mining Ltd (ASX: EVN) and Saracen Mineral Holdings Limited (ASX: SAR) are surging higher on Friday after a solid rebound in the gold price overnight. The buying has been so strong today that the S&P/ASX All Ordinaries Gold index is up 3.8% at lunch. The price of the precious metal increased amid concerns over the impact that rising COVID-19 cases could have on the global economy.

Best and worst ASX 200 performers.

The GrainCorp Ltd (ASX: GNC) share price is the best performer on the ASX 200 today with a gain of almost 8%. This follows a positive response to yesterday’s full year results by brokers this morning. Morgans has upgraded its shares to an add rating with a $4.79 price target. The worst performer on the ASX 200 has been the Vicinity Centres (ASX: VCX) share price with a 3.5% decline. This comes the day after the shopping centre operator’s annual general meeting.

More reading

• NEXTDC (ASX:NXT) share price edges higher on AGM update
• Ramsay Health Care (ASX:RHC) share price on watch after Q1 update
• 5 things to watch on the ASX 200 on Friday
• The ASX 200 fell 0.5% on Thursday
• After 8 months, ASX 200 shares are finally out of correction territory

Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia has recommended Ramsay Health Care 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 DroneShield Ltd (ASX: DRO) share price is climbing higher after announcing a new research & development (R&D) contract today.

In mid-morning trade, shares in the defence contractor shot up 10.5% to a high of 21 cents, before retreating slightly to 20 cents at the time of writing. In comparison, the All Ordinaries Index (ASX: XAO) is flat at 6,617 points.

Let’s take a look at what exactly is fuelling the DroneShield share price rise.

New contract win

DroneShield advised that it received an R&D contract related to its artificial intelligence/machine learning algorithms.

The company did not reveal which country placed the order, but said that it was from a defence department of a ‘Five Eyes’ country. The term ‘Five Eyes’ relates to a signals alliance between the United States, Canada, Australia, the United Kingdom, and New Zealand.

The deal is expected to be worth approximately $600,000 with a performance period that runs through to mid 2021. In the contract, defence applications include artificial intelligence capabilities providing a military advantage to adversaries.

DroneShield said the order did not include any of its counter-drone technology.

What did the CEO say?

Commenting on the contract, DroneShield CEO Oleg Vornik said:

This ground-breaking contract expands DroneShield beyond being a pioneer and global leader in the C-UAS domain, and into the artificial intelligence/machine learning space within the defence sector.

The contract leverages off the cutting-edge AI capabilities that DroneShield has developed within its C-UAS products, applying it to wider defence applications. Further, this contract creates a trusted dialogue with this specific high-profile defence customer, allowing us to more deeply understand their requirements and provide them with solutions to address their needs.

What does this mean for the DroneShield share price?

Most recently, the DroneShield share price has been gaining traction following a raft of positive market updates. It was only last month that the company received a government order for its DroneGun Tactical hand-held counter-drone products. And weeks before the contract win, DroneShield bagged an order for its DroneSentry system to a Southeast Asian nation.

Since the start of September, the DroneShield share price has shot up from 13.5 cents to today’s price of 21 cents. This represents a gain of 55%.

More reading

• The Cleanspace (ASX:CSX) share price is soaring 12% higher today. Here’s why.
• Sky Network (ASX:SKT) share price shoots 6% higher on upgraded guidance
• Why the Immutep (ASX:IMM) share price flew up 5% this morning
• ASX 200 Weekly Wrap: US election special
• Why the Dubber (ASX:DUB) share price is soaring 8% 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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Resimac Group Ltd (ASX: RMC) shares rocketed up 17.5% to $1.92 a share this morning, after it provided the market with a trading update. The Resimac share price has retreated slightly to $1.91 at the time of writing, up 16.82%.

What was announced?

Resimac has provided the market with guidance on its FY21 first-half profit of between $48 million and $53 million. The company says the numbers will be achieved based on lower funding costs, cost controls, and growth in assets under management. 

Resimac says home loan settlements from July to October were $1.4 billion, with 65% being ‘prime’ loans,  and 35% ‘specialist’ loans. Its home loan assets under management were $12.7 billion, up from $12.4 billion in June. Around 4.4% of customers were in COVID-19 payment deferrals at October 31.  Remicas says it is unlikely to increase the 30 June 2020 COVID-19 collective provision overlay of $16.4m.

Brief take on Resimac

Resimac is a leading non-bank residential mortgage lender. It was recognised as Australian Non-Bank of the Year by the Australian Mortgage Awards in 2020. Resimac’s business includes origination, servicing, and funding residential mortgages in Australia and New Zealand. The company’s loan book is more than $12 billion, and assets under management at almost $15 billion.

Recently Resimac signed a partnership agreement with technology provider Infosys Finacle to deliver more personalised digital banking experiences for its customers. The move facilitates Resimac’s “end-to-end digital modernisation”, taking it a step closer to its goal of becoming Australia’s first ‘neo-non-bank’. 

How did Resimac share price fare in 2020?

The Resimac share price has gone up by 30% on a year-to-date basis including today’s rise of 17.5%. At current price of $1.92, the company commands a market cap of $667 million.

More reading

• Looking to invest in non-bank lending ASX shares?
• 1 ASX share to buy for the WA housing boom

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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