Tag: Motley Fool

The COVID-19 pandemic and the government measures put in place to halt its spread have wrought havoc on economies across the world. Travel restrictions have wiped billions off the tourism sector, consumer confidence has nosedived, and Australia is entering its first recession in some 30 years. None of which is much cause for optimism.

However, pandemics pass and economies eventually recover. And futurists might already be looking ahead to see which industries will lead the world out of this pandemic. Picking individual companies is difficult and risky – particularly in the current climate. However, exchange-traded funds (ETFs) offer an alternative investment option.

Buying ETFs basically means you buy shares in a basket of companies. This gives your portfolio broader exposure to the market than you would otherwise be able to achieve on your own – and hence reduces your risk. But the targeted nature of many modern ETFs also gives you the chance to still be selective about which ASX trends you want to participate in.

Here are three options for targeted ETFs that could tap into growing areas of the economy post-COVID-19.

Betashares Australian Sustainability Leaders ETF (ASX:FAIR)

This Betashares ETF tracks an index of companies that meet various ethical and sustainability standards. These standards are primarily based around exposures to the mining or fossil fuel industries, but also extend to activities that involve animal cruelty or gambling. It also preferences companies that are market leaders in adopting sustainable business practices.

The index excludes Australia’s big four banks, and is heavily weighted towards healthcare. Its largest holdings are in companies like Fisher & Paykel Healthcare Corporation Ltd (ASX:FPH) and CSL Limited (ASX:CSL). But it also includes companies in the communications services and technology space.

Climate-conscious investors were already becoming more discerning about where they invested their money prior to the COVID-19 pandemic. This crisis may only advance that trend.    

ETFS ROBO Global Robotics and Automation ETF (ASX:ROBO)

With a real eye to the future, this ETF aims to track an index of up to 200 companies that are global leaders in robotics, automation and artificial intelligence. While it is heavily weighted towards the industrials and IT sectors, it invests across multiple industries, including healthcare. Currently, its largest holding is in US-based computer game company NVIDIA Corporation (NASDAQ:NVDA).

AI and robotics are rapidly evolving ASX trends that could shape the future. This is particularly in a post-COVID-19 world where companies seek to drive efficiencies through automation and more business is conducted digitally. This ETF could give you exposure to the exciting companies that are pushing the boundaries of this technology.

ETFS S&P Biotech (ASX:CURE)

The last ETF on my list provides exposure to the US biotech sector. Biotech is a niche part of the healthcare industry that focuses on the research and development of treatments and vaccines based on genetic engineering.

The index includes companies like Novavax, Inc. (NASDAQ:NVAX) that are in the race to develop a COVID-19 vaccine. However, all these companies develop cutting-edge treatments that will have applications well beyond our current pandemic.

Barriers to entry for this part of the healthcare sector are incredibly high – new companies are required to invest heavily in research and development just to gain a foothold. This means that once a company is established, it can grow its market share and profits rapidly.

More reading

• Leading brokers name 3 ASX shares to buy today
• Is another stock market crash coming?
• How to turn $20,000 into $200,000 in 10 years with ASX shares
• Should you buy these beaten down ASX 200 shares?
• Where to invest your first $1,000 into ASX shares

Rhys Brock has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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 Citadel Group Ltd (ASX: CGL) share price has returned from its trading halt this afternoon and rocketed higher.

At the time of writing the software and services company’s shares are up a massive 39% to $5.55.

Why is the Citadel share price rocketing higher?

Investors have been scrambling to buy the company’s shares on Monday after it revealed that it has received a takeover approach from Pacific Equity Partners.

According to the release, the two parties have entered into a binding scheme implementation deed, under which it is proposed that Pacific Equity Partners will acquire Citadel for $5.70 per share in cash. This consideration will be reduced by any special dividend that is declared between now and completion. A scrip alternative is also available to Citadel shareholders.

If the scheme is implemented, the Citadel board intends to declare a fully franked special dividend of up to 15 cents per share.

Is this a good deal?

Based on the cash consideration of $5.70 per share, Pacific Equity Partners is valuing Citadel’s equity at $448.6 million and enterprise value at $503.1 million.

This offer represents a 43.2% premium to the closing price of Citadel shares on 11 September 2020.

However, it is worth noting that it is a significant discount to where its shares were trading in November 2018. At that point the company’s shares were changing hands for over $9.00.

Furthermore, it is actually lower than its February high of $5.92. Some might call this offer opportunistic.

Nevertheless, the company’s directors are supportive of the offer and are recommending that shareholders vote in favour of the scheme. This is in the absence of a superior proposal and subject to the independent expert concluding that it is in their best interests.

“An attractive transaction.”

Citadel’s Chairman, Peter Leahy AC Lt-Gen (Retd), believes it is an attractive offer.

He said: “The Scheme is an attractive transaction which provides an all-cash option for Citadel shareholders. The Citadel Board has unanimously concluded that the Scheme represents a compelling outcome for our shareholders, customers, suppliers, and staff.”

Mr Leahy also notes that it gives shareholders certainty of value and the opportunity to realise their investment in full.

“The price is a very tangible measure of the value and quality of Citadel’s industry leading expertise in specialist software and critical secure information management in complex environments like healthcare, defence and national security, government and tertiary education. At a significant premium to the current trading price, PEP’s offer provides Citadel shareholders with certainty of value and the opportunity to realise their investment in full for cash,” he added.

The chairman concluded: “Citadel’s customers will benefit from access to a broader product suite and service capability given Citadel’s ability to invest more in growth markets and sectors, and further develop its industry-leading software solutions, with PEP’s backing. In addition, the Scheme is positive news for Citadel staff, as we believe there will be increased opportunities to develop new technologies with new partners and advance and grow their careers.”

More reading

• 3 ASX shares for beginners to buy
• Where to invest $10,000 into ASX shares today
• 3 small cap ASX shares I’d buy with $3,000 right now
• Top ASX growth shares to buy in September 2020
• Here’s how to make a $1 million portfolio by investing $1,000 a month

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Citadel Group 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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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.

In auto racing, cars sometimes have to make pit stops for potential mechanical problems to be checked out. We’re seeing the equivalent of that happen now in the race to develop a coronavirus vaccine.

On Wednesday, AstraZeneca plc (NYSE: AZN) announced that it was pausing late-stage clinical trials of COVID-19 vaccine candidate AZD1222. Why? A participant in the U.K. trial experienced an unexplained illness after receiving the investigational vaccine.

The pause didn’t last long. On Saturday, AstraZeneca received a green light from U.K. regulators to resume the clinical trial. However, as pit stops do with car racing, this temporary delay changes the dynamics in the coronavirus vaccine race to some extent. And I think that there’s one surefire vaccine winner following AstraZeneca’s COVID-19 trial pause — Pfizer Inc. (NYSE: PFE).

What it doesn’t mean

Before my use of the term “surefire winner” causes a surefire firestorm, allow me to provide some context. I’m not in any way implying that Pfizer and its partner BioNTech SE (NASDAQ: BNTX) are guaranteed success with their COVID-19 vaccine candidate BNT162b2.

Granted, I think the chances of success for BNT162b2 are pretty good. I base my view on the clinical results that have been announced so far and the historical track record of vaccines that make it to phase 3 testing. Between 2006 and 2015, over 74% of vaccines in phase 3 testing went on to win FDA approval, according to industry organization BIO. But I also realize that there’s a real possibility that Pfizer’s and BioNTech’s vaccine could stumble in late-stage testing. 

I also don’t mean that Pfizer will necessarily be the best-performing stock out of all of the companies developing COVID-19 vaccines because of AstraZeneca’s delay. Smaller biotech stocks could (and probably will) deliver greater returns than Pfizer will. 

Winning the perception game

So what do I mean when I maintain that Pfizer is the “surefire winner” after AstraZeneca’s COVID-19 clinical trial pause? The big drugmaker is now viewed as the clear frontrunner in the coronavirus vaccine race by many investors. Pfizer is winning the perception game.

To be clear, I don’t think the trial pause will hurt AstraZeneca all that much over the long run. After all, it lasted only a few days. But to return to the car race analogy, AstraZeneca’s “pit stop” is allowing another drugmaker to move into a clear lead in the race.

Why isn’t Moderna Inc (NASDAQ: MRNA) that clear leader? Just a few days before AstraZeneca’s announcement of its trial pause, the biotech revealed that it’s temporarily slowing down enrollment in the late-stage study of COVID-19 vaccine candidate mRNA-1273 to boost minority participation. That’s a wise move, but the combination of Moderna’s slowdown and AstraZeneca’s delay works to Pfizer’s advantage when it comes to investors’ perception.

There are other companies with coronavirus vaccine candidates already in late-stage testing. But they’re based in China and Russia. Their vaccines are likely to be non-factors in the U.S. market. Johnson & Johnson (NYSE: JNJ) also is starting late-stage testing of its COVID-19 vaccine this month. However promising this vaccine might be, though, J&J lags well behind Pfizer.

BioNTech arguably deserves greater acclaim than Pfizer. After all, the German biotech originally developed multiple coronavirus vaccine candidates, including BNT162b2. But Pfizer recognized the potential for the BNT162 program and ponied upfront cash to fund the development of the investigational vaccines. A lot more U.S. investors know who Pfizer is than know who BioNTech is. Again, it’s all about perception.

Will Pfizer be the ultimate winner?

There’s no question in my mind that Pfizer is the clear winner from AstraZeneca’s trial delay — for now. But will the big pharma company be the ultimate winner in the coronavirus vaccine market? That remains to be seen.

I definitely think Pfizer could be the biggest winner over the long run in terms of global sales. It’s a positive sign, in my view, that the company plans to advance another COVID-19 vaccine candidate into early stage clinical testing in September. That shows that Pfizer is looking to the future and not just the near term.

But there’s also a surefire certainty: The coronavirus vaccine race is far from over.

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

More reading

• What if more than one company wins the coronavirus vaccine race?
• Coronavirus vaccine race: 7 key things you’ll want to know
• 3 exotic ASX tech ETFs you might want to add to your portfolio today
• AstraZeneca coronavirus vaccine clinical trial paused
• How to invest in coronavirus vaccine stocks

Keith Speights owns shares of Pfizer. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Johnson & Johnson. 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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Cleanaway Waste Management Ltd (ASX: CWY) shares are plummeting today. At the time of writing, the Cleanaway share price is down 7.14% to $2.34 and is down nearly 10% since 3 September. So is this a chance to clean up with this waste manager today?

Why the Cleanaway share price is getting compacted today

The Cleanaway share price is today responding to a couple of developments coming out of the company. It’s been an impressive month or two for the waste company so far. Cleanaway shares responded very well to the company’s earnings report for the 2020 financial year that was released last month. August saw the Cleanaway share price rise more than 22% as a result and also saw the company enter September trading at the highest share prices seen since the glory days of 2007.

But today’s sharp plunge is a step back for the company and one worthy of a long, hard look in my view.

So, today Cleanaway announced two developments. Firstly, it announced the departure of the company’s chief financial officer (CFO), Brendan Gill. Mr Gill will be retiring effective 1 February 2021 and will be replaced by the (aptly named) Paul Binfield.

Secondly, the company released a response to ‘a media article’ which alleges workplace misconduct from its CEO, Vik Bansal. Cleanaway’s management told investors that “the company takes allegations of misconduct in the workplace very seriously” and has implemented “a range of measures” in response. These include “enhanced leadership mentoring, enhanced reporting and monitoring of the CEO’s conduct”.

Mr Bansal has said, “I accept the feedback and remain totally committed to creating a progressive culture at Cleanaway while executing on our strategy and delivering ongoing financial performance.”

Cleanaway chair Mark Chellow had this to say on the allegations:

Mr Bansal had some issues with overly-assertive behaviour in the workplace and has acknowledged that he needed to address them. The Board is disappointed in the circumstances but has taken appropriate action. We have noted the committed and sincere manner in which Mr Bansal has responded. The Board will not tolerate any further instances of unacceptable conduct.

Should investors bin the company’s shares in response?

Whilst these allegations of misconduct from Mr Bansal are concerning, I don’t think it warrants an investor exodus from the company just yet. I think the chair’s strongly worded statement draws a firm line in the sand and puts Mr Bansal on sufficient notice that change is needed. Mr Bansal has been the CEO of Cleanaway since 2015. Since his appointment, the Cleanaway share price is up more than 300%. 

Even so, this conduct is not something investors want to see. Further muddying the waters is the fact that, according to reporting in the Australian Financial Review (AFR), Mr Bansal has recently offloaded around 4 million of his 5.5 million Cleanaway shares, reducing his stake in the company by 73%. This sale occurred late last month.

As such, I wouldn’t want to initiate a position in this company just yet. Even after today’s slump, the Cleanaway share price isn’t exactly cheap in my opinion. While the company remains more than 10% off of its new 52-week high, it is still trading at a lofty price-to-earnings (P/E) ratio of 42.7. I don’t think today’s developments warrant existing shareholders to sell-out. But I wouldn’t be initiating a new position right now all the same.

More reading

• ASX 200 up 0.4%: Macquarie guidance disappoints, Cleanaway sinks on CEO behaviour reports
• Why Cleanaway, De Grey, Macquarie, & Zip shares are dropping lower
• 5 things to watch on the ASX 200 on Friday
• Latest ASX stocks brokers are urging you to buy today
• UBS picks the best and worst ASX stocks from the reporting season

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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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy.

The good news is that brokers across the country are doing a lot of the hard work for you.

Three top shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Bravura Solutions Ltd (ASX: BVS)

According to a note out of Goldman Sachs, its analysts have retained their buy rating but trimmed the price target on this financial technology company’s shares to $4.80. The broker believes the recent pullback in the Bravura share price has created a buying opportunity for investors. Especially given its high degree of recurring revenues, which accounted for 77% of total revenue in FY 2020. It also feels its valuation is undemanding and that there is limited downside for its share price. I agree with Goldman and would be a buyer of its shares.

CSL Limited (ASX: CSL)

Analysts at Citi have upgraded this biotherapeutics company’s shares to a buy rating with an improved price target of $325.00. Although the broker acknowledges that plasma collections will be under pressure in the near term, it notes that demand for immunoglobulins remains strong and expects its current level of growth to be sustained for a number of years to come. I think Citi is spot on with CSL and it would be a great long term option for investors at the current level.

Rio Tinto Limited (ASX: RIO)

A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and $114.00 price target on this mining giant’s shares. This follows the exit of a number of executives in response to the Juukan destruction. The broker expects these exits to help the company regain trust with stakeholders. Outside this, Macquarie notes that iron ore prices remain strong and Rio Tinto stands to benefit greatly from this. I would have to agree with this recommendation too. I think Rio Tinto is a great pick in the resources sector.

More reading

• Why Althea, BrainChip, Rio Tinto, & Starpharma shares are pushing higher
• Rio Tinto could pull a shock move to end crisis
• ESG investing after the Rio (ASX:RIO) resignations
• Is another stock market crash coming?
• Smash low interest rates with these ASX dividend 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 CSL Ltd. The Motley Fool Australia owns shares of and has recommended Bravura Solutions 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 Afterpay Ltd (ASX: APT) share price is sliding again today, down 4.5% in early afternoon trading. At the current $70.51 per share, that puts Afterpay’s share price down 24% since hitting an all time high of $92.48 per share on 25 August.

Unless you’ve bought shares in the last 3 weeks though, you should still be sitting on some healthy gains.

Despite crashing more than 77% during the COVID-19 market rout in February and March, the Afterpay share price is up 132% year-to-date. That’s thanks to a tremendous 700% surge since 23 March.

Afterpay is part of the S&P/ASX 200 Index (ASX: XJO). In comparison, the ASX 200 is still down 12% year-to-date.

What does Afterpay do?

Afterpay is an Australian incorporated technology company and a leader in the buy now, pay later (BNPL) market. Afterpay’s payment platform allows people to buy and receive goods and spread the cost of their purchase out over equal payments, without any interest fees.

The company was founded in 2015. Afterpay shares first began trading on the ASX in June 2017. These days the company operates in Australia, the United States and the United Kingdom, with current expansion plans into the wider European market.

What kind of new regulations could impact the Afterpay share price?

Afterpay’s share price – and indeed the share price of most every BNPL player on the ASX – has been pulling back amid fears that weak barriers to entry are seeing major new competitors enter the same space.

After posting eye-popping gains, Afterpay’s share price was also due for a pullback as investors took some profits off the table.

Adding an additional unwanted headwind for shareholders, the Reserve Bank of Australia (RBA) and the Australian Securities and Investments Commission (ASIC) could be ready to move forward on new regulations in the BNPL business. Though both agencies won’t have their reports completed until next year.

The RBA is looking into Afterpay’s prohibitions on merchants adding a surcharge to BNPL users, something merchants can tack onto credit card purchases. If merchants are enabled to charge customers more when using a service like Afterpay, it would almost certainly see reduced use and result in lower share prices.

There’s also growing concern that some customers are having trouble meeting their scheduled interest-free repayments.

The Australian Competition Tribunal is also preparing to reveal its decision on whether Afterpay and its BNPL competitors will need to conduct income and expense checks before offering their services to new customers.

Should the Tribunal find these checks are in order, Afterpay’s share price could fall further from here.

More reading

• How to position your ASX share portfolio for a downturn
• Is another stock market crash coming?
• 5 things to watch on the ASX 200 on Monday
• How to tell if this is the end of the ASX bull market
• Are higher P/E ratios really here to stay?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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 Auscann Group Holdings Ltd (ASX: AC8) share price has smoked the All Ordinaries Index (ASX: XAO) today, up 6.2% to 17 cents compared to a 0.3% gain for the All Ords.

The Auscann share price movement is in response to an update regarding the completion of its Neuvis phase I study.

Neuvis phase I study results

Auscann announced the completion of its first clinical trial of an orally administered cannabis-based capsule developed to treat nerve pain.

The tetrahydrocannabinol (THC) and cannabidiol (CBD) combination using its Neuvis hard-shell capsules involved the treatment of 25 patients. The study was divided into 2 groups who received either a low 2.5mg or high 10mg dosage. The hard-shell capsules were supplemented with a cross-over to a pre-formulation oil comparator.

Auscann noted that the hard-shell capsule showed a lower peak concentration than the oil-based comparator with the 2.5mg dosage. However, the 10mg quantity was similar to the comparator and to the results for its volunteers receiving comparable dosages of its oral spray Sativex product.

Furthermore, adverse events were seen more often during treatment with the oil comparator than with the Auscann capsule formulation. The company recorded 16 of 28 (57%) patients experiencing at least one adverse event with the oil, compared to 7 of 25 subjects (28%) treated with the capsules. The Sativex oral spray adverse event rate was at 66%, more than double the rate of using capsules.

The full clinical trial of its completed phase I study is expected to be released in next month. In addition, Auscann will prepare to conduct an investigator-led phase IIA research in the near future.

Management commentary

Auscann’s CEO Nick Woolf was pleased with the completion of the phase I study of the hard-shell capsules using the novel Neuvis platform. He commented:

We are committed to an evidence- based approach to support the appropriate prescribing of our novel cannabinoid-based pharmaceutical products. Our intent in conducting this study was to provide data to assist doctors in the use of our THC:CBD combination capsules and to make informed treatment decisions.

Our capsules are presented in a familiar dose form so that Healthcare Professionals can have confidence in dose uniformity and ease of use for their patients, which should enhance patient compliance and correct dosing.

About the Auscann share price

The Auscann share price has fallen heavily since the cannabis hype wore off in the market in 2018. It reached a 52-week high of 39 cents before dropping to its 52-week low of 13.5 cents in March. 

At the time of writing, Auscann shares are up by more than 6%.

More reading

• How the China rift could spur these ASX tech share prices to new records
• ASX 200 Weekly Wrap: ASX 200 hits 4 straight weeks of losses
• Why the Retail Food Group (ASX:RFG) share price is up 4%
• Myer (ASX:MYR) share price dives 15% as FY20 results fail to impress
• 4DS Memory (ASX:4DS) share price rockets 46% higher today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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An Australian company already with international operations will list on the ASX on Tuesday, with a market capitalisation of $177.4 million.

Access Innovation Holdings Limited (ASX: AIM) is scheduled to float on 15 September with an issue price of $1.23 per share.

The Motley Fool has confirmed with the initial public offer (IPO) information line that the listing will happen Tuesday as planned.

AIM is best known as AI-Media, a company that develops technology to provide captioning and transcription services.

AI-Media did not return The Motley Fool’s requests for comment.

However, its prospectus and publicly available information gives some clues about its situation as it goes public.

What does AI-Media do and who started it?

AI-Media was founded in 2003 by Alex Jones and Tony Abrahams in Sydney. Jones was born deaf and recognised the gap in the market for accessibility technology.

Abrahams is still hands-on, running the joint as chief executive officer. Before the float he owned almost a quarter of AI-Media, but will now cash in more than $7 million from selling down to 19.2%.

The main game for the company is its cloud-based software that combines artificial intelligence, machine learning and human intervention that provides “captioning, transcription and translations”.

More than $50 million has been poured into the technology platform since 2009.

AI-Media runs business lines that respectively deal with content from “live broadcast”, “live enterprise” and “recorded” sources.

“Using a combination of machine and human curation provides levels of accuracy that are greater than machines alone,” the prospectus reads.

“This level of accuracy is a requirement to service AI-Media’s enterprise customers.”

AI-Media reported a pro-forma forecast of $37.9 million in revenue for the 2020 financial year, while it predicted $43.8 million for 2021. 

It will run a $8.6 million net loss after tax for 2020, and forecasts losing $5.8 million for the 2021 financial year.

Demand for captioning on the rise

The demand for captioning is on the rise with a significant rise in streaming video in recent years, according to AI-Media. Internationally, hard-of-hearing people make up 6% of the population, but this is predicted to double between by 2050.

“The media and entertainment industry also has to contend with regulatory requirements that mandate equality of access to content for hard-of-hearing individuals,” states the company.

“Legislation and regulations in many markets require that an increasing percentage of content requires captions, including that delivered through new channels (such as VOD), as well as the more established terrestrial and pay-TV sectors.”

The company is also seeing demand from the corporate and education sectors.

Acquisition and private capital raising this year

In May, AI-Media acquired US captioning and interpretation company Alternative Communications Services (ACS).

While the purchase price was not disclosed, AI-Media’s financial year 2020 revenue increased by 59% after the transaction.

AI-Media this year also raised about $10 million from external investors, including private investors CVC Emerging Companies Fund in the UK and Anzu Partners in the US.

Foxtel’s role in AI-Media’s early success

One of AI-Media’s first clients was subscription television provider Foxtel.

“In 2003, the costs of captioning were too high for the emerging Pay TV industry. The new Pay TV providers were faced with many more channels and smaller audience shares, but were confronted with the same costs to produce an hour of captioning.”

Jones and Abrahams proposed cutting captioning costs by editing existing international transcripts. That solution allowed Foxtel to provide more captions across as many channels as possible.

The co-founders also showcased their technology in 2010 on the ABC television show New Inventors, winning their episode.

AI-Media now has offices in Australia, USA, UK, Canada, Singapore and Norway. It employs about 160 full-time staff plus a pool of 2,000 contractors, casuals and freelancers.

More reading

• Cleanaway (ASX:CWY) share price plummets 7% today. Time to buy?
• Leading brokers name 3 ASX shares to buy today
• How this new red tape could send the Afterpay share price tumbling
• Auscann (ASX:AC8) share price up 6% on phase I study results
• The latest ASX 200 stocks that top brokers just upgraded to “buy”

Motley Fool contributor Tony Yoo 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 S&P/ASX 200 Index (Index:^AXJO) kicked off the week on a positive footing. But there are two ASX stocks in particular that’re capturing attention after they were upgraded by brokers.

The upgrades show there are still bargains to be found even as some experts worry that our market is getting too expensive since March’s COVID-19 bounce.

Fertilised for a broker upgrade

One underperformer that is capturing attention is the Incitec Pivot Ltd (ASX: IPL) share price. The fertiliser supplier was upgraded by UBS to “buy” from “neutral” as it’s looking too cheap to ignore.

“IPL has underperformed the ASX200 by c.8% since May given a depressed global fertiliser price backdrop,” said UBS.

“IPL’s share price and earnings are significantly influenced by the DAP and ammonia prices, and importantly, these prices have finally found some support after a lengthy period of underperformance.”

Incitec looking cheap on current estimates

The broker believes that the improved fertiliser pricing outlook, especially for DAP, can underpin a 13% growth in earnings before interest and tax through FY21.

This will generate around $300 million in free cash flow (FCF) for the group, which will put the stock on an attractive FCF yield of 8% (vs. long run average of 6%) and a price-earnings multiple of 16 times.

The Incitec share price jumped 4.6% today to $2.18. UBS increased its price target on the stock to $2.40 from $2.25 a share.

Good upside even after surge

Another stock outperforming the market today is the Fortescue Metals Group Limited (ASX: FMG) share price.

Even though shares in the iron ore miner surged 63% since the start of calendar 2020, this didn’t stop JPMorgan from upgrading it to “overweight”.

The broker became more bullish on Fortescue after reviewing its commodity price forecasts, although it did warn that the rising Australian dollar will offset some of the gains.

“2021 and 2022 AUD is expected to be up 6%/5% respectively, which takes out some of the upgrades of USD denominated commodities,” said JPMorgan.

“For the iron ore names, we have already factored this in, along with higher iron ore prices.”

JPMorgan’s 12-month price target on Fortescue is $20 a share.

I believe this target could look conservative if the iron ore price holds around its current level of around US$120 a tonne through FY21.

More reading

• Why the Austal (ASX:ASB) share price is moving today
• ASX 200 up 0.4%: Macquarie guidance disappoints, Cleanaway sinks on CEO behaviour reports
• Is the Westpac share price still a buy for dividends?
• How to position your ASX share portfolio for a downturn
• The Boral (ASX:BLD) share price back in the M&A spotlight as Stokes buys another 45m shares

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.

The post The latest ASX 200 stocks that top brokers just upgraded to “buy” appeared first on Motley Fool Australia.

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The Starpharma Holdings Limited (ASX: SPL) share price has been among the best performers on Monday.

In afternoon trade the dendrimer products developer’s shares are up 8% to $1.73.

Why is the Starpharma share price zooming higher?

Investors have been buying Starpharma shares today after it released another update on its antiviral nasal spray.

The spray, also known as SPL7013, is being tested against SARS-CoV-2, which is the virus that causes COVID-19.

According to today’s update, additional antiviral testing of SPL7013 against SARS-CoV-2 has been completed. This testing was undertaken in studies conducted in the laboratory of internationally recognised virology researcher, Professor Philippe Gallay, at the renowned Scripps Research Institute in the United States.

The latest results confirm that when SPL7013 is applied at the concentration of the SPL7013 COVID-19 nasal spray, it has potent virucidal activity, inactivating more than 99.9% of SARS-CoV-2.

Dr Jackie Fairley, Starpharma CEO, commented: “We are delighted to be working with Professor Gallay to expedite the development of this important product. These latest data show that at clinically relevant concentrations, SPL7013 inactivates more than 99.9% of SARS-CoV-2, which represents a compelling feature for the product. This potent virucidal action is consistent with the activity seen for SPL7013 in other viruses, including HIV and HSV.”

What now?

The company believes this nasal spray could be an important near-term preventative product and sees its route to market as quicker and less complex. This is due to the fact that it is based on an already marketed active product.

In addition to this, the company notes that the SPL7013 COVID-19 nasal spray is entirely complementary to other prevention measures such as PPE and vaccines. It also has special relevance where social distancing is not possible such as crowded environments and certain workplaces.

Dr Fairley commented: “The importance of having multiple preventative product strategies has been highlighted by the recent challenges with some vaccine trials. Starpharma’s topical antiviral nasal spray could play a role both prior to vaccines being available, and complementary to vaccines once available to further reduce risk.”

The company is now expediting the development of the SPL7013 nasal spray and has already completed a number of activities such as reformulation, pilot product manufacture, and the identification of a manufacturer. It has also compiled regulatory documentation in preparation for submission and commenced commercial discussions.

All in all, it expects the product to be ready for market in the first half of calendar year 2021.

More reading

• Why Althea, BrainChip, Rio Tinto, & Starpharma shares are pushing higher
• Why IOOF, SKYCITY, Starpharma, & Telix shares are storming higher
• Starpharma share price jumps 5% on funding for COVID-19 nasal spray
• Why Lendlease, Redbubble, SeaLink, & Starpharma shares are pushing higher
• Starpharma share price rockets to record high on DEP remdesivir COVID-19 news

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 Starpharma Holdings Limited. The Motley Fool Australia has recommended Starpharma Holdings 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.

The post Starpharma (ASX:SPL) share price jumps on COVID-19 nasal spray update appeared first on Motley Fool Australia.

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