Tag: Motley Fool

Commonwealth Bank of Australia (ASX: CBA) is the biggest ASX bank share in Australia. What is the predicted profit for CBA shares for the next few years? In this article, we’re going to look at some estimates which may justify, or warn us about, the current CBA share price.

With how the CBA share price has soared 16% in six months, you’d think that good profit growth is forecast. Let’s have a look.

Challenging FY24

On a cash basis, the company generated $6.01 of continuing operations earnings per share (EPS) in FY23.

However, the business is seeing rising arrears and a fairly competitive environment in the banking sector. Credit growth is quite low, too. In the FY24 first-half result, it reported cash profit fell 3% to $5.02 billion and the net interest margin (NIM) fell 11 basis points year over year to 1.99%.

The broker UBS thinks very optimistic assumptions are required to justify the recent run-up in bank share prices.

Commsec has independent estimates that suggest owners of CBA shares could see EPS of $5.77 in FY24, which could mean a 4% fall in EPS year over year.

This would put the CBA share price at over 20 times FY24’s estimated earnings.

Subdued FY25

Things may not get much better in FY25 as it’s possible that interest rates may still be high and arrears/bad debts could be elevated, depending on what happens with the economy.

The estimate is that CBA’s EPS could fall again to $5.63, which would be a drop of around 2.5% in FY25.

It implies the CBA share price is valued at 21 times FY25’s estimated earnings.

Recovery to start in FY26?

The FY26 projected profit is still predicted to be below FY23.

The current forecast is that the ASX bank share might generate $5.77 in FY26. That’s the same as FY24, so it would put the bank at 20 times FY26’s estimated earnings.

Foolish takeaway

The major bank has seen its share price soar to all-time highs, yet the profit is expected to be lower than FY23 for a number of years.

To me, it’s clear that CBA shares have become significantly more expensive and its profit growth doesn’t justify that. I’d be cautious at this level and look to other ASX shares as potential ideas.

The post Here is the profit forecast to 2026 for CBA shares appeared first on The Motley Fool Australia.

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More reading

• How much passive income will I get from shares vs. property?
• Should you wait for a dip to buy ASX 200 bank shares?
• Why are short sellers shifting into ASX blue chips and out of lithium losers?
• Here’s how the ASX 200 market sectors stacked up this week
• Forget CBA and buy this ASX bank stock for big returns

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Treasury Wine Estates Ltd (ASX: TWE) share price is charging higher on Wednesday.

In morning trade, the wine giant’s shares are up 4% to $12.80.

Why is the Treasury Wine share price charging higher?

Investors have been buying the company’s shares after it revealed that the Chinese Ministry of Commerce (MOFCOM) has released an interim draft determination relating to tariffs on Australian wine.

As a reminder, back in 2020, the company was hit hard when MOFCOM applied a deposit rate of 169.3% to the imported value of its wine in containers of two litres or less. This effectively shut its luxury wine out of the country.

But these tariffs could now be a thing of the past. According to its announcement, MOFCOM’s interim draft determination has outlined a proposed removal of the current tariffs on Australian wine imports into China.

Though, the company warned that the interim draft determination is not a final determination and is subject to change by MOFCOM. Treasury Wine anticipates that the Ministry will release a final determination in the coming weeks.

What impact could this have?

Treasury Wine has a plan in place that it will pursue should the tariffs be removed.

However, given the timing of this development, it only expects an incremental EBITS contribution from the re-establishment of its Australian country of origin portfolio in China in FY 2024.

Broker reaction

Goldman Sachs was pleased with the news. It commented:

Despite a minimal impact to FY24e EBITS, if the import tariffs are indeed removed, we see it as a positive catalyst for TWE as it signals the reopening of a significant, high profit market, where Penfolds still hold strong brand equity.

The Treasury Wine share price is now in positive territory on a 12-month basis.

The post Treasury Wine share price races higher on Chinese tariffs news appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Wednesday
• Best ASX growth stocks to consider buying in March
• 34 ASX 200 shares with ex-dividend dates next week
• Here are 2 high-quality ASX 200 blue chip shares that analysts are bullish on

Motley Fool contributor James Mickleboro has positions in Treasury Wine Estates. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended Treasury Wine Estates. 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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Appen Ltd (ASX: APX) shares are crashing after returning from a trading halt.

In morning trade, the artificial intelligence data services company’s shares are down 21% to 85 cents.

Why are Appen shares crashing?

Investors were fighting to get hold of the company’s shares on Tuesday on the back of takeover speculation. This led to the Appen share price rising a massive 30% to $1.08 before being slammed into its trading halt.

Well, it turns out that there’s no smoke without fire.

After the market close, Appen responded to a price query from the Australian stock market operator and revealed that it has been in takeover discussions with Innodata Inc (NASDAQ: INOD).

However, the market may be disappointed to learn that the price being discussed is significantly lower than where Appen’s shares were trading yesterday. It states:

Appen recently received a highly conditional, confidential, non-binding, indicative proposal from Innodata, a New Jersey based NASDAQ listed entity, in relation to a potential combination of the two companies through a stock-for-stock transaction (the Indicative Proposal). The Indicative Proposal contemplates offer consideration of A$0.70 worth of Innodata shares per Appen share (which equated to a premium in excess of 100% to the Appen share price at the time the Indicative Proposal was provided).

The Appen board is now seeking to understand the potential value to Appen shareholders from the proposed combination and has agreed to a limited exchange of non-public information on both businesses to occur on a non-exclusive basis.

It also notes that it has made no determination as to whether the indicative consideration proposed by Innodata would be acceptable.

Appen’s shares are now down 65% since this time last year.

The post Why are Appen shares crashing 21% today? appeared first on The Motley Fool Australia.

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More reading

• Appen share price on watch following takeover offer
• Big news about to drop: Appen share price put on ice following 41% surge
• Appen share price tumbles amid ongoing losses for the ASX AI stock
• Guess which beaten-up ASX 300 tech stock is rocketing 15% today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by 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.

Nvidia (NASDAQ: NVDA) jumped again on Tuesday, adding to its ongoing winning streak this year. The stock gained ground as the trading day wore on and by the time the market closed, the stock was up 7.2%.

The broader market was decidedly mixed today, looking for direction, but the catalyst that helped send the chipmaker higher was strong quarterly results by Oracle (NYSE: ORCL). The company cited strong demand for AI-centric cloud services with demand far outstripping supply. Oracle also cited a recent cloud-infrastructure contract with Nvidia and hinted at more to come, saying “We expect to have some very nice joint announcements with Nvidia next week,” at the company’s GPU Technology Conference (GTC), which begins on Monday.

Is Nvidia stock still a buy?

This announcement adds to the growing mountain of evidence that the demand for generative AI is just getting started. Nvidia has nabbed the pole position by supplying the graphics processing units (GPUs) equipped to handle the rigors of AI processing. Furthermore, rivals have been unable to come up with a better solution, allowing Nvidia to dominate the field — in two ways.

First, Nvidia is the leading provider of the GPUs used in data centers, with a dominant 98% of the market, according to Wells Fargo analysts. Since the vast majority of AI computing is done in the cloud and data centers, this benefits Nvidia. Second, the company is also the go-to for processors used in machine learning — an earlier branch of AI — controlling a 95% share of that market as well. This gives Nvidia an entrenched position, a clear advantage over would-be challengers.

As a result, Nvidia has delivered three consecutive quarters of record-setting growth, highlighted by triple-digit, year-over-year revenue and profit growth, with another triple-digit quarter on tap.

This leads to the quintessential investing question: Is Nvidia stock a buy. After the company’s recent blockbuster earnings, Nvidia’s valuation dropped significantly, currently trading for 36 times forward earnings. While that’s a premium compared to a price-to-earnings (P/E) ratio of 28 for the S&P 500, Nvidia’s track record of blockbuster growth illustrates that its deserving of a premium.

It seems clear that the demand for AI will continue, with Nvidia sitting at the toll gate. This, in turn, will profit the company — and investors. 

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

The post Nvidia shares surged (again) today. Is it too late to buy the red-hot artificial intelligence (AI) growth stock? appeared first on The Motley Fool Australia.

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More reading

• Can you buy Nvidia shares on the ASX?
• This trend could signal more gains for Nvidia shares
• Is the surging Nvidia share price causing a stock market bubble?
• Should I buy Nvidia stock as an Australian investor?
• 1 ASX stock I think is just as hot as Nvidia (without all the hype)

Danny Vena has positions in Nvidia. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia and Oracle. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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The great thing about exchange-traded funds (ETFs) is that they cater to all investment groups.

It doesn’t matter whether you’re a growth investor or an income investor, there will be an ETF out there for you.

With that in mind, let’s now take a look at two ASX ETFs that could be quality options for income investors. They are as follows:

Vanguard Australian Shares High Yield ETF (ASX: VHY)

The Vanguard Australian Shares High Yield ETF could be a top option for income investors.

This fund gives you exposure to a portfolio filled with many of the biggest payers on the Australian share market.

The good news is that it has been built with diversity in mind. In order to stop you from owning purely banks and miners, Vanguard limits how much it invests in any particular industry or company.

Among its ~70 holdings are BHP Group Ltd (ASX: BHP), Coles Group Ltd (ASX: COL), Commonwealth Bank of Australia (ASX: CBA), Fortescue Ltd (ASX: FMG), Transurban Group (ASX: TCL), and Wesfarmers Ltd (ASX: WES).

The ASX ETF currently trades with a dividend yield of 5.1%. Based on this yield, a $10,000 investment would generate $510 of income.

Vanguard Australian Shares Index ETF (ASX: VAS)

Another ASX ETF for income investors to consider buying is the popular Vanguard Australian Shares Index ETF.

It is a low-cost index-based exchange traded fund that aims to track the ASX 300 index. This means that you will be buying a slice of Australia’s leading 300 listed companies.

Among this very diverse group of shares are dividend payers such as Lovisa Holdings Ltd (ASX: LOV), Macquarie Group Ltd (ASX: MQG), Origin Energy Ltd (ASX: ORG), and Woodside Energy Group Ltd (ASX: WDS).

At present, it trades with a dividend yield of 3.9%. This means that a $10,000 investment would yield second income of $390.

The post Buy these ASX ETFs for a second income appeared first on The Motley Fool Australia.

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More reading

• How much would I have now if I’d invested $10,000 in Vanguard Australian Shares Index ETF (VAS) a year ago?
• With a spare $500, here’s how I’d start buying ASX shares this March
• 5 ASX shares to buy for an effortless path to financial freedom
• Buy these ASX ETFs for easy passive income
• 3 reasons to buy another ASX ETF over the Vanguard Australian Shares Index ETF (VAS)

Motley Fool contributor James Mickleboro has positions in Lovisa and Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa, Macquarie Group, Transurban Group, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Coles Group, Macquarie Group, and Wesfarmers. The Motley Fool Australia has recommended Lovisa and Vanguard Australian Shares High Yield ETF. 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 (ASX: XJO) stock Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), AKA Soul Patts, is soon going to report its FY24 first-half result. All eyes are going to be on Soul Patts shares later this month.

There are a lot of moving parts to the business – it owns sizeable stakes in numerous businesses including TPG Telecom Ltd (ASX: TPG), New Hope Corporation Ltd (ASX: NHC), Brickworks Limited (ASX: BKW), Tuas Ltd (ASX: TUA), Pengana Capital Group Ltd (ASX: PCG) and Apex Healthcare.

It also has an ASX large-cap share portfolio, with names like Macquarie Group Ltd (ASX: MQG), BHP Group Ltd (ASX: BHP), CSL Ltd (ASX: CSL), Wesfarmers Ltd (ASX: WES) and Commonwealth Bank of Australia (ASX: CBA).

Other segments of the business include a private equity portfolio, an emerging companies portfolio, a structured yield portfolio and a property portfolio.

What I’m expecting to see from Soul Patts shares

Over the six months to 31 January 2024, the Soul Patts share price (which rose by 4.4%) outperformed the ASX 200 (which climbed by 3.6%). It seems the ASX 200 stock will be able to report another good period of shareholder returns compared to the market.

I also expect that Soul Patts’ board will decide to increase the dividend. It has increased its annual ordinary dividend each year since 2000, and I think that will continue. FY23 saw the ordinary dividend increase by around 20%.

One of the biggest positives in the result may be the amount of interest income that it generates from its cash and loans. The company has allocated a lot more to its structured yield portfolio over the last couple of years and it’s generating a much stronger yield now.

A year ago, in the FY23 first-half result, we learned that New Hope accounted for $103 million of the $240.2 million total dividend and distribution income that Soul Patts made. However, the coal price has dropped heavily and New Hope’s latest dividend – special and ordinary – was cut by nearly half to 30 cents per share.

We’ve also seen cuts from names like Macquarie and BHP.

But, other names like Brickworks, CBA and Wesfarmers have grown their dividend.

We don’t know how the ASX 200 stock’s private equity portfolio has performed, so that will be interesting to see.  

Any new investments?

The business may provide some more detail about where it has been putting its money.

At the AGM in December, it said it had made some investments across its agriculture, credit and emerging companies.

It said it acquired one of the most advanced fruit packing and processing plants globally to its agriculture portfolio. Soul Patts also revealed that it had made a major investment in ASX uranium miner Nexgen Energy (Canada) CDI (ASX: NXG), which is reportedly developing the largest low-cost producing uranium mine globally.

The post Own Soul Patts shares? Here’s the ASX 200 stock’s result preview appeared first on The Motley Fool Australia.

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More reading

• Are you investing or gambling?
• Is it too late to buy Soul Patts stock?
• 5 ASX shares to buy for an effortless path to financial freedom
• 2 ASX shares I’ve been buying!
• Seeking retirement income from ASX bank shares at 52-week highs? What I’d buy instead

Motley Fool contributor Tristan Harrison has positions in Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks, CSL, Macquarie Group, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Brickworks, Macquarie Group, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has recommended CSL. 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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It was an exceptional day for the Block Inc (ASX: SQ2) stock price on Tuesday. The S&P/ASX 200 Index (ASX: XJO) did record a mild gain of 0.11%. But Block shares surged by an impressive 3.33%.

The US-based tech company even closed at a new 52-week high of $124.88 a share.

Block’s gains over recent months have been nothing short of extraordinary. It was only in October last year that the company formerly known as Square hit a new 52-week (and ASX record) low of $60.56. That means ASX investors have now enjoyed a whopping gain of over 105% in just a few months.

So for the investors who are looking on with envy, could Block stock still be worth a buy at this new 52-week high?

Block is an interesting case in my view. I agree with my Fool colleague Tony that although investors have enjoyed some massive gains in recent months, the shares still look cheap compared to where they have traded in the past.

Despite the triple-digit gain since late October, the company is still down by more than 27% since its ASX debut back in early 2022, when it replaced the old Afterpay (which is now part of Block).

The Block share price also only has a (still decent) 15% or so gain to boast of over the past 12 months.

But does it remain at good value today?

Is the Block share price one of the best ASX stocks to buy now?

Well, I think there are signs that it is. I’ve been impressed with the company’s recent cost-cutting drive. As well as the continuing growth of its flagship Cash App in the United States and internationally.

However, some other branches of Block’s business model give me pause. Block CEO Jack Dorsey is a well-known advocate of increased cryptocurrency use. Under his watch, the company has made several large bets on a bright future for cryptocurrencies like Bitcoin (CRYPTO: BTC). Bitcoin may be enjoying some time in the sun right now, but long-term observers would note that interest in this arena has been highly volatile in the past.

I’m also still not convinced of the long-term profitability of buy now, pay later (BNPL) services like Afterpay. I think Block grossly overpaid for Afterpay when it bought the company in 2022 for US$29 billion.

It would have probably saved a good chunk of that buying price if it waited another few months. Afterpay may still be growing in use. But in my view, we’re a long way off the BNPL service becoming a cash cow for Block.

So I think the Block share price could be a buy today for anyone who understands this business well, and has a bullish view of both BNPL and cryptocurrencies. It certainly has a lot of things going for it. But it remains an investment that I’m not tempted by right now.

The post Block share price hits new 52-week high. So, is SQ2 a best stock to buy now? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why 4DMedical, Block, Judo, and Mesoblast shares are pushing higher today
• Up 93% since October, why are Block shares marching ahead again on Friday?
• 6 ASX shares to buy and hold until the next leap year
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Sebastian Bowen has positions in Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Block. The Motley Fool Australia has positions in and has recommended Bitcoin and Block. 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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Are you looking for some ASX dividend stocks to buy?

If you are, then it could be worth looking at the two listed below that are leaders in their fields and have recently been named as buys.

Here’s what you need to know about them:

Aurizon Holdings Ltd (ASX: AZJ)

The first ASX dividend stock that could be a buy is Aurizon. It is Australia’s largest rail freight operator, moving coal, iron ore, agricultural freight, and more across the country.

Ord Minnett is feeling very positive about the company. In response to its half-year results, the broker has put an accumulate rating and $4.70 price target on its shares.

As for dividends, the broker is forecasting partially franked dividends of 17.8 cents per share in FY 2024 and then 24.3 cents per share in FY 2025.

Based on the latest Aurizon share price of $3.95, this will mean yields of 4.5% and 6.15%, respectively.

Baby Bunting Group Ltd (ASX: BBN)

Another ASX dividend stock that could be a buy is Baby Bunting. It is Australia’s largest specialty maternity and baby goods retailer.

Its performance has been a touch underwhelming in recent times but the team at Morgans think it is worth sticking with the company. This is because its analysts “continue to believe BBN will grow earnings in FY25 as its simpler price architecture and greater focus on value start to drive the top line.”

Morgans has an add rating and $2.00 price target on its shares.

As for income, the broker is forecasting fully franked dividends per share of 6 cents in FY 2024 and then 9.8 cents in FY 2025. Based on the current Baby Bunting share price of $1.73, this will mean dividend yields of 3.5% and 5.7%, respectively.

The post 2 ASX dividend stocks that are market leaders to buy now appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 dividend shares that analysts love
• 25 ASX 200 shares with ex-dividend dates next week
• Want big income? Buy these high-yield ASX dividend shares
• Analysts have put buy ratings on these ASX dividend stocks
• Why Baby Bunting, Humm, Liontown, and Star shares are sinking today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Aurizon. 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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Telstra Group Ltd (ASX: TLS) shares have been out of form this year.

So much so, they are trading within a whisker of their 52-week low of $3.75.

One leading broker that believes investors should be taking advantage of this weakness is Bell Potter.

What did the broker say about Telstra shares?

In response to recent declines, the broker believes that the company’s shares are “starting to look reasonable value.”

As a result, it has upgraded them from a hold rating to a buy rating with a $4.25 price target.

Based on its current share price, this implies potential upside of 12% for investors over the next 12 months.

In addition to this upside, the broker is forecasting a growing stream of dividends from the telco giant’s shares.

It has pencilled in fully franked dividends per share of 18 cents in FY 2024, 19 cents in FY 2025, and 20 cents in FY 2026. If this proves accurate, it will mean dividend yields of 4.75%, 5%, and 5.3%, respectively.

This means a potential 12-month total return of approximately 17% for any investors buying its shares at current levels.

Lack of catalysts but low risk

Bell Potter acknowledges that there are few potential catalysts to support a re-rating for Telstra shares in the near term. However, it feels Telstra makes up for this with its low risk growth. It explains:

In our view Telstra is starting to look reasonable value trading on an FY25 PE ratio of <20x while the average of other reasonable comps in the S&P/ASX 20 is now c.23x. Admittedly the growth outlook for Telstra is not as good as for some of the comps (e.g. Aristocrat, CSL and Goodman Group all have forecast double digit EPS growth in FY25) but Telstra still has reasonable growth (mid to high single digit forecast EPS growth in FY25) plus a good dividend yield (forecast 5.0% fully franked in FY25) and the option of selling part or all of its Infrastructure business (which in our view would unlock value and drive more of a sum-of-the-parts valuation).

There is perhaps a lack of catalysts to drive a re-rate of the multiple up towards the average of the peers but on the flip side there is little risk in our view of the company not achieving its FY24 guidance which implies or suggests a better H2 result relative to H1.

The post Here’s why this broker just upgraded Telstra shares appeared first on The Motley Fool Australia.

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setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
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Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Goodman Group. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended CSL and Goodman Group. 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 Appen Ltd (ASX: APX) share price will be one to watch very closely on Wednesday.

The artificial intelligence data services provider’s shares rocketed 30% higher to $1.08 on Tuesday before being thrown into a trading halt.

Appen’s shares are now expected to return to trade this morning after the company responded to a price query from the Australian stock exchange.

What’s going on with the Appen share price?

Investors were scrambling to buy the beaten down tech stock yesterday amid speculation that it could be a takeover target.

Appen responded to the speculation after the market close and revealed that it has indeed received a takeover proposal.

However, any investors buying shares yesterday might be disappointed to learn that the price that has been offered is notably lower than the current Appen share price.

According to the release, Appen has received a highly conditional, confidential, non-binding, indicative proposal from Innodata Inc (NASDAQ: INOD) that contemplates offer consideration of A$0.70 worth of Innodata shares per Appen share.

While this was a 100% premium to the Appen share price at the time, it is now a 35% discount to where it trades today.

What’s next?

The company revealed that its board is currently seeking to understand the potential value to Appen shareholders from the proposed combination. It has agreed to a limited exchange of non-public information on both businesses to occur on a non-exclusive basis.

As things stand, it has made no determination as to whether the indicative consideration proposed by Innodata would be acceptable. It has also warned that there is no certainty that the indicative proposal will result in a binding proposal for Appen.

The Appen share price remains down 55% over the last 12 months despite yesterday’s jump.

The post Appen share price on watch following takeover offer appeared first on The Motley Fool Australia.

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More reading

• Big news about to drop: Appen share price put on ice following 41% surge
• Appen share price tumbles amid ongoing losses for the ASX AI stock
• Guess which beaten-up ASX 300 tech stock is rocketing 15% today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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