The EML Payments Ltd (ASX: EML) share price has come under significant pressure again on Friday.

In morning trade, the embattled payments company's shares dropped 15% to 49 cents.

This means the EML share price is now down 80% over the last 12 months, as you can see below.

Why is the EML share price crashing today?

Investors have been selling down the EML share price on Friday after the company released an update on its European operations.

These operations, which are overseen by its PFS Card Services Ireland business, have come under fire from regulators over the last 18 months amid concerns over its anti-money laundering and counter-terrorism financing (AML/CFT) compliance.

According to the latest update, PFS Card Services Ireland has received further damning correspondence from the Central Bank of Ireland.

The central bank has stated that it considers that PFS Card Services Ireland has made limited remediation progress to date with significant and ongoing deficiencies remaining in its AML/CFT control framework. The bank also advised that it is not satisfied with PCSIL's remediation plan and timetable for completion.

In light of this, EML now believes there is a risk that its remediation program and third-party assessment may not be completed as planned by the end of 2023.

Potential penalties

As a result of its lack of progress, the Central Bank of Ireland has informed PFS Card Services Ireland that it is "minded to issue a direction" that growth in total payment volumes for the period 31 March 2023 to 30 March 2024 be restricted to 0% above annualised baseline volumes in the year January to December 2022.

This would be a change from the previous 10% growth restriction imposed until 8 December 2023.

Though, it is worth noting that the central bank has not yet made this direction and has provided PFS Card Services Ireland with an opportunity to provide it with submissions by 10 March 2023 for its consideration. Management advised that work has already commenced in that regard.

The company estimates that the proposed growth restrictions would reduce its EBITDA by $2 million in FY 2023.

Strategic review

EML has revealed that it disappointed with the news and is now looking at a strategic review of the PFS Card Services Ireland business. It commented:

The Board is disappointed with this development. The reconstituted Board is taking the concerns of the CBI very seriously. It is committed to remediating the issues that are of concern to the CBI and engaging constructively with the CBI in relation to the remediation. In that context, the Board has established a new dedicated subcommittee (chaired by new non-executive director, Peter Lang) charged with oversight of the remediation program. The Board has also resolved to immediately commence a strategic review of the business with the assistance of global investment banking advisors. The Board will provide an update on the strategic review in due course.

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The EML Payments Ltd (ASX: EML) share price is frozen at yesterday's closing price of 58 cents.

The company requested a pause in trading pending an announcement before the market open today.

At about 11am, the ASX tech share went into a trading halt at the company's request. EML shares will remain halted until the earlier of either an announcement or the start of trading on Monday.

Why is the EML share price frozen?

EML requested the halt " … pending an announcement by EML in relation to a letter received overnight by its Irish subsidiary, PFS Card Services Ireland Limited from its regulator, the Central Bank of Ireland".

EML's Irish and United Kingdom businesses face ongoing regulatory issues.

The Central Bank of Ireland has limited EML's total payment volumes to 10% growth until December. The bank retains the discretion to lift the restriction sooner if EML can get its house in order before then.

The last time EML provided a formal update on its situation in Ireland was on 10 November 2022.

In that statement, EML said material growth cap restrictions would remain in place until the company completed its remediation program and provided satisfactory third-party verification to the central bank.

EML Chair Peter Martin described 2022 as "one of the toughest periods in our history" at the company's annual general meeting on 25 November.

Martin said:

It is clear that uncertainty about EML's future prospects has led to a loss of confidence and contributed to the fall in market value.

I'm referring to the continuing regulatory issues in our Irish subsidiary, PFS Card Services, and our UK subsidiary, Prepaid Financial Services, and the related costs.

Despite our genuine efforts, there's been a lack of clarity about what this means to EML and how we are going about fixing the problems.

What's the latest news from EML?

The EML share price finished yesterday's session down 9.4% after the company released its 1H FY23 results.

After an initial 18% share price crash on news of its 95% profit decimation, EML rebounded over the day.

The company's underlying net profit after tax, adjusted to exclude the non-cash tax-effected amortisation of intangibles and significant non-operating items (NPATA) was $700,000, down 95% on 1H FY22.

The decline is largely due to investment in its transformation strategy and non-cash impairments.

EML wants to become a leading payments provider in four key segments over the next five years. They are human capital management, financial services, retail and gifting, and government.

Its remediation programs in Ireland and the United Kingdom are expected to be completed by the end of December.

The post Here's why the EML share price is on ice today appeared first on The Motley Fool Australia.

The EML Payments Ltd (ASX: EML) share price took a severe tumble in early trading after the company released its 1H FY23 results.

The EML share price opened at 56 cents, down 12.5% on yesterday's close. It quickly declined to an intraday low of 52.5 cents shortly after the market open.

However, the ASX tech share rebounded quickly and is now trading at 60.2 cents, down 6% for the day.

While the headline news is bad, revenue and gross profit are both up. The company's net profit decline is largely due to investment in its transformation strategy and non-cash impairments.

Let's take a look.

EML share price dives after 95% profit decimation

The key points for the six months ending 31 December 2022 are:

• Group revenue of $116.6 million, up 2% on the prior corresponding period (pcp) of 1H FY22
• Underlying gross profit was up 5% pcp but group underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $13.4 million was down 50% pcp
• Group underlying net profit after tax, adjusted to exclude the non-cash tax-effected amortisation of intangibles and significant non-operating items (NPATA) of $700,000 is down 95% pcp
• Group net loss of $129.9 million, largely reflecting non-cash impairments
• Cash balance up 7% to $79.2 million pcp
• Underlying operating cash flow conversion of 102%

Management said revenue was up largely due to a significant increase in interest income at $7.1 million.

Benefits stemming from the Sentenial acquisition were behind a 55% boost to gross debit volumes at $49.4 billion. The 5% increase in gross profit was driven by increased high-margin revenues from Sentenial, plus interest.

The halving of group EBITDA was largely reflective of further investment in the European businesses.

What did management say?

EML group CEO Emma Shand said:

Underlying financial performance for the half was in line with expectations reflecting the heavy set of challenges that the company has faced over the past two years and reinforcing the importance of our transformation strategy.

During the half, we have focused on getting the foundations right and have made solid progress on our remediation program, Elevate, which we have committed to completing by the end of December 2023, as previously announced.

What's next?

EML is continuing with the execution of its transformation strategy.

EML announced its transformation plan at its annual general meeting in November 2022. Investors responded favourably to the plan at the time, with the EML share price leaping 12% on the day.

The plan is to make EML a leading payments provider in four key segments over the next five years: human capital management, financial services, retail and gifting, and government.

The company said progress over the half included further work on its remediation programs in Ireland and the United Kingdom, which are expected to be completed by the end of December.

EML launched a new data platform in January to support Elevate and move toward a single source of data. It also introduced a new product suite campaign in the human capital management segment.

Shand said:

We have a strong balance sheet and a clear transformation path ahead of us and are well positioned to execute EML's next chapter and deliver on our commitment to be an embedded finance leader of the future."

The company reaffirmed its guidance for underlying full-year EBITDA of between $26 million and $34 million but altered guidance on revenue and costs.

Revenue expectations are now between $235 million and $245 million based on the first-half results and an expected upswing in interest.

Underlying costs are expected to be lower and in the range of $133 million and $140 million.

EML share price snapshot

The ASX tech share is down 0.8% in the year to date compared to a 4.8% bump for the S&P/ASX All Ordinaries Index (ASX: XAO).

Over the past 12 months, EML shares have fallen 75% compared to a rise of 0.7% for the All Ords index.

The post EML share price crashes 18% on half-year results but quickly rebounds appeared first on The Motley Fool Australia.

The EML Payments Ltd (ASX: EML) share price is ending the week on a high after the company outlined "a new chapter" at today's annual general meeting (AGM).   

It comes after an 18-month period of upset brought about by regulatory issues, misaligned organisational structure, and a competitive environment.

Right now, the EML share price is up 12.26%, trading at 59.5 cents. That's more than 80% lower than it was 18 months ago.

For comparison, the All Ordinaries Index (ASX: XAO) is up 0.22% at the time of writing.

Let's take a closer look at the news driving the EML Payments share price today.

What's boosting the EML share price today?

The EML share price is roaring upward today as the company's leaders address recent challenges. Speaking at its AGM, chair Peter Martin said:

As far as EML is concerned it's been one of the toughest periods in our history.

It is clear that uncertainty about EML's future prospects has led to a loss of confidence and contributed to the fall in market value. I'm referring to the continuing regulatory issues in our Irish subsidiary, PFS Card Services, and our UK subsidiary, Prepaid Financial Services, and the related costs.

Despite our genuine efforts, there's been a lack of clarity about what this means to EML and how we are going about fixing the problems.

How indeed? Well, that was also outlined today. EML has undergone a strategic review, with CEO and managing director Emma Shand commenting:

The review identified numerous shortcomings which the company will address as a priority in a bid to reshape it a competitive valuable proposition for stakeholders.

"It won't happen overnight, but we can do it," Shand said, continuing:

Of EML's seven acquisitions between FY15 and FY21, six were prepaid card businesses. However … the acquired businesses have largely been left to operate in silos, missing an opportunity to integrate, extract synergies, and align culturally.

Finally, while EML's point solutions are well appreciated by our loyal client base, these highly bespoke point solutions, across 10+ industry sectors, are not easily scaled.

What's next?

On the back of the findings, EML will begin a transformation. It will focus on its European and UK remediation efforts, streamlining its customer and operational effectiveness, and repositioning the business for growth. Speaking on the latter, Shand said:

There is a significant and exciting opportunity to evolve our business over time; from being largely in prepaid cards, to an embedded finance leader within the next five years.

The company will focus its efforts on embedded payments solutions, human capital management, retail, and government. It says these four pillars represent 70% of global total addressable payments revenue.

It expects to have a controllable cost out of the business of between 10% and 15% by FY24, with full impact in FY25.

Trading update

EML also provided a trading update this morning.

Its revenue fell 5% over the first quarter on that of the prior comparable period (pcp), coming in at $49 million. Its gross profit also slumped 4% to $32.5 million after cycling $5.3 million of one-off revenues in the pcp.

The company's overheads lifted 29% on those of the pcp but fell quarter-on-quarter. Its gifting segment has started off the holiday period strongly.

It also saw $2.5 million of net interest income last quarter, compared to $1.4 million over the whole of FY22.

Finally, it recognised $14 million of casts relating to regulatory matters, one-off restructuring, executive retentions, and European fraud costs.

Is new FY23 guidance also lifting the EML share price?

The company's new guidance may be another driver lifting the EML share price today.

It expects its net interest margin to increase to between $17 million and $21 million this fiscal year. Rising interest rates are also expected to add $16 million to $20 million to its full-year earnings before interest, tax, depreciation, and amortisation (EBITDA).

EML's revenue is tipped to come in at between $240 million and $260 million. Meanwhile, its gross profit margin is expected to be around 67%.

The company's overheads guidance is between $135 million and $145 million. Finally, its underlying EBITDA is expected to come in at $26 million to $34 million.

The post EML share price jumps 12% in 'new chapter' after troubled past appeared first on The Motley Fool Australia.

It's been another big week of news on the ASX, with many of the market's inhabitants releasing some major announcements.

Looking beyond the market, there's also been plenty of news from central banks.

The Reserve Bank of Australia upped the benchmark interest rate by 0.25% on Tuesday, taking it to 2.85%. Then, on Thursday, the US Federal Reserve hiked rates another 0.75% – leaving the nation's cash rate at 3.75% to 4%. Both hikes were in response to soaring inflation.

Inflation was also the talk of the town on the Aussie bourse this week after an S&P/ASX 200 Index (ASX: XJO) giant posted a quarterly update. Let's get stuck into it.

5 ASX announcements making news this week

Woolworths' earnings disappoint

The Woolworths Group Ltd (ASX: WOW) share price slumped yesterday when the supermarket operator posted its September quarter update, detailing a 1.8% increase in group sales.

Its BIG W and Australian business-to-business legs' growth managed to offset a decline in sales at its Australian and New Zealand food businesses. Much of the drop was due to the cycling of COVID-19 lockdowns in the prior comparable period.

Woolworths CEO Brad Banducci also commented:

Inflation continued to accelerate in Q1 … We continue to see early signs of customer purchasing habits changing, but it remains unclear how much of this relates to cost-of-living pressures compared to COVID normalisation.

Another regulatory blow for EML

The share price of EML Payments Ltd (ASX: EML) also suffered this week, plummeting 35% on Monday. Its fall came after the former ASX 200 fintech announced it had agreed to pause the onboarding of new users to its United Kingdom subsidiary, Prepaid Financial Services, amid regulatory concerns.

The issues raised were said to be similar to the (still unresolved) concerns brought about by the Central Bank of Ireland in 2021. They related to the company's compliance with anti-money laundering and counter-terrorism financing laws.

Nitro catches a winning takeover curveball

After months of courtship and two takeover bids, the Nitro Software Ltd (ASX: NTO) board has finally recommended a potential buyer's offer. However, it wasn't posed by the suitor previously chasing the company.

Canada's Alludo's $2 per share takeover offer was 11% higher than the $1.80 bid Potentia Capital offered on Friday. Potentia has been chasing Nitro since August when it posted its initial $1.58 bid.

Lithium drives IGO's earnings higher

Good news for ASX lithium fans – IGO Ltd (ASX: IGO) announced its lithium business' sales revenue more than doubled quarter-on-quarter to come in a $1.8 billion over the three months ended 30 September.

That helped the company report a 136% increase in after-tax profits, coming in at $253 million, and a 54% jump in underlying earnings before interest, tax, depreciation, and amortisation (EBITDA), reaching a record $398 million.

Tiny lithium mining share surges 81% amid exploration news

Finally, a win for the little guys. The share price of $110 million lithium explorer Winsome Resources Ltd (ASX: WR1) exploded this week. It has gained 80.8% since the close of trade on Friday, and is currently trading at 85 cents apiece.

The surge followed last week's announcement of positive drilling results at two of the ASX company's Canadian projects.

This week, it provided additional data on numerous drill holes and an investor presentation. The releases seemingly spurred the market's interest in the stock once more.

But that wasn't the end of the drama. The lithium share was halted following an ASX query on Wednesday.

It returned to trade this morning on an update pertaining to its previously released presentation. Additionally, the company responded to the ASX's 'please explain', saying:

With this series of encouraging exploration results being made public, there appears to be a recognition that WR1's market capitalisation is low when compared with many of its peers in the lithium exploration market.

The post 5 big ASX announcements making news this week appeared first on The Motley Fool Australia.

Writing in its latest monthly update, leading fund manager QVG Capital reports a positive return for its Long Short Fund in October, up 3.6% for the month versus a gain of 5.8% for the S&P/ASX 300 Index (ASX: XKO).

The QVG Long Short Fund is a 'best ideas' fund with the flexibility to take advantage of the best ASX opportunities regardless of share price direction or market capitalisation.

The fund's solid performance in October was driven by its long positions, the top contributors being Aristocrat Leisure Limited (ASX: ALL), Hub24 Ltd (ASX: HUB) and IDP Education Ltd (ASX: IEL).

Aristocrat Leisure offers a diverse range of products and services, including electronic gaming machines, casino management systems, and free-to-play mobile games.

Although the Aristocrat Leisure share price jumped 15% higher in October, in tune with other ASX growth stocks trading on premium valuations, Aristocrat shares are still down 23% over the past 12 months. 

Writing about the company, the fund says Aristocrat is a beneficiary of the stronger US dollar. In addition, the QVG Capital Long Short Fund says, "feedback from the Global Gaming Expo of continued strong trading over recent months both for the US land-based market and Aristocrat's market share bodes well for near-term earnings".

The Hub24 share price climbed more than 20% in October on the back of a September quarter trading update which showed resilient inflows onto the platform amid elevated levels of stock market volatility. 

"Given the nature of financial markets, we were impressed with the strength of HUB's flows. Commentary around revenue margins and operating cost growth were also encouraging," the portfolio manager said in its monthly update. 

The IDP Education share price jumped almost 12% higher in October as the provider of international student placement services and high-stakes English language testing services continued to bounce back from a difficult period impacted by the pandemic.

Writing in its update, the QVG Capital Long Short Fund said it expects the headwind of falling valuations to no longer be the driving force behind the ASX stock's performance. Going forward, the fund expects earnings growth will be the key driver of future returns, saying its English language testing and student placement divisions are recovering strongly. 

"IDP has a runway of multiple years of ~20% revenue growth as they exploit the benefits of their scale to entrench their market leadership."

IDP Education shares trade at 75 times trailing earnings, with that multiple forecast to come down to around 50 times FY23 earnings based on S&P Capital IQ forecasts.

On the short book, QVG names EML Payments Ltd (ASX: EML), Megaport Ltd (ASX: MP1) and Appen Ltd (ASX: APX) as top contributors to returns in the month of October. 

Respectively, regulatory issues, increased cash burn and another downgrade weighed on these share prices.

The EML Payments share price was hit for six on the last day of October when the global payments company was hit with yet more regulatory concerns.

The Megaport share price took a dive after the network-as-a-service provider released a lacklustre first-quarter trading update.

The post Leading fund manager names the 3 ASX stocks that drove its returns higher in October appeared first on The Motley Fool Australia.

The EML Payments Ltd (ASX: EML) share price has been on a wild ride over the past few days.

Shares of the payment solutions provider dropped 35.71% on Monday, and then bounced back 30.86% the day after.

At the time of writing, the company's shares are 0.94% lower and currently trade for 52.5 cents each.

To make sense of why EML's shares plunged and then rebounded so strongly, let's cover some events that unfolded.

What's going on with the EML share price?

On Monday, EML said it would temporarily halt the onboarding of new users of its UK subsidiary as it contended with regulatory concerns.

The halt affected new customers, agents, and distributors of its subsidiary Prepaid Financial Services Ltd.

In its market announcement on Monday, EML said the delay was estimated to reduce group revenue by "less than $5 million" in FY23.

The company said the concerns of the UK's Financial Conduct Authority (FCA) were "similar to those raised by the Central Bank of Ireland" with its Irish subsidiary, PFS Card Services.

Irish authorities questioned the company's anti-money laundering credentials in May 2021. EML's Irish subsidiary undertook a substantial remediation program but, in July, the Central Bank of Ireland found there were still gaps.

EML said it was "currently undertaking a remediation program" to address ongoing Irish concerns.

It seems another regulatory issue may have spooked investors, leading to an enormous red candle for the day on Monday with EML shares trading at record volume levels.

So why are EML's shares back on the upswing?

There's no news from the company to piece together why the stock rebounded almost 31% a day later.

One theory is that as older investors left in droves, new ones spotted an opportunity to pick up a piece of a potentially undervalued company, thus causing its share price to recover.

And when looking solely at EML's valuation ratios, a case could be made that there is further upside in store. For instance, the company's price-to-sales (P/S) ratio currently stands at 0.8. This means it costs around 80 cents to buy one unit of the company's sales.

This is significant because, all else being equal, a share with a P/S ratio of one to two is good, while a share with a P/S ratio of less than one is extraordinary.

The other interpretation of this ratio though is that investors may not be feeling confident in the company's long-term prospects. This, in turn, enables units of revenue to be bought at bargain prices due to their perceived riskiness.

Whatever the case, the market has certainly found an equilibrium for the EML share price and the negative events that have transpired.

EML share price snapshot

The EML share price is down 83.6% year to date. By comparison, the S&P/ASX 200 Index (ASX: XJO) is down around 6% over the same period.

The company has a current market capitalisation of approximately $198 million.

The post Why has the EML share price rebounded 30% in 2 days? appeared first on The Motley Fool Australia.

However, a number of ASX All Ords shares are performing materially better on Melbourne Cup Day. Here's why these three shares are off to the races today:

EML Payments Ltd (ASX: EML)

The EML share price has bounced back from a heavy decline on Monday and is up 38% to 56 cents. Investors were selling the payments company's shares yesterday after the company revealed that regulatory action was being taken against the UK operations of its Prepaid Financial Services business.

Janison Education Group Ltd (ASX: JAN)

The Janison share price was up as much as 7.5% to 50 cents this morning before giving back some gains. The education technology company's shares are currently up over 3% to 48 cents at the time of writing. That's despite there being no news out of Janison.

Redbubble Ltd (ASX: RBL)

The Redbubble share price has surged over 13% higher to 58.5 cents. Once again, this is despite there being no news out of the ecommerce company today.

Why are these ASX All Ords shares storming higher?

One potential reason for the strong gains being recorded by these ASX All Ords shares is news that Readytech Holdings Ltd (ASX: RDY) has received a takeover offer this morning.

The enterprise technology company is the latest in a growing list of beaten down tech shares that private equity and larger peers have been running the rule over following heavy declines this year.

So, with EML, Janison, and Redbubble all down materially since the start of the year, some investors may be snapping up their shares today on the belief that they could be next in line to receive an offer.

Time will tell if that is the case.

The post Here are 3 ASX All Ords shares that are off to the races today appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the marker higher today are listed below. Here's why they are falling:

Brainchip Holdings Ltd (ASX: BRN)

The Brainchip share price is down a further 2% to 65.5 cents. This semiconductor company's shares have been absolutely smashed over the last two trading sessions following the release of a terrible quarterly update. That update revealed paltry cash receipts of $118,000, a difficult operating environment, and further cash burn. Surprisingly, Brainchip still has a market capitalisation over $1 billion despite these declines.

Bubs Australia Ltd (ASX: BUB)

The Bubs share price is down over 10% to 39 cents. This follows the release of a disappointing quarterly update from the junior infant formula company. Although Bubs recorded solid quarter sales growth thanks largely to currency tailwinds and supply shortages in the United States, it continues to operate at a loss. In addition, management warned that there is an oversupply of infant formula in the China market, making trading conditions particularly tough.

EML Payments Ltd (ASX: EML)

The EML share price has crashed 30% to 44 cents. This morning the embattled payments company revealed that it will temporarily cease onboarding new customers, agents, and distributors to its UK subsidiary, Prepaid Financial Services. This follows concerns raised by the UK Regulator, the Financial Conduct Authority (FCA).

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price is down 1.5% to $14.55. Investors have been selling the iron ore giant's shares on Monday after the price of the steel making ingredient tumbled again. Traders were selling down the iron ore price below US$80 a tonne amid concerns over softening demand in China and increasing supply.

The post Why Brainchip, Bubs, EML, and Fortescue shares are falling today appeared first on The Motley Fool Australia.

In morning trade, the payments company's shares have crashed 30% to a new multi-year low of 44 cents.

This means the EML share price is now down almost 90% since the start of the year.

Why is the EML share price crashing?

Investors have been hitting the sell button in a panic this morning after the company announced that it has been hit with another regulatory bombshell.

According to the release, the company has agreed to temporarily cease onboarding new customers, agents, and distributors to its UK subsidiary, Prepaid Financial Services. This follows concerns raised by the UK Regulator, the Financial Conduct Authority (FCA).

The release notes that these measures will allow Prepaid Financial Services UK to address concerns highlighted by the FCA. While not specified, it advised that the concerns are similar in nature to those (anti-money laundering shortcomings) raised by the Central Bank of Ireland relating to the PFS Card Services Ireland business.

Management notes that the financial impact of this temporary measure is expected to reduce group revenue by less than $5 million in FY 2023.

And while such a sharp decline by the EML share price might seem excessive for a $5 million revenue hit, investors appear concerned about what might come next. Particularly given how the Central bank of Ireland has not yet decided on what action to take with the PFS Card Services Ireland business, which is responsible for its entire European operations.

EML's CEO, Emma Shand, commented:

It has been my priority to work constructively with the Regulators. EML accepts that it has not moved quick enough in the past to address regulatory concerns in the PFS business. We need to do better, and we will. We have made some key senior management appointments and are putting more resources into building capability in key areas including governance, risk management and regulatory compliance. We understand we have an important role to play in tackling financial crime and to keep our customers safe, at a time that threats are ever increasing across the banking and payments sectors.

The post EML shares plummet 30% as regulatory update takes its pound of flesh appeared first on The Motley Fool Australia.

ASX All Ords tech shares have been sold off significantly in 2022, but could this mean there are bargains waiting to be snapped up?

There are definitely some cheap shares out there, according to Elston Asset Management portfolio manager Justin Woerner.

Speaking to Livewire, Woerner singled out a number of cheap ASX All Ords tech shares that have slumped by more than 80% this year to date.

He did not suggest whether or not these specific companies are good opportunities. However, he believes the sell-off in tech shares has much more to do with changing investor risk appetites and interest rate hikes than negative adjustments to their fundamentals.

Woerner said:

Technology businesses tend to be less mature and rely on long-term revenue growth to justify valuations. Higher interest rates have worked to discount valuations. So, most of the price damage has been due to contracting PE (price-to-earnings) ratios rather than weakening earnings.

If you're willing to look through the short-term volatility, we see long-term value for several of the higher-quality technology businesses.

Here are the three ASX All Ords tech shares mentioned by Woerner as the biggest fallers this year. However, he urged caution when it comes to investing in the tech sector, saying companies need to be assessed on their individual merits.

EML Payments Ltd (ASX: EML)

The EML Payments share price is down by 81% year to date. It ended Friday's session at 63 cents.

The payment solutions platform was ousted from the ASX 200 in September due to not keeping up with the pack in terms of market capitalisation. Other bad news included being one of the most shorted ASX shares on 12 September.

However, some positive news emerged in August when the company announced its full-year results for FY22. EML Payments shares leapt 11% amid its earnings card hitting the market.

The company posted record revenue of $234.41 million, as well as a group underlying net profit after tax (NPAT) of $32.1 million. A $20 million share buyback program was also announced.

Redbubble Ltd (ASX: RBL)

The Redbubble share price is down 85% so far this year, closing on Friday at 50 cents.

The e-commerce company for artists has been having a rough ride in the recent past, including crashing 26% when it announced its first-quarter update on 20 October.

Red Bubble's earnings before interest and tax (EBIT) turned sharply negative during the quarter, ending with a $17 million loss. To put this into perspective, in the previous quarter this ASX All Ords share reported a $0.9 million profit.

It also inflated its expenses during the quarter, including a $3.8 million brand investment, and increased staff salaries and wages by $4.7 million.

Disappointing results were also recorded for FY22, as its earnings before interest, taxes, depreciation and amortisation (EBITDA) nose-dived 121.25% year over year to $11.2 million.

Dubber Corp Ltd (ASX: DUB)

The Dubber Corp share price is down 88% year to date to 32 cents.

Although the cloud-based call recording company's shares have been on a downward slide since late last year, shares slipped a massive 35% on 10 October due to its accounts being audited and then posted to the market.

The audit showed that its revenues were $10.3 million lower than its unaudited results described. Not only were its revenues lower, but its costs had also been significantly underestimated, too. Its total current loss stands at $83.2 million, compared with the previous unaudited figure of $64.7 million.

In a separate release to the market that day, the ASX All Ords share announced it was relieving its CFO Peter Curigliano of his duties with immediate effect.

On Tuesday, the company released its latest quarterly activities report. It reported cash receipts in the September quarter of $9.5 million, up 42% quarter-on-quarter. Operating cash costs increased by $500,000 to $20 million, while revenue was $6.6 million — down 3% quarter-on-quarter and up 10% year-on-year. Cash on hand at 30 September was $73.8 million.

The Dubber share price fell 8.6% on the day of the release.

The post Down more than 80% in 2022, are these ASX All Ords shares now screaming bargains? appeared first on The Motley Fool Australia.

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

Clinuvel Pharmaceuticals Limited (ASX: CUV)

The Clinuvel share price is down 7% to $19.87. This morning this biopharmaceutical company's shares were dumped out of the ASX 200 index at the quarterly rebalance. In other news, the company released its latest strategy update. But that clearly hasn't been enough to boost its shares today.

EML Payments Ltd (ASX: EML)

The EML share price is down almost 4% to 90 cents. This embattled payments company's shares were also kicked out of the ASX 200 index this morning following the quarterly rebalance. With its shares down over 70% this year, the company's market capitalisation has dropped to just over $330 million. This wasn't enough to make it a top 200 company.

Infomedia Limited (ASX: IFM)

The Infomedia share price is down 4.5% to $1.30. This morning the software provider to the automotive industry revealed that after 13 weeks of discussions, the TA Consortium has been unable to develop and submit a binding takeover offer. The consortium previously tabled a non-binding $1.70 cents per share offer.

Link Administration Holdings Ltd (ASX: LNK)

The Link share price is down 2.5% to $3.38. This has also been driven by a takeover update. On this occasion, the administration services provider announced this morning that it has rejected a revised takeover offer from Dye & Durham. The suitor revised its offer after coming to the view that it cannot accept conditions set by the UK regulator to complete the deal as it was.

The post Why Clinuvel, EML, Infomedia, and Link shares are dropping today appeared first on The Motley Fool Australia.

No, it's a big day for the ASX 200 today because the latest quarterly rebalancing has just taken effect. The ASX 200 has just had a shakeup.

Why do indexes need rebalancing?

Like most indexes, the ASX 200 is constructed through weighting by market capitalisation. This means the largest companies by size enjoy the largest weighting in the index.

So even though there are 200 or so ASX shares in the ASX 200, the largest ones have more influence than the smallest ones. So Commonwealth Bank of Australia (ASX: CBA), for example, has a far more influential presence on the ASX 200 than, say, Bank of Queensland Limited (ASX: BOQ).  

But market capitalisations are determined by a company's sales price. And, as we know, this changes every trading day. As such, the largest ASX 200 shares by market capitalisation are always in flux.

To make up for this, the ASX 200 is rebalanced every three months to ensure the index is accurately representing the Australian share market. What might have been the ASX 200's 195th largest share by market cap in one quarter might become the 205th, for example, by the time the next quarter rolls around.

As such, there are normally new companies that leave the index when this rebalancing takes place. These will be replaced by others that have seen their market capitalisation rise over the quarter in question.

So these changes to the ASX 200 Index are normally announced with a few weeks to spare. This gives index funds and other concerned parties the time to adjust and hopefully prevents no unnecessarily wild price swings on the rebalance day.

We found out what the latest rebalancing would involve a few weeks ago on 2 September. But today is the day these changes take effect. So let's go over some of the biggest changes to the ASX 200 Index that are in place from today.

A new look ASX 200

So, to get the bad news out of the way first, here is a list of the ASX 200 shares that are, well, no longer ASX 200 shares.:

• Life360 Inc (ASX: 360)
• AVZ Minerals Ltd (ASX: AVZ)
• City Chic Collective Ltd (ASX: CCX)
• Clinuvel Pharmaceuticals Limited (ASX: CUV)
• EML Payments Ltd (ASX: EML)
• Janus Henderson Group (ASX: JHG)
• Pointsbet Holdings Ltd (ASX PBH)
• Zip Co Ltd (ASX: ZIP)

In their place, here are the new faces that have just gained an ASX 200 membership card:

• Capricorn Metals Ltd (ASX: CMM)
• Charter Hall Social Infrastructure REIT (ASX: CQE)
• Johns Lyng Group Ltd (ASX: JLG)
• Karoon Energy Ltd (ASX: KAR)
• Lovisa Holdings Ltd (ASX: LOV)
• Smartgroup Corporation Ltd (ASX: SIQ)
• Spark New Zealand Ltd (ASX: SPK)
• Sayona Mining Ltd (ASX: SYA)

So some interesting names here, which perhaps some readers might be familiar with.     

ASX 200 membership can be a big deal for a company's shares. For example, as of today, any ASX 200 index fund or exchange-traded fund (ETF) that tracks the ASX 200 will have now sold any of the companies in our first list. They also would have just welcomed all of the companies in our second list in their funds.

There's also the prestige that comes along with being in the flagship index of ASX 200 shares.

So today might be a bitter day for some ASX shares that didn't make the cut this time. But it will also be a happy day for the new companies being welcomed onto the ASX 200 as of this Monday.

The post The ASX 200 is getting a shakeup today. Here's the tea appeared first on The Motley Fool Australia.

This is the day that additions and removals from major indices to reflect changes in market capitalisations and liquidity are made effective.

Earlier this month S&P Dow Jones Indices announced a sizeable eight additions and eight removals from the benchmark ASX 200 index.

For the companies entering the index, it often gives their shares a boost. That's because index funds have to buy them to reflect the change and fund managers that are only allowed to buy ASX 200 shares now have the option to invest.

Conversely, the shares that are kicked out of the ASX 200 index can come under pressure from selling from index funds and fund managers dumping shares they are no longer able to hold due to strict investment mandates.

And while most of the buying and selling is likely to be done in the two weeks between the announcement and the rebalance becoming effective, it is always interesting to see how these shares perform on rebalance day.

How are the ASX 200 evictees performing?

Let's take a look at how the eight ASX shares that have been kicked out of the ASX 200 today are performing. Here's a summary:

The AVZ Minerals Ltd (ASX: AVZ) share price has been suspended for over four months and thus has not been impacted (yet) by this rebalance.

The City Chic Collective Ltd (ASX: CCX) share price is down 4% to $1.62 on Monday. This plus sized fashion retailer's shares are now trading close to a 52-week low.

The Clinuvel Pharmaceuticals Limited (ASX: CUV) share price has dropped 5% to $20.32 today.

The EML Payments Ltd (ASX: EML) share price has tumbled 4% to 90 cents. This struggling payments company's shares are now down over 70% in 2022.

The Janus Henderson Group (ASX: JHG) share price is down 0.5% today.

The Life360 Inc (ASX: 360) share price is defying the trend and storming 6% higher to $5.64 this afternoon.

The Pointsbet Holdings Ltd (ASX: PBH) share price is also managing to push higher despite its ASX 200 exit. The sports betting company's shares are up 2% to $2.14.

The Zip Co Ltd (ASX: ZIP) share price is down 2% to 80.5 cents. This buy now pay later provider's shares are now down 81% in 2022.

The post Out in the cold: How are the ASX 200 evictees faring on Monday? appeared first on The Motley Fool Australia.

Tech shares are outperforming the S&P/ASX 200 Index (ASX: XJO) on Monday.

The S&P/ASX 200 Information Technology Index (ASX: XIJ) has lifted 1.6% compared to the broader index's 0.99% rise at the time of writing.

That makes it the market's second-best performing sector, behind only the S&P/ASX 200 Materials Index (ASX: XMJ).

Further, the S&P/ASX All Technology Index (ASX: XTX) has lifted 1.21% right now.

So, what's driving tech shares higher on Monday and which ASX 200 constituents are leading the sector? Let's take a look.

Why are ASX 200 tech shares outperforming today?

ASX 200 tech shares have started the week out on the right foot following a strong session on Wall Street.

The tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) lifted 2.11% to post its third consecutive gain on Friday after dumping 8.6% between 25 August and 6 September. The index ultimately gained 4.14% over the course of last week.

And ASX 200 tech stocks are following its lead. The tech sector gained 3.8% last week, while today's rise has boosted it to a three-week high.

It appears that one of the most embattled stocks is posting the biggest gains today. The best performing ASX 200 tech share right now is EML Payments Ltd (ASX: EML), having gained 6.5% to trade at $1.065 at the time of writing.

It plummeted 11% on 24 August after the company revealed it identified fraudulent activity within its debt processing business.

The Block Inc (ASX: SQ2) share price is also posting a notable gain today, rising 4.9% to $109 right now.

Meanwhile, in third place is the Life360 Inc (ASX: 360) share price. It's currently up 5.5% at $5.73.

Its fellow market favourites Megaport Ltd (ASX: MP1) and NextDC Ltd (ASX: NXT) are also pushing higher, gaining 3.1% and 2.8% respectively.

However, the ASX 200 tech sector has a long way to go to catch up with the broader market. It has dumped 28% year to date, while the All Tech Index has slumped 27%.

For context, the ASX 200 has lost 8% since the start of this year.

The post Why are ASX 200 tech shares having such a cracking start to the week? appeared first on The Motley Fool Australia.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn't quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) continues to be the most share despite reporting a sizeable week on week reduction in short interest to 14.6%. Short sellers appear doubtful on the travel market recovery.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest rise to 14.1%. Last month, this betting technology company posted a massive $89.2 million loss in FY 2022. Given the market's current dislike for loss-makers, it isn't surprising to see short sellers target the company.
• Lake Resources N.L. (ASX: LKE) has short interest of 10.1%, which is up slightly week on week. Short sellers aren't giving up on this lithium developer's shares despite a huge rally recently. Doubts over its DLE technology and a shock CEO departure recently are partly to blame for this short interest.
• Block Inc (ASX: SQ2) has short interest of 10%, which is down slightly week on week yet again. This short interest appears to have been driven by concerns over a potential US recession and the market's aforementioned dislike of loss-making tech stocks.
• Zip Co Ltd (ASX: ZIP) has seen its short interest rise slightly to 9.8%. Short sellers appear doubtful that this buy now pay later provider's cost cutting plans will lead to it becoming profitable in the coming years.
• City Chic Collective Ltd (ASX: CCX) has short interest of 9.05%, which is down slightly since last week. Short sellers have been loading up on this plus sized fashion retailer's shares since the release of a very disappointing full year result which revealed the tripling of its inventory position and negative cash flow.
• Nanosonics Ltd (ASX: NAN) has short interest of 8.6%, which is down materially week on week. Short sellers have been targeting this infection prevention company's shares due to concerns over sales disruption from a business model change in the key US market.
• De Grey Mining Limited (ASX: DEG) has short interest of 8.3%, which is also down materially week on week. Short sellers will have been disappointed to see this gold developer's shares surge higher last week following an update on its Mallina Gold Project.
• EML Payments Ltd (ASX: EML) has returned to the top ten with short interest of 8%. This embattled payments company's European operations are dealing with major regulatory issues at the moment.
• Pointsbet Holdings Ltd (ASX: PBH) has entered the top ten with short interest of 7.8%. Concerns over this sport betting company's cash burn have been weighing on sentiment greatly.

The post Here are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) posted its highest close of September so far today. It lifted 0.66% to end Friday's session at 6,894.20 points. That marks a 0.96% week-on-week gain.

The S&P/ASX 200 Materials Index (ASX: XMJ) led the index with a 3.3% improvement amid higher commodity prices.

Iron ore futures lifted 3% overnight to reach US$100.09 a tonne while the price of copper rose 3.9% and that of nickel gained 0.9%. Gold futures, however, slipped 0.4% to US$1,720.20 an ounce.

The S&P/ASX 200 Energy Index (ASX: XEJ) also rose 1.1% alongside oil prices.

The Brent crude oil price lifted 1.3% to US$89.15 a barrel while the US Nymex crude oil price increased 2% to US$83.54 a barrel.

On the other end of the stick, the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) posted a 1.2% fall while the S&P/ASX 200 Real Estate Index (ASX: XRE) slumped 0.8%.

All in all, five of the ASX 200's 11 sectors closed higher today. But which stocks outperformed? Keep reading to find out.

Top 10 ASX 200 shares countdown

The biggest gain on the ASX 200 on Friday came from materials share Mineral Resources Limited (ASX: MIN).

Rumours the company could be considering spinning out its lithium business likely drove its share price higher today.

Today's biggest gains were made by these ASX shares:

Our top 10 ASX 200 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) slid into the red after a decent start to Tuesday's trade on news the Reserve Bank of Australia lifted interest rates by 0.5% today. The index closed 0.38% lower at 6,826.50 points.

Today's decision from the central bank marks the fifth consecutive month in which Australian interest rates have been hiked, bringing the official cash rate to 2.35%. The move is another effort to tame inflation, which sat at 6.1% at last count.

The S&P/ASX 200 Utilities Index (ASX: XUJ) was the market's worst performing sector today, falling 1.9%.

Meanwhile, the S&P/ASX 200 Information Technology Index (ASX: XIJ) outperformed, lifting 0.7%.

The S&P/ASX 200 Energy Index (ASX: XEJ) also lifted 0.5% amid rising oil prices. The Brent crude oil price rose 2.9% to US$95.74 a barrel overnight while the US Nymex crude oil price gained 2.4% to US$88.92 a barrel.

Finally, iron ore futures saw a 3.3% overnight rise, trading at US$98.47 a tonne. But it wasn't enough to bolster the S&P/ASX 200 Materials Index (ASX: XMJ). It fell 0.7%.

Four of the ASX 200's 11 sectors closed in the green today. But which shares outperformed? Let's take a look.

Top 10 ASX 200 shares countdown

ASX lithium stocks led on Tuesday, and in the lead was Core Lithium Ltd (ASX: CXO).

A bullish outlook for both the battery-making material and fellow producer Pilbara Minerals Ltd (ASX: PLS) may have been behind the gain.

Find out more about Core Lithium and what it's been up to lately here.

Today's biggest gains were made by these ASX shares:

Our top 10 ASX 200 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

Outstanding company performance and favourable economic conditions are obviously fantastic for ASX shares.

But occasionally stocks might get a nice boost from an unexpected circumstance.

That's exactly the great fortune Johns Lyng Group Ltd (ASX: JLG), Sayona Mining Ltd (ASX: SYA), and Lovisa Holdings Ltd (ASX: LOV) investors find themselves in this month.

That's because those three ASX shares have been named as new additions to the S&P/ASX 200 Index (ASX: XJO).

They will be welcomed into the flagship index before trading begins on Monday 19 September.

Not just prestige, but actual practical ramifications

So why is joining the ASX 200 such a boon for stocks?

That's because passive funds that follow the index are forced to buy the shares, thereby pushing up demand.

And of course, the share price heads upward as demand increases.

This will be some relief for investors of insurance building repairer Johns Lyng. The price for that stock has dipped 15.5% over the last couple of weeks.

Shareholders for lithium producer Sayona Mining will be glad too, with that stock losing about a third of its value since 19 April.

Lovisa shares have gained a whopping 71% since mid-June, so the ASX 200 addition could light another fire under the rocket.

More to watch

Those three stocks aren't the only ones entering the exclusive 200 club though.

Investors may keep an eye on these other companies to see how they might move as 19 September approaches:

• Capricorn Metals Ltd (ASX: CMM)
• Charter Hall Social Infrastructure REIT (ASX: CQE)
• Karoon Energy Ltd (ASX: KAR)
• Smartgroup Corporation Ltd (ASX: SIQ)
• Spark New Zealand Ltd (ASX: SPK)

Conversely, for each stock that's added to the ASX 200, one gets removed.

And that's potentially bad news for those companies, as passive funds that follow the index are forced to sell.

When supply increases, the share price dips.

So watch out if you're holding any of these ASX shares, which will be kicked out of the ASX 200 on the morning of 19 September:

• Life360 Inc (ASX: 360)
• AVZ Minerals Limited (ASX: AVZ)
• City Chic Collective Ltd (ASX: CCX)
• Clinuvel Pharmaceuticals Limited (ASX: CUV)
• EML Payments Ltd (ASX: EML)
• Janus Henderson Group CDI (ASX: JHG)
• Pointsbet Holdings Ltd (ASX: PBH)
• Zip Co Ltd (ASX: ZIP)

The post Why these 3 ASX shares could be in for a massive boost this month appeared first on The Motley Fool Australia.

After the market close on Friday, the buy now pay later (BNPL) provider's shares were dealt another blow.

What's happening?

According to an announcement out of S&P Dow Jones Indices, it will be kicking out Zip's shares from the ASX 200 index at the next rebalance.

The index provider appears to have made the move after Zip's market capitalisation dropped to such an extent that it was no longer among the 200 largest companies on the Australian share market.

Based on the current Zip share price of 87 cents and the 687,983,539 shares on issue, the BNPL provider's market capitalisation is a touch under $600 million.

Other tech exits

But Zip won't be the only removal from the index. It will have a few tech shares to keep it company on the long walk to the exit later this month.

Embattled payment company EML Payments Ltd (ASX: EML), location technology company Life360 Inc (ASX: 360), and sports betting company Pointsbet Holdings Ltd (ASX: PBH) will also be removed from the ASX 200 before the market open on 19 September.

Unsurprisingly, given the state of the tech sector right now, none of their peers will be replacing them. Among the new additions are gold producer Capricorn Metals Ltd (ASX: CMM), energy producer Karoon Energy Ltd (ASX: KAR), and lithium developer Sayona Mining Ltd (ASX: SYA).

Another removal of note is AVZ Minerals Ltd (ASX: AVZ). Remember it? This lithium share exits the ASX 200 index after just six months in it. Though, the embattled lithium developer has spent a good portion of this time suspended from trade due to an ownership dispute.

Interestingly, AVZ also has the ignominy of being kicked out of the ASX 300 index as well. Ouch!

What does this mean?

As fund managers often have strict mandates allowing them to only invest in shares in particular indices, such as the ASX 200 index, they could be forced to sell Zip and the others between now and the rebalance.

This has the potential to put extra pressure on the sell side at a time when the buy side is already very weak.

The post Zip and these shares have been kicked out of the ASX 200 index appeared first on The Motley Fool Australia.