Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Cyan Investment Management portfolio manager Dean Fergie reveals what he would do with three ASX shares that have lost half their value in 2022.

Cut or keep?

The Motley Fool: Now let's talk about three ASX shares that have seen their prices plummet in recent times.

What would you do with Playside Studios Ltd (ASX: PLY), which you've previously discussed with us. How do you feel about it these days? The share price has halved this year.

Dean Fergie: Look, Playside, I think it got pretty hyped up. They did a game called Dumb Ways to Die and released a bunch of NFTs on the back of it. So the characters within the game are called Beans, and they released 2,000 Beans. And they made, within a month, something like $7 or $8 million by selling the NFTs. Now, I don't have to tell anyone that the whole cryptocurrency and NFTs are not the flavour of the month anymore. So I think some of the hype that was in Playside has dissipated. 

However, in the last month they've signed an extended agreement with Facebook and Meta Platforms Inc (NASDAQ: META) to do more gaming development for them. They've got a couple of big games that they're about to release. So, for us, we think it's an A-grade gaming developer on a global stage, which is a small company based in Australia. 

And we think there's clearly been quite a bit of corporate activity in terms of Microsoft Corporation (NASDAQ: MSFT) buying Activision Blizzard last year. So for us a business like Playside, that's doing its own IP [intellectual property] in terms of gaming but also gaming development for some of the biggest gaming companies around the globe, is a great long-term investment.

MF: And for such a small company, it's profitable, isn't it? That's handy.

DF: That's right. Really, really strong growing revenues, but a nice blend of its own IP in terms of games, but also work for hire for some of the really, really big companies around town. So we think it's a great medium-term story.

MF: Great. So it sounds like you still have your holdings and are happy to hold onto them.

DF: Yeah. What's been really interesting about all of our holdings that have fallen pretty substantially over the last six months is that the news they've released has been, by and large, really, really positive. 

It's not like they've come out with strong earnings downgrades, that they've had debt covenants flow and all these things, haven't lost customers. Across the board, the news flow has been really positive, which has been in stark contrast to the movement in share prices.

MF: The next one is one that I don't think your fund has ever held — a software company called Whispir Ltd (ASX: WSP), which has also halved so far this year.

DF: This was one of these businesses that when it IPOed, we probably thought it was a little bit toppy in terms of its valuation. Maybe we were correct for a while. I think it maybe floated at around $1.50 and then went up to $4, and it's come back to a dollar or so.

This is one of these businesses that has got a really, really strong corporate client base, which is positive, [and] really, really strong growth in revenues. But, unfortunately, it's still running a pretty high cost base. So it still isn't profitable. Even though, from my memory, they said at the IPO they would be profitable in the next year, which they haven't been. And I would say right now, if any business should be cutting costs, it would be right now.

I think it's got a market cap of around $130 million and something like $30 million on its balance sheet. I think this is one of these businesses, it's probably worth investors having a closer look at, because they've got a good commercialised messaging product with Bluetooth clients, a strong balance sheet, growing revenues. They just need to dial back their costs and it could actually be quite a good business.

MF: So next month's results season will be pretty interesting for Whispir, won't it?

DF: Yeah. I think these businesses they've just got to stop burning cash. This is not a market where you can raise money easily, or if you want to raise money, it's going to be expensive because your share prices are so trash. 

So it's certainly one that if they start making the right noises, then I'd consider adding it to my portfolio.

MF: And the third one is Maggie Beer Holdings Ltd (ASX: MBH), which has halved since February. It's another one that you've discussed in the past. I wonder how you feel about it at this moment?

DF: Yeah… we've recently sold it. Their dairy assets, they're trying to sell them, but they haven't sold them yet. I think there's some challenges in terms of getting a decent price for them. 

But Maggie Beer products I think are selling quite well. The Hampers Emporium business, the online business that they bought a couple of years ago, is a good business, but I think it was a real COVID play.

You've seen it across the board with Adore Beauty Group Ltd (ASX: ABY), Temple & Webster Group Ltd (ASX: TPW), Kogan.com Ltd (ASX: KGN), and the like, all these online businesses had a great [few years]. 

As everyone gets back to normal, they're more likely to spend money going on an overseas holiday or interstate rather than sending a hamper to their friends. So I think there's some pressure there. 

Plus, on the cost side, in terms of packaging, logistics, transport, and the like, these businesses, their margins are going to come under pressure. And when you don't have an enthusiastic client base, I think their margins are going to continue to get squeezed in the medium term.

MF: Did you end up selling at a loss or a gain?

DF: We held it for quite a long period of time. Let me just have a look. We might have been close to square. Maybe a moderate profit. 

We would have done really nice if we'd sold at 50 or 60 cents, but we sold it in the high 30s, low 40s, having bought it a couple of years previously. So it wasn't as good as we thought it would have been. 

The post 'Great long-term investment': Expert names small-cap ASX share to buy for cheap appeared first on The Motley Fool Australia.

The Maggie Beer Holdings Ltd (ASX: MBH) share price is sinking after the company released a trading update for financial year 2022.

While sales continued to increase at the company's core businesses, it's faced notable unforeseen costs. In reaction, the company dropped its earnings guidance and upped prices charged for its products.

At the time of writing, the Maggie Beer share price is 40 cents, 13.04% lower than its previous close.

However, that's an improvement on its earlier performance. The stock was swapping hands for just 38 cents at its intraday low, representing a 17% tumble.  

Maggie Beer share price plummets as costs surge

Some of the key points from the Maggie Beer trading update include:

• The company's core business Hampers and Gifts Australia saw pro-forma sales increase 25.6% over the financial year to April compared to the same period of last financial year
• Fellow core business, Maggie Beer Products, saw a 19.3% increase in sales over the period
• Maggie Beer's e-commerce sales rose 165.6% while its net sales increased 13.1%.
• The company dropped its earnings guidance by $4.2 million
• It's on track to announce its maiden dividend at the end of the financial year

What's happened over the financial year so far?

The Maggie Beer share price is plunging on bad news regarding the company's full-year earnings.

The company has realised $4.2 million of unforeseen and higher than expected costs. Many of these were born from floods in Australia, the war in Ukraine, lockdowns in China, and global fuel and freight costs.

Maggie Beer's dairy segment accounted for around $2.8 million of the expenses. It was hampered by ongoing COVID-19 impacts, a shortage of milk, and high commodity prices.

Paris Creek Farms' branded milk's launch into 400 stores – scheduled for March – was delayed by COVID-19 disruptions and flood events. The milk reached 200 stores in May with the remainder expected to be on shelves by September. That will dint the company's earnings for this financial year.

Additionally, its Saint David Dairy has struggled through skills and labour shortages, resulting in the loss of some customers.

The company noted it has now labelled its dairy businesses "non-core". It expects to outline the segment's future in its full-year results.

Maggie Beer started working to increase the price of its products to offset the additional costs in March.

However, such increases are slow to hit the major supermarkets. The price rise should be reflected on grocery store shelves later this month.

What did management say?

Maggie Beer CEO and managing director Chantale Millard commented on the news driving the company's share price lower today, saying:

As with all businesses, the second half of [financial year 2022] has seen many new challenges arise, with further flow-on effects of COVID-19, increases in costs due to the devastating floods in Central Australia and Northern NSW and QLD, and the war in Ukraine.

The group and in particular [Maggie Beer Products] and [Hampers and Gifts Australia] have continued to perform well, with its diversified revenue stream, whilst absorbing the higher costs and delivering industry leading gross margins.

With price increases being implemented across the group we expect to see our earnings growth return to expected levels in [financial year 2023].

What's next?

The Maggie Beer share price is likely also being dinted by a guidance downgrade.

It's on track to reach its previously given net sales guidance of between $95 million and $100 million.

However, its earnings before interest, tax, depreciation, and amortisation (EBITDA) for the full year is now expected to fall between $9.25 million and $10.5 million. Previously, its financial year 2022 EBITDA guidance was $13.5 million to $15.5 million.

The company has also brought forward its working capital requirements on the expectation of increased demand and supply chain issues next financial year.

Finally, Maggie Beer expects to declare a maiden dividend or capital return of no less than 1 cent per share alongside its final results.

Maggie Beer share price snapshot

Today's fall included, the Maggie Beer share price has tumbled 27% in 2022.

Though, it's 25% higher than it was this time last year.

The post Why did the Maggie Beer share price just crumble 17%? appeared first on The Motley Fool Australia.

It's an exciting day for owners of these ASX small-cap shares – they're hitting their highest share price in years.

Shares in both Monash IVF Group Ltd (ASX: MVF) and Maggie Beer Holdings Ltd (ASX: MBH) are revelling in reporting season.

The Monash IVF share price has hit its highest point since August 2019 ­– surging to $1.135 in intraday trade.

Meanwhile, the Maggie Beer share price reached a new all-time high of 61 cents earlier today on the back of the company's half-year earnings.

Let's take a closer look at what's got small-cap enthusiasts excited about these ASX shares.

What's boosting the share price of these ASX small-caps today?

First off, Maggie Beer's surge follows some tasty figures in the company's half-year earnings.

Over the course of the 6 months ended 31 December 2021, Maggie Beer's sales increased 113% compared to those of the previous first half, reaching $64.5 million.

Meanwhile, its trading earnings before interest, tax, depreciation, and amortisation (EBITDA) soared 438% to $9.8 million.

The company also broke even after reporting a net profit after tax (NPAT) of $5.5 million.

Maggie Beer's first half of financial year 2022 was bolstered by its recent acquisition of Hampers & Gifts Australia.

While the Maggie Beer share price rose 3.3% earlier today, it is now at 60 cents, up 1.69%.

As Maggie Beer's stock was surging, that of Monash IVF was also up despite no word from the reproductive services provider.

However, the market might be anticipating big things from the company's own first-half earnings. They're set to drop tomorrow.

Its share price has also come off its multi-year high this afternoon. It's currently trading at $1.12 – down from its intraday high of $1.135.

The post 2 ASX small-cap shares breaking multi-year highs today appeared first on The Motley Fool Australia.

The Maggie Beer Holdings Ltd (ASX: MBH) share price is soaring today after the company released its results for financial year 2021 (FY21).

Right now, the Maggie Beer share price is up by 4.88% to 43 cents.

Maggie Beer share price jumps on 177% increase to EBITDA

Here's how the premium food and beverage producer and retailer performed during FY21:

• Total revenue up 18.1% to around $53.8 million
• Net profit after tax (NPAT) of $1.9 million, up from a $14.8 million loss in FY20
• Trading earnings before interest, tax, depreciation, and amortisation (EBITDA) of $3.1 million, up 177% on that of FY20
• Net sales of $52.9 million – up 18.8%

According to Maggie Beer, its NPAT increase was primarily due to growth in its retail and e-commerce products.

The company's net sales increase was underpinned by Maggie Beer Products' 23% sales growth. The brand brought in around $25 million in FY21.

The Paris Creek Farms brand earned Maggie Beer around $16 million, while its St David Dairy segment brought in roughly $9 million.

The company's newest addition, Hampers & Gifts Australia, earned it around $2 million.

Maggie Beer repaid a $400,000 loan in full over the year.

Finally, the company ended the period with $13.5 million of cash, $1.6 million of lease liabilities, and $3 million in undrawn debt facilities.

What happened in FY21 for Maggie Beer?

Perhaps the most exciting happening for Maggie Beer in FY21, was actually becoming Maggie Beer.

The company had previously traded as Longtable Group Ltd, under the ticker LON. Longtable was officially renamed Maggie Beer in July 2020.

Also exciting was the company's acquisition of Hampers & Gifts Australia.

Unfortunately, COVID-19 hit the company hard. Its Melbourne-based St David Dairy segment was worst affected. Though, it still ended the year with a 10% revenue growth.

The company is also in the middle of a strategic review into its Paris Creek Farms business. The review is an attempt to unlock greater value from the segment.

What did management say?

Maggie Beer's CEO & managing director Chantale Millard commented on the results, saying:

[FY21] has seen us well and truly shift from "fix it" mode to "growth" mode and successfully create the foundations for sustained future growth…

We are excited about the future of the group, as we push towards group revenue of $100 million over the next 12 months.

Maggie Beer's chair Reg Weine also commented on the results boosting the company's share price today. He said:

The 2021 financial year was a pivotal year… The group achieved a positive net profit, reflecting the underlying strength of our premium brands, diversified business model, tight cost control and focus on continuous improvement and innovation. Reflecting the strength of our brands, these results were achieved through a period of unprecedented challenges brought on by the evolving global COVID-19 pandemic.

We continue to benefit from the consumer shift to on-line purchasing through growth in our Maggie Beer Food Club and our direct-to-consumer channel, with MBP's e-commerce sales increasing 103% year on year.

What's next for Maggie Beer?

Here's what may drive the Maggie Beer share price during FY22:

According to the company, FY22 will see it growing its retail grocery businesses. It plans to launch new products and increase its marketing.

Additionally, Maggie Beer stated Hampers & Gifts Australia saw 36% more sales in July 2021 than it had during the previous comparable period. Meanwhile, Maggie Beer Products' e-commerce net sales also grew by 90% in July.

The company is hoping to deliver group revenue of $100 million in FY22, with a trading EBITDA of between $13.5 million and $15.5 million. Though, the company's outlook is subject to COVID-19.

Maggie Beer share price snapshot

The Maggie Beer share price has fallen 12% year to date. However, it has gained 59% since this time last year.

The post Maggie Beer (ASX:MBH) share price soars on $54 million revenue appeared first on The Motley Fool Australia.

If you're looking for inspiration for your next ASX share investment, it is often useful to see what the professionals are making money out of.

Australian fund Cyan C3G gained 1.8% in July and remains a firm believer in growth shares.

"Most recently the growth and tech sectors have received support on the back of the announcement that Afterpay Ltd (ASX: APT) will be acquired by Square Inc (NYSE: SQ) for $39 billion," portfolio manager Dean Fergie said in a memo to clients.

"This illustrates that fast-growing fintech businesses such as Square Inc are willing to buy aggressively to improve [their] strategic position as they continue to disrupt traditional industry incumbents."

Three particular ASX shares within the Cyan portfolio leapt ahead last month. Despite the ballooning valuations, Fergie's team will continue to keep the faith to call them "long-term holdings":

A true Delta lockdown winner

Fergie previously told The Motley Fool how fond he was of Maggie Beer Holdings Ltd (ASX: MBH), and his belief was rewarded handsomely.

The gourmet food ASX share returned 6% over July.

It was no coincidence that demand for its goods and services accelerated during the ongoing COVID-19 resurgence.

In great timing, Maggie Beer had just completed its acquisition of online business The Hamper Emporium.

"Particularly considering the extended periods of domestic lockdown, the online element of their hamper business is looking increasingly attractive," said Fergie.

"The market now appears to be realising the benefits, synergies and strengthened business model of the combined group."

Maggie Beer shares are arguably not super expensive though, with the price still more than 16% lower than when the year started.

Aussie studio about to release blockbusters

Fergie has also been on the record as a fan of Playside Studios Ltd (ASX: PLY).

And that loyalty brought his fund a stunning 40% during July.

"This Melbourne based game developer, which listed in December last year, delivered solid cashflow performance and proved that its business model, which combines work for hire and original IP games development, is performing outstandingly."

And what's better is that Fergie anticipates more positive news coming over the next year or so.

"The company has an exciting 12 months ahead with the upcoming release of several new games including titles based on blockbuster movies Legally Blonde and The Godfather which should contribute to a material uplift in revenues in FY22."

Similar to Maggie Beer, despite the sensational climb in July, Playside shares are still down more than 11% for the year.

Raiz the roof, says fund manager

The micro-investing app RAIZ Invest Ltd (ASX: RZI) had a sensational 28 July, when the share price rocketed 8%.

The boost was thanks to a record quarterly result.

"Raiz achieved record results for global active customers, funds under management (FUM) and revenue," reported The Motley Fool's Kerry Sun.

"Global active customers totalled 456,927 at quarter-end, an increase of 86.7% on the prior corresponding period."

All up Raiz shares stepped up 10% for the month of July.

"It is comfortably on track to exceed FUM of $1 billion by the close of 2021, representing a doubling in size over 12 months," said Fergie.

"It remains one of our most high-conviction positions as we find the company's consumer product offering very compelling."

The fintech had another upward spike in its stock price last week after it revealed positive July performance metrics.

Raiz shares are up a stunning 90% for the year.

The post One Delta lockdown winner and 2 other rocketing ASX shares appeared first on The Motley Fool Australia.

Banking, mining, retail, technology — we all know the ASX sectors that investors favour.

But what about some of the lesser-known industries?

If most people are backing companies in the same old fields then surely there must be some underpriced gems in niche areas?

When The Motley Fool spoke to Cyan Investment Management portfolio manager Dean Fergie recently, he picked 2 shares that he considered the best buys currently.

And they both play in unusual sectors.

Steady-earning ASX share is working on the 'one big winner'

Melbourne electronic games developer Playside Studios Ltd (ASX: PLY) floated on the ASX last December.

Fergie noted that game makers can go down one of two paths. Either create original content or make software for other companies, such as movie studios.

"Playside has got a really, really good blend of building games for the other big studios. So that revenue is more defined, a lot lower risk," he told this week's Ask A Fund Manager.

"But what they're also doing is developing their own IP in games and working towards having that one big winner down the track — be it console, mobile or PC."

Hitting that 'home run' makes or breaks most games developers.

"It's almost like running a movie studio. If you've got enough content, you're going to get that one big hit that really builds the company."

Playside shares entered the ASX with an initial public offering (IPO) price of 20 cents. That immediately doubled to 41 cents within a few hours of listing.

That IPO hype has now died down, with the stock going for 30 cents on Tuesday afternoon.

A famous name who found an absolute steal

Did you know television chef Maggie Beer has an ASX-listed company named after her?

Fergie is a fan of Maggie Beer Holdings Ltd (ASX: MBH), which focuses on producing gourmet food and drinks.

"Everyone knows the Maggie Beer name," he said.

"But most excitingly, a couple of months ago, they bought an online business called The Hamper Emporium. And we think they got that at an absolute steal."

According to Fergie, having this online presence perfectly complements the existing physical business.

"We think as entertainment is kind of subsiding a bit — you're not thanking your customers anymore by taking them to the footy or the Grand Prix or the Olympics," he said.

"This hamper kind of gifting is going to continue to boom."

Maggie Beer, which has its namesake on the board, has seen its shares slide down 21.4% for the year. However, the stock is up 75% in the past year.

Fergie still can't believe how little the company paid for The Hamper Emporium.

"They paid about a third of the multiple. I actually don't know how they got it so cheaply, but they did."

The post 2 hot ASX shares playing in niche sectors appeared first on The Motley Fool Australia.

Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Cyan Investment Management portfolio manager Dean Fergie tips 2 ASX shares flying under the radar in very niche sectors.

Investment style

The Motley Fool: How would you describe your fund to a potential client?

Dean Fergie: It's the sort of fund that if an investor had the time and expertise to trawl over the smaller stocks in the ASX with the best potential and the lowest risk, our portfolio is a collection of those businesses. We avoid certain sectors that we think are quite high risk — like resources and biotechnology — but we aim to, as much as possible, find the next big stocks. The ones that have got potential, but that are not really at the early stage as such.

Everyone's got one or two stocks in their portfolio that they really like because they know really well, or someone's given to them cheap and they end up being really great performers. We like to think we've got 20 of those in our portfolio because it's what we do, spend time. 

And we've got the contacts and the expertise and the privilege of having a lot of information in our hands to be able to compare a lot of different businesses and select what we think are the best.

MF: Mining is self-explanatory, but with biotech, do you avoid them because they're so binary?

DF: Yeah, absolutely. Not in all cases, but in a lot of cases, it's either the drug is successful or not, or it's approved or it's not. 

The path to market and to being commercial is very, very long. The further out your potential earnings' horizon, the more the risk areas in current valuation. And, a lot of these, especially these life sciences businesses, they're all 10 year-plus horizons and to look at this distance and say, "Look, are they worth $100 million, $2 billion or $0?" is really difficult.

And the other aspect, for us, is just the level of understanding. I'm not a scientist, I've got no expert in oncology or stem cell research or anything, so I think investors that don't have a background in that kind of industry and think they can make wise investment decisions are probably kidding themselves. 

MF: What are your two biggest holdings?

DF: One is called RAIZ Invest Ltd (ASX: RZI). That's incredibly easy to understand. It's basically a micro investing platform. It allows retail investors to save by rounding up in their spending. It allows them to make their own deposits into small investment accounts. It's all online via an app. It's all automated. 

They can easily select [from] 3 or 4 different portfolios, some of which are ESG investments. There's one that's got a small amount of Bitcoin, some that are conservative, all at a very, very cheap rate. The costs start at $3.50 a month. 

So that's something [for] people that maybe don't want to invest in their own stocks, but know that they want to start investing, it's a really simple, straightforward, value-for-money proposition. And quite rightly, it's gaining a lot of traction in the marketplace. That's one we really like.

MF: Last month in a memo to clients, you sounded frustrated that Raiz shares should really be 2 or 3 times its current price.

DF: I did say that. I said you could potentially have a price target of about $4, given their parent company is listing in the US at that kind of valuation.

That I wouldn't say [is] a 'pie in the sky' valuation — it's not at all. Arguably, you could say that Raiz has got more potential because it's operating in smaller markets with a lot more potential.

The other one that we've invested in, and it's probably been our most successful investment over the past 2 or 3 years, is a company called Alcidion Group Ltd (ASX: ALC). That's a little bit harder to quantify because they provide software to hospitals — patient tracking, nurse paging and clinical decision-making software. 

They're sort of replacing all the [manual work] when you go to hospital and people are just writing on boards to say "I've given them this medicine and I'll come back," and someone else reads it. That's all managed on an IT platform, which makes mistakes within hospitals much rarer. You can see exactly how patients are being managed, the outcomes and all that sort of stuff. 

It's actually become commercially proven. This year, they're going to do something like $28 million in revenue. They're in reference sites, both here in Australia and the UK. So it's a really kind of exciting role, that of new technology. It isn't widely adopted in a very slow-moving industry. 

We look at something like that and, say, the path that's been forged by businesses like Pro Medicus Limited (ASX: PME), which is medical imaging software. These businesses attract massive multiples by the time they commercialise and are looking at global rollouts. So in theory, steep customer bases, strong return revenue streams, and really, really good options for revenue and earnings growth into the near future.

Hottest ASX shares

MF: What are the 2 best stock buys right now?

DF: One is a Melbourne-based game developer called Playside Studios Ltd (ASX: PLY). There've been a number of game developers that have met with varying levels of success. One's called Mighty Kingdom Ltd (ASX: MKL) that's floated that has really, really struggled. Another one that got delisted, but has jumped on the Bitcoin bandwagon is Animoca Brands Corporation Limited.

The thing with game developers, you can obviously make your own content or you can do it as work for hire. Playside has got a really, really good blend of building games for the other big studios. So that revenue is more defined, a lot lower risk, but what they're also doing is developing their own IP in games and working towards having that one big winner down the track — be it console, mobile or PC. 

It's almost like running a movie studio. If you've got enough content, you're going to get that one big hit that really builds the company. But Playside, importantly, has reasonable match revenue, a moderate amount of profitability and the upside in a marketplace that is booming at the moment. 

MF: Did you buy-in during the initial public offer (IPO) last year or afterwards?

DF: At the IPO. We actually were in pre-IPO and then got another allocation at the IPO, and I think even bought a few more shares on-market. 

The other one I'd go to, which is again a different sort of industry, is Maggie Beer Holdings Ltd (ASX: MBH). Everyone knows the Maggie Beer name. 

They're building out that kind of high-end food business. But most excitingly, a couple of months ago, they bought an online business called The Hamper Emporium. And we think they got that at an absolute steal compared to what other online businesses are doing, such as Adore Beauty Group Ltd (ASX: ABY), Temple & Webster Group Ltd (ASX: TPW), Kogan.com Ltd (ASX: KGN). They paid about a third of the multiple. I actually don't know how they got it so cheaply, but they did.

Obviously, online is huge at the moment… We think as entertainment is kind of subsiding a bit — you're not thanking your customers anymore by taking them to the footy or the Grand Prix or the Olympics — that this hamper kind of gifting is going to continue to boom. 

We [also] like the existing Maggie Beer business, because it's clearly an excellent brand name. As people spend more time at home, and looking at obviously buying fancy food and doing more cooking and entertaining and things like that. And with this online business, you're kind of seeing the best of both worlds.

MF: If the market closed tomorrow for 5 years, which stock would you want to hold?

DF: I'd probably say our two biggest holdings [Raiz and Alcidion], just because I honestly think I could close my eyes and open them in 5 years and be highly confident they're going to be much, much bigger businesses than they are now. Highly confident. 

Something like PlaySide could be anything. We own shares in Big River Industries Ltd (ASX: BRI), which is a timber supplier and booming at the moment, but in 5 years could be anything. Might be a disaster, but it might be going well. 

MF: Your conviction is reflected in your fund positioning.

DF: That's right. The thing is, also, when you're operating in the small to mid-cap space, if you've got a big holding in a company, you sort of are committing to it for a period of time.

I can't just wake up tomorrow and go, "I've changed my mind on Alcidion and I'm going to sell them." I might be able to do that over the space of a month or more, but I won't be able to do [instantly] without some price impact.

The stocks that I've got most confidence in, I've just got a smaller weighting in. But that's the beauty of investing in the stock market is that you can make incremental changes to investment holding as you see the risks and the returns potential for those businesses. It's not like a car or a house that you've either got to be all-in or all-out. You can fine-tune your investments and I think that's important.

Looking back

MF: Is there a move that you regret from the past? For example, a missed opportunity or buying a stock at the wrong timing or price.

DF:  I do plenty of things every year that I regret. I do. 

You can't go through life as an investor [without regrets] because every time you buy or sell a share, at any point in time you're making a right or wrong decision, for sure.

The ones that hurt… We were in Afterpay Ltd (ASX: APT) really early and we sold out at $35. We thought that was a really smart move at the time.

MF: Do you remember how much you bought in at?

DF: Well, we bought it at the IPO when it was $1.

MF: Oh, really? So you got a 35-bagger.

DF: Yeah, so I mean that was great, but could have been 100-bagger. That probably hurts a fair bit.

We thought we were really, really smart there for a while. I mean, we just didn't realise how much it would take off. 

But I think so many investors missed an amazing opportunity last year, in hindsight. At the time, I didn't know anyone that was saying, "Oh, now you got to pile in to buy some JB Hi-Fi Ltd (ASX: JBH)", or Kogan, or any of those. It just wasn't happening.

In terms of individual investments, there's been a lot of stuff that I've been in. We owned shares in Lovisa Holdings Ltd (ASX: LOV), bought at $2 or $3, and sold out at $4 before it started really expanding because we weren't confident enough that they could expand offshore.

We owned shares in Victory Offices Ltd (ASX: VOL) that got hit with COVID. I mean everyone's probably got a COVID sob story, but again, I regret doing the investment. But we also sold out at 50 cents and it's now 20, so that was a good result. 

We owned shares in Blue Sky Alternative Investments Limited (ASX: BLA) that ran really strong, we made a lot of money, and then gave half of it back in a short period of time. But we sold out before the stock went to zero. Probably on balance, I don't regret that because we made money from it, but I probably wish I'd seen the writing on the wall a little bit sooner.

MF: It's a salient point you made earlier, that it's unrealistic for investors to expect a 100% strike rate. Because even the professionals go into it knowing that some you're going to lose.

DF: I say the thing with long-only investing is that it's an asymmetrical outcome. You can't lose more than 100%, but you can make much more than 100%. 

So you don't even have to get 50% of your calls right. You just got to make sure that the ones you get wrong, you don't double down on and keep throwing good money after bad. And the ones that go well, you let those profits run.

Graeme and I do everything unanimously at Cyan, but one thing that is completely non-negotiable is we do not throw good money after bad. We don't prop up businesses that aren't going well because we think the price has got too cheap, or lost opportunity. We will let other people do that. We never follow any business that's going down. We never keep topping up.

That's probably one of the smartest things we do. It's an emotionally difficult thing to do, because it's like, "Oh, I'm going to prove the market's got this wrong," but it's just silly. 

So we cut our losses, let our profits run, and I think that's why we've managed to generate some pretty good returns over the long term.

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The Maggie Beer Holdings Ltd (ASX: MBH) share price was up as much as 9% today before partially retreating. This comes after the company announced, "strong double-digit growth in FY21" and a new ranging deal with Woolworths Group Ltd (ASX: WOW).

At the time of writing, shares in the food and beverage company are trading for 34.5 cents each – up 4.55%. For comparison, the All Ordinaries Index (ASX: XAO) is currently trading 0.68% lower.

Let's take a closer look at today's announcement.

Why the Maggie Beer share price is on the move

Business update

In a statement to the ASX, Maggie Beer Holdings said net sales, compared to last year, are up by double digits. Its "core business and e-commerce" platforms are up a combined 29% in April 2021, compared to the year prior.

Easing COVID-19 restrictions in Victoria have seen sales in its Saint David Dairy range "restored to pre-COVID levels". Net sales YTD for the products are up 9% on this time last year. Paris Creek Farms sales are up 5% on the previous year.

Maggie Beer says sales for Paris Creek have been impacted by a "realignment" of its private-label business. The company claims this has resulted in reduced sales but greater profits. As well, the company says the product is being ranged more widely in Victoria and South Australia. Maggie Beer Holdings will now conduct a "strategic review" of Paris Creek to "unlock shareholder value."

Sales in Hampers and Gifts Australia (HGA), which the company acquired in March, are up 96% on April last year. Maggie Beer says it will fully integrate the business into the fold by the end of May.

News of the HGA purchase sent the Maggie Beer share price rocketing 18%.

New product ranging

Also in the statement, Maggie Beer Holdings reported it will "launch [a] new range of Finishing Sauces and Bone Broths in October 2021…" in at least 75% of Woolworths supermarkets. The company hopes the launch of these products will aid in the reduction of seasonal variations in its sales.

Independent stores will also be selling the new products from October.

The new range of products will comprise four different sauces and two bone broths.

Management commentary

Chantale Millard, CEO of Maggie Beer Holdings, said:

We are very pleased with the continued growth in the MBH Group, in particular the strong growth of the Maggie Beer Products business.

It is also great to see Hampers & Gifts Australia continuing to demonstrate excellent growth over FY20, including over the sharp uplift in sales experienced by the e-commerce industry in April 2020 from the Covid-19 pandemic lockdown. With the recent successful completion of the capital raise to purchase HGA and the launch of the two new products lines for Maggie Beer Products later this year, we are expecting our strong growth to continue into FY22 and beyond, as the MBH Group cements its position as the premium food and beverage brand in the entertaining and e-commerce space.

Maggie Beer share price snapshot

Over the last 12 months, the Maggie Beer share price has increased by 163.8%. It is, however, down by around 30% since the beginning of this year.

Given its current valuation, Maggie Beer Holdings has a market capitalisation of approximately $97 million.

The post What's moving the Maggie Beer (ASX:MBH) share price today? appeared first on The Motley Fool Australia.

The Maggie Beer Holdings Ltd (ASX: MBH) share price has returned from its trading halt and is charging higher today.

At the time of writing, the premium food company's shares are up an impressive 18% to 43 cents.

Why was the Maggie Beer share price in a trading halt?

Maggie Beer requested a trading halt earlier this week so that it could raise funds to acquire Hampers & Gifts Australia for $40 million in cash and shares.

Hampers & Gifts Australia is the company behind the Hamper Emporium and Gifts Australia ecommerce businesses.

The release advises that these businesses are forecast to generate revenue of $36.4 million and EBITDA of approximately $9.1 million in FY 2021.

Capital raising

This morning Maggie Beer revealed that it has successfully completed the placement and the institutional component of its entitlement offer.

This means the company has raised gross proceeds of $20.4 million, comprising $10.9 million from the placement and $9.5 million from its institutional entitlement offer.

These funds were raised at 35 cents per share, representing a 4.1% discount to its last close price.

According to the release, the capital raising had strong support from institutional investors. The placement attracted strong demand from both existing and new investors, whereas the entitlement offer experienced a take-up rate from eligible investors of greater than 97%.

Maggie Beer's CEO, Chantale Millard, said: "We are very pleased with the strong support shown by new and existing shareholders for the capital raising and the acquisition of Hampers & Gifts Australia Pty Ltd. This exciting transaction will help us transform the MBH Group and move it to its next level of growth and shareholder value. We look forward to sharing the journey with our shareholders, as we execute our e-commerce and direct to consumer strategy."

The company will now seek to raise a further $9.6 million from retail shareholders at the same price.

The post Why the Maggie Beer (ASX:MBH) share price is jumping 18% today appeared first on The Motley Fool Australia.

The Maggie Beer Holdings Ltd (ASX: MBH) share price will be one to watch when it returns from its trading halt.

This follows the announcement of a major acquisition and accompanying capital raising.

What did Maggie Beer announce?

This morning the premium food and beverage company announced an agreement to acquire Hampers & Gifts Australia.

According to the release, Hampers & Gifts Australia is the company behind the Hamper Emporium and Gifts Australia ecommerce businesses. These businesses are forecast to generate revenue of $36.4 million and EBITDA of approximately $9.1 million in FY 2021.

Management believes the acquisition fits strategically into its ecommerce and digital transformation strategy and expects it to be immediately earnings per share accretive. After which, synergies and growth initiatives are expected to deliver strong EBITDA growth in FY 2022.

What will it cost and how will it be funded?

The release explains that the two parties have agreed an acquisition price of $40 million, which will be split evenly between cash and shares.

The deal will also include a base earnout of $10 million. This will be paid subject to the new businesses achieving no less than $10 million in EBITDA for the financial year ending 30 June 2023. Once again, this will be split evenly between cash and shares.

In addition, the vendors will be entitled to an additional $1 million for every increase of $1 million in EBITDA (up to a maximum of $5 million) over and above the base earnout amount.

To fund the acquisition, Maggie Beer is aiming to raise $30 million via a capital raising at 35 cents per share. This represents a 4.1% discount to its last close price.

This will comprise a placement of $10.9 million and a pro rata accelerated, non-renounceable entitlement offer to raise approximately $19.1 million. The latter is intended to be fully underwritten.

Maggie Beer's CEO, Chantale Millard, said: "It is a key strategy of the MBH Group to grow its e-commerce and direct to consumer business. This exciting opportunity will allow us to do this whilst partnering with a fantastic e-commerce hamper and gifting business, which has an amazing team and is very profitable and cash generating. It will help us transform the MBH Group and move it to its next level of growth."

The post Maggie Beer (ASX:MBH) share price on watch after announcing major acquisition appeared first on The Motley Fool Australia.

The Maggie Beer Holdings Ltd (ASX: MBH) share price is surging today, despite a sagging S&P/ASX 200 Index (ASX: XJO). At the time of writing, Maggie Beer shares are up 3.53% to 44 cents a share, contrasting nicely against the ASX 200's 0.9% drop.

The catalyst for today's moves is (of course) the company's earnings report for the first half of the 2021 financial year (1H21).

What did Maggie Beer report this morning?

Maggie Beer holdings has reported that net sales grew by 19.7% in 1H21 to $27.6 million, up from the prior corresponding period (1H20)'s $23.05 million.

That helped push gross profits up to $12.83 million, up 14.5% on 1H20's $11.2 million. It was a different story for net profits after tax (NPAT) though. Maggie Beer reported an NPAT loss of $367,000, still a 97% improvement from 1H20's loss of  $14.3 million (which included a $12.07 million impairment expense).

Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $1.34 million, up from a loss of $449,000 in 1H20. Meanwhile, Maggie Beer's trading EBITDA metric (which includes leases) turned out at $2.23 million, up 1,378% from $151,000 in 1H20.

Sales were the highlight of Maggie Beer's results. The company reported that Maggie Beer-branded products' net sales increased by 28.6% over the prior period. E-commerce sales of those products grew by 167% to represent 8% of net sales. The Maggie Beer Cheese line was the standout performer of the brand stable, with sales rising 76% over 1H20's numbers. Cooking stocks were up 44%, while fruit paste and pate sales were up 19% and 7% respectively.

The company will be launching a new range of soup products in April this year through the Woolworths Group Ltd (ASX: WOW) grocery stores. The company has also announced it is also planning on expanding its ice cream range in the first quarter of FY2022.

Sales for the company's Paris Creek Farms line were up 11.4%, while St David Dairy sales increased by 5.5%.

Meanwhile, the company's gross margin fell, dropping 2.7% to 46.3%, compared with 1H20"s 48.9%.

Looking forward to 2021 and beyond

Maggie Beer Holdings CEO, Chantale Millard, had this to say on the results, and the future of the company:

We are pleased to confirm to the market our strong result…  however we are cognisant that there is still uncertainty in the economic outlook as JobKeeper winds down in March 21. Despite this uncertainty we remain confident of continuing to deliver double-digit net sales growth… With strong new product development in the pipeline across the Group that we are accelerating for launch, and some exciting plans for our e-commerce and direct to consumer business, we have a busy and exciting second half in front of us.

Judging by the Maggie Beer share price today, investors are in agreement.

The post Maggie Beer (ASX:MBH) share price surges on 20% sales growth appeared first on The Motley Fool Australia.

The Maggie Beer Holdings Ltd (ASX: MBH) share price has had a massive year, jumping up more than 160% in the past 12 months.

Shares in the Maggie Beer Group – which encompasses Maggie Beer products, Paris Creek Farms and Saint David Dairy brands – went up 3.5% yesterday on a positive trading update, but flopped more than 8% in opening trade today. At the time of writing, the Maggie Beer share price has regained some lost ground, now trading at 42 cents, down 1.8%.

Let's take a closer look at what's happening.

What did the Maggie Beer quarterly release say?

In yesterday's release, the company said it had achieved record sales and booming growth across multiple initiatives during the first half of FY21. E-commerce sales increased by 167%, net sales powered up 20%, and the cash position has increased $1.2 million compared to the prior corresponding period.

Commenting on the progress, Maggie Beer Group CEO Chantale Millard said:

It is fantastic for the group to have such a strong start to FY21 and the team have done a tremendous job managing the growth over the past 6 months. We are looking forward to continuing this trend, by supplying premium Australian products to our consumers.

Maggie Beer presently holds a cash balance of $6.3 million following the $1.2 million gain realised in the first half of FY21.

Coles partnership helps along the way

Following the announcement of a partnership with Coles Group Ltd (ASX: COL) last August, the Maggie Beer share price has continued to find its way upward. Coles agreed to launch a range of plant-based meals across approximately 400 Coles locations nationwide.

The day this news was announced, the Maggie Beer share price jumped 23%.

Capitalising on growth opportunities 

According to yesterday's update, Maggie Beer will continue to focus on growth as we enter 2021. The company's market cap has reached $86.1 million and the company has roughly 207 million shares outstanding.

Maggie Beer expects its cash holdings to increase further when incoming third quarter payments quarter for the second quarter trading period are received.

Said Ms Millard: "With our strong cash and balance sheet position, we are well-placed to capitalise on our growth opportunities."

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Maggie Beer Holdings Ltd (ASX: MBH) is a company you might not have heard of. But I'm sure the eponymous name gives it away regardless. Maggie Beer is a famous Australian chef, perhaps best known for her appearances on television shows like Masterchef, or from the self-branded range of foods and kitchen products.

But it's not just this chef that's been cooking up a storm lately. Maggie Beer Holdings is the company behind Maggie Beer (the chef). It grew it out of a small shop that accompanied one of Ms Beer's restaurants back in the 1970s. But today, it is the company behind the product range described above, as well as a growing stable of supplementary brands, such as Paris Creek Farms and Saint David Dairy.

That's despite it only changing its name to Maggie Beer Holdings in July this year (it was formerly known as 'Longtable Group'). It has done very well in 2020 too, rising more than 158% in value since the start of the year. Maggie Beer Holdings is currently (at the time of writing) trading at 45 cents a share.

Investors tap the keg at Maggie Beer

And clearly, investors have noticed. According to reporting in the Australian Financial Review (AFR) this week, Maggie Beer Holdings is attracting a lot of attention as an investment, even though Ms Beer no longer owns a substantial stake in the company (despite still being a director). The AFR reports that Ms Beer and her husband sold their remaining 52% stake in the company last year. But that hasn't stopped other investors taking up the slack.

The AFR reports that fund manager Ellerston Capital has become a major shareholder in the company. Ellerston has reportedly built a rough 7.2% stake in Maggie Beer Holdings after picking up 5 million shares earlier this week.

But Ellerston is not the only large-scale investor either. The AFR also reports that Geoff Wilson, of Wilson Asset Management (WAM), has also 'got on the Beer' in 2020. Wilson (in a private capacity, rather than through a WAM company) has reportedly racked up a 7.6% stake in the company of his own, through his private company Dynasty Peak Pty Ltd. That stake is worth more than $6 million on today's prices.

It appears Mr Wison's timing was impeccable. The AFR reports that Maggie Beer Holdings reported sales growth for the first quarter of FY2021 of 19% at its annual general meeting last week. It also reported that the Maggie Beer brand enjoyed sales growth of 24% over the same period.

The Paris Creek Farms range is apparently in the black now as well, after previously being a money loser. The company also recently made headlines for inking a deal with Coles Group Ltd (ASX: COL). Coles is now stocking a range of plant-based meals from Maggie Beer, which the markets welcomed at the time.

The post Maggie Beer (ASX:MBH) is brewing up some solid support appeared first on The Motley Fool Australia.

The Maggie Beer Holdings Ltd (ASX: MBH) share price has this morning surged 22.7%. This came following the company's announcement it will be launching a range of plant-based meals in Coles. The launch will increase the company's presence in the $1 billion Australian prepared meals market.

Formerly known as Longtable Group, the company recently changed its name to Maggie Beer Holdings at a general meeting held on 16 July 2020.

Coles agreement

In mid-October this year, Maggie Beer Holdings will launch new incremental ranging of 3 'Maggie's Food for Life' ready to eat meals in approximately 400 Coles supermarkets nationally.  The plant-based meals target the fast growing, prepared and plant-based meals category.

Additionally, the announced launch of the range in a major supermarket is an important step in the company's growth strategy.

Prior to the announcement, Maggie Beer prepared meals had been launched in independent supermarkets in the H1 FY20. 

FY20 preliminary trading update

On 9 July 2020, Maggie Beer provided an unaudited trading update. In the update, the company announced strong sales in May and June this year and advised it is on track to achieve positive earnings before interest, tax, depreciation and amortisation (EBITDA) in FY20. This represents an increase of approximately $5.3 million compared to FY19.

The group's cash position has increased from $5.1 million at the end of December to $7.2 million at the end of FY20. Additionally, it is well funded by $10.2 million in cash reserves and undrawn debt facilities. 

Net sales in FY20 have increased approximately 3.5% compared to the prior corresponding period despite challenging conditions due to summer bushfires and the COVID-19 pandemic. 

Maggie Beer is continuing to work on its eCommerce presence with an an improved digital marketing plan and continued growth generated by the 'Cooking with Maggie' series which, at the time of the update, had over 4.4 million views on social media websites, Facebook and Instagram. Additionally, it will include a new website launch in FY21.

About the Maggie Beer share price

The company's mission is to be a leader in meeting the expectations of discerning consumers with new, high-quality food and beverage experiences. According to Maggie Beer, "This means being at the forefront of mainstream trends, but not side-tracked by fads, recognising that opportunities arise locally & internationally". The Maggie Beer share price is currently trading at 26.5 cents which represents a gain of more than 20% in today's trade. The Maggie Beer share price is up 56% in year to date trading and the company has a market capitalisation of around $52 million.

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While not all of them will go on to be a success, three that I am watching closely are listed below.

Here's why I think they should be on your watchlist:

Auscann Group Holdings Ltd (ASX: AC8)

I think that AusCann could have a bright future ahead of it if the Australian healthcare sector embraces medicinal cannabis. Especially given its sizeable production capabilities, strong management team, strategic ties with cannabis giant Canopy Growth Corp, and first-mover advantage. It is still early days, but I am optimistic that its education program will bring prescribing general practitioners on side and give the company a shot at winning a share of the lucrative chronic pain management market.

Bubs Australia Ltd (ASX: BUB)

I think that this goat milk infant formula and baby food company has done incredibly well at growing its distribution network significantly over the last 12 months. This puts it in a position to follow in the footsteps of A2 Milk Company Ltd (ASX: A2M) in the China market, all being well. However, its sales have been a touch underwhelming thus far, so I'm holding off an investment until I see signs that consumers are taking to its products. After all, you could have the best distribution network in the world, but without willing buyers it is all for nothing.

Longtable Group Ltd (ASX: LON)

I think that Longtable, formerly known as Primary Opinion Ltd, is a growing food company that investors should watch out for. The company is headed by Lauran McBain, the former CEO of Bellamy's Australia Ltd (ASX: BAL). At the end of 2017 Longtable raised $43 million in order to fund the acquisition of leading biodynamic-organic dairy products company B.-d Farm Paris Creek. This complements its existing stake in Maggie Beer's product range. If McBain can recreate her success at Bellamy's with Longtable, then Longtable could be a real star of the future.

The post 3 speculative small cap shares to watch appeared first on The Motley Fool Australia.

While the three shares below may not be ready to be invested in just yet, I think they are well worth putting on your watchlist after they made great strides towards their goals in 2017.

They are as follows:

Bioxyne Ltd (ASX: BXN)

Bioxyne is an Australian life sciences and health products company with its eye firmly fixed on the Asia market. Last year the company caught my eye after announcing plans to launch three health and wellness products in the market. In my opinion, the product with the most potential is its BK18 nutritional health drink which is made with dairy from Waikato, New Zealand and includes an immune boosting probiotic and a range of key vitamins. In addition to these products, it has also just recently announced the launch of a nutritional shake for men into the Malaysian market.

Fastbrick Robotics Ltd (ASX: FBR)

This robotics company's Hadrian X brick-laying robot is an impressive piece of technology and threatens to steal the jobs of bricklayers across the world. Hadrian X is able to lay 1,000 standard brick equivalents per hour, compared to the 400 bricks per day a typical Australian bricklayer lays. When a robot can do the weekly output of a human in just two hours, it is clear to see the benefits for home builders when used at scale. Fastbrick Robotics has US-giant Caterpillar as a strategic partner and recently announced a major memorandum of understanding (MOU) to build 50,000 new homes in Saudi Arabia. If this MOU becomes a fully-fledged agreement, it could be quite lucrative for the company.

Longtable Group Ltd (ASX: LON)

Longtable, formerly known as Primary Opinion Ltd (ASX: POP), is a growing food company headed by former Bellamy's Australia Ltd (ASX: BAL) CEO Laura McBain. At the end of last year the company raised $43 million in order to fund the acquisition of leading biodynamic-organic dairy products company B.-d Farm Paris Creek. Previously the company's only asset was a 48% stake in Maggie Beer's product range. Time will tell whether McBain can take another small company onto the global stage, but considering the ease in which the company raised that $43 million, she certainly has a lot of backers.

The post 3 speculative shares on my watchlist this year appeared first on The Motley Fool Australia.

While they may not be ready to be invested in, I do think they are worth keeping a close eye on this year:

Bioxyne Ltd (ASX: BXN)

This Australian life sciences and health products company caught the eye last year when it announced plans to launch three health and wellness products into the South East Asia market. The key product, in my opinion, is its BK18 nutritional health drink which is made with dairy from Waikato, New Zealand and includes an immune boosting probiotic and a range of key vitamins. Orders have already flooded in prior to its marketing campaign launching, which could be a very positive sign.

Longtable Group Ltd (ASX: LON) (Formerly known as Primary Opinion Ltd (ASX: POP)

This food company is headed by former Bellamy's Australia Ltd (ASX: BAL) CEO Laura McBain. Up until recently the only asset on its books was its 48% stake in the Maggie Beer product range. However, the company recently raised $43 million in order to fund the acquisition of leading biodynamic-organic dairy products company B.-d Farm Paris Creek at a multiple of 2.1x sales. I think this acquisition and McBain's experience in taking a small company onto the global stage puts Longtable in a position to grow strongly over the next few years.

SKY and Space Global Ltd (ASX: SAS)

Last year SKY and Space Global successfully launched into orbit and tested its first three nano-satellites. These are the first part of a plan to create a full Equatorial constellation that will deliver cost-effective communications infrastructure and services to disrupt the telecommunications and international transport industries. Management estimates the quantum of bandwidth generated by the full constellation has the potential to generate between US$600 million and US$1 billion in annual revenues. The company recently announced a US$30 million five-year deal with BeepTool to provide bandwidth for building innovative messaging and payment solutions designed to help connect the unconnected throughout key African markets.

The post 3 speculative small-cap shares to watch this year appeared first on The Motley Fool Australia.

In afternoon trade its shares have emerged from their trading halt and are 31% higher at 4.2 cents.

What happened?

This morning the company, headed by former Bellamy's Australia Ltd (ASX: BAL) CEO Laura McBain, announced that it has successfully raised $43 million at 3 cents per share in order to fund the acquisition of B.-d Farm Paris Creek Pty Ltd (Paris Creek).

Primary Opinion has agreed an equity price of $34 million in cash and shares to purchase the leading biodynamic-organic dairy products company.

A further $7.8 million will be used to repay Paris Creek's existing bank facilities, with the remaining balance of up to $6.7 million (Including up to $2 million to be raised via a share purchase plan) to be used to fund the costs of the raising, provide working capital, and fund further investment in the business.

According to the release, Paris Creek has been growing its revenue a strong rate for a number of years and recently posted revenue of $19.8 million for FY 2017. This prices the transaction at 2.1x sales including debt, which I feel is great value.

The good news for shareholders is that this growth looks set to continue in the future. Strong demand for its products led the company to recently upgrade its production capacity from 10 million litres to approximately 30 million litres.

Should you invest?

Overall, I think this is a positive move by Primary Opinion that will complement its 48% stake in Maggie Beer's product range.

If Laura McBain can grow this small-cap company to just a fraction of the size of Bellamy's then shareholders will do very well from it.

While I'm not ready to make an investment just yet, I do think Primary Opinion will be one small-cap share to watch in 2018.

The post Why the Primary Opinion Ltd share price is up 31% today appeared first on The Motley Fool Australia.

Generally they are among the more volatile shares on the share market and largely unsuitable for the majority of investors.

Three penny stocks which are gathering a lot of attention at the moment are listed below. Whilst I don't think they are all investable right now, they could be worth keeping an eye on. Here's why:

Bubs Australia Ltd (ASX: BUB)

Thanks to supply agreements with Brilite Nutritionals and NetEase Kaola.com, I believe this infant formula and baby food company has positioned itself perfectly to challenge a2 Milk Company Ltd (Australia) (ASX: A2M) in the lucrative China market. However, with so much future growth already built into its share price, I would suggest investors wait for a better entry point. Somewhere around the 42 cents mark would be a good price in my opinion. Though it is a high risk investment given its lack of sales to date.

Digitalx Ltd (ASX: DCC)

This blockchain technology company's shares have gone gangbusters in the last month and risen a massive 70%. DigitalX provides a range of services including initial coin offerings, Bitcoin trading, and Bitcoin mining. It recently announced a joint venture agreement with Stargroup Ltd (ASX: STL) to develop two-way Bitcoin ATMs. At present there are less than 20 ATMs in Australia that can facilitate a Bitcoin transaction and conversion fees are in the range of 4% to 8% of the transaction value. DigitalX and Stargroup believe that a wide-scale rollout provides a potentially lucrative commercial opportunity.

Primary Opinion Ltd (ASX: POP)

Primary Opinion has a 42% ownership of celebrity chef Maggie Beer's product range. In August former Bellamy's Australia Ltd (ASX: BAL) CEO Laura McBain joined the company as its managing director with the aim of growing sales of the range internationally. Whilst McBain does have a track record of developing small brands into international success stories, only time will tell whether the Maggie Beer brand will appeal to an international audience.

The post Should you buy these 3 popular penny stocks? appeared first on The Motley Fool Australia.

Four shares that have climbed more than most today are listed below. Here's why they have started the week with a bang:

The Baby Bunting Group Ltd (ASX: BBN) share price is up 5% to $1.68. On Friday the baby products retailer's shares fell 16% after its full-year results announcement revealed that same store sales were down sharply so far in FY 2018. But with management confident that things will improve as the year progresses, it seems bargain hunters are snapping up shares today. Even after today's gain I still see a lot of value in them.

The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price has climbed over 6% to $11.96 following the release of a solid full-year result. The regional bank reported underlying cash earnings of $418.3 million, a 4.2% increase on the prior financial year. The bank has held its final dividend firm at 34 cents fully franked. This means its shares provide a trailing fully franked 5.7% dividend.

The oOh!Media Ltd (ASX: OML) share price is 6% higher to $4.28 after the advertising company posted a 27% increase in underlying half-year EBITDA to $34 million. Furthermore, the company reaffirmed its full-year guidance of between $88 million and $92 million in EBITDA. I think this was an impressive result and could make oOh!Media worthy of a closer look.

The Primary Opinion Ltd (ASX: POP) share price rocketed 14% to 4 cents despite there being no further news out of the company. Its shares have been on a tear since last week's announcement that former Bellamy's Australia Ltd (ASX: BAL) CEO Laura McBain had joined the company as its managing director. Whilst this is a promising development, I think the 150% increase in its share price since the announcement has been excessive.

The post Why these 4 ASX shares have started the week with a bang appeared first on The Motley Fool Australia.