On Friday, the United States' 16th largest bank, Silicon Valley Bank (SVB), collapsed following a bank run.

Given that SVB had a big presence in the tech sector, a large number of ASX tech shares were customers and had funds in its bank accounts.

With the bank now falling into insolvency, it is unclear what will happen to these funds and what ramifications it will have on their operations and access to capital.

Though, the good news is that no ASX tech shares appear to have put all their eggs in one basket, underlying the importance of diversification and limiting their exposure to this collapse.

Here's a summary of tech shares with SVB exposure:

Bigtincan Holdings Ltd (ASX: BTH)

This sales enablement platform provider revealed that it has no material exposure to SVB.

Life360 Inc (ASX: 360)

This location technology company is a little more complex than others but estimates that its exposure is US$5.6 million. However, Life360 acknowledges that it also has US$75.4 million in shares of money market mutual funds invested in short-term, AAA-rated U.S. Government Treasury and Government Agency securities that are in SVB custodian accounts. It believes that these accounts were not co-mingled with SVB's assets.

Nitro Software Ltd (ASX: NTO)

This document productivity software company has US$12.2 million of its cash reserves held on deposit at SVB. This compares to its cash balance of US$28 million at the end of December. Positively, though, the company revealed that this development has not impacted its takeover approach from Potentia.

Redbubble Ltd (ASX: RBL)

This struggling ecommerce company estimates that its cash exposure to the SVB collapse is $1.3 million. However, it had a first-half closing cash balance of $97 million, so this is immaterial.

Sezzle Inc (ASX: SZL)

This buy now pay later provider had limited exposure to SVB. Just US$1.2 million of its US$68 million was held at the collapsed bank.

Siteminder Ltd (ASX: SDR)

This travel technology joined in on the bank run on Friday and "had success in transferring some of its cash holdings to other banking partners." However, cash holdings of up to A$10 million were not able to be transferred. The company also revealed that it has an undrawn US$20 million revolving credit facility with SVB. Nevertheless, it currently has A$58 million in cash outside SVB to fund its operations.

Xero Limited (ASX: XRO)

This cloud accounting platform provider revealed that its total exposure to SVB is approximately US$5 million. This represents less than 1% of its most recent cash and cash equivalents balance.

Latest development

In the last few minutes, the US government has announced that it will be stepping in.

According to CNBC, depositors at both SVB and Signature Bank in New York, which has also just closed, will have full access to their deposits on Monday.

A joint statement from Fed Chair Jerome Powell, Treasury Secretary Janet Yellen, and FDIC Chair Martin Gruenberg, said:

Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.

After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

This news has given Wall Street a major lift and sent US futures hurtling higher.

The post These ASX tech shares have exposure to the Silicon Valley Bank collapse appeared first on The Motley Fool Australia.

ASX All Ords shares are trading lower this morning with the S&P/ASX All Ordinaries Index (ASX: XAO) down 0.67%.

However, these two All Ords companies are outperforming their peers after reporting strong half-year results.

Pact Group Holdings Ltd (ASX: PGH)

This ASX All Ords share shot up a whopping 8.4% this morning to $1.10 after the packaging manufacturer reported its FY23 half-year results. The company's share price is currently 2.17% higher at $1.037.

Pact Group is the largest rigid packaging plastics manufacturer in Australia and New Zealand with a growing overseas business.

Pact reported $998 million in revenue for the half, which was 8% up on the prior corresponding period (pcp) of 1H FY22.

Its underlying earnings before interest and taxes (EBIT) was $75 million, 3% above the top of its guidance range but down 8% pcp.

Underlying net profit after tax (NPAT) was $26 million, down 33% pcp but "in line with the performance of the business and increased finance costs", the company said.

The All Ords business said the recovery of costs and volume growth had driven the increased revenue.

It noted increased demand for sustainable packaging and recycled products, new contract wins, and contract re-pricing of existing contracts during the half.

The ASX All Ords share will not pay an interim dividend, reflecting "the desire to preserve cash to allow the Company to reduce debt and continue its capital program in line with its Vision to lead the Circular Economy".

Pact reiterated its guidance for FY23 underlying EBIT to be slightly ahead of FY22 underlying EBIT.

Redbubble Ltd (ASX: RBL)

Rebubble also reported its FY23 half-year earnings this morning. The ASX All Ords share was not out of the blocks as fast as Pact Group but is steadily climbing in lunchtime trade. The Redbubble share price is currently up 3.19% at 48.5 cents.

Redbubble is an online artwork and design marketplace selling a range of products. The All Ords company reported a 1% lift in revenue to $343.8 million for 1H FY23 compared to the pcp of 1H FY22.

Gross profit is down 6% at $101.3 million and the gross profit margin fell 2.5%.

Operating expenses excluding brand investment were 20% higher at $63.6 million.

Looking forward, Redbubble CEO Michael Ilczynski said:

Enhancing the Redbubble marketplace's content quality and search and discovery is a primary focus for the Group to ensure customers can find products among four billion listings which appeal to their
specific interests and needs.

We are uniquely positioned to benefit from recent improvements in AI, which could revolutionize search and discovery of artists' content and greatly enhance new and existing customers' experience.

Early signs are positive and we expect to roll-out implementation of this technology at scale this calendar year.

The post 2 ASX All Ords shares leaping higher with one up 8% on half-year results appeared first on The Motley Fool Australia.

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, Eley Griffiths portfolio manager Nick Guidera takes a look at three heavily discounted small-cap ASX shares.

Cut or keep?

The Motley Fool: Let's examine three ASX shares that have been devastated in the past year, and see if you think each of these fallen stars are now a bargain to pick up or if you'd stay away.

The first one is Wisr Ltd (ASX: WZR), a fintech stock that's plunged 64% over the last 12 months.

Nick Guidera: At this point in time, we believe it is too early [to buy]. 

The team at Wisr have built a disruptive next-generation personal lender with a focus on building financial products, apps, and services that are designed to improve the wellness of Australians. A track record of growing new loans since inception, Wisr now has a sizable loan book of close to $900 million and is targeting profitability in 2023. 

While the market opportunity is large, competition remains intense, and higher interest rates have meant the cost of funding has increased. As the economic outlook deteriorates in Australia, there is also likely to be further pressure on the consumer.

MF: Art marketplace Redbubble Ltd (ASX: RBL) has been slashed 76% in the past year. Would you pick it up as a bargain?

NG: At this stage, no. Redbubble has delivered a series of successive earnings downgrades, as the inflated revenue unwinds from the COVID bump. The CEO is embarking on a turnaround of sorts, however, the challenging trading conditions have meant there is a need to focus on cost out to conserve cash. 

MF: How about online furniture retailer Temple & Webster Group Ltd (ASX: TPW)? It's dropped about 40% over the past 12 months.

NG: At this stage, yes we are likely to [buy]. 

While there are consumer headwinds in Australia, Temple & Webster is the clear leader in the online furniture and homewares category. It has demonstrated it can continue to grow its customer base at a time where penetration remains low for online spend in the category relative to other developed markets.

The post Bargains or traps? Fundie reveals if these 3 ASX shares are worth buying cheap appeared first on The Motley Fool Australia.

Four ASX shares that have not been able to follow the market higher today are listed below. Here's why they are sinking:

HUB24 Ltd (ASX: HUB)

The HUB24 share price is down 6.5% to $24.95. In response to this investment platform provider's "weaker than expected" quarterly update on Tuesday, analysts at Citi have retained their neutral rating but cut their price target to $29.00. HUB24's funds under administration was 2% lower than Citi's estimates.

Lovisa Holdings Ltd (ASX: LOV)

The Lovisa share price is down 2% to $25.29. This morning, analysts at Morgan Stanley downgraded the retailer's shares to an equal-weight rating with a $25.00 price target. The broker has concerns that demand could be easing.

Redbubble Ltd (ASX: RBL)

The Redbubble share price is down 12% to 50 cents. This ecommerce company's shares have been sold off following the release of another disappointing update. Redbubble revealed that trading conditions have been "increasingly challenging" during the first half. This has led to the company reporting an $18 million operating loss for the half, down from an operating profit of $10.5 million a year earlier.

Warrego Energy Ltd (ASX: WGO)

The Warrego Energy share price is down 2.5% to 37 cents. This is despite there being no material news out of the company today. However, investors appear to have been betting on a bidding war inflating the takeover price for the energy explorer. They may now be concerned that the war is over and the takeover offer price won't rise beyond current levels.

The post Why HUB24, Lovisa, Redbubble, and Warrego shares are sinking today appeared first on The Motley Fool Australia.

For example, listed below are two ASX shares that have made big moves in opposite directions on Wednesday following the release of their updates. Here's what's happening:

Ampol Ltd (ASX: ALD)

This fuel retailer's shares were up as much as 4% to $29.87 following the release of its quarterly update. Ampol, formerly known as Caltex, revealed that its fourth quarter group RCOP earnings before interest and tax is expected to be slightly ahead of the third quarter result.

The company also revealed that the Lytton Refiner Margin (LRM) for the fourth quarter remained above historical levels averaging US$11.75 per barrel. Furthermore, refinery production for the period was 1,580 ML, increasing from 1,546 ML in the third quarter.

Overall, a solid quarter from the fuel giant.

Redbubble Ltd (ASX: RBL)

Investors have been selling down Redbubble's shares after the release of yet another disappointing update. The ecommerce company's shares are currently down over 12% to 50 cents, which means they are now down approximately 80% since this time last year.

This morning, Redbubble reported a modest increase in second quarter marketplace revenue, which led to flat first half revenue. However, higher costs mean that it expects to post an $18 million operating loss for the half. This compares to a $10.5 million operating profit a year earlier. Management blamed "increasingly challenging" trading conditions and higher promotional activity.

This loss has led to Redubble's cash balance falling by approximately $46 million over the last 12 months to $97 million.

Unfortunately, management expects "macroeconomic conditions to remain challenging in the near term." As a result, the company has decided to adjust its operating expenditure with the aim of being sustainably cash flow positive by the end of 2023.

The post 2 ASX shares making big moves following quarterly updates appeared first on The Motley Fool Australia.

1. The terminal cash rate for this economic cycle will likely be around 4%. That means the Reserve Bank of Australia (RBA) will be largely done raising interest rates by around the middle of next year.

2. Elements of the equity markets will recover from their recent lows. In the US, I'd be looking at large-cap tech stocks like Microsoft Corp (NASDAQ: MSFT), Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), and Meta Platforms Inc (NASDAQ: META). Australia is a little trickier, given commodity stocks have been strong, bank stocks relatively stable, and some tech stocks, even after their shellacking this year, still look expensive.

3. Many stocks will never again reach their 2021 all-time highs. Many former market darlings and COVID-19 beneficiaries would have to 10x from here to get back to where they traded at their peak. It just isn't going to happen. I'm looking at you Zip Co Ltd (ASX: ZIP), Sezzle Inc (ASX: SZL), and Redbubble Ltd (ASX: RBL), and they've got plenty of mates.

4. That said, some fallen heroes will stage remarkable recoveries, rising 300% or more from these depressed levels. I own a few that have taken big tumbles for which I hold out hope of recovery, and in more recent times, I've taken bites in a few beaten-down ASX small and microcap stocks that are still growing quickly.

Recovery hopefuls: Pinnacle Investment Management Group Ltd (ASX: PNI), Aussie Broadband Ltd (ASX: ABB)

Newer bites: Field Solutions Holdings Ltd (ASX: FSG), Alloggio Group Ltd (ASX: ALO), Mighty Craft Ltd (ASX: MCL)

5. The economy will slow as interest rate rises start to bite. This will put pressure on corporate earnings, particularly in consumer discretionary retailers like Harvey Norman Holdings Limited (ASX: HVN), Kogan.com Ltd (ASX: KGN), and Temple & Webster Group Ltd (ASX: TPW). Profit warnings will likely outpace profit upgrades.

6. Even though some companies are likely going to experience falling profits in FY23, in some cases this has already been priced into their cheap stock prices. I'm certainly no energy and commodity stock expert, and I'm always very conscious of their cyclicality, but Woodside Energy Group Ltd (ASX: WDS) and BHP Group Ltd (ASX: BHP) trading on 8 to 10% trailing fully franked dividend yields and on trailing single digit multiples have significant future falls in the iron ore and oil price already reflected in their share prices.  

7. On a trailing basis, some retailers look dirt cheap. At $2, the Dusk Group Ltd (ASX: DSK) share price trades at seven-times profit and on a fully franked dividend yield of 10%. The specialty retailer of home fragrance products didn't provide FY23 guidance given "ongoing uncertainty surrounding the macro-environment". Dusk is capitalised at $125 million, has $21 million cash, and no debt. 

8. If you believe the economy will recover (it always has done so in the past) and corporate profits will be higher three to five years from now (as they have been in the past), and that will translate to a higher stock market in the future (as it has done so in the past), one of the simplest investing strategies and processes is to dollar-cost average into a low-cost exchange-traded fund (ETF).

My favoured option is the Vanguard MSCI Index International Shares ETF (ASX: VGS). Since its inception in 2014, it has returned 11.4% per annum, something that would have turned an initial $10,000 investment into almost $23,000. The ETF holds stakes in large US companies, including Apple, Microsoft, Amazon, Tesla, Johnson & Johnson, and Exxon Mobil. 

If you want to throw in a local flavour, consider adding the Vanguard Australian Shares Index ETF (ASX: VAS). You'll get exposure to the big miners, the big banks, and the big supermarkets.

9. Interest rates will start turning lower around the third quarter of next year as the economy slows in response to standard variable mortgage rates of around 7.5 to 8%. Consumer confidence has already taken a big hit, dropping to its lowest level since April 2020 amid higher interest rates and surging inflation. 

To the points above, discretionary spend – retail, food and beverage, even travel – is about to take a hit.

10. The forward-looking stock market has already priced much of what's coming into the prices of individual stocks. It knows not how far spending will fall, nor how much some corporate profits will shrink. 

Just as the stock market is falling now, despite an economy with near-record-low unemployment, the forward-looking stock market will go higher in the face of a sharply weaker economy. Bad news is good news for the stock market.

In the meantime, volatility is likely to persist. There could even be another bear market from here, where the S&P/ASX 200 Index (ASX: XJO) falls a further 20%.

For stock pickers, use it to your advantage to add to your favourite existing stocks, and to throw a couple of new positions into your portfolio. 

For ETF investors, continue making regular (fortnightly or monthly) contributions, come hell or high water. With annualised returns potentially around the 8% level, an investment made today would double in nine years. 

It reminds me of the Bill Gates quote…

"Most people overestimate what they can do in one year and underestimate what they can do in ten years."

The post These 10 predictions could help you profit from the stock market regardless of inflation, interest rates or even another bear market appeared first on The Motley Fool Australia.

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, Forager Funds Management portfolio manager Alex Shevelev evaluates three ASX shares going for cheap right now.

Cut or keep?

The Motley Fool: Let's take a look at three ASX shares that have plunged this year, to see if you think each of those fallen stars are now a bargain or if you'd keep away.

The first one is online marketplace Redbubble Ltd (ASX: RBL), which has fallen a horrendous 85% in 2022.

Alex Shevelev: There's a lot of fallen stars out there, but that's been one of the most significant of those fallen stars. 

It sells products to consumers with designs by independent artists. It's been a very volatile ride for long-term Redbubble shareholders — $1 pre-COVID, to 50 cents in the early stages of the COVID market panic, to $7 during the online COVID buying boom, and now back to 50 cents. 

It's really very uncertain as to whether this business is actually going to be able to earn the required margins in what is actually a very competitive space. And the recent first quarter update didn't do the business many favours. There was $17 million worth of losses at the EBIT line and lower year-on-year revenue, which is quite problematic.

MF: Some investors might see that it has annual revenue of half a billion dollars but the market cap's now down to $135 million, and consider it a very cheap valuation. But you reckon it might be a bit of a value trap?

AS: Well, I think it is very important that whatever the level of revenue is that the business can structurally achieve free cash flows from that revenue. And in Redbubble's case, that is not something that they have been able to successfully do outside of some very buoyant COVID periods.

MF: Next one is Viva Leisure Ltd (ASX: VVA), which has halved this year. What do you reckon about that one?

AS: That's right. So, this is a gym group and it's hardly had a break during its listed life, given the closures during COVID over the last couple of years. 

During that period, though, they've been opening new locations, they've been acquiring other locations. It now has 150 locations, gyms around the country. It's moving closer to 190 by financial year end as well, to make it a significant gym group. 

We've seen a lot of inflation over the last six to nine months. The business has been able to pass that inflation onto its members by increasing membership prices, which in the context of its business is actually [a] very, very good achievement. 

The company's given guidance for this current financial year, the margins in that guidance are actually holding up quite well. So, 21-odd per cent is a good outcome for the business and that margin should grow from that point. 

As it improves its margins, as it continues to get growth on locations and revenue, they will actually garner more investor attention.

MF: Fantastic. The third one is sports tech provider Catapult Group International Ltd (ASX: CAT), which has also almost halved in share price year to date. 

AS: This is a business that provides wearables and video analytics to professional sports teams. It's also very sticky, very low-churn revenue, and it's a pretty small relative cost for a very useful product for teams. 

The wearables part of the business, it's been growing 30-odd per cent for years. Last year, Catapult made an acquisition in advanced video analytics, the business was called SBG. And that's really going to help drive the video side of the business that had been lagging previously.

It's been free cash flow generative before, but spent money over the last couple of years integrating those two products together into something that combines the wearables and the video analytics and actually looks to be a first for that market, which is very exciting. 

From next year, the company has said that it's going to be free cash flow positive, if only slightly. But that will put it on good footing because from that point, we'd still be expecting their preferred metric of revenue to be growing 20%-plus over the next couple of years with some good operating leverage. 

So that's another one where a value should flow through and be more clear over the next few years.

MF: Your fund holds both Catapult and Viva at the moment?

AS: We hold both of those, yes.

The post 2 ASX shares to buy that have HALVED in price this year: fund manager 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.

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:

Allkem Ltd (ASX: AKE)

The Allkem share price is down 1.5% to $14.68. This follows the release of the lithium miner's quarterly update this morning. Although Allkem reported strong revenue and cash margins thanks to sky high lithium prices, investors appear concerned by rising project costs.

Bowen Coking Coal Ltd (ASX: BCB)

The Bowen Coking Coal share price is down 14% to 32.2 cents. This has been driven by the coal miner announcing the successful completion of an $85 million placement at discount of $0.30 per share. The funds raised from the placement will be applied to infrastructure guarantees and prepayments, growth and working capital.

Pantoro Ltd (ASX: PNR)

The Pantoro share price is down 16.5% to 14.2 cents. This has also been caused by the completion of an equity raising this morning. The gold miner revealed that it has received firm commitments for an institutional placement to raise $28.5 million at a discount of 14.5 cents per share. Proceeds will be applied to support the Norseman Project as it ramps up to full production, as well as for working capital.

Redbubble Ltd (ASX: RBL)

The Redbubble share price has continued its decline and is down a further 4.5% to 50.7 cents. Investors have been selling off this ecommerce company's shares this week following another poor update. As well as lacklustre top line growth, the company revealed a significant increase in its salaries and wages to $19.3 million for the quarter. This annualises at a massive $77.2 million.

The post Why Allkem, Bowen Coking Coal, Pantoro, and Redbubble are dropping today 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:

Bapcor Ltd (ASX: BAP)

The Bapcor share price is down 3.5% to $6.12. This morning analysts at Credit Suisse downgraded the auto parts retailer's shares to a neutral rating and cut the price target on them by 90 cents to $6.60. This followed the release of a trading update at Bapcor's annual general meeting on Wednesday which revealed higher than expected costs.

BrainChip Holdings Ltd (ASX: BRN)

The BrainChip share price is down 6% to 88.5 cents. This is despite there being no news out of the heavily shorted semiconductor company. Though, it is worth noting that the tech sector is a sea of red today, with the S&P/ASX All Technology Index currently down 3.9%.

Evolution Mining Ltd (ASX: EVN)

The Evolution Mining share price is down 7% to $1.87. Investors have been selling this gold miner's shares following a drop in the gold price and the release of its quarterly update. The former has seen a number of gold shares tumble today. This has led to the S&P/ASX All Ordinaries Gold index falling 2.7%.

Redbubble Ltd (ASX: RBL)

The Redbubble share price has crashed 26% to 53.5 cents. This follows the release of another poor update from this ecommerce company. To the disbelief of many, the loss-making Redbubble is increasing its costs materially in FY 2023. This includes increasing its salaries and wages by $4.7 million during the first quarter, which took them to $19.3 million and annualises at a massive $77.2 million. That's more than half its market capitalisation. Incredibly, further increases to its wages of at least $9.3 million are expected over the remainder of FY 2023!

The post Why Bapcor, BrainChip, Evolution Mining, and Redbubble shares are sinking appeared first on The Motley Fool Australia.

The Redbubble Ltd (ASX: RBL) share price is having another day to forget.

In morning trade, the e-commerce company's shares are down 26% to a two-year low of 53 cents.

This makes it the worst performer on the All Ordinaries Index (ASX: XAO) today.

It also means the Redbubble share price is now down 84% since the start of the year.

Why is the Redbubble share price crashing?

Investors have been heading to the exits in their droves this morning following the release of the company's first-quarter update.

For the three months ended 30 September, Redbubble reported a 5% decline in gross transaction value (GTV) to $134.9 million and a 5% reduction in underlying marketplace revenue (MPR) to $102 million. Both metrics were down 8% in constant currency despite the Australian dollar's significant weakness this year.

While that wasn't great, things got worse the further down the income statement you travelled.

For example, Redbubble's gross profit fell 7% to $39.4 million or 10% in constant currency terms.

Finally, the company's earnings before interest and tax (EBIT) turned negative during the quarter and went from a profit of $0.9 million to a whopping $17 million loss. That's despite its gross profit only falling $3 million year on year.

Bizarrely, at a time when most companies are cutting costs, Redbubble has increased its costs materially. It made a $3.8 million brand investment, which didn't even deliver sales growth, recorded a $4 million increase in other expenses, and increased its salaries and wages by $4.7 million.

The latter means that its salaries and wages totalled $19.3 million for the first quarter. Annualised, this equates to $77.2 million, which is the equivalent of half the company's market capitalisation!

But it won't stop there, it intends to increase its salaries and wages by $14 million to $18 million in FY 2023. This means at least another $9.3 million increase over the remainder of the year.

Management commentary

Redbubble's CEO Michael Ilczynski commented:

The MPR this quarter was down $5.1 million versus the pcp. This largely reflects the impact of cycling $4 million of mask sales within the Accessories category, and the encouraging and continued growth in the T-Shirts category of 12% or $7 million. The growth in T-Shirts was not sufficient to offset the decline in the Artwork and Homeware categories. The MPR result was impacted by slightly lower sales in Australia, Europe and the UK than expected, particularly in September. Importantly, the Group's largest market, North America, remained resilient in the first quarter of FY23.

Salaries and wages totaled $19.3 million for the first quarter. The increase in salaries and wages reflects our strategy to invest to drive revenue and margin growth, with 76% of new FTEs since July 2021 added to our growth focused areas of Product & Technology, Marketing, Commercial and Supply Chain & Logistics.

FY 2023 guidance

Redbubble's guidance for FY 2023 remains unchanged.

It continues to expect revenue growth and "compelling" unit economics, as represented by the GPAPA margin, supported by the 6% average base price rise from early May 2022.

The post Why did this ASX All Ordinaries share just crash 26%? appeared first on The Motley Fool Australia.

Here's why brokers think investors ought to buy them next week:

Mineral Resources Limited (ASX: MIN)

According to a note out of Citi, its analysts have retained their buy rating and lifted their price target on this mining and mining services company's shares to $76.00. The broker has become even more bullish on the company due to its belief that lithium prices will be higher for longer. This has led to Citi upgrading its earnings estimate materially for the coming years. And with Mineral Resources expected to provide an update on its lithium operations with its results next week, the broker suspects that consensus earnings estimates may need to be bumped higher. The Mineral Resources share price ended the week at $60.90.

Redbubble Ltd (ASX: RBL)

A note out of Morgans reveals that its analysts have retained their add rating but cut their price target on this ecommerce company's shares to $1.65. The broker notes that Redbubble's shares were sold off after its full year results following concerns about elevated operating expenses. While this is disappointing and the broker has adjusted its forecasts and valuation to accordingly, it still sees plenty of value in its shares at the current level. The Redbubble share price was fetching 93 cents at Friday's close.

Treasury Wine Estates Ltd (ASX: TWE)

Analysts at Macquarie have upgraded this wine giant's shares to an outperform rating with an improved price target of $15.00. This follows the release of a solid full year result for FY 2022 that was ahead of expectations. Macquarie was impressed with the success of Treasury Wine's premiumisation of its portfolio and its transition away from China. This has led to the broker lifting its earnings estimates. It is now forecasting solid growth in the coming years. The Treasury Wine share price ended the week at $13.42.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

ASX reporting season went into overdrive this week as a flock of S&P/ASX 200 Index (ASX: XJO) shares handed in their results.

With a flurry of news and ASX announcements, it can be hard keeping up.

So, here's the lowdown on some of the biggest movers from ASX reporting season this week. 

You'll find links to our relevant Foolish earnings coverage for further reading.

The ASX winners

The Nearmap Ltd (ASX: NEA) share price soared above the clouds this week, propelling 30%. While the aerial imaging company lifted the lid on its FY22 results, it was a takeover bid that had the market excited. 

The Temple & Webster Group Ltd (ASX: TPW) share price was also on fire, lighting up 30% on Tuesday before eventually running out of steam to post a 7% gain across the week. Investors cheered as the online furniture retailer delivered 31% revenue growth in FY22 while its earnings margin came in at the high range of guidance.

The IPH Ltd (ASX: IPH) share price also hit a home run, finishing the week 17% higher. The market appears pleased with the company's global ambitions. Alongside its FY22 results, IPH announced a $387 million acquisition of Smart & Biggar, a leading Canadian intellectual property firm. This marks IPH's first expansion beyond the Asia Pacific region.

The Brambles Limited (ASX: BXB) share price also ended the week in the winners' column, pumping out a 12% gain. The logistics group shook off global supply chain challenges to deliver 9% sales growth in FY22, ahead of guidance, and boosted its final dividend.

Last but certainly not least, the BHP Group Ltd (ASX: BHP) share price punched in a 7% weekly rise, fortifying its crown as the ASX's largest company. The Big Australian beat expectations in FY22 as strong cash flow performance led to a juicy final dividend of US$1.75 per share.

The ASX losers

While Temple & Webster soared, the pain continued for fellow ASX e-commerce share Redbubble Ltd (ASX: RBL). The Redbubble share price suffered a steep 40% intraday fall on Wednesday after marketplace revenue dropped 13% and earnings reversed in FY22.

The Pact Group Holdings Ltd (ASX: PGH) share price also found itself under pressure, packaging up a weekly loss of 19%. COVID and supply chain challenges contributed to a 25% fall in the company's FY22 underlying profit. Pact Group also slashed its final dividend by 75%.

The week wasn't kind to the TPG Telecom Ltd (ASX: TPG) share price either, descending 13%. The ASX telco reported soft first-half results, impacted by restructuring and rising cost pressures.

The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price also had a week to forget, stumbling 11% as investors were unimpressed by the company's FY22 results. The ASX bank's commentary around its net interest margin may have spooked the market.

Finally, the Beach Energy Ltd (ASX: BPT) share price failed to fire, slipping 8% across the week. The company's FY22 profits fell short of expectations and the ASX oil share warned investors that unit field operating costs would likely head north in FY23. 

Which ASX 200 shares are reporting next?

Gear up for another jam-packed week of ASX reporting season as a swarm of ASX 200 shares prepare to release their results.

According to our Foolish ASX reporting season calendar, some of the ASX blue-chip shares reporting next week include Wesfarmers Ltd (ASX: WES), Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL) and Qantas Airways Limited (ASX: QAN).

The post ASX reporting season weekly wrap: Winners and losers appeared first on The Motley Fool Australia.

With interest rates rising and investors anxious about an economic downturn, ASX shares in the retail sector have been hammered for most of this year.

While the devaluation has affected the entire industry, it's hit online retailers especially hard.

Technology shares have also plunged in 2022, so it's little wonder businesses that intersect between the two sectors would struggle to maintain their valuations.

Analysts at Firetrail, in a memo to clients, took US giant Shopify Inc (NYSE: SHOP) as an example of what's happened globally.

"Shares in US e-commerce platform Shopify fell over 14% in late July after the company announced it was cutting 10% of its workforce," read the memo.

"Shopify, like many other online retailers, had bet that COVID would permanently shift the channel mix away from physical retail. However, now that the US economy has reopened, e-commerce adoption has fallen back to the pre-COVID trend line."

Locally, the Firetrail team cited how Temple & Webster Group Ltd (ASX: TPW) and Kogan.com Ltd (ASX: KGN) have seen their share prices halve so far this year. Redbubble Ltd (ASX: RBL) has lost a painful 70%.

A golden buying opportunity for online retail shares?

But, perhaps in a contrarian view, Firetrail questioned whether this presents a buying opportunity for online retail stocks.

"Assuming a reversion to e-commerce adoption growth in 2023/2024, could value be emerging in the online retailers?"

The Motley Fool chief investment officer Scott Phillips agreed with this proposition.

"It seems to me that the market has decided that, because the economy might slow (maybe even dramatically) many – most – retail stocks are worth nearly nothing," he said.

"But let's say you have a 5, 7 or 10 year time horizon. As long as these businesses aren't significantly or permanently damaged by a recession, they'll come out the other side. They'll probably go on to deliver even higher sales and profits in the years ahead."

Already some investors are waking up to this opportunity, sending some ASX shares to the moon in a hurry over the past few weeks.

Temple & Webster has enjoyed a 57% rocket upwards over the past month, Kogan has travelled 39% up, and Cettire Ltd (ASX: CTT) shares are a crazy 132.5% higher.

What are the chances that business is lost forever?

According to Phillips, the devaluation seen this year assumes a permanent loss of business.

But the probability is that that's not true over a long period, even if a recession rudely interrupts for a brief time.

"If you could buy an asset that might struggle for a short time, then go back to its successful past… well, a share price that suggests relative Armageddon is likely to be, in hindsight, cheap."

The Firetrail team noted how Woolworths Group Ltd (ASX: WOW) took this attitude when it recently decided to buy online retailer Mydeal.Com Au Ltd (ASX: MYD).

"The company offered a 61% premium to market [price] to acquire listed marketplace Mydeal.com.au in May."

The post Could these devastated ASX shares make a roaring comeback? appeared first on The Motley Fool Australia.

The Redbubble Ltd (ASX: RBL) share price is plummeting today after the company announced a severe FY22 loss in its latest annual report.

Shares in the artists' e-commerce marketplace are currently trading for 90 cents apiece, a drop of 39.8% at the time of writing. They closed yesterday's session at $1.495 each.

Let's go over the key metrics of the report.

What did Redbubble report?

• Gross transaction value down 10% year on year (YoY) to $629.6 million
• Earnings before interest, taxes, depreciation, and amortisation (EBITDA) down 121.25% YoY to an $11.2 million loss
• Gross profit down 18% YoY to $183.1 million
• Operating cash flow down 95% YoY to a $52.3 million loss

The company cited numerous headwinds contributing to its earnings and revenue reductions. They included disruption from COVID-19, volatility from supply chain disruptions, inflationary pressures, and the war in Ukraine.

Despite the financial pain, Redbubble stated it now has 809,000 monetised artists on its platform, the largest number ever.

However, the number of selling artists was offset by a 7% reduction in the number of active members on the platform, which shrank to 14.4 million.

What else happened in FY22?

The company noted that $55 million worth of mask sales boosted its FY21 revenue. In FY22, mask sales accounted for just $10 million.

Redbubble said 68% of its marketplace revenue was recurring from existing artists. Furthermore, 46% of revenue came from users making repeat purchases, up from 42% in FY21.

Organic sales, or sales generated in the absence of paid ads, were said to account for 60% of the company's revenue.

A new pet category was also launched on the website in June.

What did management say?

Redbubble CEO Michael J. Ilczynski gave the following comments on the company's performance.

Actions taken by Redbubble during FY22 remain focussed on continued investment in our technology platforms, experiences for artists and their customers, and more recently our brand. This reflects our disciplined approach to investing to drive sustainable growth for the medium and long term. Overall, the Group's outcomes demonstrate continued resilience across all three sides of the marketplaces, and importantly, financial performance and operating momentum improved in Q4FY22.

What's next?

The company said it expects revenue growth in FY23, supported by a 6% increase in the average price of products on the platform.

Redbubble also intends to significantly slash its employee growth, down to 4% this financial year from 30% in FY22.

An investment in the company's brand will also run to a total of $8 million to $12 million.

Over the medium term, Redbubble intends to grow its gross transaction value to more than $1.5 billion, with the majority coming from marketplace revenue at $1.25 billion.

Redbubble share price snapshot

The Redbubble share price is down 70% over the last 12 months and 72% year to date.

That's signifantly below the performance of the S&P/ASX 200 Index (ASX: XJO), which has dropped 5.4% in a year and 4.5% in 2022 so far.

Redbubble's market capitalisation currently stands at around $251 million.

The post Redbubble share price tumbles 40% as profit turns to loss appeared first on The Motley Fool Australia.

The Redbubble Ltd (ASX: RBL) share price spent a day in the green today following positive news from a prominent broker.

After zipping to an intraday high of $1.335, shares in the e-commerce company closed 16.67% higher at $1.33.

Broker slaps a buy rating on Redbubble shares

Investors were driving up the Redbubble share price higher following an updated broker note.

As reported in the Australian Financial Review, the team at UBS upgraded Redbubble shares to a "buy" rating and lifted the company's price target by 10% to $1.60 per share.

UBS analysts touched on the attractive opportunity currently presenting Redbubble shares, saying:

Given the extreme level of investor disinterest in the name, combined with a valuation multiple implying further downgrades and a short interest position of over 4%, we think a FY22 result which meets or potentially beats consensus expectations, combined with an improved July sales update will be a positive catalyst for the share price.

UBS added that the company's sales and margin trends could be better than what the market expects.

The report stated that "channel checks with US print-on-demand peers suggest digital marketing costs have not materially worsened".

Furthermore, a challenging microenvironment is putting pressure on smaller peers to focus on preserving cash rather than investing in marketing activities.

Nonetheless, UBS believes that Redbubble shares are grossly undervalued at the current price. From where it trades today, this represents an upside of more than 20%.

The company is scheduled to report its full-year results on Wednesday, 17 August.

Redbubble share price snapshot

Despite today's gains, the Redbubble share price has slumped 60% over the past 12 months.

The company's shares hit a low of 77.5 cents in June before moving onto an upwards trajectory.

Redbubble commands a market capitalisation of around $366.9 million.

The post Why has the Redbubble share price burst 17% higher on Monday? appeared first on The Motley Fool Australia.

A number of ASX growth shares have been hit hard during 2022. But, could some of these names actually be opportunities at the current, beaten-down prices?

Not every business is worth buying just because it has fallen heavily. However, if there are expectations of growth over the long term, then some names could be solid ideas.

E-commerce saw a big boost during the worst of the COVID-19 period. But now, after heavy falls, could they be attractive ideas because of how much profit and growth they could achieve?

Let's look at two ASX shares that could be interesting ideas.

Kogan.com Ltd (ASX: KGN)

Kogan is an e-commerce business offering a wide range of products and services. Not only does it sell things like televisions, phones, computers and toys, it also offers products like phone plans, insurance and credit cards.

The Kogan share price has dropped around 50% since the beginning of the year, despite its recent boost.

The company recently gave a business update regarding FY22, reporting growth in gross sales by 0.1%. Kogan generated a positive quarterly adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) in the fourth quarter of FY22 after a "successful ongoing recalibration of operating costs".

The ASX share is certainly not generating the same sort of profit or margins that it did a couple of years ago. But, the worst could be behind the company, having suffered from lower demand and excess inventory.

The founder of Kogan, Ruslan Kogan, said:

Times are changing. In uncertain times, people don't want to alter their lifestyle but they are happy to shift the way they shop. We know that in an environment where great value becomes even more important, Kogan.com serves an important need.

However, broker Credit Suisse isn't yet convinced. It has an underperform rating on the business, with a price target of just $3.44 because of numerous headwinds.

Redbubble Ltd (ASX: RBL)

Redbubble is another e-commerce ASX share. It sells items such as apparel, stationery, housewares, bags, and so on, featuring artist-created designs.

The Redbubble share price is another that has suffered heavily this year, down more than 60% in 2022.

The most recent trading update came from the company in April regarding the FY22 third quarter performance.

Redbubble said that the underlying marketplace revenue was down 7% to $96 million, while it made an operating EBITDA loss of $6 million. Nonetheless, the ASX share boasted that it is seeing strong overall customer retention.

At the time of that update management said, "the board does not believe that the current share price reflects the fundamentals and prospects of the business".

The ASX share has a medium-term goal to grow its marketplace revenue to $1.25 billion per annum. The EBITDA margin is expected to "expand significantly over the medium-term" with that revenue growth.

Meanwhile, broker Morgan Stanley has become more cautious on names like Redbubble, with the economic environment expected to hurt demand and growth. Though it does see potential for Redbubble over time.

Morgan Stanley has an equal-weight rating on the business, with a price target of $1. So, it thinks the Redbubble share price could drift lower over the next year.

The post Is it time to buy these 2 beaten-up ASX shares in August? appeared first on The Motley Fool Australia.

Let's have a look at the state of play for some of the leading names.

The Kogan.com Ltd (ASX: KGN) share price soared 50.16%.

The Redbubble Ltd (ASX: RBL) share price ended 22.75% higher.

The Cettire Ltd (ASX: CTT) share price jumped 23.36%.

The Temple & Webster Group Ltd (ASX: TPW) finished up 13.50%.

Despite these large gains, they are still heavily in the red for 2022, but things could be looking up for them individually and as a sector. Company quarterly updates have been flowing thick and fast today.

Why could things be better than expected?

Normally there's a reason for such exuberance in a particular sector.

While only today's buyers of each of these shares can truly say why they were happy to pay a much higher price today than yesterday, there could be a few different reasons.

For starters, Kogan's update for FY22 may have included some promising signs for the sector. Sometimes investors like to take positive signs from an update from one business and then think that it's applicable to other businesses.

Kogan showed that in FY22, gross sales increased by 0.1% compared to FY21. The e-commerce business noted that it had returned to positive quarterly adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) after a "successful ongoing recalibration of operating costs."

Inflation picks up

For the three months to 30 June 2022, the Australian Bureau of Statistics (ABS) reported that consumer price index (CPI) inflation rose by 1.8%.

Over the 12 months to June 2022, CPI inflation increased to 6.1%.

The ABS noted that the most significant price rises were new dwelling purchases by owner occupiers (up 5.6%), automotive fuel (up 4.2%) and furniture (up 7%).

Looking at the broader furnishings, household equipment and services segment, annual inflation was 6.3%. Food and non-alcoholic beverages saw inflation of 5.9%.

The ABS stated that goods accounted for 79% of the rise in the CPI in the latest quarter, reflecting "high freight costs, supply constraints and prolonged strong demand."

Online retailers could benefit from the inflation environment

There are a couple of factors that could mean online retailers are able to deal with the current situation better than their bricks and mortar peers.

One example is that ASX online retail shares may not have the same exposure to the increase in costs. For example, online retailers don't have store networks. Stores come with costs like wages, electricity and rent. Employee costs and electricity costs are rising. Online retailers don't have the sales staff to pay more wages to.

Another possibility is the fact that online retail businesses collectively may be able to attract customers looking for the cheapest prices amid the inflation damage to household budgets. Discounted online sales could be particularly attractive during this period.

The founder of Kogan, Ruslan Kogan, made comments today that highlighted the potential changing customer behaviour:

Times are changing. In uncertain times, people don't want to alter their lifestyle but they are happy to shift the way they shop. We know that in an environment where great value becomes even more important, Kogan.com serves an important need.

What's next?

There isn't a crystal ball to say what happens next with inflation.

But, August will reveal a lot of results and trading updates to tell investors how things are going. Outlook statements and guidance could be particularly interesting.

The post Could ASX online retail shares be getting a boost out of inflation? appeared first on The Motley Fool Australia.

It's a good day for many S&P/ASX 300 Index (ASX: XKO) retail shares, with some market favourites launching as high as 50%.

Their gains follow news Australian retail turnover reached another record high in June, lifting 0.2% – a sixth consecutive monthly increase. Though, it's also the smallest increase of this year so far.

The Australian Bureau of Statistic's Ben Dorber notes cost-of-living pressures – driven by rising inflation, which hit 6.1% last quarter – seem to be slowing spending growth. He said:

Given the increases in prices we've seen in the Consumer Price Index, it will also be important to look at changes in the volumes of retail goods in next week's release of quarterly data.

But that doesn't appear to have dampened sentiment for ASX 300 retail shares on Thursday.

These three favourites have rocketed higher. Let's take a closer look at their outstanding performances.

These ASX All Ords retail shares are surging higher

Kogan.com Ltd (ASX: KGN)

The Kogan share price is skyrocketing 54.31% on Thursday to trade at $4.84.

That's despite a business update from the online retailer detailing falling profits.

However, it also recorded a return to positive earnings before interest, tax, depreciation, and amortisation (EBITDA) after ending in the red in the March quarter.   

Temple & Webster Group Ltd (ASX: TPW)

Fellow ASX 300 retailer Temple & Webster is also in the green today. Its shares are currently up 16.13% to $4.65 despite the company's silence.

Today's gain sees the Temple & Webster share price 30% higher than it was at Tuesday's close. Though, it's still 45% below what it was at the start of 2022.

Redbubble Ltd (ASX: RBL)

The final ASX 300 retail share posting a whopper of a gain is Redbubble. The online marketplace's stock has rocketed to $1.145 – a 21.16% gain.

Once more, there's been no news from the company. Today's gain sees it trading at a near-three-month high.

The post 3 ASX 300 retail shares majorly cashing in on Thursday appeared first on The Motley Fool Australia.