The ASX recorded its first weekly loss in over a month this week, however, the drop was fractional, with the key benchmark index shedding just 2.8 points to finish on 7060.7 points.
Quarterly trading updates have begun to weigh on a number of ASX stocks trading at high multiples, ensuring next week’s US mega-tech earnings are a key watch-point.
Elsewhere, SelfWealth (ASX: SWF) Managing Director, Rob Edgley, took the opportunity to present to Coffee Microcaps about SelfWealth’s most-recent quarterly, the company’s performance amid the surge in retail share trading, as well as a look to what lies ahead. You can watch the presentation here.
Which shares excelled?
Shares in Accent Group (ASX: AX1) were on a tear this week as the footwear retailer announced that it would acquire apparel retailer Glue Store and distributor Next Athleisure for $13 million. With the acquisition expected to be finalised by the end of May, it will broaden the company’s sales profile, allowing it to leverage existing expertise to drive further efficiencies in the new businesses.
De Grey Mining (ASX: DEG) was a big winner this week on the back of a positive exploration update. The gold explorer’s shares gained 24.9% over the course of the week, with the biggest influence being news that it detected strong mineralisation at its Crow and Aquila sites. Management noted that visible gold was intersected at one of the prospects at Crow, giving shareholders reason to be optimistic.
With iron ore prices soaring towards an all-time high, there was strong buying support for the miners in this space. While BHP and Rio Tinto both delivered strong quarterly updates, they were outdone by some of the ‘second tier’ iron ore miners, including Champion Iron (ASX: CIA) and Mineral Resources (ASX: MIN), which leapt 8.3% and 7.2% respectively.
Megaport’s (ASX: MP1) quarterly update sparked life into the company’s shares, with the stock gaining 10.5%. The IT services provider announced an 8% increase in recurring monthly revenue compared with the prior quarter, while network operating cash outflow eased on the back of reduced staff expenses among other cost-cutting measures.
Higher gold prices provided a catalyst for OceanaGold Corporation (ASX: OGC), with the gold miner seeing strong interest ahead of its first-quarter results set to be released next week.
Finally, a diverse range of names also found favour this week including Corporate Travel Management (ASX: CTD), Hub24 (ASX: HUB), Eagers Automotive (ASX: APE), Monadelphous Group (ASX: MND) and Reliance Worldwide Corporation (ASX: RWC).
Which shares dragged on the market?
Redbubble (ASX: RBL) was slammed this week despite its third-quarter update showcasing significant marketplace revenue growth of 54% to $103.4 million. However, the result fell flat with investors who took issue with quarter-on-quarter revenue slumping approximately 50% versus that from the prior quarter, even though seasonal variances influenced the result. By the end of the week, RBL shares had dived 27.3%.
Investment management firm Challenger (ASX: CGF) was in the doghouse, with its share price crashing on Tuesday following its own third-quarter trading update. Management provided greater clarity over the company’s profit guidance, with pre-tax earnings now set to come in at the lower-end of its $390 million to $440 million range. Weaker credit spreads were cited as an issue, and the slump comes after a period of sustained share price appreciation since September last year.
Highlighting how volatile the ecommerce retailers have been, both Kogan (ASX: KGN) and Temple and Webster (ASX: TPW) were hit hard this week following quarterly reports. The duo shed 19.7% and 12.3% respectively. Weighing on Kogan’s share price was news that its revenue growth has slowed, EBITDA has pulled back, and there may be price inflation risks moving forward. For Temple & Webster, the company’s outlook commentary suggested revenue may be prioritised over earnings.
Shares in A2 Milk (ASX: A2M) continue to face pressure as industry developments begin to dampen sentiment for the infant formula and dairy business. During the week, Credit Suisse and Morgans slashed their price targets for the stock, while comments from Blackmores’ (ASX: BKL) CEO around a ‘permanent’ $200 million reduction in daigou trade across the industry spooked shareholders in affiliated stocks. The A2 Milk share price lost 9.4% this week to trade at a new multi-year low.
Having recently stuck by its prospectus guidance when it reported mid-year results, Nuix (ASX: NXL) was forced to abandon those aspirations as it unveiled a modest earnings downgrade. The company expects revenue to now be at least 4.4% lower than first flagged, while annualised contract value is tipped to be at least 11.3% below that reaffirmed in February.
Wrapping up some of the other names facing a tough time this week, and there were sliding share prices for Whitehaven Coal (ASX: WHC), New Hope Corporation (ASX: NHC), Pilbara Minerals (ASX: PLS), Lynas Rare Earths (ASX: LYC), Appen (ASX: APX) and Mesoblast (ASX: MSB).
We’ll be back next week with another Weekly ASX Trading Wrap Up – until then, have a great week!
SelfWealth Ltd ACN 52 154 324 428 (“SelfWealth”) (Australian Financial Services Licence Number 421789). The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. Taxation, legal and other matters referred to on this website are of a general nature only and should not be relied upon in place of appropriate professional advice.