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Investment Solutions

Features

ASX Trading Wrap: Brainchip back on the winners list, travel stocks take flight

Rene Anthony

Thursday, February 3, 2022

Thursday, February 3, 2022

The ASX posted its first weekly gain since the start of the year, buoyed by results from Amazon in the US

The ASX posted its first weekly gain since the start of the year, buoyed by results from Amazon in the US

In a week where earnings season played a key role in separating the fortunes of a number of stocks, the ASX 200 looked past a historic slump in Facebook shares to advance 1.9% to end on 7,120.10 points, with travel shares, iron ore stocks and tech favourite Brainchip among the winners.

Which shares excelled?

Shares in agriculture company Nufarm (ASX: NUF) popped higher this week, with Thursday trading session in particular proving a winner for shareholders. Nufarm provided a first-quarter trading update, with revenue up 36% versus a year ago on the back of favourable weather conditions and new products. The company also guided a strong mid-term outlook, predicting sales could hit $4 billion by FY26 as it services a growing population that embraces sustainable agriculture practices.Shares in Selfwealth community favourite Brainchip (ASX: BRN) surged higher earlier this week, even as gains were cut by the end of the trading week. The artificial intelligence chip manufacturer announced it has received another patent in the US, this time covering Method and a System for Creating Dynamic Neural Function Libraries, and in the process expanding its IP portfolio.Takeover news lifted real estate investment trust Irongate (ASX: IAP) almost 20%, with the firm receiving a bid from Charter Hall Group (ASX: CHC). Having already rejected one bid from another suitor, this latest offer values securities in Irongate at $1.90 a piece, with the company Board now evaluating the non-binding and conditional indicative proposal.After plunging to an all-time low at the end of January as the growth sell-off took hold over markets, shares in Li-S Energy (ASX: LIS) rebounded this week. There wasn't any particular catalyst, however, it could have been a case of investors believing the stock may have been oversold. The lithium-sulphur battery technology stock listed at the end of September last year, up more than 200% in its early days, but has since shed nearly 60% of its value from its peak.Also bouncing after a recent sell-off was Telix Pharmaceuticals (ASX: TLX). The stock pared some of its recent losses following the announcement of a $175 million capital raising, priced at $7.70 per share, however, it ended the week firmly below the offer price. In the meantime, Telix is working on the commercialisation of its prostate cancer imaging product, Illuccix, with funding set aside for further studies.Travel stocks also had a good run, with the likes of Air New Zealand (ASX: AIZ), Qantas (ASX: QAN), Flight Centre (ASX: FLT) and Webjet (ASX: WEB) rallying ahead of New Zealand border opening announcement, and the prospect that Australia international borders could open to tourism by Easter.Some of this week other names charging higher included Seven West Media (ASX: SWM), AVZ Minerals (ASX: AVZ), as well as iron ore duo Fortescue Metals Group (ASX: FMG) and Champion Iron (ASX: CIA).

Selfwealth ASX Trading Wrap travel shares iron ore stocks brainchip

Which shares dragged on the market?

Ansell (ASX: ANN) led this week underperformers, with the industrial and medical supplies company stunning the market with a major earnings downgrade. Both earnings before interest and tax (EBIT) and earnings per share (EPS) are expected to come in significantly lower than a year ago, with customer demand waning and the impact of manufacturing shutdowns from COVID cases and higher staff and logistics costs. The company has also been impacted by a temporary prohibition for importing gloves into the US, with one of its key suppliers falling under the scrutiny of US authorities. From an expected guidance ofUS$1.75 to US$1.95, EPS is now predicted to be US$1.25 to US$1.45.Another name sliding in the midst of reporting season was luxury fashion retailer Cettire (ASX: CTT), which plummeted despite a record result for HY22. Gross revenue soared nearly 200% to $154.1 million, while product margins, order numbers, and its active customer base grew by a similar amount. However, the company recorded a statutory net loss after tax of $8.3 million, versus $2.3 million profit a year ago, with $25 million in advertising and marketing costs weighing on the result.Elsewhere, Novonix (ASX: NVX) shares continued their downtrend, with the stock entering Friday trading session on track for a third major weekly decline in a row. The battery metals tech firm has proven to be one of the more vulnerable stocks amid the recent market sell-off, and adding to its woes this week was a broker price target downgrade from Morgans, as well as a lacklustre debut following the commencement of trading in its shares on the Nasdaq.Syrah Resources (ASX: SYR) also had a tricky week, with the stock trading in a volatile range over recent trading sessions. The graphite and lithium miner released its quarterly report at the start of the week, with one of the big takeaways being continued supply chain issues. Production during the December quarter was hamstrung by disruption in the container shipping market, with operating cash outflows also weighing on sentiment.Last but not least, wealth management platform Hub24 (ASX: HUB) trended lower again this week, while Brambles (ASX: BXB), Codan (ASX: CDA) and Energy Resources of Australia (ASX: ERA) suffered setbacks as well.

We'll be back next week with another Weekly ASX Trading Wrap Up - until then, have a great week!

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