Viewpoint: Bullish
Building products business CSR has been on our watchlist for a few weeks following its 20% correction. The stock is forecast to yield an attractive 4.1% fully franked return with the next dividend due in November, a great adjunct for a company which MM believes is ideally positioned for at least the next 6-12 months.
Squares bid for Afterpay (APT) set the BNPL space alight overnight with the suitor rallying 10% and rival Affirm (AFFRM US) +15% – it feels like they may agree with our view that consolidation is the way forward to dominate this space.
Iron ore has plunged 20% in the last 2-weeks dragging down FMG in the process although the ~6% dip is hardly dramatic at this stage. However we believe there’s now a good change the bulk commodity will dip another ~15% which could send FMG back down towards $20 where it would be attractive to MM – if this does unfold it would…
Z1P managed to rally over 9% yesterday but it continues to languish ~50% below its 2021 peak making it a “high flying” stock which is hurting investors who miss-timed their entry. With APT looking likely to be acquired by Twitters founder Z1P becomes by default Australia’s largest BNPL stock with a market cap of $4b. We continue to…
It’s hard to imagine a stock putting Xero (XRO) to shame from a performance perspective but that’s exactly what Californian based rival Intuit (INT US) has achieved taking its market cap to almost $200bn, compared to XRO at just $21bn. I ponder why INTU wouldn’t consider following in Squares footsteps by bidding for XRO with a scrip as…
Block, Inc. is focused on creating ecosystems for distinct customer audiences. The Company operates through two segments: Square and Cash App. Square segment includes managed payment services, software solutions, hardware, and financial services offered to sellers, excluding those that involve Cash App. Square is a cohesive commerce ecosystem that helps sellers start, run, and grow their businesses, including enabling sellers to accept card payments, provide reporting and analytics, and facilitating next-day settlement. Cash App segment includes the financial tools available to individuals within the mobile Cash App, including peer-to-peer payments, bitcoin and stock investments. Cash App also includes Cash App Card, which is linked to customer stored balances that customers can use to pay for purchases or withdraw funds from an ATM. Cash App also includes the BNPL platform. Its bitcoin ecosystem includes TBD, which is an open developer platform.
The ASX200 open well as expected yesterday but for a pleasant change it continued to rally strongly with 80% of the market closing up on the day. There were a number of obvious standouts on Monday including the $39bn bid for Afterpay (APT) and Santos (STO) raising their offer for Oil Search (OSH) but a few other less obvious moves also caught our attention:
ABB +2.46%: 4th quarter update from the small telco was a positive one today. Total connections topped 400k, up 7.4% in the final quarter, giving the company enough confidence to guide the market to the higher end of the EBITDA guidance range of $17-20m. Bear in mind that this guidance was twice upgraded from the prospectus on…
STO +0.62% / OSH +4.72%: merger talks between the two oil & gas companies have progressed with Santos revising their initial 0.589/sh offer higher to 0.6275 STO shares for each OSH share. The new number represents around a 17% premium to the close prior to the initial offer and would see Oil Search shareholders own 38.5% of the combined unit.
Z1P +9.04%: The No 2 BNPL player rallied today on the read through from the Square (SQ US) tilt at Afterpay (APT). SQ is a massive payments company and a market leader across innovation in the payments space, and the move not only validates the BNPL space with the transaction providing support for all sector participants, it draws a line in the sand around valuation or at least the price a large suitor is prepared to pay.
