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ASX Small Caps Lunch Wrap: ASX moves up after Wisetech CEO steps down
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- Wisetech CEO Richard White kind-of resigned last night
- Qantas AGM is underway and it is precisely the bunfight we expected
- Local markets up thanks to Wisetech and Resmed
Local markets are up this morning, tracking a mixed session on Wall Street that left local investors looking a bit directionless today.
But, there was a major (but not unexpected) after-hours development yesterday concerning embattled WiseTech Global (ASX:WTC) founder Richard White, which has almost single-handedly pushed the market higher throughout the morning session.
… Please, let this be the end of that saga.
TO MARKETS
The ASX 200 is tracking higher at lunchtime today, after a gentle start to the morning was turbocharged by a massive surge in Wisetech Global stocks at the start of the session.
I’ll get to that in a moment, but first we should check out what the market sectors are doing.
In short: they’re mostly doing bugger all, with the exception of a decent lift among Health Care stocks, and the bleedingly obvious surge for the tech sector.
On the health front, investors can thank sector giant ResMed (ASX:RMD) for the lift today – it’s up a long way (for a company that size, I mean) off the back of a banger of a quarterly that was presented to the ASX this morning.
Here are the highlights, per ResMed’s report:
- Revenue increased by 11% to $1.2 billion; up 11% on a constant currency basis
- Gross margin improved 420 bps to 58.6%; non-GAAP gross margin improved 320 bps to 59.2%
- Income from operations increased 34%; non-GAAP income from operations up 27%
- Operating cash flow of $326 million
- Diluted earnings per share of $2.11; non-GAAP diluted earnings per share of $2.20
Niiiice, right? The market certainly seems to think so, and Resmed has surged more than 7.5% this morning.
Here’s what the sub-indices looked like at lunchtime:
The other big mover today is the biggest tech company on the Aussie bourse, Wisetech Global – which has surged more than 14% (at the time of writing) on news that it’s founder and CEO Richard White has finally stepped aside.
In case you’ve been in a coma for the past 10 days or so, Wisetech has been suffering badly after White made what looks like a terrible error of judgement.
The short version: White (current net worth somewhere around $13 billion) publicly went after his alleged former lover – beauty entrepreneur Linda Rogan – with legal action stemming from a dispute over $91,000 worth of furniture.
Annnd, that let the cat out of the bag… the affair became public, and the whole messy debacle caused a massive sell-down of Wisetech’s shares, which ended up wiping more than 25% off the company’s share price, sending it below $100 a pop.
It was cheap, tawdry and so gallingly unnecessary… and it left White with little option other than to step down as CEO, which he did yesterday afternoon at the company’s Sydney headquarters.
It would have been a very weird couple of hours for staff, as it’s been reported that White’s resignation happened immediately after cake had been served at Wisetech HQ to celebrate the 30th anniversary of the company’s founding.
White hasn’t left the company entirely, though – he will retain the title of “Founding CEO”, and will continue to consult to the company with a salary of $1 million per year.
There’s no word on who the new CEO will be, but whoever steps up to take on the role better be wearing a decent set of asbestos gloves and have medics on speed dial – that’s about as big a poison chalice as corporate Australia has seen in quite some time.
… and speaking of poison chalices, Qantas (ASX:QAN) CEO Vanessa Hudson has been overseeing her second company AGM this morning, with the meeting being held in the ultra-convenient for everyone location of Hobart today.
It’s still groaning along as I write this, but so far it’s been a fairly lengthy session of apologies on behalf of a bunch of people who are no longer with the company – including former CEO Alan Joyce, whose remuneration package is still making people cranky – and a lot of corporate make-good from the company’s leadership.
The Qantas AGM took place against the backdrop of major industrial action by Qantas employees at airports around the country, and to say the meeting has been fractious is something of an understatement.
But for those who are protesting, Hudson has some “good news” – a $1,000 one-off cash splash for all 27,000 non-exec Qantas workers, which is apparently a “thank you gift”, and absolutely not at all a transparently obvious and very expensive $27 million… er, guess we’ll call it an incentive… to drag an unhappy workforce back in line.
Here’s what’s been happening elsewhere in the world.
NOT THE ASX
Things were mixed on Wall Street overnight. The tech-heavy Nasdaq was up by 0.61%, driven by the big rally from Tesla. The S&P 500 rose by 0.21%, but the blue chips-focused Dow Jones index slumped by 0.33%, marking four days of losses in a row.
Tesla’s shares shot up by 21% following yesterday’s post-market earnings report.
As you may recall, Tesla posted adjusted earnings of 72 cents per share for Q3, surpassing expectations. Net income rose 17.3% year-over-year to US$2.17 billion, but revenue fell short at US$25.18 billion.
In the earnings call, CEO Elon Musk made some optimistic predictions, including that vehicle sales could increase “20 per cent to 30 per cent next year”.
Boeing shares dipped 1% after the company’s biggest union turned down a new labour contract, dragging out a six-week strike that’s really hit production hard.
United Parcel Service (UPS) shares jumped 5% after the company reported Q3 earnings of US$1.76 per share, beating analysts’ expectations of US$1.63.
IBM dropped 6% after reporting Q3 earnings of US$2.30 per share, beating expectations of US$2.22. However, its revenue came in at US$15 billion, just shy of the US$15.1 billion forecast, even though it was up 1% from last year.
Newmont plunged by 15% after the gold miner reported Q3 earnings of US 81 cents per share, below the expected US 86 cents. Its revenue came in at US$4.61 billion, falling short of the US$4.67 billion analysts were looking for.
Elsewhere, 10-year US Treasury yields dropped to 4.21%, but are still near three-month highs. This follows reports suggesting the Fed Reserve might take its time with rate cuts. Bond yields have spiked this week in both the US and Australia as investors reassess interest rate predictions.
Oil prices dropped by 1% amid fears that sluggish economic growth in Europe could hit energy demand, as well as concerns about the conflict in the Middle East.
In Asian markets this morning, Japan’s Nikkei is down 0.7%, and it’s still too early to tell what’s going to happen on China’s markets today, so you’re going to have to check that out for yourself. I’m busy.
ASX SMALL CAP WINNERS
Here are the best performing ASX small cap stocks for October 25 [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
Code Name Price % Change Volume Market Cap AVM Advance Metals 0.047 67.9 20,009,625 $4,717,977 ERA Energy Resources 0.003 50.0 27,109,895 $44,296,598 WML Woomera Mining 0.003 50.0 34,668 $4,110,149 IEC Intra Energy Corp 0.002 33.3 33,972,563 $2,536,172 VPR Volt Group 0.002 33.3 407,822 $16,074,312 EWC Energy World Corp 0.02 33.3 269,245 $46,183,819 RC1 Redcastle Resources 0.013 30.0 26,538,179 $4,915,480 FFF Forbidden Foods 0.009 28.6 552,857 $4,005,564 88E 88 Energy 0.0025 25.0 2,562,580 $57,867,624 ADD Adavale Resource 0.0025 25.0 3,675,000 $2,447,531 ECT Env Clean Tech 0.0025 25.0 107,806 $6,343,621 PGM Platina Resources 0.026 23.8 689,758 $13,086,787 CHM Chimeric Therapeutic 0.011 22.2 5,629,381 $8,776,267 ICG Inca Minerals 0.006 20.0 216,600 $4,078,113 BDG Black Dragon Gold 0.038 18.8 1,370,631 $8,560,566 ICR Intelicare Holdings 0.013 18.2 1,000 $5,348,070 STM Sunstone Metals 0.007 16.7 34,582,467 $30,737,422 TMX Terrain Minerals 0.0035 16.7 1,900,750 $5,400,086 MTM MTM Critical Metals 0.098 15.3 3,484,182 $29,395,347 PTR Petratherm 0.053 15.2 547,638 $13,960,186 Code Name Price % Change Volume Market Cap AVM Advance Metals 0.047 67.9 20,009,625 $4,717,977 ERA Energy Resources 0.003 50.0 27,109,895 $44,296,598 WML Woomera Mining 0.003 50.0 34,668 $4,110,149 IEC Intra Energy Corp 0.002 33.3 33,972,563 $2,536,172 VPR Volt Group 0.002 33.3 407,822 $16,074,312 EWC Energy World Corp 0.02 33.3 269,245 $46,183,819 RC1 Redcastle Resources 0.013 30.0 26,538,179 $4,915,480 FFF Forbidden Foods 0.009 28.6 552,857 $4,005,564 88E 88 Energy 0.0025 25.0 2,562,580 $57,867,624 ADD Adavale Resource 0.0025 25.0 3,675,000 $2,447,531 ECT Env Clean Tech 0.0025 25.0 107,806 $6,343,621 PGM Platina Resources 0.026 23.8 689,758 $13,086,787 CHM Chimeric Therapeutic 0.011 22.2 5,629,381 $8,776,267 ICG Inca Minerals 0.006 20.0 216,600 $4,078,113 BDG Black Dragon Gold 0.038 18.8 1,370,631 $8,560,566 ICR Intelicare Holdings 0.013 18.2 1,000 $5,348,070 STM Sunstone Metals 0.007 16.7 34,582,467 $30,737,422 TMX Terrain Minerals 0.0035 16.7 1,900,750 $5,400,086 MTM MTM Critical Metals 0.098 15.3 3,484,182 $29,395,347 PTR Petratherm 0.053 15.2 547,638 $13,960,186
Top of the charts at lunchtime is Advance Metals (ASX:AVM), which has entered into a binding sale agreement with Golden Minerals Company (NYSE: AUMN, TSX: AUMN), to acquire a 100% interest in the Yoquivo Silver Project located in northwest Chihuahua State, Mexico, which boasts 17.23M oz silver equivalent (AgEq2) @ 570 g/t AgEq, with the purchase coming at a time when silver prices are at record highs.
Earlier, Godolphin Resources (ASX:GRL) was up this morning on news that the company has reached a major milestone, after process development testing produced the first Mixed Rare Earth Carbonate (MREC) from its Narraburra REE project. Godolphon reports that the quality of the MREC – an intermediate product from rare earth mining and processing which can be sold to specialist refining companies for processing into rare earth metals and oxides – is “excellent”, and indicates a high value product with significant concentrations of Tb and Dy with low impurities.
Battery materials and technology company Talga Group (ASX:TLG) was also up early, on news that it has been selected for an EU Innovation Fund grant for its commercial scale Luleå Anode Refinery, part of its integrated Vittangi Anode Project, awarded by the European Commission. Talga successfully applied for a $115 million grant under the IF23 call, and is one of 85 entities out of 337 applicants to share in a total of $7.8 billion in grants under the EU Innovation Fund.
Just out of the charts but rising with news was Golden State Mining (ASX:GSM) which was rising after the company released a quarterly report covering how things are progressing at its Yule project, and targeting work across its other gold and lithium focused projects.
Similarly, Buxton Resources (ASX:BUX) was up this morning after company CEO Martin Moloney sent out a refreshingly frank and simple letter to the company’s 1,413 shareholders. It’s all good news – and if you’re looking for a light read when you’re done here, defo check it out, if only because it’s just so gosh-darn friendly.
ASX SMALL CAP LOSERS
Here are the most-worst performing ASX small cap stocks for October 25 [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
Code Company Price % Volume Market Cap CML Connected Minerals 0.215 -40.3 191,360 $14,888,956 EEL Enrg Elements 0.002 -33.3 24,552,800 $3,135,048 HCD Hydrocarbon Dynamic 0.002 -33.3 250,000 $2,425,747 LNU Linius Tech 0.0015 -25.0 100,000 $11,730,481 C7A Clara Resources 0.008 -20.0 500,029 $2,501,390 EVR EV Resources 0.004 -20.0 348,050 $6,981,357 GGE Grand Gulf Energy 0.004 -20.0 1,124,270 $12,251,936 IVX Invion 0.002 -20.0 1,922,962 $17,041,479 LPD Lepidico 0.002 -20.0 50,602 $21,472,812 M4M Macro Metals 0.01 -16.7 18,712,037 $43,477,283 POS Poseidon Nickel 0.005 -16.7 25,569,112 $25,223,253 PRX Prodigy Gold 0.0025 -16.7 542,725 $6,997,367 PUA Peak Minerals 0.005 -16.7 27,944,872 $14,982,662 FBM Future Battery 0.018 -14.3 363,112 $13,972,474 ODE Odessa Minerals 0.006 -14.3 13,656,823 $8,877,978 TOU Tlou Energy 0.024 -14.3 477,233 $36,360,361 HRZ Horizon 0.054 -14.3 7,873,602 $70,469,223 TGH Terragen 0.04 -13.0 384,898 $16,977,732 GRV Greenvale Energy 0.027 -12.9 484,541 $14,685,595 ASQ Australian Silica 0.034 -12.8 46,686 $10,992,555
ICYMI – AM EDITION
Antipa Minerals (ASX:AZY) has completed the sale of its non-controlling interest in the Citadel joint venture in WA’s Paterson Province to Rio Tinto for $17m in cash.
The sale proceeds take the company’s cash balance up to more than $23m, giving it a strong financial base from which to accelerate development of its highly prospective Minyari Dome gold-copper project.
It retains interests in the Paterson farm-in project with IGO and the Wilki farm-in project with Newmont.
Managing director Roger Mason said completion of the transaction was a significant milestone that placed the company in an excellent financial position to advance exploration and development of Minyari Dome, which was the subject of a very promising updated scoping study earlier this month.
Regener8 Resources (ASX:R8R) has started maiden drilling at its East Ponton project in WA’s Goldfield’s region to test the Hatlifter paleochannel-hosted nickel-cobalt target and Grasshopper rare earths and niobium carbonatite prospect.
The program of 11 holes will run for about two weeks.
Historical drilling at Hatlifter, which shares many geological similarities to Deep Yellow’s (ASX:DYL) Mulga Rocks multi commodity project in the same paleochannel system, had returned a high-grade, end-of-hole intersection of 3m at 1.26% nickel and 0.6% cobalt from 57m.
Meanwhile, Grasshopper hosts numerous REE anomalies coincident with magnetic features interpreted as an intrusive complex that were highlighted by Anglo Gold Ashanti drilling 2013.
C29 Metals (ASX:C29) has continued to build constructive and mutually beneficial relationships with the regional Kazakhstan government where the company’s Ulytau uranium project is located.
The company says it was warmly welcomed at a meeting earlier this month where it presented an update on operations and future plans in the country, reiterating its commitments to local procurement and employment where possible.
The project is approximately 15 km southwest of the Bota-Burum mine, one of the largest uranium deposits mined in the former Soviet Union which hosted total mined reserves at 20,000 tonnes of uranium (44 million pounds).
At Stockhead, we tell it like it is. While C29 Metals, Antipa Minerals and Regener8 Resources are Stockhead advertisers, they did not sponsor this article.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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