The S&P/ASX 200 Information Technology Index (ASX: XIJ) is leading the S&P/ASX 200 Index (ASX: XJO) with a 1.87% gain while the S&P/ASX All Technology Index(ASX: XTX) is lifting 1.52%.

For context, the ASX 200 is currently down 0.34% and the All Ordinaries Index (ASX: XAO) has dumped 0.23%.

And these ASX tech shares are reaping the rewards of their sector's gains.

They're each surging more than 10% on Wednesday. Let's take a look at why.

3 ASX tech shares gaining more than 10% today

Splitit Ltd (ASX: SPT)

ASX buy now, pay later (BNPL) provider Splitit is gaining today. Its share price is lifting 11.5% at the time of writing to trade at 26.2 cents.

There's been no news from the company to explain its rise. However, many of its BNPL peers are also well and truly in the green.

The Zip Co Ltd (ASX: ZIP) share price is currently up 9% while that of Sezzle Inc (ASX: SZL) is gaining 5%.

Webcentral Ltd (ASX: WCG)

Meanwhile, ASX digital services provider Webcentral is also getting in on tech's day in the green, surging 13% to trade at 26 cents today.

The company announced an on-market share buyback on Wednesday. It said the buyback highlights its strong balance sheet, cash flow generation, and disciplined capital management.

Dotz Nano Ltd (ASX: DTZ)

The final ASX tech share to be posting a notable gain today is Dotz Nano. The stock has leapt 11% to reach 30 cents right now.

There's been no news from the anticounterfeiting and tracing solutions-focused tech company to explain today's gains.

However, it tumbled 10% over the course of Monday and Tuesday. Thus, its Wednesday gains might be representing a rebound of sorts.

The post 3 ASX tech shares surging more than 10% today appeared first on The Motley Fool Australia.

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Capital H Management founder and chief executive Harley Grosser reveals two small-cap ASX shares that are in the buy zone, and the ones that he missed that still haunt him.

Hottest ASX shares

The Motley Fool: What are the two best stock buys right now?

Harley Grosser: The first one is one that I think readers may have seen me mention before, but it's just gotten to such attractive valuation levels that I think it's a near-term buy — that's Webcentral Ltd (ASX: WCG).

This is the telco, cloud services and domain management business. They've given $30 million of EBITDA guidance in FY23, which means it's trading on a bit over four times EBITDA today, which is just way too cheap. 

They flag organic growth to kick in, and there's definitely going to be M&A still to come — that's the style of their management team. 

The stocks sold off heavily because of the merger they did with 5G Networks and a lot of shareholders that took scrip from 5G, we think, have just sold into a liquid market at the time the general markets are selling off.

We'd view that as an opportunity. And I think that at this price, it actually becomes an acquisition target itself for someone like web.com or one of the majors to just lob a bid, because to us it just looks too cheap. 

We think that'll correct in time. But in the meantime, I'd probably say it's a near-term buy opportunity.

MF: This is the company that's also betting on existing domain owners to transfer to the new .au domains to accelerate its business?

HG: Yeah, that's correct. That's just one of the tailwinds behind this business. They've given us a brief update on how sales have gone in .au thus far. We expect more detail at the half-year results this month. We think that'll be positive. It's definitely going to be growing as a nice tailwind. 

One important point to note is that with domains, if you're Webcentral, you receive the cash for, let's say for a two- or three-year domain sale, upfront — but then you only book the revenue each month as it's incurred. So what you'll see is you won't see revenue jump, but you'll see a cash jump.

So I'd just flag that's probably the metric to watch, but hopefully the company will give more detailed numbers around how that looks.

MF: And your second best buy at the moment?

HG: Well, the other one that we've been buying lately is ARC Funds Ltd (ASX: ARC) for the reasons that I outlined earlier. 

So last year when we joined the board, all of 2021 was just about pivoting the strategy, giving us a good sort of platform to launch off. I think we did that with the two managers that we secured in Magnum and Mario. They're both now going well, Mario's up and running and Magnum will launch their fund fairly soon. But this year, with the share price re-rated and with our shareholders happy and everything going in the right direction and a really nice pipeline, we think this year is all about growth. So we've been buying that of late. 

We expect it to, like I said before, it all comes down to execution. If we do our job, then I think we've got some upside there.

Looking back

MF: Is there a move that you regret from the past? For example, a missed opportunity or buying a stock at the wrong timing or price.

HG: In small caps we've got heaps of stocks wrong and you can't avoid getting them wrong. It hurts when you lose money, but it's just part of the game. 

At Capital H we try to pride ourselves on being a small-cap specialist, which means that we need to be across the entire market. It doesn't annoy me if we get a stock wrong, it doesn't annoy me if we take a view on a stock and then that view is wrong. But what does annoy me is if we don't get around to making the effort to look at a stock and at least form a view, then they end up being multibag — that really frustrates me. 

So there's been unfortunately plenty of those over the last sort of 10 years or so. Too long to list, but we try to use that frustration when we do miss one to get onto the next one. 

MF: Is there one painful one off the top of your head you could name?

HG: I remember years ago, Altium Limited (ASX: ALU). We missed that one, when we were much smaller.

I think probably one that was in our wheelhouse that we missed because it was a bit big for us was Pinnacle Investment Management Group Ltd (ASX: PNI). Pinnacle has the same business model as ARC Funds. That's one that we probably should have been more across. 

But look, everyone missed Afterpay. We probably should have been more across the Afterpay story. That was one that I didn't really understand from a product user perspective and therefore missed the stock.

The post 3 ASX shares I missed that haunt me to this day appeared first on The Motley Fool Australia.

So perhaps that can also apply to your ASX share portfolio. A time to consider companies you haven't before?

If you need some ideas about how to make your money work for you in 2022, one expert has named 2 ASX shares that he reckons could go ballistic.

At this time of the year, Capital H Management managing director Harley Grosser usually posts one stock that could rocket in the new year on Livewire — but not this time around.

"This year I thought I'd diversify a little and rather than place all my eggs in one basket, I'd give you 2 stocks that we think are genuine candidates to be multi-baggers in 2022, both of which we've been buying recently."

And they're tickers that are not necessarily household names on the ASX:

Merger shareholders are selling off for no good reason

Grosser first mentioned Webcentral Ltd (ASX: WCG) as a bolter in March. While the share price is actually down almost 25% since then, he's still unambiguously bullish on the digital services provider.

"Webcentral recently merged with 5G Networks and is now an integrated IT, hosting, data centre and managed services company, as well as the third-largest domain provider in Australia," Grosser said.

"The complexity of that merger now hides what is, in our view, the cheapest IT services company on the ASX."

He explained that while his team was supportive of the merger, many other shareholders were not.

"Based on the share register and broker data, most of the selling since then has been retail shareholders who previously owned 5G Networks and were issued Webcentral scrip," he said. 

"We think that selling is a significant opportunity."

Webcentral shares closed for Christmas at 40 cents apiece.

Grosser has declared for a while now that the Webcentral share price should hit $1. Despite a tough 2021, his view has not changed.

"We continue to believe this is the case and have been adding to our position as a result."

ASX share at heart of 'the most exciting investment thematic of our time'

Environmental Group Ltd (ASX: EGL) is faithful to its label, providing environmental solutions for industrial processes.

Grosser's colleague, portfolio manager Joshua Baker, explained that the company has 5 different businesses with one acting as the "core" moneymaker.

"The core business is profitable and growing with tailwinds," he posted on Livewire.

"Success in the new business units, now substantially de-risked due to the successful PFAS [perfluoroalkyl and polyfluoroalkyl substances] trial results, which would open new and potentially highly profitable growth opportunities over the longer term."

Environmental Group is a "high conviction investment" heading into 2022, said Grosser.

"EGL is a highly profitable, well managed and growing business that finds itself right in the heart of what is probably the most exciting investment thematic of our time in decarbonisation and green investing."

The post 2 potential multi-bagger ASX shares for 2022 appeared first on The Motley Fool Australia.

Webcentral merger sees 5G Networks share price soar

Investors received the news of a merger between these Aussie small-caps well. According to today's presentation, the merger will aim to deliver value through a number of avenues.

5G Networks focuses on cloud-based solutions, managed services and network services. Webcentral is one of Australia's top domain providers and the "largest Australian-owned operator of fibre networks, cloud and data centres", according to the company's presentation.

The companies are hoping a larger entity will create enhanced prospects for growth. Webcentral and 5G Networks also flagged a push towards inclusion in the S&P/ASX 300 Index (ASX: XKO) as another highlight.

Other key benefits of the merger include a simplified sales strategy for a combined 330,000+ customers, alongside cost synergies, combined management expertise and a consolidated debt facility.

Investors were clearly bullish on the merger news as the 5G Networks share price surged higher. Shares in the telco are up 10.06% at the time of writing with Webcentral shares up more than 5%.

On a pro-forma, consolidated basis, the merged entity would have revenue of $110-120 million with an earnings before interest, tax, depreciation and amortisation (EBITDA) margin in excess of 20%. On top of the 330,000+ customers, the companies boast 2,500 corporate and government clients, along with 360 staff.

The big message today was one of growth. This morning's presentation indicates the consolidated group will be focused on acquisitions and organic growth into FY2022 and beyond.

That was music to investors' ears who propelled the 5G Network share price higher on Friday morning. Today's gains mean the company's shares are now up 13.5% in July.

The post 5G Networks (ASX: 5GN) share price jumps 10% on Webcentral merger appeared first on The Motley Fool Australia.

Let's take a look at how the telco has been performing.

Quarterly update 

The 5G Networks share price opened just 0.9% higher this morning but increasing optimism has boosted it further in midday trade.   

5G Networks today reported achieving revenues of $26.5 million in the third quarter, with a $14.1 million contribution from its 44.6% ownership of Webcentral Group Ltd (ASX: WCG). By comparison, the telco reported $13 million in cash receipts for the March quarter last year.

The company's performance reflects strong growth across all three core products and increasing demand for its Voice Bridge One Microsoft Teams product. 

This helped it achieve earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $4.7 million for the quarter, with $3.2 million of this coming from Webcentral. The company achieved an EBITDA target of 20% of revenue for the month of March. Looking ahead, 5G Networks expects continued margin growth as cloud, data centre and network services continue to be consolidated within its infrastructure. 

The company is eyeing a number of initiatives to act as growth drivers. These include the launch of a wholesale automated service fulfilment portal in early May, new data centre fibre builds and integration synergies from previous acquisitions. 

5G Networks has traditionally put its foot on the pedal for strategic acquisitions to drive scale and growth. This includes its acquisition of ColoAU back in July 2020, ex-Pipe Networks Data Centre in Fortitude Valley in November 2020 and acquiring 100% of leading dedicated cloud provider Intergrid Group in March 2021.

Today's quarterly report hinted that a number of strategic acquisitions are currently being reviewed. 

5G Networks share price performance 

The 5G Networks share price has struggled to make headway after topping out at $2.44 in late August 2020. Even with today's boost, the company's shares remain almost 19% lower year to date. Over the past 12 months, however, 5G shares have gained 30%.

The post 5G Networks (ASX:5GN) share price jumps 7% on quarterly results appeared first on The Motley Fool Australia.

However, Capital H Management portfolio manager Harley Crosser reckons he's found a gem that's undervalued, profitable and with plenty of room to grow.

It's digital services provider Webcentral Group Ltd (ASX: WCG). The Webcentral share price was trading at 53 cents at market close on Monday.

"With a clean balance sheet, sticky/recurring revenues, strong cash flows, growing top line and an appetite for acquisitions I'd argue WCG deserves 20x [price to] EBITDA," Crosser posted on Livewire.

"That would put the stock above $1."

That's double the current price.

Capital H Management holds the shares so it's in Crosser's interests to see the stock do well. But here are the reasons he outlines:

A huge tailwind coming in July

Australian Domain Administration (auDA) is the authority that administers internet names under the .au domain.

According to Crosser, July this year will see history created as auDA will allow registrations of first-level domain names directly under .au. For example, instead of fool.com.au, this publication could grab the name fool.au.

auDA denied to The Motley Fool that July has been set as the open date for registrations. The Motley Fool understands it could be later in the year.

Regardless of when it happens, first-level domains under .au has never been allowed before and is expected to see a surge in business for domain name registrars like Webcentral.

Australians that already have web addresses will have a 6-month grace period to flag their interest in the equivalent new .au name. This is to stop opportunistic 'squatters' from nabbing existing business names.

"If you think from the perspective of a business owner, the logical decision is to just buy the domain in order to protect your brand," said Crosser.

"The risk is that someone else buys it and either you have confused customers sent to the wrong website, or a fight on your hands. It's a small outlay each year for this security and peace of mind."

He added that when a similar move occurred in the UK, the industry saw a 20% to 30% increase in revenues.

"Webcentral has given early guidance around why they expect domain registrations to rise by a similar amount on the release of .au domains," Crosser said.

".uk domains have since become the dominant extension and I would think that in a few years the same will happen here."

Pre-sales of .au names open from 12 April.

While it's a one-off event, the new incoming clientele has very sticky potential.

"It'll be recurring every year as domains need to be renewed. It also kicks in at the very start of FY22, which is nice from a timing perspective for the financial markets," said Crosser.

"Domains are typically the pull through for other Webcentral services too. You buy a domain, then hosting, emails, security, online marketing, etc. so the other parts of the business should benefit."

New management after a bidding war

Webcentral was the company originally named Melbourne IT, which was Australia's first internet domain name registrar.

So for three decades, Australian businesses and residents have engaged with it to register their .com.au and other .au internet addresses. But in recent times the business has been in huge trouble.

"Late last year, the company was still saddled with debt and the 'for sale' sign was put up by the previous board," said Crosser.

A bidding war then ensued between US giant web.com and 5G Networks Ltd (ASX: 5GN).

According to Crosser, both parties "significantly" undervalued the business with their initial bids. But just as the purchase price went up, web.com dropped out of the race.

5G Networks' final offer was rejected by Capital H Management and another large shareholder. But 5G ended up with a part shareholding and took board and executive control of Webcentral.

"The stock started to rally almost as soon as the offer period closed, reflecting the fact that: 1, new management could fix the company, with some very low hanging fruit in front of them; and 2, the debt issue, which was the main reason the stock was so depressed, had effectively been removed."

Crosser believes the new management's interests are synchronised with minority shareholders.

"The MD, Joe Demase, owns 15% of 5GN and 10% of Webcentral personally. He's taking no cash salary," he said.

"His Webcentral options vest on hitting $10m of annualised EBITDA in that company. He bought another $100k of stock on-market earlier this month."

Erasing the debt

According to Crosser, new management has taken control of the debt.

"As part of the all-scrip bid, 5GN paid back the $46m of debt to Webcentral's bankers and assumed it themselves. That has since been reduced down to $40m of net debt, or 3 to 4x free cash flow."

The company has committed to the market that the remainder of the debt will be paid off. Management has a few different options to reduce it even further, according to Crosser:

• Capital raise or external bank funding
• A merger with 5G Networks
• Eventually pay it off with cash (it has $10 to $12 million of yearly free cash flow)
• Debt to equity conversion
• A combination

The post This ASX tech share will get a massive boost in July appeared first on The Motley Fool Australia.

These wild share price moves come following Webcentral's release of its financial year 2021 first half results (H1 FY21).

What did Webcentral report?

The Webcentral share price is all over the show this morning after the company reported that revenue from its domain registrations rose early in 2020. This came as the pandemic saw more people working from home. However, Webcentral's revenue declined in the second half of 2020. H1 FY21 revenue from domain registration was down 4.2% relative to H1 FY20.

Revenue from the company's email services posted moderate growth (up 1.6%) and Webcentral said it expected further growth in this sector.

Meanwhile revenue from hosting services was down 17.4% compared to the first half of the 2020 financial year, falling to $7.25 million from $8.78 million.

Digital marketing revenue also fell by 33.4% over the previous corresponding half year. The company noted that this segment is a value add to its core products and it expects revenue from digital marketing will grow in line with the company's overall success.

Webcentral's revenue from other income decreased by 27.3% compared to the same half in 2020. The company expects revenue from other income to keep falling as it completes transitional service agreements, and brings in less revenue from its property sublease (due to shrinking property assets).

Total revenue declined by 14.7% compared to the first half of the 2020 financial year.

The company pointed to the impact of COVID-19 and poor customer experience as the cause for the drop in revenue.

It added that the business is undertaking "a number of initiatives to address these issues. Management is confident that revenue growth will return across all four core services as these short term issues are resolved."

Looking ahead, Webcentral forecasts strong growth with the introduction of the .au domains in the second half of 2021. It expects pre-registrations to commence near the end of first half of the year and a 25% to 35% growth in new domain name registrations.

Commenting on the results, managing director Joe Demase said:

The completion of the takeover has delivered significant value to both groups of shareholders. We are now focused on our Strategic Transformation Program to improve customer experience, achieve revenue growth and simplify Webcentral's operations.

Webcentral had been targeted for takeover by both 5G Networks Ltd (ASX: 5GN) and Keybridge Capital Limited (ASX: KBC), with the former prevailing.

Webcentral share price and company snapshot

Webcentral provides a range of website services including domain name registrations and renewals, website and email hosting, website development, search engine marketing and social advertising campaigns.

The Webcentral share price is up nearly 50% over the past 12 months and up more than 800% from its 30 March lows. In 2021, Webcentral shares are up around 28%.

By comparison the All Ordinaries Index (ASX: XAO) is up 2% so far in 2021.

The post Why is the Webcentral (ASX:WCG) share price on a rollercoaster today? appeared first on The Motley Fool Australia.

Webcentral shares have had an inversely parabolic year in 2020 so far. The company's shares were riding high at the start of the year (trading at 38 cents in February), but were hit hard in the March market crash, and slid as low as 6 cents a share soon after. That means that, on current pricing, Webcentral shares are up 600% from these lows.

Even so, Webcentral has been giving investors a tough time in recent years. The company's shares are down more than 77% over the past 5 years and more than 76% since this time 10 years ago. 

So who is Webcentral? And why are the company's shares surging today?

Webcentral: an introduction

Webcentral is a company that has been around for a while, albeit under a different name – Melbourne IT Group. It was founded back in 1996 and first listed on the ASX in 1999, but has never quite seen the sky-high share price of ~$14 that the then-dot.com boom was giving out at the time since.

Webcentral describes itself as "Australia's largest full-service digital services partner for small and medium business."

According to the company, it supports the growth of over 300,000 Australian businesses. It does so by providing internet domain registration, email and office applications, cloud services, security services and digital marketing. On the former, it was apparently the first Australian company to offer internet domain registry services.

Webcentral has four main brands: Netregistry, WME, Melbourne IT and Domainz. Netregistry is the brand behind Webcentral's domain, marketing and hosting services. WME specialises in search engine optimisation (SEO), social media marketing, and web design. Melbourne IT offers domains, online security and website design, while Domainz is the company's New Zealand business, offering similar services that the other three brands provide across the ditch.

Interestingly, Webcentral has recently been the target of a takeover by 5G Networks Ltd (ASX: 5GN), which has a lot to do with the company's recent share price performance.

Why are Webcentral shares surging today?

The 5G Networks takeover is effectively underway, with 57% of shareholders accepting the offer, according to reporting in the Australian Financial Review (AFR). The offer was reportedly a 1-for-12 all-stock bid, which the AFR alleges could be worth as little as 14 cents a share.

The company said the following on this development: "5GN has long considered the Webcentral Group a valuable enterprise in need of funding and direction."

Webcentral recently announced to the ASX a capital raising program, partly in order to fund the merger with 5G Networks, which resulted in the shares being suspended from trading.

Following the successful shareholder vote, 5G is reportedly already moved to install its own CEO Joe Demase as a director of Webcentral, alongside the appointment of other executive positions.

Investors are evidently giving a vote of confidence to 5G Network's plans for the company, which is likely behind the Webcentral share price's dramatic surge today.

The post ASX stock of the day: Webcentral (ASX:WCG) shares surge 34% appeared first on The Motley Fool Australia.

Webcentral is an Australian, full-service digital services partner for small and medium businesses. 5G Networks already owns a 10.2% stake in the company.

What has changed?

5G Networks first stated its intentions to acquire Webcentral in early September along with a $30 million capital raise to provide the funds for the takeover. 

However, prior to the announcement, Web.com was the leading candidate for the takeover. The American domain registration and web development company had proposed to acquire all of the shares in Webcentral for 15.5 cents each.

Nonetheless, despite an improved offer of 18 cents per share from the American company, the Webcentral board has decided to go with 5G Networks' proposal. As such, the company has entered into a bid implementation deed with 5G Networks.

Why did 5G Networks' offer get selected?

Notwithstanding a higher offer by Web.com, the Webcentral board believes the 5G Networks proposal provides shareholders with a better outcome.

This is as a result of ongoing exposure to potential improvement in the performance of Webcentral after a period of underperformance and a declining share price. Furthermore, there is potential value from benefits of scale and potential synergies of the combined group.  

Ultimately, the deal with 5G Networks provided less completion risk and higher execution certainty as compared to the Web.com scheme. 5G Networks has agreed that it will offer to acquire all the Webcentral shares which it does not presently hold.

What will Webcentral bring to 5G Networks?

I believe the deal represents a transformational transaction for 5G Networks, materially changing the scale and earning profile of the business. Furthermore, the deal would see increased diversification and resilience of 5G Networks' earnings profile through the introduction of complimentary product offerings. As such, the combined businesses would create a diverse enterprise with a significant combined customer base and deep management expertise.

Finally, the opportunity to gain exposure to new markets and access a large base of new customers represents obvious upside. Management believes the combination of the two businesses can generate synergies of over $7 million per annum on a run rate basis.

Foolish takeaway

In my opinion, the acquisition is a shrewd piece of business for 5G Networks. Webcentral is a strong strategic fit, aligning with 5G Networks' growth strategy to acquire businesses with operational and product synergies to augment its current capabilities. The 5G Networks share price is currently trading nearly 126% higher so far this year.

The post 5G Networks (ASX:5GN) share price falls on takeover update appeared first on The Motley Fool Australia.

In afternoon trade the data networks company's shares are down 8% to $1.96.

Why is the 5G Networks share price sinking lower?

The 5G Networks share price has come under pressure on Monday after it announced the successful completion of its institutional placement.

According to the release, the company raised $27.5 million through the issue of 15.28 million new shares at $1.80 per share. This represents a 15.5% discount to the last close price.

The company advised that the placement was completed with a broad range of new and existing institutional investors.

In addition to this, the company's founder, Joe Demase, has sold 2.78 million shares for the same price. While this represents 14.5% of his shareholding, he will remain 5G Networks' largest shareholder with a relevant interest in approximately 16.2 million shares. This is the equivalent to approximately 15.3% of the ordinary shares on issue post the placement.

The company advised that Mr Demase sold the shares in part to satisfy a personal tax obligation and to fund the exercise of performance rights which may be exercised in the future.

Why is 5G Networks raising funds?

5G Networks launched the institutional placement to provide it with the funds to make an acquisition proposal for Webcentral Group Ltd (ASX: WCG).

According to the release, the company has tabled a non-binding indicative proposal to acquire the small business digital services provider for 17.7 cents per share or $21.6 million.

This is significantly more than the 10 cents per share that has been offered by Web.com for Webcentral.

Why does 5G Networks want to acquire Webcentral?

Management believes the combination of the two businesses can generate synergies of over $7 million per annum on a run rate basis.

It also believes the proposed acquisition would be transformational for its earnings. Its earnings per share is expected to more than double on a pre-synergies basis and further increase on a post-synergies basis.

This news has no doubt gone down well Webcentral shareholders. The shares of the company formerly known as Melbourne IT are up 50% this afternoon.

The post Why the 5G Networks share price is sinking lower today appeared first on The Motley Fool Australia.

Unfortunately, not all shares are faring as well as the market. Here's why these ASX shares have just hit 52-lows or worse:

ARQ Group Ltd (ASX: ARQ)

The ARQ Group share price dropped to a multi-year low of 25 cents last week. Investors have been selling the digital solutions partner's shares due to a sharp downturn in its performance over the last 12 months. In addition to this, this month ARQ Group announced the signing of a binding agreement to sell its Enterprise Services Division for $35 million. The agreement is with an entity owned by a consortium comprising Quadrant Private Equity and certain members of its management team. This includes its CEO Tristan Sternson, who has now stepped down and will be replaced by Brett Fenton. The sale includes the rights to the name ARQ, which means the company formerly known as Melbourne IT will be changing its name again.

CIMIC Group Ltd (ASX: CIM)

The CIMIC Group share price hit a multi-year low of $27.27 on Friday. The engineering company's shares have come under pressure following a bitterly disappointing performance in FY 2019 and a scathing attack by a short seller. In respect to the former, for the 12 months ended December 31, CIMIC reported revenue of $14.7 billion and a statutory net loss after tax of $1 billion. This poor performance led to a change of CEO earlier this month.

Mayne Pharma Group Ltd (ASX: MYX)

The Mayne Pharma share price continued its slide and hit a multi-year low of 40 cents last week. The pharmaceutical company's shares have been sold off in recent months following a very poor start to FY 2020. In November management warned that sustained pressure on generic drug pricing was weighing on its performance. As a result, its revenue fell 16% to $153 million during the first four months of the financial year. Conditions don't appear to easing for the company, which doesn't bode well for its profits in FY 2020.

The post Why Mayne Pharma and these ASX shares just hit multi-year lows appeared first on The Motley Fool Australia.

Four shares that have failed to follow the market higher today are listed below. Here's why they are tumbling lower:

The ARQ Group Ltd (ASX: ARQ) share price has continued its slide and is down a further 9.5% to 28.5 cents. Investors have been selling the digital solutions partner's shares after it announced the signing of a binding agreement to sell its Enterprise Services Division for $35 million. The agreement is with an entity owned by a consortium comprising Quadrant Private Equity and certain members of its management team. This includes its CEO Tristan Sternson, who has now stepped down and will be replaced by Brett Fenton.

The Blackmores Limited (ASX: BKL) share price has crashed 16% lower to $75.20. The health supplements company's shares have been sold off after it downgraded its guidance and suspended its dividend. Due to higher costs and tough trading conditions, Blackmores expects to report an underlying NPAT of $18 million in the first half. This will be a 47% decline on the prior corresponding period and falls short of its ~$21 million guidance. Things are expected to worsen in the second half, with management forecasting a full year NPAT of just $17 million to $21 million.

The James Hardie Industries plc (ASX: JHX) share price is down 3.5% to $31.02 following the release of its third quarter update. The building products company reported a 17% increase in adjusted net operating profit for both the quarter and financial year to date. Whilst this is solid, its guidance for the full year appears to have disappointed the market. Management expects full year adjusted net operating profit to be between US$350 million and US$370 million. This compares to consensus estimates of US$356 million and US$380 million.

The Orora Ltd (ASX: ORA) share price is down almost 6% to $2.96 after its half year results underwhelmed investors. The packaging company reported a 13.3% increase in revenue to $1,835.2 million, but a 4.1% decline in EBIT to $133.1 million. Its North American business was largely to blame for the decline in earnings.

The post Why ARQ Group, Blackmores, James Hardie, & Orora are tumbling lower appeared first on The Motley Fool Australia.

In afternoon trade the leading digital solutions partner's shares have returned from a trading halt and are down 12.5% to 31.5 cents.

This latest decline means that Arq Group's shares are now down almost 80% since this time last year.

Why is the Arq Group share price crashing lower?

This afternoon the company announced the signing of a binding agreement to sell its Enterprise Services Division on a cash and debt free basis.

According to the release, the agreement is with an entity owned by a consortium comprising Quadrant Private Equity and certain members of its management team. This includes CEO Tristan Sternson.

Gross cash proceeds of the sale are expected to be $35 million less a final payment of $6 million due to the vendors of InfoReady, which was acquired by the company in 2016. The net proceeds will be used to pay down the company's debt.

The transaction is expected to complete on March 2 and is not subject to any conditions.

Name change.

As the transaction includes the rights to the Arq brand, the company will be changing its name once again. Arq Group was until only recently known as Melbourne IT.

The company intends to put forward a change of name resolution at its upcoming annual general meeting.

The Chair of Arq Group, Andrew Reitzer, said: "After engaging with numerous parties interested in acquiring the Enterprise business over the past few months, we are pleased to announce the sale of the business to Quadrant. Quadrant has a track record of acquiring industry leading businesses and we wish the team every success in the future."

"Decoupling Enterprise will allow for the team to focus on SMB, enabling it to deliver to its vision of being the most impactful digital marketing partner in Australia, unlocking the growth potential of local small and medium businesses," added Mr Reitzer.

Change of CEO.

As a result of this transaction, the company will be replacing its CEO Tristan Sternson.

Brett Fenton, who leads the company's only remaining business, the SMB Division, will replace Mr Sternson as interim CEO with immediate effect.

The post Why this small cap ASX tech share is crashing 12% lower today appeared first on The Motley Fool Australia.

Four shares that have failed to follow the market higher today are listed below. Here's why they are dropping lower:

The ARQ Group Ltd (ASX: ARQ) share price is down 2.5% to 37.5 cents. Although there is no news out of IT company, it is worth noting that its shares have been sold off over the last 12 months due to a series of earnings guidance downgrades. Due to the continued underperformance of its Enterprise division, ARQ's group underlying EBITDA is expected to be in the range of $13.8 million to $15.8 million in FY 2019. This compares to previous guidance of $16.8 million to $19.3 million.

The Evolution Mining Ltd (ASX: EVN) share price is down over 2% to $3.67 despite a rise in the gold price overnight. This decline appears to have been triggered by news that one of its major shareholders, La Mancha Group, has been selling down its holding. According to a notice released on Thursday, La Mancha Group has sold down its stake in the gold miner from 7.65% to 6.64%.

The Moneyme Ltd (ASX: MME) share price has fallen over 2.5% to $1.40. The technology-driven consumer credit company's shares rocketed higher after listing on the ASX in December, but have fallen heavily since. After climbing as high as $1.74, its shares are now trading closer to its listing price of $1.25.

The Sezzle Inc (ASX: SZL) share price is sinking lower again and is down 12% to $1.45. The buy now pay later company's shares have come under significant selling pressure this week. This follows news that the California Department of Business Oversight failed to approve an application by Sezzle for a California Financing Law license to make loans. Industry rival Afterpay Ltd (ASX: APT) has had its application approved. Sezzle intends to apply again.

The post Why ARQ, Evolution, Moneyme, & Sezzle shares are dropping lower appeared first on The Motley Fool Australia.

Four shares that have failed to follow the market higher today are listed below. Here's why they are dropping lower:

The ARQ Group Ltd (ASX: ARQ) share price is down 5% to 36 cents. This decline means the IT company's shares have given back all their gains since they charged higher following a strategic review update on Christmas Eve. That update revealed that its lenders have continued to be supportive despite it breaching its debt covenants. Management also reaffirmed its recently downgraded EBITDA guidance for calendar year 2019.

The Australian Ethical Investment Limited (ASX: AEF) share price has fallen 5% to $3.50. This is despite there being no news out of the ethical investment company. However, with its shares up significantly year to date, this decline could be due to profit taking from some investors. Australian Ethical Investment recently provided its half year guidance. It expects an underlying profit after tax of between $4.2 million and $4.6 million. The mid-point of this range represents a 38.7% increase.

The Objective Corporation Limited (ASX: OCL) share price has dropped 4.5% to $6.25. The catalyst for this might be news that independent non-executive director, Nick Kingsbury, recently sold a large number of shares. The director offloaded 120,000 shares for a total consideration of $704,790.

The Panoramic Resources Ltd (ASX: PAN) share price has crashed 19% lower to 32.7 cents. This follows news that Independence Group NL (ASX: IGO) has pulled the plug on its takeover approach for its fellow nickel producer. Independence intends to let its takeover offer lapse on the evening of January 17. According to the release, it made the move after a number of defeating conditions of its offer were breached.

The post Why ARQ Group, Australian Ethical, Objective Corp, Panoramic are dropping lower appeared first on The Motley Fool Australia.

Four shares that have failed to follow the market higher today are listed below. Here's why they are ending the week in the red:

The AP Eagers Ltd (ASX: APE) share price has continued its slide and is down a further 7.5% to $10.07. The auto retailer's shares have come under pressure after it warned that external trading conditions in the national automotive retail sector remain challenging. As a result, underlying operating profit before tax has fallen 6% over the last 10 months. This led to Ord Minnett downgrading its shares to a hold rating this morning.

The ARQ Group Ltd (ASX: ARQ) share price is down 2.5% to 40 cents. The IT company's shares have been sold off this week after it downgraded its guidance once again. Due to the continued underperformance of its Enterprise division, group underlying EBITDA is expected to be in the range of $13.8 million to $15.8 million. This compares to previous guidance of $16.8 million to $19.3 million.

The Freedom Foods Group Ltd (ASX: FNP) share price is trading 4% lower to $5.57 on the day of its annual general meeting. Investors appear disappointed with the lack of guidance for FY 2020. Management only said that it expects "revenues and operating profits will increase as the Company moves out of the investment cycle, balanced against a requirement to invest in people, systems and process to manage a scaled and diversified business platform."

The G8 Education Ltd (ASX: GEM) share price has crashed lower again and is down 7% to $1.98. This follows the release of a disappointing trading update on Thursday. That update saw the childcare centre operator warn of short-term earnings headwinds impacting its FY 2020 performance. This includes an increase in supply which looks set to weigh on its occupancy levels. As a result, it downgraded its earnings guidance.

The post Why AP Eagers, ARQ, Freedom Foods, & G8 Education shares are dropping lower appeared first on The Motley Fool Australia.

Four shares that have fallen more than most today are listed below. Here's why they are sinking lower:

The ARQ Group Ltd (ASX: ARQ) share price is down 15% to 38.7 cents. Investors have been selling the IT company's shares following an update on its strategic review and revised guidance for FY 2019. Due to the continued underperformance of its Enterprise division, group underlying EBITDA is expected to be in the range of $13.8 million to $15.8 million. This compares to previous guidance of $16.8 million to $19.3 million.

The Avita Medical Ltd (ASX: AVH) share price has tumbled 8% to 63.5 cents after the medical technology company returned from a trading halt. Avita announced the successful completion of an institutional placement raising $120 million at 59 cents per share. This will be used to fund the pipeline development of new indications. This includes optimising support for clinical trials and development projects, as well as its continued U.S. commercial growth strategy.

The Incitec Pivot Ltd (ASX: IPL) share price has fallen 2% to $3.42. The catalyst for this decline appears to have been a broker downgrade. According to a note out of Morgan Stanley, its analysts have downgraded the industrial chemicals company's shares to an underweight rating with a $3.20 price target. Although its FY 2019 earnings came in ahead of expectations yesterday, it notes that this was driven by the sale of land.

The OZ Minerals Limited (ASX: OZL) share price has dropped 4% to $10.50. This also appears to have been driven by broker downgrades. This morning Citi downgraded the copper miner's shares to a neutral rating from buy. It also trimmed the price target on its shares to $12.00. Elsewhere, Ord Minnett downgraded its shares to a lighten rating and cut the price target on them to $9.60. Delays in production at Carrapateena appear to be behind these downgrades.

The post Why ARQ, Avita, Incitec Pivot, & OZ Minerals shares are sinking lower appeared first on The Motley Fool Australia.

The group formerly known as Melbourne IT has seen its shares tumble around 82% over the past year on the back of a huge profit downgrade not long after its former CEO sold shares on market himself.

ARQ  is now forecasting fiscal 2020 EBITDA between $16.8 million to $19.3 million, compared to a prior forecast between $27 million to $30.5 million. 

Today it announced it will "test the ground" for the sale of both its operating divisions and flagged that its SMB division continues to perform in line with expectation. It's expected to deliver "core underlying EBITDA" between $9.7 million to $10.7 million on revenue up to $70 million over fiscal 2019. 

The Achilles heel remains the beleaguered enterprise division that ARQ is also shopping around to potential buyers.

The group is also looking to save around $2.3 million in annualised costs going forward in response to the poor operational performance and diabolical shareholder returns. 

Others in the IT services or internet connectivity space include Rhipe Ltd (ASX: RHP) and Megaport Ltd (ASX: MP1).

The post ARQ share price flat as it puts asset sales on the table appeared first on The Motley Fool Australia.

For example insider selling can be for a number of reasons (i.e. to buy a house, settle a divorce, pay a tax bill) other than because an insider believes the share price is about to tumble.

Sometimes though insider selling does precede bad news and a cratering share price. It's just for investors it's difficult to determine when this each scenario is applicable. 

For example footwear retailer Accent Group Ltd (ASX: AX1) has recently seen some heavy insider selling, but the shares have performed well.

While others like IT services business ARQ Group Ltd (ASX: ARQ) saw heavy insider selling just prior to a poor trading update and share price crash. 

Therefore, I prefer to focus on insider buying in shares as it leaves less guesswork as nobody buys shares in the expectation that they'll fall even over the short term.

To be clear I am talking about insider buying "on market", not via the exercise of options or other related performance grants issued to employees for example. 

This is because insider buying "on market' is the only example where a buyer voluntarily buys shares with their own money.

I rate the insider buying even higher if the insider already owns a large chunk of shares as this suggests even more conviction in their trades. 

One business that has seen its CEO and a director buy shares on market recently is Webjet Limited (ASX: WEB).

CEO, John Guscic, bought 35,00 shares on market on September 24/25 for an average price around $11.30 per share. The CEO then added to his already large stake with another 26,500 shares on October 1 at an average price around $10.69 per share. 

Mr Guscic is known as a savvy business operator and already held a huge stake in the business plus huge amounts of options exercisable in the future dependent on the share price.

As such he had no real incentive to buy shares other than in the belief they're undervalued. Another director also bought 3,000 shares on September 26. 

Today, Webjet shares are down 3% to a 52-week low of $10 probably in sympathy with news out of  Flight Centre Travel Group Ltd (ASX: FLT). It just flagged a soft start to the Australian leisure travel sector over FY 2020 will see H1 FY 2020 profit fall below H1 FY 2019. 

The post Attention: The Webjet CEO is backing up the truck to buy shares appeared first on The Motley Fool Australia.

Four shares that have failed to follow the market higher today are listed below. Here's why they have sunk lower:

The ARQ Group Ltd (ASX: ARQ) share price has crashed 32% lower to 37 cents. Investors have been hitting the sell button in a panic today after the IT company, formerly known as Melbourne IT, downgraded its full year earnings guidance materially. Due to market conditions softening significantly for its Enterprise division, management has downgraded its group underlying EBITDA guidance to be in the range of $16.8 million to $19.3 million. Previously it was targeting $27 million to $30.5 million in FY 2019.

The Fortescue Metals Group Limited (ASX: FMG) share price is down almost 4% to $8.64. This share price weakness appears to have been caused by a broker note out of Morgan Stanley this morning. According to the note, the broker has downgraded the iron ore producer's shares to an underweight rating with a price target of $7.85. It made the move largely on valuation grounds.

The iSignthis Ltd (ASX: ISX) share price is down a sizeable 10% to 94.5 cents. The under pressure payments company's shares have tumbled lower again today after the AFR reported that there were a number of suspicious transactions flagged ahead of iSignthis achieving a $5 million revenue target that supported the issue of a significant number of performance shares.

The Wattle Health Australia Ltd (ASX: WHA) share price has sunk 16.5% lower to 59.5 cents. The infant formula company's shares have crashed lower today after a series of strong gains over the last few trading days led to its share price almost doubling in value. The rise was so sharp that the ASX queried it. Management advised that it knew of no company-specific reason for the rise and put it down to increased investors interest following M&A activity.

The post Why ARQ, Fortescue, iSignthis, & Wattle Health shares are sinking lower appeared first on The Motley Fool Australia.