Australian Vintage Ltd (ASX: AVG), Clarity Pharmaceuticals Ltd (ASX: CU6) and AIC Mines Ltd (A1M) are rated as buy or overweight in separate reports published by the ASX.

Let's take a look at these three ASX shares in more detail.

AIC Mines

AIC Mines shares are flat today and currently fetching 45 cents. Ord Minnett has placed a "speculative buy" rating on the AIC Mines share price with an 80 cent price target. This implies an almost 78% upside on the current share price.

Ord Minnett is positive on AIC Mines' takeover of Demetallica Limited (ASX: DRM). Commenting on the acquisition, analysts said:

….the acquisition increases A1M's prominence in terms of scale, liquidity, mine life and risk profile – which should place it on the radar for more investors. We increase our target price to A$0.80/sh (+7%) and retain our positive view.

Australian Vintage

Australian Vintage shares are down 3.2% today and are currently fetching 60.5 cents. MA Moelis Australia has placed a buy rating on the wine company's share price with an 87 cent price target. This implies an upside of about 43%. Analysts are positive on the company's agreement to sell multiple commercial vineyards to Warakirri Asset Management for $62.5 million. This deal "unlocks significant value" from the company's balance sheet, CEO Craig Garvin said earlier this month.

Commenting on the outlook for Australian Vintage, broker MA Moelis Australia said:

We see the sale and leaseback of the Coldridge and Grande Junction commercial
vineyards as a positive move, which strengthens the balance sheet at a time when
market conditions are relatively challenging due to an oversupply of Australian wine.

We maintain our buy rating and raise our target price to $0.87 (prev: $0.81),
reflecting the change in capital structure.

Clarity Pharmaceuticals

Clarity Pharmaceuticals shares are 1.1% in the green today and are currently priced at 92 cents. Wilsons has maintained an "overweight" rating on Clarity Pharmaceuticals with a 12-month price target of $1.22. This implies a nearly 33% upside based on the current share price.

Wilsons is positive on Clarity's upcoming trial results for its SAR-bisPSMA product for prostate cancer. Analysts said:

We maintain our overweight rating on Clarity Pharmaceuticals with a revised price target of $1.22/sh. We view the upcoming release of Clarity's Phase I/II propeller trial results for their 64Cu-SAR-bisPSMA in prostate cancer diagnosis as a de-risking event, with clear signals
towards a positive outcome.

Pending the release of these results, we revise our SOTP ROVs, additionally supported by the SAR-Bombesin PSMA-negative prostate tracking ~3 years ahead of schedule.

The post 3 small-cap ASX shares with over 30% upside: brokers appeared first on The Motley Fool Australia.

Why is the Australian Vintage share price on the move?

This afternoon's vintage and trading update has been the big factor behind today's movements. Australian Vintage reported 116,600 tonnes of grapes were crushed in Vintage 2021, up 15% from last year's 101,400 tonnes.

CEO Craig Garvin said, "This year's improved total crush of 116,000 tonnes is very pleasing with favourable seasonal conditions contributing to a very high quality and improved yielding vintage".

Grape yields from owned and leased vineyards climbed 11% on last year's with premium vineyard yields up 97% from 2020. Mr Garvin reported the Adelaide Hills and Barossa vineyards were recovering well from fires and droughts affecting the prior vintage.

Higher production numbers haven't been enough to boost the Australian Vintage share price this afternoon. UK/Europe/America sales to the end of March 2021 were up 12% with Australia and New Zealand sales up 4%.

Increased yields will improve self generating and regenerating assets (SGARA) income by about $1.3 million after tax against 2020. "This improvement in SGARA income is below expectation due to the decline in market price of red grapes", added Mr Garvin.

The 15% increase in tonnes crushed has reportedly increased winery efficiency. Australian Vintage expects lower processing costs for all wine made from this year's vintage as a result.

The Australian Vintage share price climbed as much as 3.5% before paring back gains. That's despite the company remaining on track to achieve its FY2021 profit target. The target range of $18.2 million to $19.2 million would be a significant jump on last year's $11.0 million results.

Results to March 31 are "in line with expectations" with hopes that China sales will resume in the medium term. Mr Garvin said, "Cash flow from operating activities is forecast to be significantly up on last year" with a forecast capital expenditure of $8.9 million.

Foolish takeaway

The Australian Vintage share price has been tumbling early in the afternoon following the trading update. Sales in the company's four core brands – McGuigan, Tempus Two, Nepenthe and Barossa Valley Wine Company – climbed 17% during the quarter.

That has helped offset lower Asia sales, with China sales down 88% amid ongoing trade tensions and tariffs.

The post Why the Australian Vintage (ASX:AVG) share price is seesawing appeared first on The Motley Fool Australia.

The iconic Aussie wine company has a market cap of more than $8 billion, with a portfolio of globally recognised names including the likes of Penfolds, Beringer, Lindemans and Wolf Blass.

But as you likely know, Treasury Wine has been struggling to diversify from its dependence on the Chinese market, following import restrictions from the Chinese government.

Which brings us to a lesser-known ASX wine share, Australian Vintage Ltd (ASX: AVG), with a market cap of $202 million. You may be familiar with the company's McGuigan Wines brand.

Why this fundie likes Australian Vintage shares

Simon Mawhinney is contrarian fund manager Allan Gray Australia's chief investment officer. According to the Australian Financial Review, Allan Gray owns 19.6% of Australian Vintages shares.

Why?

According to Mawhinney:

It's always been our view that Australian Vintage's earnings potential was much higher. It still trades at a hefty discount to its Net Tangible Assets and appears cheap to us, on a (price earnings) multiple of 10 times its most recent earnings guidance. It looks a lot cheaper than similar wine companies in Australia and elsewhere.

The AFR notes that Australian Vintage has run into some snags in past years, with grape-supply contract issues seeing the company enter the lower-profit margin bulk wine market.

But as Mawhinney points out, that's no longer predominantly the case:

The company has spent a lot of energy exiting those significant, onerous grape contracts. The majority of its wine is now sold in some branded form. That should make its earnings less volatile and improve returns over time.

Australian Vintage share price snapshot

Without a doubt it's been a good 12 months for Australian Vintage shareholders, with shares up 61% since 10 March last year. For comparison the All Ordinaries Index (ASX: XAO) is up 16% in that same time.

Year-to-date the Australian Vintage share price is up 25%. Based on the current price of 73 cents per share, Australian Vintage pays an annual dividend yield of 3.8%.

The post Why this fundie tips Australian Vintage (ASX:AVG) shares appeared first on The Motley Fool Australia.

Why has the Treasury share price failed to bounce?

The Treasury Wine share price has only managed to bounce around 30% from its mid-March lows and is currently trading down more than 28% for 2020. This recovery dulls in comparison with the double and triple-digit recovery we have seen in other shares on the ASX.

Earlier this year, Treasury materially reduced market expectations citing an unexpected decline in profits from its US operations. The owner of famous brands like Wolf Blass, Lindemans and Penfolds was not spared during the COVID-19 pandemic, with Treasury acknowledging a decline in demand from China for its luxury wines.

In the company's most recent trading update, Treasury informed investors that the COVID-19 pandemic and global lockdowns in major markets has reduced on-premise and cellar door sales. The company now expects earnings before interest, tax and accounting in FY20 to be between $530 million and $540 million. This compares to management's guidance of $716–750 million at the interim result, which was then withdrawn on 25 February.

What deal has the federal government made?

According to a recent article in the Australian Financial Review, the federal government recently negotiated a deal that has lifted Canadian restrictions on Australian imports. Previous restrictions on Australian imports included a variety of taxes, markups and sales requirements. The new deal will lift these restrictions, allowing Australian wine producers and exporters like Treasury to take advantage of a market worth approximately $200 million per year.

Should you invest?

In my opinion, although the federal governments deal is a great win, I think that Treasury and the Australian wine sector in general faces multiple headwinds in the short term. Earlier this year, Treasury announced that it was considering a demerger of its flagship Penfolds business into a separate company listed on the ASX, which has further clouded the outlook for the company.

Despite the uncertainty, Treasury has reported positive signs of recovery in its major markets, which could see the company's share price recover in the longer term. Instead of jumping the gun and buying shares in the company, I think a prudent strategy would be to wait until Treasury releases its full-year report in the August reporting season to get a better idea before investing.

In addition to Treasury, another listed wine company you might want to keep an eye on is Australian Vintage Limited (ASX: AVG).

The post Is the Treasury Wine share price a buy? appeared first on The Motley Fool Australia.

The coronavirus pandemic has been the recent headwind that has hit the industry, sapping demand from China and bringing supply chains to a halt. However, with the Chinese economy getting ready to recover and surging consumer demand at bottle shops, ASX shares in the wine sector may have bottomed.

So with that in mind, here are 2 winemakers on the ASX to keep an eye on.

Treasury Wine Estates Ltd (ASX: TWE)

The Treasury Wine share price has struggled in 2020, down around 40% for the year, and is currently trading at multi-year lows. The company recently made headlines with rumours that Treasury was considering a demerger of its flagship Penfolds business into a separate company listed on the ASX.

Treasury is also facing a potential class action from shareholders, who allege that the company breached continuous disclosure law when it revealed an unexpected decline in profits from its US operations earlier this year. China remains the most profitable market for Treasury, with sales mainly driven by demand for its luxury and prestige brands, such as Penfold.

Recently, the winemaker announced it had collaborated with prominent US rapper Snoop Dogg. The multi-year partnership will see the entertainment icon launch a personalised brand in collaboration with Treasury's '19 Crimes' segment. The marketing venture is designed to reignite demand in the US for Treasury's commercial products.  

In addition, Treasury Wine provided an update earlier this month reassuring investors that supply chain operations continue to function. The company also noted that operations in China have resumed and cited the strong retail demand as consumers stock products for in-home consumption during the government shutdown periods.

Australian Vintage Limited (ASX: AVG)

Last week, Australian Vintage reported a 22% increase in grape crushing volume, despite the impact of drought and bushfires. The company also reported that grape yields from owned and leased vineyards increased 29% from the previous year. As a result, Australian Vintage lifted its full-year guidance for FY20 net profit after tax growth to a range of 25% to 30%, in comparison to previous forecasts of growth between 20% to 25%.

Australian Vintage is one of Australia's largest vertically integrated producers and distributors of wine. The company's affordable McGuigan brand has seen increased consumer demand in Australia and the UK recently, due to changed buying habits amid the coronavirus pandemic. The recent update from Australian Vintage points to a solid performance and reflects strong growth of its core brands.

Should you buy?

In my opinion, ASX shares in the Australian wine sector will continue to face headwinds in the short term. However, as macro and micro economic factors improve post-coronavirus, I think these shares could offer great long-term value and growth prospects.

A prudent strategy would be to keep an eye on shares in the wine sector and wait for positive price action before making an investment decision.   

The post Have ASX shares in the Australian wine sector bottomed? appeared first on The Motley Fool Australia.

Don't get me wrong – I think Treasury Wine delivered a solid result too and that stock looks cheap in my view (and that's why I own the stock), but not many investors may have picked up on Australian Vintage as the small cap wine producer hasn't done much over the past month.

But that changed today with the AVG share price breaking out of its trading band to jump 4% to a more than four-month high of $0.52 cents after Morgans reiterated its "add" recommendation for the stock even as it lowered its price target to $0.62 from $0.64 per share.

Overlook the bad weather

"AVG posted a very strong interim result with NPAT +46% (6.5% beat to us) and EBIT +27% to A$11.8m (8.3% beat). The strong EBIT growth was achieved despite a SGARA headwind of A$0.5m," said Morgans.

"Revenue rose 8% and gross profit was up 11% as AVG reduced loss-making bulk wine sales, increased sales of core brands (+14%), and improved its sales mix."

Self-generating and regenerating assets, or SGARA, was a big problem for the group and is the key reason behind management's FY19 earnings guidance cut. Without this, Morgans would have upgraded its earnings forecast and valuation on Australian Vintage.

But the higher than expected SGARA doesn't take anything away from the positive underlying fundamentals of the stock, not according to Morgans.

The rise in SGARA is due to extreme heat and dry conditions in December and January, plus the frost in October.

Growth momentum intact

While the weather is outside of management's control (and hopefully will be less of an issue this year), things that are under its control have gone very well with the result from its UK and European operations a clear standout.

"In a highly competitive wine market, EBIT rose 36% to A$6.4m due to strong performance of its McGuigan brand (third largest global brand in the UK) and increased distribution," said Morgans.

"The progress in Asia was also a highlight with EBIT +85% to A$1.2m and now more than 10% of group earnings. Operating cashflow was again strong at A$10.9m and supported the group's winery expansion at Buronga Hill."

Despite the adverse SGARA impact, the stock is looking cheap as its trading on a circa 33% discount to its trailing net tangible asset backing – and Morgans claims that's too cheap to ignore.

The post Is this ASX stock better placed to rally than the Treasury Wine share price? appeared first on The Motley Fool Australia.

At lunch the wine company's shares are down almost 5% to $15.43 following the release of export data from Wine Australia.

What data was released?

This morning Wine Australia released its export data for the 12 months ended September 30.

The data showed that Australian wine exports continued to experience strong growth in both value and volume over the 12-month period. The value of wine exports during the period increased 11% to $2.71 billion, whereas volume lifted 5% to 842 million litres.

In addition to this, shipments of bottled wine increased by 8% in value to $2.16 billion and 2% in volume to 366 million litres. There was also growth in shipments of unpackaged wine during the 12 months. These grew 23% in value to $525 million and 9% in volume to 468 million litres.

One final positive was the increase in the average value of wine exported. The data shows that this increased 7% to $5.90 per litre for bottled wine, 13% to $1.12 per litre for unpackaged wine, and 5% to $3.21 per litre for all wine exported.

According to the data, the strong performance was driven by growth in all but one major export destination. Northeast Asia was the star of the show with a 24% increase in exports to $1.14 billion. This offset a disappointing performance for U.S. exports which experienced a $38 million decline. This can be seen on the table shown below.

It appears to be the decline in U.S. wine exports that has sent the Treasury Wine share price tumbling today. This is a big market for the company and is expected to be a key driver of future growth.

However, given that management last week reiterated that it was on track to reach its target of 25% profit growth in FY 2019, I think today's selloff has been unnecessary.

In light of this, I think this could potentially be a buying opportunity for investors that are prepared to hold its shares for the long term.

Elsewhere in the industry, Australian Vintage Limited (ASX: AVG) and Broo Ltd (ASX: BEE) shares are flat, while Gage Roads Brewing Co Limited (ASX: GRB) shares are down 4.5% today.

The post Why Treasury Wine Estates Ltd (ASX:TWE) shares dropped 5% lower today appeared first on The Motley Fool Australia.

Three which I think are worth a closer look are listed below. Here's why I like them:

Australian Vintage Limited (ASX: AVG)

This Australian wine company could be worth considering after its return to form in FY 2018. Last week the company behind the McGuigan and Nepenthe brand posted a net profit after tax of $7.7 million on revenue of $264.6 million. This was an increase of 79% and 16.9%, respectively, on FY 2017's result. A key driver of this growth was a 31% rise in North American sales thanks to a strong increase in demand from Canada. While the company does have significant exposure to the UK and could be impacted by any Brexit-related currency devaluations, if the British pound holds up then FY 2019 is likely to be another year of profit and dividend growth. At present its shares provide a 2.6% dividend yield.

Money3 Corporation Limited (ASX: MNY)

Another strong performer in FY 2018 was this financial services company. Money3 delivered a 10.1% increase in net profit after tax to $32 million thanks largely to a 16.6% lift in its secured auto loan book. This impressive performance led to the Money3 board declaring a final, fully franked dividend of 5 cents per share, taking its full year dividend to 9.5 cents per share. This was a 68.1% increase on FY 2017's dividend and equates to a yield of 4.6%. Pleasingly, management expects good growth in secured loan receivables again this year.

Paragon Care Ltd (ASX: PGC)

I think Paragon Care could be another good option for investors. The shares of this provider of integrated services to the health and aged care markets currently offer a trailing fully franked 4.2% dividend. While this is a generous yield already, I feel that this dividend could grow at a solid rate over the coming years thanks to the positive impact of a series of earnings accretive acquisitions and its leading position in a growing market.

The post 3 small cap dividend shares I would buy this month appeared first on The Motley Fool Australia.

With so many results being announced, I wouldn't be surprised if these three slipped under the radar:

The Australian Vintage Limited (ASX: AVG) share price dropped 1% to 54 cents today despite the wine company posting a net profit after tax of $7.7 million on revenue of $264.6 million. This was an increase of 79% and 16.9%, respectively, on FY 2017's result. A key driver of this growth was a 14% increase in the sales of its McGuigan, Tempus Two, and Nepenthe brands. North American sales grew 31% in FY 2018 thanks to a significant increase in sales to Canada. Management expects earnings growth of 10% in FY 2019 based on a GBP exchange rate remaining at around 56 pence. If the British pound isn't hit by the Brexit, I feel Australian Vintage could be a great investment.

The Cabcharge Australia Limited (ASX: CAB) share price sank 7% lower to $2.10 after the payments company reported a 22% increase in revenue to $185.5 million, but a 36.2% decline in underlying profit after tax to $13.6 million. The decline in profits led to the Cabcharge board slashing its full year dividend down to 8 cents from 20 cents in FY 2017. While the company appears positive on the year ahead, it seems some investors aren't sticking around to find out how it fares.

The Marley Spoon AG (ASX: MMM) share price finished the day flat at 95 cents after releasing its half year results. The subscription-based weekly meal kit company posted half year revenue of €39.5 million on a constant currency basis, up 99% on the prior corresponding period. Marley Spoon's top line was boosted by strong growth across all regions, particularly in Australia. The strong first half means that the company is on track to meet its prospectus forecast for FY 2018.

The post 3 results you might have missed on Wednesday appeared first on The Motley Fool Australia.

In fact Gage's sales of draught beers were up 445% over the prior corresponding quarter, with sales to independent retail channels up 183%.

Sales to national retail chains were up 58% and the group managed to grow total sales of Gage Roads' (higher margin) own brands to 39% of the total sales mix, compared to 32% for the financial year-to-date period last year.

The news might lead shareholders to crack open a Gage tonight after a tough five years that have seen the stock lose 40% of its value to trade at 8.8 cents today.

Gage's management singled out sales of its Single Fin Summer Ale as especially strong, while Red Rye IPA is also being pinned as a sales growth driver thanks to its reported quality.

For the quarter net operating cash inflows were $2.1 million and the company has cash on hand of $5.6 million.

Moreover, Gage is also now debt free and I expect the share price could get a wriggle on through the rest of 2018 if its operational improvements continue, although it's not my cup of tea as an investment.

Other listed-liquor-merchants include Treasury Wine Estates Ltd (ASX: TWE) and Australian Vintage Group (ASX: AVG), both of which are benefiting from strong overseas demand for Australian wines.

The post Why Gage Roads Brewing Co Limited is going gangbusters appeared first on The Motley Fool Australia.

Now I thought I would look at the other side of the coin, at the shares that have raced to 52-week highs today. Two that caught my eye are listed below. Here's why they are flying high:

The Australian Vintage Limited (ASX: AVG) share price climbed to a 52-week high of 56 cents today. Although there hasn't been any news out of the company for some time, there was positive wine export data released last month. That data revealed that Australia shipped out a record 811 million litres of wine in 2017, which was an 8% increase on 2016.

Furthermore, the share price of rival wine company rival Treasury Wine Estates Ltd (ASX: TWE) has scaled to new heights in the last couple of weeks on the back of a stellar half-year result. Investors may be betting that Australian Vintage has been able to turn around its performance. They won't have long to wait to see if that is the case. It is due to report its earnings on February 21. I would suggest investors keep their powder dry until then.

The Idp Education Ltd (ASX: IEL) share price reached a 52-week high of $7.02 on Thursday a day after its strong half-year result release. The education services company posted an impressive 27% increase in first-half net profit after tax to $30.5 million thanks largely to strong demand for its English language tests.

One broker that liked what it saw was Goldman Sachs. According to a note released this morning, its analysts retained their buy rating on IDP Education and increased their price target on its shares by 24% to $7.90. I would have to agree with Goldman on this one. I was very impressed with its half-year result and think it could still be a great investment even after its sizeable gain this week.

The post These ASX shares raced to 52-week highs today appeared first on The Motley Fool Australia.

Three which you may have missed are summarised below:

The Australian Vintage Limited (ASX: AVG) share price fell 9% to 43.5 cents after the wine company posted a full-year net profit before one-off items of $4.3 million. This was a disappointing 38.5% decline on last year's result and was largely down to weakness in the British pound since the Brexit. Although Australian Vintage attempted to combat this through price increases, it wasn't ultimately enough to offset the unfavourable currency movements. However, management expects net profit after tax growth of 10% in FY 2018. This could make it an opportune time to consider an investment.

The Boral Limited (ASX: BLD) share price ended the day down 3% to $6.63 despite posting a 28% increase in underlying profit after tax before significant items to $343 million. Key to the strong result was the company's Boral Australia division which delivered an 11% lift in EBIT to $349 million. This was driven by volume and margin improvements thanks largely to strong east coast residential markets and growing infrastructure activity. Today's decline may be related to the company's increase in debt. Boral ended the year with net debt of $2.3 billion, up from $893 million last year.

The MotorCycle Holdings Ltd (ASX: MTO) share price tumbled 3% to $4.10 despite the motorcycle retailer posting a record net profit of $9.3 million. This was a 16% increase on FY 2016 and was driven by a series of acquisitions and strong sales of new motorcycles. The company's New Motorcycle segment saw a 21% increase in sales volumes to 9089 units, compared with market growth of just 2%. As strong as the result was, management has advised that trading conditions remain subdued. This may have investors concerned that the strong result will not be repeated next year.

The post 3 earnings results you may have missed on Wednesday appeared first on The Motley Fool Australia.

Unfortunately not all shares on the market have managed to perform as strongly. In fact, three shares in particular have just hit 52-week lows. Here's why:

The Australian Vintage Limited (ASX: AVG) share price hit a 52-week low of 43 cents yesterday. The wine company behind brands such as Nepenthe, Passion Pop, and McGuigan Wines has seen its shares come under pressure since the release of a disappointing half-year result. As the company has significant exposure to the UK market, the depreciation of the British pound has hit its bottom line. But with a distribution deal recently signed with a top US distributor, it could be worth giving Australian Vintage more time.

The CSG Limited (ASX: CSV) share price has fallen 41% year-to-date and reached a 52-week low of 43 cents on Tuesday. The print and business technology solutions provider's shares took a dive after a disastrous half-year result led to yet another downgrade to full-year revenue and earnings guidance. Although its shares do look cheap now, management's inability to accurately forecast its business performance doesn't fill me with confidence. For this reason I would avoid CSG.

The GBST Holdings Limited (ASX: GBT) share price tumbled to a 52-week low of $2.64 yesterday. Thanks largely to a weaker-than-expected half-year result, the financial technology company's shares have now fallen a massive 29% in 2017. Like Australian Vintage, GBST has significant exposure to the UK. Management blamed much of the 20% drop in half-year revenue on soft economic conditions in the country. But they clearly believe things will improve judging by the way they have been buying up shares.

The post These 3 ASX shares just hit 52-week lows: Are they bargain buys? appeared first on The Motley Fool Australia.

Because of this I think investors should look beyond traditional blue-chips such as Woolworths Limited (ASX: WOW) and Telstra Corporation Ltd (ASX: TLS) and focus on the smaller side of the market.

Although small-cap shares carry greater risk than their blue-chip peers, I believe if you choose wisely you can go some way to limiting this risk.

Three small-cap stars which are at the top of my watch list right now are as follows:

The Australian Vintage Limited (ASX: AVG) share price is currently hovering just above its 52-week low. The wine company's share price declined sharply this year after its half-year results were impacted significantly by the Brexit. Although volumes rose, revenue fell 8% to $119.3 million as a result of unfavourable exchange rates. Whilst things are unlikely to get easier for the company in the UK any time soon, I expect sales into Asia and its distribution deal in the United States could help offset this weakness.

The Amaysim Australia Ltd (ASX: AYS) share price has fallen around 11% this year despite a reasonably solid half-year result which revealed a 34% increase in mobile subscribers. But the big news from the earnings release was that the long-awaited launch of its NBN service is just around the corner. I believe its asset-light model will allow Amaysim to undercut the bigger players whilst still remaining profitable. If the company can disrupt the home broadband market like it did the mobile phone market, I feel there could be significant growth ahead.

Despite a big decline last week, the Tassal Group Limited (ASX: TGR) share price is up over 9% this year. The leading salmon producer's share price took a hit last week after it completed an $80 million placement of shares at a price of $4.55 per share. But I feel confident that management's plan to invest the funds in a range of working capital and capital investment initiatives will ultimately bring value to shareholders. Due to supply issues, global salmon prices are on the rise. If these high prices are sustained then I expect Tassal will be in a strong position to grow its bottom line at an above-average rate over the next couple of years.

The post Here are 3 small-cap stars I've added to my watch list appeared first on The Motley Fool Australia.

What's new?

The share price of Treasury, which owns the Penfolds, Blossom Hill, and Wolf Blass wine brands, is influenced heavily by tourist and overseas demand for Australian wines.

The main driver for the price surge appears to be a report from broker Morgan Stanley that noted "the recent surge in Australian wine sold to China isn't a one-off event that will fade, but rather just the start of a golden period."

This is great news for Treasury, as the company already has operations in China and it appears the company may be able to bump up shipments: "The largest impediment to purchasing more Australian wine, according to Chinese consumers, is availability, a problem that we think can be easily fixed and an area that TWE has already made strong progress in."

What now?

Treasury is in a much better position now than it was a couple of years ago and analysts are still pointing to strong earnings per share growth in excess of 20% for the coming financial year. Investors could do much worse than investigating this company further as its exposure to growing Chinese consumption and the strong UK and US wine markets appears a good position for it.

Something to consider though is how competition from the likes of Australian Vintage Limited (ASX: AVG) may impact the company. Treasury's iconic Australian brands will remain popular but the more 'niche' products developed by smaller producers may become the wine of choice, with higher margins/price points, in the future.

Another concern is Treasury's spotted history when it comes to expanding – history can repeat itself and is often the reason why investors get sucked into rotten stocks.

The post Why the Treasury Wine Estates Ltd share price is soaring today appeared first on The Motley Fool Australia.

While smaller companies are usually more risky than their larger counterparts, they also offer the prospect of significantly higher returns.

With that in mind, here are four small-cap shares that I think risk tolerant investors might want to take a closer look at:

Smart Parking Ltd (ASX: SPZ) – Trading at 32 cents per share with a market cap of $112 million.

Smart Parking develops and installs technology-based parking solutions that makes it easier for consumers to park their cars, and for car park owners to manage their operations. The company recently raised fresh capital to fund further expansion and is well on its way to becoming profitable over the next year or so.

Updater Inc (ASX: UPD) – Trading at 43 cents per share with a market cap of $121 million.

Updater is a US-based company that has developed technology to help make home relocation easier. While the company is still some way from being profitable, its offering is certainly gaining traction with users. Its estimated market share has increased from 2.2% to 7.1% in just the last 12 months.

Australian Vintage Limited (ASX: AVG) – Trading at 55 cents per share with a market cap of $132 million.

Australian Vintage is a relatively small wine producer that is behind the increasingly popular McGuigan Wines brand. The company has been successful in growing its sales volumes domestically and abroad, although the depreciation of the British pound is creating a short-term headwind for the company. Despite this, the medium-term outlook for Australian Vintage looks quite promising and the company is still to tap into a number of major wine export markets.

zipMoney Ltd (ASX: ZML) – Trading at 76 cents per share with a market cap of $118 million.

zipMoney is a digital finance and payments company that offers point-of-sale credit and digital payment services to the retail, education, health and travel industries. The company's core offering allows customers to 'buy now and pay later' and it is now being accepted as a payment option at over 3,000 locations online and in-store. Importantly, zipMoney's key financial metrics are trending strongly in the right direction and the company also remains debt free.

The post 4 shares under $1 that need your attention today appeared first on The Motley Fool Australia.

Thanks largely to a stunning 131% jump in statutory net profit after tax to $179 million, the wine company's share price has rocketed higher by 25% year to date. Clearly there is a growing demand for Australian produce across the world and the company is taking full advantage of it.

But it's not the only company looking to do so. There are three other companies listed on the Australian stock exchange which I'm sure would all aspire to be like Treasury Wine Estates.

Here they are:

Australian Vintage Limited (ASX: AVG)

Australian Vintage is the company behind the McGuigan, Nepenthe, and Tempus Two wine brands. Whilst a sharp drop in the British pound following the Brexit has seen its results negatively impacted, there's no denying that the company is making significant progress in the China market. Sales by volume in China rose 52% in FY 2016. At the current price I believe Australian Vintage would be a great buy and hold investment.

Broo Ltd (ASX: BEE)

It has been a rollercoaster ride for shareholders of beer company Broo in the last couple of weeks. Its shares rocketed over 20% at the end of last month after the company announced a Chinese distribution deal. But since then its given back all these gains and more. Whilst Broo's entry into the world's largest beer market is an exciting development, I've seen nothing from its domestic sales to indicate that sales in China will be any better. Broo delivered Australian sales of $516,334 in FY 2016, down 28.5% from $722,571 in FY 2015.

Gage Roads Brewing Co Limited (ASX: GRB)

This craft beer company has had a year to forget after the loss of major shareholder Woolworths Limited (ASX: WOW). But it has responded positively and signed a new distribution deal with Metcash Limited (ASX: MTS) through its Australian Liquor Marketers brand. This will give the company access to 12,000 hotels, liquor stores, restaurants, and other licensed premises across every Australian state. Gage Roads is down, but not out. I would suggest investors sit tight and wait to see how the new deal goes before investing.

The post Why these 3 companies could be the next Treasury Wine Estates Ltd appeared first on The Motley Fool Australia.

While it is probably a good idea for more conservative investors to steer clear from speculative shares, I think every investor should have a portion of their portfolio allocated to small cap shares that have the potential to grow into much larger investments.

With that in mind, here are three small-cap shares that I believe have bright futures ahead of them:

Touchcorp Ltd (ASX: TCH)

Touchcorp is a software company that focuses on providing payment solutions to retail businesses. The company also holds a large stake in Afterpay Holdings Ltd (ASX: AFY), which is also focused on providing consumer friendly payment solutions. Although the payments market is very competitive, Touchcorp has delivered a number of encouraging financial results that suggest the company is on the right track to becoming a leading player in the sector. With a market cap of just $250 million, I think Touchcorp is worth closer investigation.

3P Learning Ltd (ASX: 3PL)

3P Learning is another technology company, although it focuses on providing educational programs for school children. It has enjoyed great success in Australia so far and while its plans to dominate the US market haven't gone to plan the company has taken some steps to rectify this including the appointment of a new CEO who is skilled in technology platforms. Although it might still be a little too early to back 3P Learning at this point in its turnaround strategy, it nevertheless remains a company with a huge amount of potential.

Australian Vintage Limited (ASX: AVG)

Australian Vintage shares have fallen around 18% since the wine-maker announced a profit downgrade which was largely caused by unfavourable currency movements. Importantly, the company's underlying operations continue to show improvement and its strategy to focus on branded wines has produced a significant uptick in sales volumes. Although investors shouldn't expect too much from this year's financial results, I think the medium-term outlook for the company is exciting especially when you consider it has a market capitalisation that is currently hovering just above $100 million.

The post 3 small-cap shares that could make you a small fortune appeared first on The Motley Fool Australia.

The energy and materials sectors are enjoying a particularly solid day thanks to a rise in overnight energy and commodity prices.

Although the broader market is comfortably in positive territory today, these four shares have taken a pretty big tumble:

Reject Shop Ltd (ASX: TRS)

Shares of the Reject Shop have crashed more than 13.3% today after the discount retailer provided a somewhat underwhelming first quarter trading update. Like-for-like sales for the September quarter came in at just 0.3%, well below the 6.1% increase recorded in the previous corresponding period. Management also noted that the company will most likely struggle to meet last year's half-year result unless current trading conditions improve. Following today's sharp decline, the shares are now trading around 50% below their recent August highs.

Shine Corporate Ltd (ASX: SHJ)

Shares of Shine have fallen around 10% today after the law firm seemingly dampened investor expectations for FY17. At its AGM today, management reiterated that the outlook for the year ahead remains challenging for the legal market, especially in the personal injuries sector. A number of proposed government reforms in Queensland and New South Wales could also have a negative impact on the law firm if they are implemented. Although Shine did not provide any updated guidance for the full year, it does expect to deliver an improvement in the amount of work in progress (WIP) it can recover.

Australian Vintage Limited (ASX: AVG)

Shares of Australian Vintage have nose-dived more than 9% today after the wine maker said the recent plunge in the British pound would negatively impact its full year net profit after tax (NPAT) by approximately $3.5 million to $4.0 million (assuming the AUD / GBP exchange rate remains at 62.8). Although the company expects its FY17 cash flows from operating activities to exceed the previous year, NPAT this year is likely to be well below the $7.2 million generated in FY16.

Crown Resorts Ltd (ASX: CWN)

Crown continues to dominate the headlines this week and its shares have fallen another 2.5% today to $10.72. Along with the ongoing concerns about the situation with Chinese authorities, the casino operator provided a recent trading update at its AGM that revealed a decline in VIP program play turnover and a 1% increase in main floor gaming revenue for its Australian properties. Crown also released an announcement earlier in the day that confirmed it will look to IPO a 49% interest in some of its Australian hotels and associated retail property.

The post Why these 4 shares are getting crushed today appeared first on The Motley Fool Australia.

While there is a significant part of the micro-cap market that meets the criteria (think gold exploration and start-up biotechnology companies), investors shouldn't be too quick to write off the sector altogether. In fact, some of the best opportunities for growth investors reside in this part of the market.

With that in mind, here are four fast-growing companies that growth investors could consider with further research:

Australian Vintage Limited (ASX: AVL) – share price 57 cents

Currently trading at around 57 cents per share, Australian Vintage is a winemaker with a market capitalisation of $134 million. While significantly smaller than Treasury Wine Estates Ltd (ASX: TWE), the company appears to be following a similar growth strategy by promoting its branded wines both in Australia and abroad. Australian Vintage is also in the process of making significant cost savings with the benefits expected to flow through from FY18 onwards.

RXP Services Ltd (ASX: RXP) – share price 80 cents

Currently trading at 80 cents per share, RXP is an information & communications technology (ICT) company with a market capitalisation of $111 million. It operates across a diverse range of industries and has shown superb earnings momentum over the past three years. The outlook for RXP is positive with double-digit revenue growth expected across FY17 and FY18.

Mobile Embrace Ltd (ASX: MBE) – share price 29 cents

Currently trading at 29 cents per share, Mobile Embrace is a mobile payments and advertising company with a market capitalisation of $131 million. Although the company operates in a very competitive segment of the market, it has delivered surprisingly consistent growth in revenue and earnings over the past five years. With the mobile market becoming the most important e-commerce channel globally, Mobile Embrace is certainly well placed for further growth.

Compumedics Limited (ASX: CMP) – share price 61 cents

Trading at 61 cents per share, Compumedics is a developer and manufacturer of medical devices with a market capitalisation of around $105 million. The company is already the market leader in supplying sleep diagnostic devices in Australia, Japan and China and is now focusing more of its attention to growing its market share in the very lucrative US and German markets. Impressively, Compumedics is still being led by its founder after 26 years and I believe this bodes well for prospective investors.

The post 4 shares under $1 with huge potential appeared first on The Motley Fool Australia.