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 tech company operates in anti-counterfeiting, authentication and tracing. It can embed its 4 products – ValiDotz, BioDotz, Fluorensic and InSpec – into plastics, fuels and chemicals. Furthermore, the solutions have application in the oil and gas industry, bio-imaging and liquid tagging.

What's the deal?

This morning, Dotz Nano told the market it has entered into supply and distribution agreements with Zohar Dalia. The agreements are for antiviral disinfectant with verifiable surface sanitation.

Zohar Dalia is a subsidiary of Israel's largest manufacturer and supplier of detergent and cleaning products. The supply agreement is that Dotz Nano will supply Zohar Dalia with its nontoxic molecular markers and detectors for Zohar to create a new active surface sanitisation solution.

The distribution agreement will give Zohar the right to sell and advertise the products globally, in approved markets such as the United Kingdom, India, Europe, Australia, and Africa.

Notably, the agreements are not expected to have an immediate material impact on the company's revenue.

Validation

Despite no material impact on revenue, the company says the deals offer good product validation and follow a successful trial within Tel Aviv Airport where 1000 litres of disinfectant were traced and verified.

Other trials were also undertaken in public areas. As such, the solution has the potential for use across a wide range of spaces including airports, hospitals, hotels and public transport.

Management comments

Dotz Nano chair and interim CEO Bernie Brookes commented on the agreements, saying:

Our supply and distribution agreements with Zohar Dalia further highlight the broad applicability of Dotz's authentication technology, and the board believes increases our value proposition even further.

It enables us to enter a new sector in several markets with what the board believes to be a superior solution both in terms of effectiveness and the unique ability to verify proper surface sanitation.

About the Dotz Nano share price

While the agreements may not have boosted revenue in the short term, Dotz Nano says they have "significant potential based on the large addressable global market".

The Dotz Nano share price is up 37% year-to-date and has climbed a massive 792.5% over the past 12 months.

The post Dotz Nano (ASX:DTZ) share price dips on new agreements appeared first on The Motley Fool Australia.

By comparison, the All Ordinaries Index (ASX: XAO) is up 0.42%.

Let's take a closer look at what the company announced.

Approval to sell testing kits in Europe

The Dotz Nano share price is racing today after the company advised the EU has granted it permission to use the CE Mark on its COVID-19 saliva testing kits.

The CE Mark is a requirement to sell medical products in the EU. Some EU countries will also have additional regulatory hurdles to clear. The pan-European governmental organisation previously granted Dotz Nano the right to use the CE Mark for its nasal swab testing kit.

With the company's saliva-based kit, a sample of saliva is swabbed from the inside of a person's mouth. After no longer than 17 minutes, the kit will indicate whether or not the test subject is carrying the novel coronavirus. This is much less intrusive than the nasal swab test, which involves one swab in each nostril, up to the sinus, and a swab of the recipient's throat. The results are also many times faster than the nasal swab test. Nasal swabs must be sent to a lab for processing and can take up to 48 hours to deliver results. 

According to Dotz Nano, the kit has a 0% false-negative rate for saliva samples containing a viral load of at least 1,250 copies per millilitre (mL). Samples containing as few as 313 virus copies per mL will induce a false-negative rate of 30%.

The test does not produce false-positive results, according to the statement.

Europe is entering a third wave

The approval of the testing kit could not come at a better time for European citizens. According to the New York Times, Europe is entering a third wave of coronavirus infections. The rise in COVID cases comes at the same time many European nations suspended the use of the AstraZeneca vaccine over blood clotting fears.

France, Germany, Italy, Poland, Greece, Czechia, Spain, Belgium, Ireland, and many other EU nations are tightening restrictions on gatherings, businesses, and general movement in response to the increasing cases.

The testing kits may also be music to the ears of many Australians still stranded in Europe. It is currently a requirement of the Australian Government that anyone flying into the country must test negative to the virus at least 72 hours before departing.

Dotz Nano share price snapshot

Over the last 12-months, the Dotz Nano share price has increased a remarkable 662.5%. Today's share price high is only half a cent off from the company's 52-week record.

Dotz Nano has a market capitalisation of around $103 million.

The post Why the Dotz Nano (ASX:DTZ) share price is up 11% appeared first on The Motley Fool Australia.

Four ASX shares that are climbing more than most today are listed below. Here's why they are zooming higher:

Anteotech Ltd (ASX: ADO)

The Anteotech share price has jumped 18% to 26.5 cents. The catalyst for this was the release of an update on its rapid COVID-19 test. According to the release, the biotech company's COVID-19 Antigen Rapid Test was reviewed by the Victorian Infectious Diseases Reference Laboratory and achieved sensitivity of 97.3% and specificity of 99.6%. Management advised that the results will form the basis of its CE Mark submission.

Crown Resorts Ltd (ASX: CWN)

The Crown share price has surged 17.5% higher to $11.58. Investors have been fighting to get hold of the casino and resorts operator's shares after it confirmed the receipt of a takeover approach. US investment company Blackstone has made an unsolicited, non-binding, and indicative proposal to acquire all of the shares in Crown at $11.85 cash per share. This was a 20.1% premium to its last close price. The Crown board is now assessing the proposal.

Dotz Nano Ltd (ASX: DTZ)

The Dotz Nano share price is up 7% to 29.5 cents. This morning the advanced technology company revealed that it has obtained CE Mark authorisation for its SARS-CoV-2 virus detection technology. The CE Mark clears the saliva-based diagnostic Dotz Test Kits for sale in the European Union. Management notes that the Dotz Test Kit is less intrusive than the current standard method of sample collection in most parts of the world. 

Galan Lithium Ltd (ASX: GLN)

The Galan Lithium share price has stormed 12% higher to 52.5 cents. This morning the lithium focused mineral exploration company announced that the testing of a new process has resulted in higher grade lithium product. In fact, the end product is the same quality as that of nearby mining giants SQM and Albemarle. Galan's Managing Director, Juan Pablo Vargas de la Vega, commented: "These results are better than we envisaged and have more than solidified the serious potential of the Hombre Muerto West project."

The post Why AnteoTech, Crown, Dotz Nano, & Galan Lithium are zooming higher 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, Cyan Investment Management director and portfolio manager, Dean Fergie, reveals two Aussie businesses that are winning big contracts, and some ASX-listed foreign companies to avoid.

The Motley Fool: What's your fund's philosophy?

DF: Our philosophy is to find smaller, less well-known stocks that are commercially proven but not well-recognised and likely to go through a sustained growth phase for the next 3 to 5 years or more. 

We tend to avoid really speculative businesses and businesses that are mature, and look for the next ones that are up-and-coming.

MF: So is it fair to say that your investments are focused on smaller cap?

DF: Yeah. Our philosophy is that the bigger you get, the harder it is to grow at double digit-plus rates. So by definition you have to look down at the spine of the market.

COVID-19 crash 

MF: How's the fund going this year with all the volatility?

DF: The short answer is volatile. We took a lot of pain when COVID first came out and then have retraced some of that and more since that time.

MF: Did you manage to buy anything during the March dip?

DF: We bought quite a few stocks. I think we played it reasonably well. But you can probably always do a little bit better in hindsight. 

What I saw is the stocks or the funds that were really defensively positioned in March did really, really well. Then in April and May they all did relatively poorly and vice versa. 

We made some smart investment positions, but did we put all our money into that cohort of tech stocks that have done exceptionally well? No, unfortunately not.

I think more than ever it's a really important time to be diversified. Because if you've got all your stocks in a really defensive basket, or a really aggressive basket, or technology-laden, or value-based, there'll be times when you'll do incredibly well and times where you'll do incredibly poorly. And it's very uncertain when those periods are going to be. 

Buying and selling 

MF: What do you look at closely when considering buying a share?

DF: The ability to scale… Obviously that leads to technology businesses, specifically software, but also businesses that can grow organically or that are embarking on potentially a new kind of business angle that's not largely been explored already. 

We look at a lot of tech businesses, financial services, and we're quite big in education. We've dabbled quite successfully in some food businesses — one of our early investments that was successful was Bellamy's Australia Limited (ASX: BAL). Professional services as well.

MF: What triggers you to sell a share?

DF: Disappointment in terms of management execution, or potentially if there's new competitors to come into the market, or just companies [that] disappoint on an earnings front. 

If you think you're losing money on something, or if something's changed, just sell out. Take the capital loss and move into something that's more successful. That's the way we look at things.

MF: Even if the company is doing reasonably well, would you sell out because it's reached a certain target that you might have set for yourself?

DF: Yeah, there's an element of that. I guess what happens is that if you have stocks that become very successful, they become quite a large part of your portfolio. We have a hard limit of not having any one position more than 10% of our portfolio. So when you have businesses that rise exponentially, you're forced to sell them down. I think that's sensible. 

One of the beauties of stocks is that you have these incremental changes to your holdings. It's not like buying a house where you're either all in or all out. You can fine-tune your exposure to stocks relatively easily and cost-effectively. 

That's one of the great advantages of the stock market that I think a lot of investors don't really take advantage of. They want to buy everything at the bottom and sell everything at the top, and that's unrealistic. 

So we just buy more stocks at lower prices and sell more of them at higher prices, and not try and be too binomial about those decisions.

What's coming up?

MF: Where do you think the world is heading at the moment?

DF: I wouldn't be alone in saying that the broader economy has got a lot of challenges ahead. But what we're seeing in 2020 is that there's been a massive disconnect between economic outlook and the stock market. They just don't reflect each other anymore. 

A lot of that has actually been driven by incredibly low interest rates. Just emotionally, investors don't want to leave their money in any kind of defensive asset class if it's not giving them any return. 

So every opportunity where there's a market dip, they've looked at getting into the stock market. And even the biggest funds, the pension funds, and massive super funds tend to be allocating more towards equities. On top of that, you've got a massive amount of retail day traders in the market sending stocks sky high with massive volumes. 

So whilst I think the near-term economic outlook does look challenging, I don't think it's necessarily a bad thing for the stock market because even if you've got businesses that are earning 3% or 4% earnings yields and potentially 1% or 2% dividend yield fully franked, that's a better outcome, if you're prepared to take the capital risk, than leaving your money in the bank right now.

At the end of the day, that's what drives the stock market, demand versus supply.

MF: That situation you just described, do you think it's a fundamental structural change that's here to stay? Or do you think the situation will return back to "normal"?

DF: It will depend on the direction of interest rates. They clearly can't go very much lower unless they go negative and I don't think that's looking like a realistic outcome. 

I would suggest that a lot of that rotation into stocks has already happened. The All Ordinaries Index (ASX: XAO) is not back to pre-COVID highs, but it almost is. Certainly the smaller end, the Emerging Companies Index, is 10% above where it was pre-COVID. 

So you're seeing a lot of money flow back into the stock market really, really aggressively. And it almost creates its own demand. It's almost like this elastic band in that you rail against the bullishness of the stock market till it runs so far that you just give up and cave in — and go and buy stocks like everyone else. 

But there are patches of the market that look crazily overvalued.

When we saw a potential vaccine come out and all those tech stocks tumble within the space of a day, I think that was a little bit of a warning sign — a canary in the coal mine — that it just can't go on forever. 

Sooner or later, all investors are going to come back to buying things on fundamentals. 

Overrated and underrated shares

MF: What's your most underrated stock at the moment?

DF: One stock that we've held for a while and just hasn't performed like we expected is a business called Quickstep Holdings Limited (ASX: QHL), which is an advanced carbon fibre manufacturer. 

They do a lot of work for the defence force… It's capped at sort of $60 million [market capitalisation], it does about $80 million in revenue, and is moderately profitable. 

They just penned a deal to buy a maintenance division of Boeing Co (NYSE: BA), which will add to their revenue. We look at that on just basic earnings multiples and revenue multiples and think it looks really cheap. 

Then when you look at it versus a number of these other advanced manufacturers in terms of like Titomic Ltd (ASX: TTT), AML3D Ltd (ASX: AL3), and Amaero International Ltd (ASX: 3DA)… it just looks ridiculously good value. So that's one we like. 

It's been a long slog for them to get where they are now, but they've got a lot of cash on their balance sheet. Contracts with global defence force businesses like Boeing, Lockheed Martin Corporation (NYSE: LMT) and Northrop Grumman Corporation (NYSE: NOC) — I just think it looks like a no-brainer in terms of a business to buy into, but the market just hasn't recognised it yet.

Another one that's going great guns at the moment is a hospital software provider called Alcidion Group Ltd (ASX: ALC). Again, they just signed a $9 million deal with a hospital in the UK. And they've got more than 20 million bucks in recurring revenue. They're getting very close to profitability. Global rollout. Reference sites.

MF: I see that one's spiked up this month?

DF: Yeah. It hasn't really done too much in the last 6 to 12 months. Everyone got pretty excited, went from I think about 6 cents to about 30, and has sort of come back.

With a lot of stocks, they run on momentum and then they kind of lose a bit of momentum and people get bored and they want to be on the next big thing regardless of what it is. So often you need a new contract or something new to excite people about it. 

I think [Alcidion]'s one of these businesses that just hasn't been big on announcing new contracts, but they've signed some that are really, really significant for a business that size. 

And you've seen that with the success of companies such as Pro Medicus Limited (ASX: PME) and the like. When those businesses get some success, certainly overseas, they can become very, very big businesses. 

MF: What do you think is the most overrated stock at the moment?

DF: I look at businesses like these Israeli technology ones like Weebit Nano Ltd (ASX: WBT), Dotz Nano Ltd (ASX: DTZ), Audio Pixels Holdings Ltd (ASX: AKP). 

They're all speculative businesses that are doing nothing in terms of revenue, keep sucking in investor cash, and don't make money. And they've got valuations in the hundreds of millions of dollars and I'm not necessarily sure that they've got anything particularly special. 

I'd say the same thing about businesses like Titomic — [they] don't really do much and they're still capped at a couple of hundred million bucks.

MF: Do you think there's a phenomenon these days of amateur investors egging each other on in internet forums?

DF: Oh, no doubt. A lot of investors will buy stocks because they're going up. It's pure speculation, but they just want to be in something because they think it'll be worth more next week than this week, not because they understand it, not because they think they're buying it at a cheap price, just simply because it's going up. 

You look at Kogan.com Ltd (ASX: KGN), Temple & Webster Group Ltd (ASX: TPW), Adore Beauty Group Ltd (ASX: ABY) as well. They've all got good business models, but the selling product online is not necessarily a business that's got huge barriers to entry. I mean, anyone can open up a Shopify store. 

Sure, you don't have the customer base, you don't have the reputation, you don't have the buying power, but they're not businesses that I think should be trading on 6 times sales and 100 times earnings. I can't see them scaling up any time soon. 

There's a lot out there that I would be very, very wary of on a purely valuation perspective.

Looking back

MF: Which stock are you most proud of from a past purchase?

DF: Afterpay Ltd (ASX: APT) is the obvious one. 

MF: Do you still hold it?

DF: No, we sold out a while ago. 

One that we bought quite a while ago is RAIZ Invest Ltd (ASX: RZI). That one did struggle for a while. It's an online investing platform — I think they offer a really, really good product. Their app's got great functionality. 

They're getting a lot of long-term customers — more people are interested in investing. I think that's a business that's got tailwinds from the structural change that people want to think more about investing in stock markets and not leave their money in the bank. 

Secondly, it's a technology play and it's getting good growth both here and they're looking to launch overseas as well. So that's one that I think will go really well. 

But probably our two biggest winners we've ever had are Afterpay and Bellamy's and, oddly enough, we made a lot of money out of Experience Co Ltd (ASX: EXP) for a while before it kind of went really badly.

Stocks never go up and down in a straight line. And that's one where we got in early and managed to get out enough of them that we ended up getting a good return for our portfolio over a period where it went up 2 or 3 times before they… struggled a little bit.

MF: Has COVID-19 changed or altered your investment methods at all?

DF: What's happened is that investors, if you think of yourself as a traditional strong "numbers and valuation" player… then you would have left a hell of a lot of money on the table. 

I think you're naive to think that the market is just driven by valuations. It's not. It's driven by sentiment, excitement, enthusiasm, momentum, those sorts of things. And they will drive stocks much higher than might be, in your view, intrinsic value. And they can all disappear overnight. 

So you've got to appreciate that there's a lot of other drivers in the market other than pure financial fundamentals and try and kind of second guess where other investors are going to either see risk or opportunity in the market — and try and take advantage of that.

Advice for your readers is try and blend a little bit of fundamental analysis with what you see as an opportunity and excitement towards positions. 

Probably the highest profile stock float this year has been Adore Beauty because it's a mainstream business. A lot of females know about it. It's run by a female founder. It's a great news story. 

But it was, we thought… incredibly expensive. 

People I saw were saying "Oh look, you know, there's a girl… and she wants to buy shares because she thinks it's a really good company." 

You've got to put a framework of what you're buying around it. What are you getting for your money? And if you don't know that, you shouldn't really be investing because it's not that straightforward.

The post This cheap ASX share is supplying US giants: fundie appeared first on The Motley Fool Australia.

What were the details of the placement?

Dotz Nano raised $7.1 million via the placement. The company sold 28.27 million shares at an issue price of 25 cents per share. The placement was announced on 19 October, and at the time was a discount of 13.8% to the last closing share price. The shares issued under the placement will begin trading on Wednesday 28 October 2020.

According to the company, the proceeds of the placement will be used to fulfil its 4 existing PPE authentication contracts in addition to increasing production capacity, establishing new distribution networks, engaging in sales and marketing and establishing proof of concepts for new products including commercialisation of Dotz's surface sanitation and on site virus detection.

A closer look at Dotz Nano

Dotz Nano is a technology company that specialises in carbon-based materials used for tracing, anti-counterfeiting and product liability solutions. Dotz Nano has been listed on the ASX since 2016.

Earlier this month, Dotz Nano announced that it had secured an agreement for the authentication of medical gowns worth US$255,000. The agreement was with Hong Kong based Universal Exports Group and followed a $1 million agreement with the same customer to authenticate medical face masks. 

Also in October, Dotz Nano gave a presentation at the Market Eye TechOpps virtual conference where it informed investors that $2.2 trillion of products are counterfeited, creating a large opportunity for Dotz Nano's authentication technology. 

About the Dotz Nano share price

The Dotz Nano share price is up 627% from its 52-week low of 3.3 cents and has risen more than 215% since the beginning of the year. The Dotz Nano share price is up 458% since this time last year.

The post Why the Dotz Nano (ASX:DTZ) share price nosedived 9% today appeared first on The Motley Fool Australia.