Four ASX shares that are falling more than most today are listed below. Here's why they are dropping:

Bapcor Ltd (ASX: BAP)

The Bapcor share price is down 20% to $1.87. Investors have been selling this auto products retailer's shares following the release of another disappointing update. Management advised that its performance in October and November was below expectation mainly in the Trade segment. In light of this, Bapcor now expects its statutory net profit after tax for the first half to be a loss in the range of $5 million to $8 million. For the full year, its statutory net profit after tax is now expected to be $31 million to $36 million. This is a downgrade on the guidance it provided in late October of $40 million to $50 million. Bapcor's CEO, Angus McKay, said: "The weaker operational performance in October and November is disappointing. Although, the turnaround of the business is more challenging and taking longer than expected we are committed to doing the difficult work that will result in a stronger, more sustainable company."

Emeco Holdings Ltd (ASX: EHL)

The Emeco share price is down 2.5% to $1.28. This follows the release of the mining equipment rental company's investor day update this morning. While the update was filled with positives and highlighted its many opportunities, there was no update to its guidance for FY 2026. It is possible that some investors had been expecting an upgrade at today's event. As things stand, Emeco still expects "moderate earnings growth" this financial year.

Liontown Ltd (ASX: LTR)

The Liontown share price is down 3% to $1.47. This is despite the lithium miner announcing an offtake agreement with China's Canmax. The agreement will see the supply of 150,000 wet metric tonnes (wmt) of spodumene concentrate per year over two years in 2027 and 2028. Liontown's Managing Director and CEO, Tony Ottaviano, said: "Their participation in our 2025 institutional placement signalled strong confidence in the long term potential of Kathleen Valley, and this Offtake Agreement reinforces their commitment." While this is good news, it is possible that profit taking is weighing on its shares. After all, they remain up by 28% since this time last month despite today's weakness.

PWR Holdings Ltd (ASX: PWH)

The PWR Holdings share price is down over 4% to $7.73. This follows news that this automotive cooling products company has appointed its new CEO. PWR Holdings advised that it has promoted its CFO, Sharyn Williams, to the top job. Given the company's poor recent performance, it is possible that some investors were looking for an outside appointment with fresh ideas.

The post Why Bapcor, Emeco, Liontown, and PWR shares are tumbling today appeared first on The Motley Fool Australia.

Macquarie describes Emeco as providing heavy equipment rental solutions and contract mining primarily for the mining industry. It has three different segments: rental, Pit n Portal, and workshops.

The rental segment provides earthmoving equipment to customers in Australia. Pit n Portal includes a range of mining services and related services in Australia. Workshops provides maintenance and component build services in Australia.

Let's get into what's appealing about the business.

What's the appeal of the ASX small-cap stock?

Macquarie was pleased with the recent trading update from the business, which showed "solid momentum" as the business enters FY26 with a strengthened balance sheet.

The company is expecting "moderate earnings growth, significant free cash flow and substantial deleveraging".

Macquarie forecasts the business could grow its operating profit (EBITDA) by 6% to $319 million in FY26.

In the update, Emeco's FY26 guidance was largely unchanged, apart from the depreciation range being lifted to between $165 million to $170 million, up from $160 million to $165 million previously.

The broker noted that the ASX small-cap stock remains focused on improving the return on capital (ROC), targeting 20%. It finished FY25 with a ROC of 17% and the current run-rate is around 18%. The company is also focused on converting earnings into free cash flow.

Macquarie believes sustained equipment utilisation and operational improvements remain critical.

The broker pointed out that in FY26, Emeco will drive cost efficiencies and increase its focus on business development to support higher utilisation, expand market share through new project opportunities, and grow fully maintained projects through the Force business.

How is the mining industry performing?

As a business heavily involved in serving the mining industry, Emeco's success is partly linked to the performance of the sector. Macquarie commented on the sector as a whole:

The outlook for FY26 remains positive. Australian mining production volumes are expected to remain buoyant, supported by continued demand for commodities. In particular, bulk commodities is forecast to remain robust (iron ore and coal), driving demand for large mining equipment and rental solutions. Strength in the gold sector, where EHL's rental and maintenance solutions can drive improved production and returns for clients, also presents growth opportunities for the company.

How attractive is the ASX small-cap stock's valuation?

Macquarie identifies several potential catalysts for the business, including ongoing deleveraging, margin improvements, generating free cash flow to reduce outstanding debt, and potential capital management initiatives (such as dividends and share buybacks). It's expecting a capital management update after refinancing its debt facilities.

The broker has a price target of $1.40, implying a potential 12-month rise of 12% from its current level, as well as a possible annual dividend of 5 cents per share, which equates to a dividend yield of 4%. That implies a possible total return of 16% over the next 12 months.

The post Macquarie tips 16% upside for this ASX small-cap stock appeared first on The Motley Fool Australia.

The company told the ASX in an announcement that it "notes the speculation appearing in The Australian newspaper that it may be in discussions relating to a potential control proposal for Emeco''

Emeco confirms that it has received unsolicited interest from a number of potential acquirers and has had discussions with those parties. However, at this time, no party has put forward a proposal which warrants being progressed to a binding proposal. Emeco will keep shareholders informed of any material developments as appropriate.

Emeco, at Friday's closing price of $1.08, was valued at $559.8 million.

The company's shares hit a 12-month high of $1.20 on Monday, with more than five times the usual volume of shares traded.

The shares are currently trading at $1.17, up 8.3%. Shareholders have done well out of the stock this year, with it having appreciated from as low as 69 cents earlier this year.

Strong results to continue

Emeco announced in August that it had generated full-year revenue of $785.4 million, up 7% from the previous year, while operating net profit was 22% higher at $84.5 million.

The company said at the time that continuing strong levels of production activity in the mining sector supported a positive outlook for heavy equipment demand.

It was anticipating moderate earnings growth, significant free cash flow, and substantial further deleveraging.

The post Takeover approaches send shares in mining equipment firm surging appeared first on The Motley Fool Australia.

One provides rental equipment for the mining industry.

The second provides automotive cooling solutions.

And the third company receiving a broker upgrade today is a major Aussie energy producer.

Which upgraded ASX All Ords stocks are we talking about here?

I'm glad you asked!

(Broker data courtesy of The Australian.)

Three ASX All Ords stocks forecast to charge higher

Starting with the big Aussie energy company, we have Santos Ltd (ASX: STO).

Santos shares are up 0.4% in early trade today, swapping hands for $6.82 apiece. This sees the ASX All Ords stock down 3% in 12 months. Santos shares also trade on an unfranked trailing dividend yield of 6.7%.

Morgan Financial forecasts better days ahead for the energy producer. The broker raised Santos shares to an add rating with a $7.40 price target. That represents a potential upside of almost 9% from current levels.

Santos held its investor day on Tuesday, 19 November.

The ASX All Ords stock maintained its 2024 cost and production guidance. And boosting investor sentiment, CEO Kevin Gallagher announced an updated capital allocation framework. The energy company will now target returns to shareholders of at least 60% of all-in free cash flow from 2026, when the major capex expenditure for its growth projects winds down.

Which brings us to the second ASX All Ords stock earning a broker upgrade today, mining machine rental company Emeco Holdings Ltd (ASX: EHL).

The Emeco share price is up 1.2% today at 82 cents. Emeco shares have enjoyed a strong year, up 42% in 12 months.

Jarden Securities expects more strong performance from the company. The broker raised Emeco to an overweight rating with a $1.00 price target, which is 22% above the current share price.

Emeco provided an FY 2025 trading update and earnings guidance yesterday, 20 November.

Investors were quick to clue into the increased earnings forecast. Management forecasts FY 2025 operating earnings before interest, taxes, depreciation and amortisation (EBITDA) of "at least" $300 million, some 7% above FY 2024 earnings.

Automotive cooling solutions provider PWR Holdings Ltd (ASX: PWH) rounds off the list of ASX All Ords stocks getting a sizeable broker upgrade today.

The PWR share price is up 5.1% in early trade today at $7.20. PWR shares are down 27% over the past year, with much of that pain hitting in yesterday's trade. The stock also trades on a fully franked trailing dividend yield of 1.9%.

Citi believes the recent selling action has been overdone. The broker raised PWR to a buy rating with a $9.45 price target. That represents a potential upside of 31% from the current price.

PWR shares closed down 24.6% yesterday after releasing an underwhelming trading update.

Investors hit the exits, perhaps too hastily, according to Citi, after the ASX All Ords stock said it expects net profit after tax (NPAT) for H1 FY 2025 to be in the range of $3.2 million to $3.7 million. That's well down from the NPAT of $9.8 million reported in H1 FY 2024.

The post These 3 ASX All Ords stocks just got sizeable broker upgrades appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back are listed below. Here's why they are rising:

Boss Energy Ltd (ASX: BOE)

The Boss Energy share price is up 1.5% to $3.10. Investors have been buying this uranium producer's shares following the release of a drilling update. Management advised that the infill drilling campaign at the Gould's Dam and Jason's satellite deposits within the Honeymoon Project in South Australia is now complete. The two deposits have combined resources of 36.7Mlbs of contained U308. This is more than the 36Mlbs that its Honeymoon project is producing under its current mining licence. Managing director, Duncan Craib, said: "These satellite deposits have the potential to drive growth as well as enabling us to leverage existing infrastructure and further capitalise on the opportunity presented by growing global demand for uranium from tier-one locations."

Emeco Holdings Ltd (ASX: EHL)

The Emeco share price is up 4% to 79.5 cents. This follows the release of a trading update at the equipment rental company's annual general meeting. Emeco revealed that it expects operating EBITDA to be at least $300 million in FY 2025. This is up from $281 million in FY 2024. The company's CEO, Ian Testrow's said: "The operating environment and business conditions remain robust with the production outlook for gold and bulk commodities remaining positive, despite weaker market conditions for nickel and lithium. We have a strong competitive advantage in the market with our rental and equipment rebuild model, along with a national footprint in the key mining regions across Australia."

Mineral Resources Ltd (ASX: MIN)

The Mineral Resources share price is up over 1.5% to $35.42. This is despite there being no news out of the embattled mining and mining services company on Wednesday. However, with its shares down sharply this year, some investors may be swooping in on the belief that they are now in bargain territory.

Plenti Group Ltd (ASX: PLT)

The Plenti share price is up 5% to 75.5 cents. This morning, this fintech lender released its half year results and revealed a 28% increase in revenue to $124.2 million. This was driven by a 17% increase in the average loan portfolio and a 9% increase in average borrower interest rates. Things were even better on the bottom line, with Plenti reporting a 260% increase in cash net profit after tax to $5.5 million.

The post Why Boss Energy, Emeco, Mineral Resources, and Plenti shares are pushing higher today appeared first on The Motley Fool Australia.

However, despite the broader market's bad mood today, a few ASX All Ords shares are still breaking away to record gains.

In fact, three have just smashed new 52-week highs. Well, two All Ords shares and one exchange-traded fund (ETF). Let's check them out.

2 ASX All Ords shares (and one ETF) clocking new highs this Wednesday

Steadfast Group Ltd (ASX: SDF)

First up, we have insurance stock Steadfast. Steadfast shares have gained a healthy 1.91% so far today and are up to $6.41 a share at the time of writing. Not only is that a new 52-week high for this insurance stock, but a new all-time record high. And there's still plenty of time left today for the price to go even higher.

This push is just the latest uptick for Steadfast, which has been on a tear for a few weeks now. Back on 21 June, the company gave investors an update regarding its expectations for the 2024 financial year. Steadfast upgraded its guidance for the 23 months ended 30 June 2024.

It previously told ASX All Ords investors to expect an underlying net profit after tax of between $290 million and $300 million. But last month, it increased this expected range to between $298 million and $303 million.

Investors have been flocking to Steadfast shares ever since, with the company now up a healthy 16.7% over the past month.

Emeco Holdings Ltd (ASX: EHL)

Next up, we have mining equipment company Emeco. Emeco shares are currently flat at 79 cents apiece. However, earlier today, they rose to 80 cents, a new 52-week high for this ASX All Ords stock.

Again, there hasn't been any fresh news out of Emeco this Wednesday. In fact, we haven't heard from this company with any price-sensitive news for a while now. But Emeco has been rising steadily ever since its last earnings report back in February.

Back then, this ASX All Ords stock reported a 21% rise in operating earnings before interest, tax, depreciation and amortisation (EBITDA) for the six months to 31 December to $137 million. Operating net profits after tax also rose by 69% over the prior corresponding period to $51 million.

Emeco shares have risen 19.7% over the past six months, so today's new 52-week high may be a byproduct of this increased optimism.

iShares Asia 50 ETF (ASX: IAA)

Finally, let's talk about the Shares Asia 50 ETF. IAA units are currently enjoying a 0.23% lift to $103.82 each. That comes after this ASX All Ords ETF clocked a new 52-week high of $105 soon after the market opened this morning.

This ASX ETF holds a portfolio of underlying shares representing 50 of the largest companies listed on Asian markets, including China, Taiwan, South Korea, and Singapore. Its holdings include Taiwan Semiconductor Manufacturing Company, Samsung, and Tencent.

When an ETF rises in value, it's normally due to the share prices of its underlying holdings appreciating. Indeed, we see that many of its top holdings have had a stellar month. Taiwan Semiconductor shares alone have gained more than 17% over the past month. Samsung has also done well, up 15.5% since this time last month.

So, it's no surprise that this ASX All Ords ETF is also succeeding.

The post 2 ASX All Ords shares (and one ETF) smashing new highs while the market sinks 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 rising:

Australian Ethical Investment Ltd (ASX: AEF)

The Australian Ethical share price is up 13% to $3.66. Investors have been buying this fund manager's shares following the release of a business update. Australian Ethical revealed further growth in its FUM and expectations for strong half-on-half profit growth in the second half.

Delta Lithium Ltd (ASX: DLI)

The Delta Lithium share price is up a further 12% to 76 cents. Investors have been buying this lithium developer's shares this week after it announced that Idemitsu Australia has invested ~$46.4 million at a premium of $0.7075 per share. The two parties will look to maximise the value of the Mt Ida and Yinnetharra lithium projects through key Australian, Japanese, and international relationships.

Emeco Holdings Ltd (ASX: EHL)

The Emeco share price is up 5% to 68.5 cents. This has been driven by the release of a trading update from the mining equipment company this morning. Management revealed that its unique business model and strategy continues to deliver solid earnings in challenging market conditions. It expects operating EBITDA of $248 million to $252 million in FY 2023.

Navigator Global Investments Ltd (ASX: NGI)

The Navigator Global share price is up over 9% to $1.28. This morning, this investment company announced that it will settle the 2026 redemption payment and acquire the remaining distributions from a portfolio of strategic investments. Management believes the "transaction has a compelling rationale and accelerates Navigator's delivery on its strategic priorities while repositioning to unlock substantial shareholder value."

The post Why Australian Ethical, Delta Lithium, Emeco, and Navigator Global are racing higher appeared first on The Motley Fool Australia.

Anyone buying a company's stock after its ex-dividend date will miss out on its next payment. So, investors wanting a piece of these dividends better get in quick.

It's also worth bearing in mind that on their ex-dividend trading day, ASX shares typically fall approximately equal to the value of their next dividend.

8 ASX All Ords shares trading ex-dividend this week

First off the bat will be Australian Clinical Labs Ltd (ASX: ACL). The ASX All Ords pathology services provider will pass its ex-dividend date today.

That means new shareholders have already missed out on its 7-cent per share dividend. It will be paid on 26 April.

And that might not be all weighing on the stock. The company's takeover target Healius Ltd (ASX: HLS) has responded to its all-scrip offer, noting the bid likely won't meet the required acceptance.

Cedar Woods Properties Limited (ASX: CWP) will be the next All Ords share to trade ex-dividend this week. Shares in the property developer will surpass the milestone on Tuesday.

Investors will see a 13-cent per share dividend paid on 28 April.

Shares in mining equipment provider Emeco Holdings Ltd (ASX: EHL) will trade ex-dividend on Wednesday.

Those holding shares in the All Ords company will receive a 1.25-cent per share dividend from 13 April.

Come Thursday, all eyes will be on agriculture-focused real estate property trust Rural Funds Group (ASX: RFF) and property investor Garda Diversified Property Fund (ASX: GDF). The pair will trade ex-dividend on Thursday.

After that, Garda will pay a 1.8-cent per share dividend on 19 April, while Rural Funds will hand out a 2.9-cent per share offering on 19 April.

Industrial- and office-focused real estate investment trusts (REITs) Centuria Industrial REIT (ASX: CIP) and Centuria Office REIT (ASX: COF) will also trade ex-dividend on Thursday.

They'll pay out their respective 4-cent per share and 3.5-cent per share offerings on 28 April.

And finally, All Ords share Harvey Norman Holdings Limited (ASX: HVN) will also trade ex-dividend this week, passing the milestone on Friday.

The furniture retailer will pay a 13-cent per share dividend on 1 May.

The post 8 ASX All Ords shares trading ex-dividend this week appeared first on The Motley Fool Australia.

In fact, investing in under-the-radar companies that others may be overlooking can sometimes give you an edge as an investor. By doing the leg work to gain an in-depth understanding of a company prior to others, you can potentially capitalize on the undiscovered potential.

With that in mind, let's take a closer look at these five ASX shares that you may not have come across before.

ASX shares building the world around us

If you asked someone on the street if they had ever heard of Maas Group Holdings Ltd (ASX: MGH), the answer would probably be, 'Who?'. Yet, Maas is a leading construction materials company boasting profits of $61.6 million on $517.1 million of revenue in FY22.

The company is growing top-line aggressively by making several debt-fuelled acquisitions. In 2022 alone, Maas made five acquisitions including quarries, plant hire, and maintenance services. Maas shares are down 45% over the last year and trade on a price-to-earnings (P/E) ratio of 13.2.

Similarly, Emeco Holdings Ltd (ASX: EHL) is another ASX share that most people couldn't tell from a bar of soap. But for such an unrecognisable name, the company sure has built up an enviable heavy machinery rental company.

In FY22, net profits after tax (NPAT) were ratcheted up by 22% to $69 million. The company achieved this result despite labour shortages, supply chain interruptions, and adverse weather events. Emeco shares are 7% in the hole over the past 12 months and are trading on a P/E ratio of 6.6.

Now, if anyone knows Capral Limited (ASX: CAA) by name, I would be impressed. At a market capitalisation of $130 million, it could easily slide by undetected by most investors. However, the aluminium product manufacturer pulled in $638.7 million of revenue in FY22 at a profit margin of nearly 8%.

While profits have since been retreating, the company still maintained a fully franked dividend — producing a dividend yield of 9.5%. Capral shares are 22% lower than where they were a year ago with the company trading on a P/E ratio of around 3.

Cars and healthcare

This next ASX share is the most profitable, in percentage margin terms, out of the bunch mentioned here. Eclipx Group Ltd (ASX: ECX) doesn't ring bells quite like Telstra Group Ltd (ASX: TLS), but the vehicle fleet leasing and management company does tout a better profit margin.

At the end of September 2022, Eclipx netted $103.3 million in profits for the previous 12 months, representing a 15.3% margin. The below industry average P/E of 5 times earnings possibly reflects the lack of top-line growth over the last five years or so.

Finally, what if I told you there is an ASX share doing over $10 billion in revenue annually and you still probably don't know it by name? Ever heard of a pharmaceutical retail giant by the name of EBOS Group Ltd (ASX: EBO)?

Maybe not… but I'd say there's a good chance you do know TerryWhite Chemmart, or Pharmacy Choice, or Good Price Pharmacy Warehouse… EBOS Group operates these businesses and many others across Australasia.

The company operates on paper-thin margins of around 2% but has successfully done so for 100 years. EBOS shares are up 7% over the last year and trade on a P/E of 32 times earnings.

The post 5 profitable ASX shares you probably have never heard of appeared first on The Motley Fool Australia.

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

BrainChip Holdings Ltd (ASX: BRN)

The BrainChip share price is down 1% to 88 cents. Investors don't appear impressed that the semiconductor is granting its former chairman 8 million restricted stock units for free after his previous options lapsed. These shares have a market value of over $7 million. The issuing of new shares is nothing new for the company. 10 years ago, BrainChip had 220.3 million shares outstanding. It now has over 1.7 billion shares outstanding plus 100 million unquoted securities.

Emeco Holdings Limited (ASX: EHL)

The Emeco share price is down 10% to 80 cents. This morning this mining equipment provider revealed that it is struggling to collect a major receivable. A customer owes Emeco $32 million, but "a potential issue regarding the full recoverability of outstanding amounts" has emerged. Emeco is currently demobilising its people and equipment.

Harvey Norman Holdings Limited (ASX: HVN)

The Harvey Norman share price is down 4% to $3.99. This retail giant's shares are falling today after trading ex-dividend for its latest final dividend. Eligible shareholders can now look forward to receiving Harvey Norman's fully franked 17.5 cents per share dividend in a month on 14 November.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price is down 5% to $4.70. Investors have been selling this lithium miner's shares this week following a bearish broker note out of Morgan Stanley. It has warned that lithium demand and pricing could be falling in China. Investors may have concerns that the high flying Pilbara Minerals share price could come under pressure if prices start to fall and have been taking profit off the table.

The post Why BrainChip, Emeco, Harvey Norman, and Pilbara Minerals shares are dropping appeared first on The Motley Fool Australia.

This group of ASX shares are industrial equipment rental companies and their shares haven't been invited to the party.

The ASX sector that's the underdog in this bull market

For instance, the Seven Group Holdings Ltd (ASX: SVW) share price has fallen 7.4% over the past year.

The Emeco Holdings Limited (ASX: EHL) share price and NRW Holdings Limited (ASX: NWH) share price have also fallen behind with an 11% drop and 2% gain, respectively, over the year.

In contrast, the ASX 200 index jumped 9% over the period, thanks in large part to surging commodity prices.

Turnaround could be in the wings

But there might be too much pessimism in this ASX sector. The latest report from UBS on a "fireside chat" with the chief executive of Orange Hire, Greg Parfitt, highlights the sector's strong outlook.

Orange Hire is an Australian private company operating in the infrastructure and equipment hire markets. It owns a fleet valued at around $110 million across the east coast of the country.

Best conditions in 30 years

There were four key takeaways that UBS got from the interview. The first is the accelerating utilisation rate for Orange Hire's equipment which now stands in the low 70% from mid 50% in the December half. The improvement comes despite adverse weather disruptions.

There is also a rebound in tendering activity for equipment hire. Demand is strong across key construction sectors, like infrastructure, housing, mining and renewables.

"Greg noted these are the most favourable conditions he has seen in over 30yrs in the equipment hire industry," said UBS.

Pricing power meets bullish outlook

The surge in demand comes at the right time for the sector too, which like the rest of the economy, is facing rising costs.

"The strong demand backdrop is supporting a favourable pricing environment with Orange Hire having successfully pushed through two 3% price increases in FY22, with another planned within the next 3 months," added the broker.

Just as importantly, the outlook for the sector is positive for FY23. Parfitt is expecting equipment hire sales growth to hit at least double digits. The growth is driven by the strong civil construction tendering environment, as well as price increases.

The ASX share that is best placed to benefit from this thematic is Seven Group, according to UBS. The group owns Coats Hire, Australia's largest equipment rental firm, and WestTrac, which is a Caterpillar equipment dealer.

The post This lagging ASX sector could be next to outperform appeared first on The Motley Fool Australia.

Shares in the mining equipment company have U-turned after earlier bolting more than 5% higher after Emeco released its full-year results for FY21.

Let's take a look at how Emeco performed for the full year.

Emeco declares first dividend in 8 years

Emeco's full-year report was highlighted by an operating EBITDA of $237.7 million.

Despite being 7% lower than operating EBITDA in FY20, Emeco highlighted the various challenges the company faced in FY21.

The company noted disruptions arising from the COVID-19 pandemic, high levels of uncertainty in global markets and declining coal prices as some of the challenges.

In addition, Emeco highlighted a return on capital of 17%, demonstrating the company's resilient business model.

For FY21, the company's revenue rose 14.8% to $620.5 million although net profit tanked 68.7% to $20.7 million.

Emeco also noted the contribution of Pit N Portal which the company acquired in February 2020.

The company also stressed its strengthened balance sheet after reducing its interest and hedging costs by 64% in June.

Despite profit tumbling, Emeco declared a fully franked dividend of 1.25 cents per share for the first time in 8 years.

The company also launched a $3.8 million on-market share buyback.

Outlook for Emeco

Emeco noted that the company is expecting a strong improvement in performance for FY22.

The company highlighted a renewed focus on redeploying idle rental equipment and improving the growth trajectory in its services-based operations.

Emeco reported its rental business is supported by strong momentum in earnings from the fourth quarter of FY21.

The company's strategic focus for FY22 will rely on winning long-term projects to continue commodity diversification and increase services revenue.

As a result, FY22 net capital expenditure is expected to be in the $140 million to $150 million range.

Emeco also noted continued strong free cash flow and delivering on management's policy of returning 25-40% of operating NPAT to shareholders.

Snapshot of the Emeco share price

Despite a dour start to the year, the Emeco share price is trading more than 13% higher since the start of 2021.

At the time of writing, shares in the mining equipment company are down 1.16% for the day to $1.275.

The Emeco share price has been trading in a wide range today as investors digest the company's results.

Shares in Emeco were more than 5% higher earlier after hitting an intraday high of $1.36.

The post Emeco (ASX:EHL) share price falters on full-year net profit drop appeared first on The Motley Fool Australia.

The broker's latest research note on this topic comes after over a quarter of Australian businesses were having trouble finding staff.

The findings from the recent ABS Business Conditions and Sentiment survey found that medium to larger businesses were struggling more to find skilled workers.

Skills shortage pain increasing most in construction

The most impacted roles include hospitality workers, engineering professionals, drivers and building trades.

"The industries most impacted include: Accommodation and Food Services, Utilities, Manufacturing and Construction with the Construction industry seeing the biggest increase in difficulties over the past six months," said JPMorgan.

"In Dec-20, only 18% of Construction respondents reported an inability to recruit staff compared to 32% in Jun-20."

Early signs of stress can be seen among some ASX engineering and constructions shares. They have been underperforming the S&P/ASX 200 Index (Index:^AXJO) recently while the rest of the market is unperturbed.

ASX shares feeling the jobs squeeze

For instance, the NRW Holdings Limited (ASX: NWH) share price has halved since the start of 2021. Meanwhile, the Monadelphous Group Limited (ASX: MND) share price and Emeco Holdings Limited (ASX: EHL) share price have fallen 24% and 11%, respectively.

In contrast, the ASX 200 has rallied 11% over the same period.

But the ASX shares that is most negatively impacted by skills shortages and potential wage rises aren't in this group, warned JPMorgan.

The ASX shares most at risk from skills shortage

The broker reckons that the Downer EDI Limited (ASX: DOW) share price has most to lose. In fact, JPMorgan is so concerned that it downgraded the Downer share price to "underperform" (equivalent to "sell") due to this risk factor.

The market may not have woken up to this threat. The Downer share price is up around 5% since January and has gained more than 30% over the past year. That's materially ahead of the other contractors listed in this article.

Perhaps Downer's greater exposure to infrastructure construction explains its outperformance. But if JPMorgan is right, the gap between the Downer share price and the sector could shrink substantially in the coming months, if not sooner.

Are there ASX buying opportunities?

This raises the question about whether now is the time to be selling Downer and buying one of the laggards.

Coincidentally, the analysts at Macquarie Group Ltd (ASX: MQG) reiterated their "outperform" recommendation on the Emeco share price on the same day JPMorgan downgraded the Downer share price.

Macquarie's bullish call on Emeco comes as the company successfully raised $250 million via senior secured notes at 6.25%.

It also helped that management reiterated its FY21 operating earnings before interest, tax, depreciation and amortisation (EBITDA) guidance of $235 million to $238 million.

Macquarie's 12-month price target on the Emeco share price is $1.30 a share.

The post The ASX shares most impacted by Australia's job squeeze appeared first on The Motley Fool Australia.

At the end of market trade, the equipment rental company's shares closed the day at 98 cents apiece, up 3.70%.

Emeco price's senior secured notes

Investors bought up Emeco shares after the company announced a positive update to the ASX.

According to its release, Emeco advised it has placed a $250 million price tag on its senior secured notes. The notes mark the company's inaugural issuance in the domestic Australian Medium-Term Note (MTN) market.

Emeco stated that the bonds will have a fixed coupon rate of 6.25%, paid bi-annually for a 5-year period. Settlement of the bonds is expected to be completed on 2 July 2021, with the maturity date falling on 10 July 2026.

The funds received will primarily be used to pay off Emeco's United States notes that are due in March 2024.

Emeco noted that the transaction meets a number of its strategic funding objectives. This includes:

• Extending the debt maturity profile;
• Lowering its funding costs – an annual interest saving of around $9 million;
• Establishing a presence in the domestic bond market; and
• Replacing US$-denominated debt with A$-denominated debt.

Emeco managing director and CEO, Ian Testrow touched on the notes offer, saying:

We are very pleased with the exceptional investor response to our entry into the Australian bond market. We had planned to partially refinance our US notes, however the significant investor interest has provided us with the opportunity to fully retire our legacy debt.

The Notes significantly reduce our funding costs, lengthens our maturity profile and will result in a cleaner capital structure.

In addition to the news, Emeco reaffirmed its FY21 operating earnings before interest, tax, depreciation and amortisation (EBITDA) of $235 million to $238 million.

The company revealed it will release its full-year results for the 2021 financial year on 18 August, 2021.

About the Emeco share price

The Emeco share price has lost 8% in the past 12 months and is down roughly 15% year-to-date. The company's shares hit a recent 52-week high of $1.245 in February but have headed lower ever since.

Emeco has a market capitalisation of about $522 million, with a tad more than 544 million shares outstanding.

The post Why the Emeco (ASX:EHL) share price finished higher today appeared first on The Motley Fool Australia.

The surge in commodity prices to multi-year, if not record highs, recently have put ASX miners on the winners' podium.

Notwithstanding the recent bout of weakness, ASX mining shares dominate the S&P/ASX 200 Index (Index:^AXJO) leader board for FY21.

These include the Chalice Mining Ltd (ASX: CHN) share price, Paladin Energy Ltd (ASX: PDN) share price and Galaxy Resources Limited (ASX: GXY) share price – just to name a few. These shares have surged by at least 300% this financial year.

ASX value buys lie just outside the mining sector

After such a big run-up for the sector, investors may have to look elsewhere for value buys. The good news is that Jarden knows exactly where you should be looking.

The broker believes that service and equipment providers to miners are undervalued as many have failed to keep pace with commodity bull run.

Discount to asset value not justified

"Concerns around the earnings and margin outlook for the Mining & Infrastructure Services companies have made some investors overly cautious in our view," said Jarden.

"Share prices of the Mining & Infrastructure Services companies are currently trading well below what we view as the equivalent stage in the prior cycle, as determined by their relative valuation to their NTA backing."

Net tangible assets compares the value of a company's hard assets with its market capitalisation. Jarden believes that the discount to NTA for ASX mining services shares is not justified as there are no major differences in the earnings power of their asset base this time.

Best ASX value buys

What's more, industry conditions are currently very supportive of the sector. Capex spend is trending higher, exploration activity is ramping up and commodity prices are stubbornly high.

The best value buys on the NTA measure are the Emeco Holdings Limited (ASX: EHL) share price and Macmahon Holdings Limited (ASX: MAH) share price, according to Jarden.

The Emeco share price is trading at a 13% discount and Macmahon share price is at a 28% discount.

While the Monadelphous Group Limited (ASX: MND) share price and NRW Holdings Limited (ASX: NWH) share price are at a premium, they are trading below their respective historical averages.

Risk-reward favours the bulls

NTA isn't always a good yardstick for ASX shares. In this case though, it works well as mining services companies have to invest heavily in equipment.

"We are positive on the outlook for the sector, despite near-term risks to margins in FY21E from higher labour inflation," added Jarden.

"Despite this, we think the ability to purchase many of these companies at discounts to NTA or discounts relative to historical averages provides ideal risk/reward at this point in the cycle."

The broker has a "buy" or "overweight" recommendation on all the four shares listed above.

The post Best ASX value buys for the commodities supercycle appeared first on The Motley Fool Australia.

At the time of writing, the equipment rental company's shares are fetching for 99 cents apiece, up 6.67%.

What did Emeco announce?

Investors are snapping up Emeco shares after the company reaffirmed its guidance for the H2 FY21 period.

In its announcement, Emeco highlighted that it is continuing to deliver strong revenue growth. This is primarily due to the successful execution of its strategy.

Operating earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be in the upper guidance range of $115 million to $118 million. Pleasingly, this is despite the company facing COVID-19 disruptions and coal weakness in the sector.

In addition, Emeco noted that it is achieving positive Q4 FY21 rental earnings that are set to run into FY22. Approximately half of the equipment off-hired last year has been re-deployed across the business into new projects.

Further to the company's share price rise, the Emeco board approved a capital management policy.

This will see between 25–40% of operating net profit after tax allocated to capital management initiatives each year. The policy will come into effect after the end of FY21, on a pro rata basis for the second half.

The board stated it will decide on the relative benefits of dividend payments to maximise shareholder value. In particular, the company aims to make use of its $85 million through franking credits and share buybacks. This of course is dependent on the share price and valuation at the time of the decision being made.

Comments from the CEO

Emeco CEO and managing director, Ian Testrow commented:

This capital management policy marks the next phase of Emeco's evolution where our strong balance sheet and cash flow supports the recommencement of returning funds to shareholders. The company is in a sound position both financially and operationally, with a positive outlook ahead. Emeco has come a long way over recent years and we are excited to continue the journey as a business which makes regular payments to shareholders, as we maximise shareholder value through the cycle.

Our aim is to provide a sustainable distribution stream to shareholders, utilising our available capital as well as our franking balance, whilst also taking into consideration our share price and valuation and ensuring that we prudently deploy our capital to support growth in a disciplined way.

About the share price

It has been a rocky 12 months for investors as the Emeco share price has gone on a rollercoaster ride. While the company's shares are almost 10% higher from this time last year, its year-to-date performance has slumped, down 10%.

Based on today's prices, Emeco has a market capitalisation of about $554 million, and 544 million shares outstanding.

The post Why the Emeco (ASX:EHL) share price is soaring 6% higher today appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back are listed below. Here's why they are storming higher:

Eclipx Group Ltd (ASX: ECX)

The Eclipx share price is up 8.5% to $2.15 following the release of its half year results. For the six months ended 31 March, the fleet management and salary packaging company reported net operating income of $105.9 million and net profit of $39.3 million. This was a 22% and 77% increase, respectively, over the prior corresponding period.

Emeco Holdings Limited (ASX: EHL)

The Emeco share price has jumped 7% to 99.5 cents. The catalyst for this was the release of a capital management update by the mining equipment company. According to the release, Emeco's new capital management policy will see the company allocate 25% to 40% of operating net profit after tax to capital management initiatives each year. The policy will take effect following the end of FY 2021.

SeaLink Travel Group Ltd (ASX: SLK)

The SeaLink share price is up 2.5% to $10.08 after announcing a new acquisition. According to the release, the travel and transport company has entered into a binding agreement to acquire Western Australia-based Go West Tours for an enterprise value of $84.7 million. The deal also includes an earnout component of up to $25 million. Go West is one of the largest specialist bus operators serving the resources sector in Western Australia.

Starpharma Holdings Limited (ASX: SPL)

The Starpharma share price has stormed 4% higher to $1.85. This follows the release of an update on its Viraleze antiviral nasal spray. According to the release, the Viraleze antiviral nasal spray is now available for purchase by consumers in Europe via the company's webstore. Viraleze is a broad spectrum antiviral nasal spray that irreversibly inactivates >99.9% of coronavirus/SARS-CoV-2 within one minute.

The post Why Eclipx, Emeco, SeaLink, & Starpharma shares are storming higher today appeared first on The Motley Fool Australia.

Our big ASX miners have surged over the past year with the Fortescue Metals Group Limited (ASX: FMG) share price jumping 159%.

The BHP Group Ltd (ASX: BHP) share price rallied 79% while the Rio Tinto Limited (ASX: RIO) share price increased by 50% over the same time.

Has the bulk carrier left the jetty?

That's enough to give anyone the case of the FOMO when the S&P/ASX 200 Index (Index:^AXJO) "only" managed a 17% uplift.

But those who loath chasing rocketing ASX share prices might find this other strategy more appealing.

Goldman Sachs have gone through the latest results from the mining sector and believe that ASX mining contractors are well placed to outperform in 2021.

Picks and shovels

It's the old saying that the best way to profit from a gold rush is to sell picks and shovels. Many investors aren't thinking that way given that ASX mining contractors have been left behind in what some believe is a commodities supercycle.

Some interesting takeaways from ASX miners during the profit reporting season include tight labour markets and wage inflation, noted Goldman.

The lead time for sample testing and equipment have also extended, which is putting upward pressure on prices.

These trends bode well for those who supply equipment and services to miners. Miners who are expecting to pay higher wages include Fortescue, Rio Tinto, Western Areas Ltd (ASX: WSA) and Mineral Resources Limited (ASX: MIN).

ASX shares to buy in the commodities supercycle

According to Goldman, ASX engineering and explosive companies that are best placed to benefit are the Emeco Holdings Limited (ASX: EHL), Orica Ltd (ASX: ORI) share price and ALS Ltd (ASX: ALQ) share price.

It's worth noting that the Emeco share price fell 10% over the past year, while the Orica share price lost nearly a third of its value.

The ALS share price fared better as it gained around 34% over the period, but that's still well behind the big miners.

Goldman has a "buy" recommendation on all three stocks.

The post Is this a better way to buy into the ASX mining supercycle? appeared first on The Motley Fool Australia.

Four ASX shares that are falling more than most today are listed below. Here's why they are tumbling lower:

Challenger Ltd (ASX: CGF)

The Challenger share price has crashed 13.5% lower to $6.24 following the release of its half year results. For the first half of FY 2021, Challenger reported a 12% increase in annuity sales to $2.2 billion and a 10% lift in total life sales to $3.4 billion. However, despite the sales growth, normalised net profit before tax (NPBT) fell 30% to $196 million.

DEXUS Property Group (ASX: DXS)

The DEXUS share price has fallen 3% to $8.47. Investors have been selling the property company's shares following the release of its half year results. DEXUS reported a half year net profit after tax of $442.9 million. This was down 55.5% on the prior corresponding period due primarily to net revaluation gains being lower than those recognised a year earlier.

Emeco Holdings Limited (ASX: EHL)

The Emeco share price is down 9% to $1.13. This follows the release of the equipment rental company's half year update. Although Emeco reported a 21.1% increase in revenue to $298.6 million, its net profit fell by a massive 87.7% to $3.3 million.

Zip Co Ltd (ASX: Z1P)

The Zip share price is down 2% to $9.62. At one stage today the buy now pay later provider's shares were down as much as 6.5% before recovering slightly. This appears to have been driven by profit taking after some very strong gains in recent weeks. In fact, prior to today, the Zip share price was up a remarkable 75% since the start of the year. This impressive gain was driven largely by a very strong quarterly update last month.

The post Why Challenger, DEXUS, Emeco, & Zip shares are tumbling lower appeared first on The Motley Fool Australia.

At the time of writing, the Emeco share price is trading down 8.87% at $1.13.

Emeco provides a rental fleet of more than 1,000 machines to mining operations around Australia. The company uses big data to assess projects and provide the necessary machinery for its clients.

How did Emeco go during the first half of 2021?

Emeco reported an operating net profit before tax of $37.7 million for the first half of FY21. This is $3.8 million less than what the company delivered 1H FY20.

Rental revenue also slipped 4.8% to $199.8 million, predominantly due to weaker market conditions in the Eastern region.

The coronavirus pandemic also took a swing at the company's earnings. 

Operating earnings before interest, tax, depreciation and amortisation (EBITDA) was down 3.5% to $117.9 million. However, this is still at the upper end of the guidance range of $115 to $118 million.

Emeco finalised its acquisition of Pit N Portal Mining Services Pty Ltd and Pit N Portal Equipment Hire Pty Ltd at the 31 December 2020 reporting date.

The company acquired Pit N Portal for $70,802,995 settled by an upfront cash payment of $62,000,000 and Emeco shares issued to the sellers of $9,178,744, less an additional cash payment of $375,749.

Group revenue hiked up 21.2% to $298.6 million for 1H FY21, with the company crediting the Pit N Portal acquisition as being a major player in the jump.

Outlook

The company believes that the flat rental earnings achieved in the first half FY21 will improve in the second half.

Emeco expects to report growth in FY22.

Supporting this growth will be an idle fleet of equipment in the east being placed into new projects and single shift projects in the west being converted to double shift projects.

Rental flexibility also exists with the company's ability to relocate its assets as required.

Emeco notes that the company's workforce is more than 1,000 strong. During the 2021 calendar year, the business will upgrade its employee recruitment, onboarding and training capability. 

The company intends to sustain an FY21 capital expenditure (CAPEX) of approximately $115 million. 

Emeco further advised that the company has been awarded fully maintained projects in coal, starting in the fourth quarter of FY21. A new metals project requiring a wide range of equipment and services for a 5-year contract will also start in late FY21.

The post Why did the Emeco (ASX:EHL) share price take a 10% dive today? appeared first on The Motley Fool Australia.