At the time of writing, the door-to-door container logistic provider's shares are down 26% to $1.46.

But this has nothing to do with market volatility.

Instead, there are concerns that the ASX stock's proposed takeover could be about to collapse.

What's going on with this ASX stock?

This morning, the Australian Competition and Consumer Commission (ACCC) raised preliminary competition concerns over the proposed $174.5 million takeover of Silk Logistics by Dubai-based logistics and shipping company DP World.

The competition regulator notes that Silk is one of the only national door-to-door container logistic providers in Australia. It hauls import and export containers using trucks to and from the ports that DP World Australia is operational at.

The proposed acquisition would result in DP World Australia, a major container stevedore, owning a national container transport provider.

The ACCC's Commissioner, Dr Philip Williams, said:

We have heard concerns that DP World's ownership of a national container transport provider is likely to reduce competition in the supply of container transport services. This could lead to higher prices and reduced quality for Australian importers and exporters.

Our review is focused on DP World Australia's ability and incentive to either increase terminal fees or worsen the quality of terminal services for container transport providers that compete with Silk, after the acquisition.

Dr Williams has concerns that DP World could lower prices to squeeze out competition before ultimately increasing them. He adds:

We are also assessing whether DP World Australia, after acquiring Silk, is likely to offer below-cost transportation prices to importers and exporters if their containers are also picked up and dropped off at DP World Australia's stevedoring terminals. This is because a discounting strategy involving below-cost prices could reduce container transport competition allowing a combined DP World Australia and Silk to raise prices later.

Company response

The ASX stock has responded to the news this morning. It advised that it will consider the impact of the ACCC's process on the scheme timetable and then provide a further update to the market as soon as possible.

Nevertheless, the company and DP World Australia remain committed to the transaction and will continue to work together to progress ACCC and FIRB approval, as well as all other regulatory steps required for implementation of the scheme.

In addition, the ASX stock's directors continue to consider that the scheme is in the best interests of shareholders and unanimously recommend that they vote in favour of the transaction. This is in the absence of a superior proposal and subject to the independent expert continuing to conclude that the scheme is in the best interests of shareholders.

But given how much its shares have fallen today, it appears that the market isn't feeling very confident that the deal will complete.

The post Which ASX stock is crashing 26% on a major takeover blow? appeared first on The Motley Fool Australia.

Let's take a look.

Brokers downgrade 4 ASX All Ords shares

ASX lithium share to fall 13% over the next year, says Citi

Citi has downgraded ASX lithium share Liontown Resources Ltd (ASX: LTR) to a sell rating.

Liontown shares are trading at 86 cents on Tuesday, up 1.79%.

Citi reckons a share price fall is coming. It has placed a 12-month share price target of 75 cents on the ASX All Ords lithium producer.

As reported in the Australian Financial Review (AFR), Citi analyst Kate McCutcheon said Liontown had reported more capital expenditure in its second half than Citi expected.

McCutcheon said:

The extra capex pulls forward our balance sheet concerns, i.e. on spot our estimates suggest additional liquidity needed by FY26 … we move to sell based on valuation.

No champagne for this ASX All Ords retail share

Both Barrenjoey and Jarden Securities have cut their ratings on liquor retailer Endeavour Group Ltd (ASX: EDV).

The ASX All Ords retail stock is currently trading for $4.41 per share, down 2.21%.

According to The Australian, Barrenjoey has cut its rating on Endeavour shares to underweight. The broker has placed a 12-month price target of $4.10 on the ASX All Ords retail share.

Jarden is a little less bearish.

While it has cut its rating on Endeavour to neutral, Jarden's 12-month share price target indicates the stock could rise. Jarden thinks Endeavour shares could increase to $5 per share over the next year.

No explosive growth ahead for this stock

CLSA has cut its rating on explosives and fertiliser manufacturer Incitec Pivot Ltd (ASX: IPL) to hold.

The broker has a 12-month share price target of $3.20 on the ASX All Ords stock.

Incitec Pivot shares are currently trading at $3.07, down 1.45% on Tuesday.

Triple whammy on ASX All Ords logistics stock

Three brokers have cut their ratings on ASX All Ords industrials share Silk Logistics Holdings Ltd (ASX: SLH).

The Silk Logistics share price is $2.08, up 0.48% on Tuesday.

Moelis & Company has cut its rating to hold on the port logistics provider. The broker has a 12-month share price target of $2.14 on Silk Holdings, implying a minor potential upside over the next year.

Shaw and Partners has also cut its rating on Silk Logistics to hold with a share price target of $2.10.

Morgans Financial has also cut its rating to hold.

The post Red alert! 4 ASX All Ords shares just got broker downgrades appeared first on The Motley Fool Australia.

Shares in Silk Logistics Holdings Ltd (ASX: SLH) are trucking 41.5% higher to $2.08 apiece on Monday. It's a remarkable performance, considering the best-performing stock inside the S&P/ASX 200 Index (ASX: XJO) is struggling to crack 4%.

Silk Logistics is a small company with a market capitalisation of less than $100 million prior to today. It specialises in 'port-to-door' delivery through its fleet of primer movers, side loaders, and trailers. Silk also flexes five warehouses across Australia, bolstering its distribution network.

ASX stock catches the eye of a global player

Small stature has held Silk Logistics back from attracting the attention of a huge name in the logistics industry.

If you're in the logistics game, you have likely heard of DP World. If not, just know that the company is integral to global shipping.

At last estimate, DP World was responsible for approximately 10% of world trade. The business, which is based in the United Arab Emirates, handles cargo logistics, port terminal operations, and maritime services.

For a sense of scale, the ASX-listed stock generated $488.6 million, while DP World raked in ~$27.7 billion in revenue in 2023 — almost 57 times more.

Well, little ol' Silk Logistics managed to court big ol' DP World. The two have entered a scheme implementation deed, which will see Silk shareholders paid a cash consideration of $2.14 per share less any dividends prior to the deal's execution.

Silk's board believes it's a deal worth taking, getting a unanimous recommendation for shareholders to vote in favour of the scheme. At a 45.6% premium to the company's last closing price, DP World's offer values the smaller Aussie businesses at an equity valuation of $174.5 million.

What's next?

What better way to understand what awaits Silk Logistics than by listening to its CEO and managing director, John Sood. The CEO, who also holds a 13.5% stake in the ASX stock, said:

[…] With the benefit of DP World Australia's infrastructure combined with Silk's landside expertise, Silk will continue to focus on providing the highest quality services to its customers. We see strong strategic and cultural alignment between Silk and DP World Australia and we look forward to working together to achieve our shared goals.

An independent expert will review the scheme and provide a report, determining whether the deal is in the best interest of shareholders. From there, DP World will need to receive the good graces of Australia's Foreign Investment Review Board (FIRB).

Assuming everything goes according to plan, the scheme is expected to be implemented in the third quarter of FY2025.

The boom in the ASX stock means Silk Logistics shares are now up 25% in the last year. Before today, investors were staring at a negative return for the 12-month period.

The post Guess which ASX stock just rocketed 40% on takeover news appeared first on The Motley Fool Australia.

The reality is that stocks sink because there is good reason for it. The business might be declining or the external environment may be hostile.

To find the occasional gem, you may need a bit of assistance from people who spend all day looking for such treasures.

Here are two cheap shares currently in that position, which experts are tipping for a revival:

New boss could turn this ailing business around

For an investment management firm whose fortunes are tied to the health of the market, the Platinum Asset Management Ltd (ASX: PTM) share price has been poor.

The stock has declined almost 35% since June 2023, and more than 16% so far this year.

Red Leaf Securities chief executive John Athanasiou rates the stock as a buy though.

"The investment manager recently appointed Jeff Peters as managing director, and the company has embarked on a turnaround strategy," Athanasiou told The Bull.

"An immediate priority is to reduce costs across the business while reviewing existing product offerings and distribution channels."

For those willing to give this one a go, a juicy 11.4% dividend yield is on offer.

"We believe Platinum Asset Management is primed for a recovery under new management."

It's fair to say this is a contrarian play from Athanasiou.

According to broking platform CMC Invest, none of the 12 analysts covering the stock recommend it as a buy.

Cheap shares with huge 'upside potential'

As a complete contrast, Silk Logistics Holdings Ltd (ASX: SLH) is rated a strong buy by all three analysts — Moelis Australia, Morgans and Shaw & Partners.

But it too is heavily discounted, to the tune of 41% since May.

The shares had a particularly brutal 16.2% drop in one day during reporting season.

Auburn Capital head of wealth management Jabin Hallihan was not at all disturbed by the half-year results.

"This integrated logistics provider generated revenue of $276.5 million in the first half of fiscal year 2024, an increase of 9% on the prior corresponding period."

The outlook is positive for the logistics provider.

"The company is forecasting revenue growth for the full year," said Hallihan.

"It has provided revenue guidance of between $540 million and $560 million provided there's no further adverse changes in economic conditions."

He added that Silk Logistics was at an advantageous point in its corporate journey.

"The company has completed the acquisition of port logistics business Secon, consolidating its position in the bulk logistics market amid generating a new revenue stream.

"The company is well managed. In my view, Silk Logistics is trading at a substantial discount for a company offering upside potential."

The post 11% yield? 2 strikingly cheap ASX shares 'primed for recovery' appeared first on The Motley Fool Australia.

While that's disappointing, it is nothing compared to the declines being recorded by the two ASX industrials shares listed below.

Here's why they are being sold off today:

Ashley Services Group Ltd (ASX: ASH)

The Ashley Services share price is down 22% to 27 cents. This morning, the integrated provider of training, recruitment and labour hire released its half-year results and reported a 10.8% increase in revenue to $290.8 million but an 83% decline in net profit after tax to $1 million. The company's profits were hit by impairments relating to the Linc business.

The ASX industrials share's managing director, Ross Shrimpton, was disappointed with the half. He said:

The first half result has been challenging. The outcome of the Linc acquisition is disappointing. As with all acquisitions, there was risk associated with the purchase of Linc. We had 18 months to renew the major customer contract or secure new customers and expand within the higher margin Oil and Gas sector. As of today, the business is ongoing, but with minor contracts in hand. Earnings from Linc in FY24 will be negligible.

The value of acquired customer relationships (originally $2.5 million) have been written off in full throughout FY23 and H1 FY24. Goodwill has also been impaired, with its value reduced to $0.35 million during H1 of FY24.

Silk Logistics Holdings Ltd (ASX: SLH)

The Silk Logistics share price is down 13% to $1.55. This follows the release of the logistics provider's half year results. Silk reported a 9% increase in revenue to $276.5 million but a 22.4% decline in underlying net profit after tax to $7.6 million. Management blamed the profit decline on additional right-of-use (property lease) depreciation expense.

Looking ahead, the company expects revenue of $540 million to $560 million and underlying EBIT of $34 million to $37 million. Though, management warned that trading conditions are tough. It said:

Trading conditions are expected to remain challenging for the remainder of FY24. Silk will focus on preserving profitability through increased operational efficiencies, driving organic growth and integration of acquired businesses to realise synergy benefits. Silk maintains a positive outlook with respect to its business development pipeline and its customer value proposition to win further new business.

The post 2 ASX industrials shares crashing up to 22% on earnings appeared first on The Motley Fool Australia.

The portfolio managers at Cyan Investment Management reckon some of those businesses are now in better shape than when the stock market started abandoning small caps at the end of 2022.

"We believe those companies that have taken this challenging period to reduce costs to right-size their businesses and focused on cash flow and balance sheet management will be best placed for the year ahead," the Cyan team said in a memo to clients.

"These are the types of business we have been focusing on and believe the portfolio is well positioned."

Here are two stocks in particular that Cyan is bullish on, that have already started to creep upwards:

'Quality of work and diversified business model'

Cyan has backed Playside Studios Ltd (ASX: PLY) pretty much since its listing at the end of 2020, and the analysts are excited about the current state of the business.

"In recent months, Playside has delivered strong cash flow performance and upgraded its already solid revenue guidance for FY24 to $55 to $60 million.

"This momentum continued in December when it announced it has signed an agreement with Warner Bros Discovery Inc (NASDAQ: WBD) Interactive Entertainment for a multi-game licence to use 'highly recognisable intellectual property' under licence for the development of two PC/console titles."

Indeed on that news the share price pushed 17% higher during the month.

"There was no financial detail, but it is assumed to be a material opportunity," read the Cyan memo.

"We see this as further validation of the quality of work and diversified business model."

The Cyan team has unanimous support among their peers.

According to CMC Invest, all three analysts covering the stock currently rate Playside as a buy.

Bad news now priced in for this small cap

Silk Logistics Holdings Ltd (ASX: SLH) also had a great December, rising 7%.

But the shares still trade almost 28% down from its peak in February last year.

"Other than general financial market weakness, the company has faced headwinds in some areas as the economic activity has slowed across verticals such [as] consumer discretionary spending," read the Cyan memo.

"SLH enjoyed some respite in December rallying to $1.85, even though there was no clear catalyst by way of any company announcements."

Despite expected weakness in performance for the December half, the Cyan analysts believe that is already reflected in the current valuation.

"We see it as priced-in and believe the company offers outstanding value and income (P/E <8, yield +5%) with strong growth in the years ahead."

The stock is sparsely covered by other professionals. But CMC Invest shows at least Morgans and Shaw & Partners agreeing with Cyan, with both rating Playside shares as a strong buy.

The post 'Outstanding value': 2 ASX small-cap shares ready to explode in 2024 appeared first on The Motley Fool Australia.

That's why it could pay to listen to the professionals who have the time to analyse the underlying business and its long-term prospects.

Here are two such ASX shares that have, at best, gone sideways recently but are poised to soar sooner or later:

An acquisition that makes sense

Although popular from time to time among professional small-cap investors, Silk Logistics Holdings Ltd (ASX: SLH) shares have slid down more than 10% over the past year.

Morgans investment advisor Jabin Hallihan, though, is a fan of its latest corporate manoeuvring.

"This integrated logistics provider has entered into a binding agreement to acquire Secon Freight Logistics for $35 million," Hallihan told The Bull.

"Secon generates more than $65 million in annual revenue. The acquisition is expected to be more than 10% earnings accretive in the first year."

The takeover will fortify Silk Logistics' strength in Victorian port logistics and provide it an entry into the bulk logistics market. 

The acquisition is scheduled to complete at the end of September, which is not too far away now.

"Growth potential exists," said Hallihan.

"Our 12-month share price target is $3.45."

The Silk Logistics share price closed Monday at $1.95.

No more joint venture

If you feel more comfortable with large-cap shares, Mineral Resources Ltd (ASX: MIN) might be more your cup of tea.

Its share price has sunk more than 10.5% year to date.

Similar to Hallihan's pick, Baker Young managed portfolio analyst Toby Grimm is bullish on Mineral Resources because of its recent strategic adjustments.

"This mining services company has updated agreements with Albemarle Corporation (NYSE: ALB). Albemarle will [now] take full ownership of the Kemerton lithium hydroxide plant," he said.

"Mineral Resources will no longer invest in any Chinese conversion assets with Albemarle. It won't make any payments to Albemarle for joint downstream investments."

Grimm called the move "prudent", boosting the company's "operational flexibility".

"[It] takes significant pressure off Mineral Resources' balance sheet as it funds the Ashburton iron ore growth project."

There is an administrative hurdle remaining that could act as a near-term catalyst for the share price.

"The arrangements depend on approval from the Foreign Investment Review Board."

He also mentioned another deal with Albemarle that could be positive.

"Mineral Resources announced it would enter a transitional tolling arrangement with Albemarle to convert Wodgina spodumene until June 30, 2024."

The post 'Growth potential': 2 ASX shares now set up for explosive returns appeared first on The Motley Fool Australia.

The S&P/ASX Small Ordinaries (INDEXASX: XSO) index is now more than 23% down from its peak in November 2021.

Cyan Investment Management portfolio managers Dean Fergie and Graeme Carson admitted there are still plenty of reasons for small caps to struggle.

"There are still headwinds in the market: a lack of corporate activity which has declined markedly from two years ago, diminished investor engagement and associated low volumes and, for the moment, higher interest rates," their memo to clients read.

However, great news is that markets are cyclical.

"These are all negative factors that are occurring simultaneously, but cannot continue indefinitely," read the Cyan memo.

"Of course, the timing of such turnarounds is difficult to predict, but our experience in the past has been when investor exasperation is at a peak, and most selling has impacted the market, this is often the time when the tables turn."

Two rising small cap stocks to quickly latch onto

Among this small-cap wreckage, when particular stocks manage to rise it's worth investors paying attention.

After all, they must be doing something right.

The Cyan analysts named two such gems in their portfolio that went gangbusters during reporting season: Silk Logistics Holdings Ltd (ASX: SLH) and Big River Industries Ltd (ASX: BRI).

They respectively rose 6.8% and 12% over February.

"Warehousing and logistics provided Silk Logistics produced yet another strong result with revenue up 39% and NPAT up 32%, along with a dividend of 5.3 cents per share." 

The fund managers are shocked at how cheap the stock is, even after rallying 10.75% year to date.

"We're surprised the stock isn't pushing much higher given the recent results and its attractive valuation metrics," read the memo.

"Silk Logistics is trading on a PE of just 11x and is paying a 5% fully franked yield — all with a net cash balance of $34 million on its balance sheet."

Big River Industries also reported well last month.

"Building products supplier Big River Industries reported strong performance with revenue up 20% and NPAT rising 34% along with a dividend to shareholders of 8.6 cents per share," the memo read.

"Big River's customers are well diversified across Australia and industries with products supplied to residential development and commercial builders and a growing civil client base with the outlook strong across the board."

The Cyan portfolio managers said that the "silver lining" with the current low liquidity environment with small caps is that "it can magnify share price movement on the upside as well as the down".

"Some optimism can be taken from the most recent RBA rate decision on 7 March that indicated there may be a pause in further rises — a distinct change from prior commentary," read their memo.

"That, combined with some extreme quantitative value in the marketplace, gives us some near-term optimism."

The post 2 small-cap ASX shares to ride on their way up: expert appeared first on The Motley Fool Australia.

Sure, one could pick up a big bank to reap income, but they have no massive prospect of growth in a saturated market.

Conversely, a high-flying tech company might do the trick for future growth, but very rarely do they pay out a decent dividend. Any free cash is ploughed back into the business to fuel further growth.

In the current climate of a stressed economy from rising interest rates, stocks with the golden combination have become even rarer.

Fortunately for The Motley Fool readers, one expert named two such ASX shares they could buy right now:

'Well managed' business giving plenty back to investors

The Silk Logistics Holdings Ltd (ASX: SLH) share price has remarkably gained more than 20% over the past 12 months, during a period when most non-mining stocks tanked.

What's more, it already pays out a dividend yield of 4.7%.

Morgans investment advisor Jabin Hallihan reckons the stock price could head up 54% from the current level of around $2.47 while paying out even more dividend.

"Our valuation is $3.80 a share," Hallihan told The Bull.

"We forecast a gross dividend yield of about 5%."

The business is "well managed", he added, and presented impressively during reporting season.

"The integrated logistics provider posted revenue of $253.6 million in the first half of fiscal year 2023, an increase of 39.1% on the prior corresponding period," Hallihan said.

"Underlying net profit after tax of $9.8 million represented an increase of 32.4%."

The Morgans team is expecting Silk Logistics to rake in between $480 million and $500 million for the full financial year.

'A significant development' for lithium business

Mining services provider Mineral Resources Ltd (ASX: MIN) digs up all sorts of minerals, but its involvement in lithium production has seen its share price rocket 83% over the past year.

But the stock has remained flat over the past month due to a lukewarm reporting season.

Hallihan is still bullish on the Western Australian company.

"While the first half 2023 result didn't meet consensus expectations, we expect a stronger second half as we anticipate lower costs."

He noted the recently announced budding agreements with the US company Albemarle Corporation (NYSE: ALB).

"We expect an equal joint venture conversion agreement to obtain a capacity of producing 100,000 tonnes of lithium chemicals a year from 2025.

"It's a significant development amid increasing demand for lithium."

The Morgans team has placed its fair valuation for Mineral Resources at $102, suggesting a 16.4% upside from the current level.

The dividend yield for Mineral Resources stands at 2.5% fully franked.

The post 2 ASX shares offering both growth and nice dividends: expert appeared first on The Motley Fool Australia.

But with those small fish, one needs to be extra fussy about which stocks to buy into.

"There's a lot of variability in there," Cyan portfolio manager Graeme Carson said in a Reach Markets video.

"It's very much about stock picking. Very much about picking the eyes out of it. To do that you need to do grassroots research, because a lot of these companies are undiscovered."

With this in mind, Carson named two ASX shares that his fund is holding very tightly for the long run:

Get most of the assets for free

Carson's partner at Cyan, Dean Fergie, has previously told The Motley Fool multiple times how much he believes in craft beer maker Mighty Craft Ltd (ASX: MCL).

Carson is no different, holding it up as a shining example of Cyan's growth portfolio.

"They hold a portfolio of liquor assets in boutique beer, ready-to-drink alcohol, cider and Aussie spirits," he said.

"We think there's pretty comfortable upside, even up to 100% upside, on a pretty conservative basis, for this one."

The Mighty Craft share price has dropped 43% over the past 12 months. But this year it has headed 11% up on the back of hype behind its Better Beer brand, which is co-owned by prominent comic duo The Inspired Unemployed.

Carson pointed out that Mighty Craft also owns some licenced venues but it could potentially sell these off to fund the growing alcohol business.

And at the current market cap below the value of Better Beer label by itself, buying the stock means investors acquire all the other assets for free anyway.

"We think it's a very very interesting opportunity."

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'Incredibly cheap' with proven performance

Carson presented Silk Logistics Holdings Ltd (ASX: SLH) as a torch bearer for Cyan's cash-generative portfolio.

"It's at $2.30 but it listed July 2021 at $2. So it's performed pretty well in a difficult market," he said.

"We think it's [still] incredibly cheap."

The company provides port and contract logistics services in Australia for many big-name clients.

"It's founder-led and managed, and they own a large chunk of the equity — and are heavily incentivised to continue the growth there."

The stock is trading at a single-digit price-to-earnings ratio all while paying out a 5% dividend yield including franking.

The performance is there in black-and-white. 

In its listing prospectus, the 2022 financial year revenue forecast was $339.4 million. Just a year later, the actual revenue turned out to be $394.7 million.

"We value it at $4.20 on a two-year view, which is 85% upside."

The Silk Logistics share price is already up 8.9% so far this year.

The post '100% upside': 2 small-cap ASX shares Cyan is quietly riding to the moon appeared first on The Motley Fool Australia.

In its most recently reported financial results, the warehousing and logistics company saw its FY22 revenue increase by 22% to $394 million. The small-cap ASX share also reported a whopping 45% increase in net profit after tax (NPAT), which reached $15.8 million.

At the current share price of $2.22, Silk Logistics has a market cap of $175 million and pays a fully franked trailing dividend yield of 3.9%.

Small-cap ASX shares emerging from tough year

The past 12 months weren't particularly kind to most of the smaller ASX shares.

Commenting on the headwinds facing small-caps, Fergie said (courtesy of The Australian):

There was a lot that happened last year in terms of geopolitical activity, and certainly inflation, that really came out of left field for investors. It was a terrible year (for small caps), it was really a place that no one wanted to be in.

To give you some idea, over the past 12 months the S&P/ASX 200 Index (ASX: XJO) has gained 9.8%. The S&P/ASX Small Ordinaries Index (ASX: XSO), on the other hand, dropped 2.4% over that same period.

But, as Fergie noted, "certainly so far this year, we've already seen a very, very strong rebound".

Indeed, the Small Ordinaries has gained 8.9% since the opening bell on 3 January, outpacing the 8.1% gains posted by the ASX 200.

And Fergie believes that strength could lead to some extra tailwinds for small-cap ASX shares moving forward.

 "I think that might prompt more people to get involved," he said. "As it goes up, people start to have a little bit of FOMO and so they put money in, which ticks the market up further."

Which brings us back to Silk Logistics.

Explaining why Silk is a top small-cap ASX share pick for Cyan, Fergie said (quoted by The Australian):

We're still seeing some companies in the online space and the like bring in a lot of goods from overseas. They want warehousing transportation and Silk now has a really good, domestic-wide footprint in Australia. They're well-funded and seeing good growth.

He added that the ASX share is "reasonably defensive too".

Silk Logistics share price snapshot

As you can see in the chart below, the Silk Logistics share price is up 3.7% since the opening bell on 3 January.

Over the past 12 months, the small-cap ASX share has gained 6.2%.

The post Small-cap ASX share 'well-funded' with 'good growth': fund manager appeared first on The Motley Fool Australia.

Although the S&P/ASX Emerging Companies Index has "only" fallen around 10% over the past year, that has masked some catastrophic sell-offs in non-mining stocks.

Particularly hard-hit have been a host of recent IPOs, including Booktopia Group Ltd (ASX: BKG) shares plunging over 90%, Hipages Group Holdings Ltd (ASX: HPG) shares sinking over 66% and the Airtasker Ltd (ASX: ART) share price having tanked 56%, all over the past 12 months.

Headed by Graeme Carson & Dean Fergie, the Cyan C3G Fund admits its recent performance has been disappointing, but feels "there are presently a number of emerging market trends that could result in markedly improved short to medium term performance."

Writing in the August update, the fund managers named the trends as…

• Continued takeover activity in the domestic market
  
• Further appreciation of underlying company performance
  
• Increased market liquidity
  
• Renewed opportunities through IPO and other corporate activity

The fund managers go on to say they feel their "investee companies have been, on the whole, trading well, and are firmly of the view that from present levels upside price appreciation far exceeds downside."

Building products manufacturer and distributor Big River Industries Ltd (ASX: BRI) was one fund holding that the managers said produced impressive financial results with FY22 revenues rising 45% to $409m and underlying profitability up 191% to $22.7m. The company announced a final dividend of 10 cents per share, and trades on a fully franked dividend yield of around 7%. The Big River share price is flat over the past 12 months.

The fund named Silk Logistics Holdings Ltd (ASX: SLH) as providing one of the highlights of the results season. The warehousing and logistics company delivered FY22 revenue up 22% to $394m and net profit after tax up 45% to $15.8m. The fund went on to say that "with further acquisitions and greenfield sites already confirmed, FY23 is forecast to be another record year. Given the impressive financials it was  both surprising and disappointing the shares closed the month slightly weaker." The Silk Logistics share price has fallen around 7% over the past 12 months.

The post Fund manager names 4 emerging trends that could result in 'markedly improved' performance appeared first on The Motley Fool Australia.

The Reserve Bank has indicated there are more interest rate hikes to come. Inflation is still raging. And no one knows how hard the economy will be hit.

So in this environment, you need to have high belief in a stock to pluck up enough courage to buy it with your hard-earned.

Thankfully, Morgans investment advisor Jabin Hallihan named two ASX shares this week that he currently rates as high-conviction pickups:

Buying opportunity for huge upside

Silk Logistics Holdings Ltd (ASX: SLH) shares have lost more than 10.7% since the start of June.

The team at Morgans believes this just gives it more upside.

"This integrated logistics provider posted [an] underlying group net profit after tax of $15.8 million in fiscal year 2022, a 45% increase on the corresponding period," Hallihan told The Bull.

"Silk Logistics continues to evaluate merger and acquisition opportunities as a means of adding further capacity across port and contract logistics."

He added that management is also seeking more warehouse sites to upgrade the capability of its network.

Hallihan's team has a price target of $3.50 for Silk Logistics shares, which represents a 62% upside from the current level.

Shaw and Partners also agrees with this assessment. Its analysts rate the stock as a strong buy, according to CMC Markets.

'A bright outlook' for analysts' pet

Lovisa Holdings Ltd (ASX: LOV) is a favourite among analysts at the moment.

That's despite a stunning 84.3% rally in the share price since mid-June.

The opinion seems to be that due to its low-cost focus, the accessories retail chain will be resistant to any forthcoming economic downturn.

Hallihan's positive on the business.

"Lovisa offers a bright outlook," he said.

"Investors reacted positively to its fiscal year 2022 result."

Lovisa's "broad product range" and high gross margins puts it into Hallihan's good books.

"This fashion jewellery and accessories retailer has developed a vertically integrated business model that's capable of responding rapidly to changing trends."

QVG Capital last week liked the expansion progress in Lovisa's latest performance update.

"Its result was glittering and the global roll-out of high returning stores appears to be accelerating."

The post 62% upside: Expert names 2 ASX shares looking beautiful right now appeared first on The Motley Fool Australia.

So it pays to listen when an expert has so much conviction in a particular stock that they're willing to forecast a 45% return over the next year.

And that's exactly the affection Morgans senior analyst Nathan Lead holds for Silk Logistics Holdings Ltd (ASX: SLH), which he rates as a definite "add".

"We think the stock is too cheap — circa five times EV/EBITDA, circa 12 times P/E ratio (FY22F) — given its potential double-digit earnings growth and growth options."

Recent catalyst

Lead liked last week's result of Silk Logistics' NSW property novation.

"The NSW property novation has Silk transferring the land purchase cost and warehouse development risk of its Kemps Creek site to the developer (ESR Australia) in exchange for a 10-year lease for purpose-built warehouses," he said.

"Conditions precedent to the lease agreement include ESR acquiring the site land and adjacent land, as well as planning, building, and development approvals."

The contract can be terminated if the construction cost exceeds a preset level, which is a handy inflation protector.

According to Lead, the agreement means Silk Logisitcs receives $13.5 million cash upfront and about $29 million of lease incentives spread across three tranches.

"We believe that the rent under the lease agreement is similar to what Silk is paying across its current NSW sites that it intended to consolidate at Kemps Creek, and that expiry of these existing site leases is closely matched to the expected commencement of the new lease," he said.

"Silk's strategy is to retain its existing sites and seek to fill the Kemps Creek warehouse with new business."

The analyst calculated that this move is 31 cents per share net present value accretive, including the incentives and the $2 million per year incremental cash flow over the 10 years.

Better than expected

Lead explained that all this ended up far more attractive than what his team had previously forecast.

"We had assumed only $10 million of cash receipts from the lease deal in FY22," he said.

"Forecast net cash flow across FY23-25F is $17 million higher in aggregate than we had previously forecast."

As well as the positive financial impact, the deal supplies additional warehouse capacity that Silk Logistics can use for growth.

Silk Logistics, for a stock that's not in the mining or banking sectors, has done pretty well in 2022.

The share price is up 13% for the year so far, or almost 24% since 9 March.

The post 45% return in a year: The ASX share that's 'too cheap' appeared first on The Motley Fool Australia.

Sure, mining shares have carried the S&P/ASX 200 Index (ASX: XJO) this year.

But what if you think they are now fully priced and it's too late to buy in?

Here are a couple of non-mining buy ideas to consider from Morgans investment advisor Jabin Hallihan. 

'Positive momentum' with 'undemanding price/earnings multiple'

Challenger Ltd (ASX: CGF) shares have rewarded investors handsomely in 2022, with the share price up 6.6% while paying a dividend yield of more than 3%.

But Hallihan reckons it's not too late to join the party.

"This financial services firm is enjoying positive momentum and its outlook is bright," he told The Bull.

"Recent robust sales growth in the Life business is encouraging."

Challenger's earnings trajectory has improved this year, and the share price is still cheap by Hallihan's standards.

"Challenger is trading on an undemanding price/earnings multiple and we retain our add recommendation and $7.74 price target at April 28."

Since that price target was set, the share price has already rallied from $6.84 to $7.34 on Monday morning.

According to CMC Markets, eight out of 14 analysts consider Challenger shares a "hold".

'Investors should be rewarded'

Hallihan has previously spruiked Silk Logistics Holdings Ltd (ASX: SLH) shares as a buy, and his view has not changed.

"The company continues to deliver growth across all key metrics," he said.

"We believe if Silk Logistics converts potential into proven earnings growth, then investors should be rewarded."

The team at Morgans has set a $3.25 price target, which is a juicy 33% premium on the price on Monday morning.

The recent financial performance impressed Hallihan.

"This integrated logistics provider generated revenue of $182.5 million in the 2022 first half, an 18.5% increase on the prior corresponding period," he said.

"Full year guidance has been subsequently upgraded by 6% to 20%."

Hallihan's colleague, senior analyst Nathan Lead, also recommended the company, saying Silk shares are "too cheap" considering "potential double-digit earnings growth and growth options".

"Potential 45% total 12-month return," he said in a Morgans memo.

Coverage is sparse on Silk Logistics but, according to CMC Markets, Shaw and Partners also rates the stock as a "strong buy".

The Silk Logistics share price is up in excess of 13% so far this year.

The post 'Outlook bright': expert picks 2 ASX shares to buy right now appeared first on The Motley Fool Australia.

They've both been named as ASX shares to buy right now by experts.

And they're both named Silk.

Silky 59% upside in share price

The share price for Silk Logistics Holdings Ltd (ASX: SLH) has plunged 5.9% for the year so far, but Morgans investment advisor Jabin Hallihan reckons it's a buying opportunity.

"Silk Logistics utilises an asset-light, technology-enabled, flexible business model that guards against increasing costs as they are passed through to customers with a margin," he told The Bull.

The Melbourne-headquartered business handles logistics from the port and wharf to warehousing and supply chain distribution.

Hallihan thought Silk Logistics had a positive February reporting season.

"The company generated revenue of $182.5 million in the 2022 first half — an 18.5% increase on the prior corresponding period," he said.

"The full-year outlook is for solid growth. Our 12-month price target is $3.31 a share."

That is a stunning 59% upside from the closing stock price on Monday. 

Silky move into New Zealand and Victoria 

The Silk Laser Australia Ltd (ASX: SLA) share price has dropped a painful 30.6% already this year.

But Wilsons investment advisor Peter Moran is still recommending the laser clinic network to clients as "overweight".

He liked the look of the first-half result despite potential customers being unable to visit due to COVID-19 lockdowns and precautions.

"The company also benefited from the acquisition of Australian Skin Clinics (ASC), which moved under Silk Laser's control in September," Moran said.

"The 56 ASC clinics are being smoothly integrated and provide a growth opportunity in Victoria and New Zealand, which had been previously missing from Silk's footprint."

While coverage for the $158 million small-cap company is scarce, both analysts surveyed on CMC Markets rate Silk Laser as a "buy".

The Silk Laser share price closed Monday at $2.97.

The post 2 ASX shares to buy for CHEAP that have the same name: experts appeared first on The Motley Fool Australia.

But the trouble is, how do you know which ones are true bargains and which ones will languish?

Taking note of the "buy" conviction of a professional investor is one way to figure it out.

Morgans investment advisor Jabin Hallihan this week picked out one ASX share that he reckons could rise more than 48%, which he definitely rates as a buy.

'Strong earnings growth' with a PE ratio below 10

Silk Logistics Holdings Ltd (ASX: SLH) provides port-to-door logistics services for clients in many different industries.

The company only listed on the ASX back in July and has seen its share price tumble in recent weeks as a part of the general market sell-off.

The stock started Tuesday at $2.15.

"We buy Silk Logistics for exposure to the growing container logistics market in Australia," Hallihan told The Bull. 

"The company offers strong earnings growth and is trading on an attractive price/earnings multiple below 10 times."

Hallihan's team has calculated the fair value for Silk Logistics is $3.19 per share, which is 48.4% above the current level.

He added that last week's $10.5 million acquisition of smaller rival 101Warehousing could be a nice catalyst.

"The acquisition multiple looks attractive, and the purchase is funded mostly from issuing shares, so the balance sheet isn't put under undue pressure."

While analyst coverage for the $160 million company is sparse, Shaw & Partners also agrees with Morgans that Silk is a "strong buy".

Silk Logistics is due to report its financials on 24 February.

"We target 1H22 EBITDA and NPAT growth of c.11% and 59%, respectively," noted Morgans' reporting season calendar.

"However, a looming uncertainty is the labour and container logistics supply chain constraints likely to have impacted the business in late 1H22/early 2H22."

The post Buy this ASX share with 48% upside: expert appeared first on The Motley Fool Australia.

The ASX transport shares that outperformed their peers over the month of October probably aren't those you're thinking of.

5 top performing ASX transport shares in October

A quick note before we start; this list only contains shares with market capitalisations of more than $100 million.

Regional Express Holdings Ltd (ASX: REX)

The REX share price outperformed its transport peers during the month of October, potentially on the back of optimism surrounding Australia's domestic borders.

Over the month just been, the company's business looked towards a brighter future without lockdowns and travel restrictions.

In fact, on 18 October, REX announced it plans to resume offering domestic flights from the middle of November.

The REX share price gained 5.33% over the course of October, finishing the month trading at $1.58.

Lindsay Australia Limited (ASX: LAU)

October was also a great month for the Lindsay Australia share price.

The integrated transport, logistics, and rural supply company's stock gained 5.26% over the course of last month. It finished October trading at 39.5 cents.

The only price-sensitive news released by Lindsay last month was its annual investor presentation which, once again, detailed a strong financial year 2021.

K&S Corporation Ltd (ASX: KSC)

Another transportation and logistics company to make this list is K&S Corporation.

The K&S Corporation share price bested many other ASX transport companies in October. It gained 4.12% to end the month at $1.77.

The company's gains came despite it maintaining its silence throughout the period.

Silk Logistics Holdings Ltd (ASX: SLH)

While October was a struggle for many ASX transport shares, one of the exchange's new faces managed to end the month in the green.

The Silk Logistics share price gained 2.22% over the course of last month, finishing it at $2.30.

The 'port-to-door' technology-focused logistics company debuted on the ASX in July. Under its prospectus, shares in the company were offered at $2 apiece.

That meant investors who got in on the company before its initial public offering (IPO) could boast a 15% gain on their investment at the end of October.

Dalrymple Bay Infrastructure Ltd (ASX: DBI)

Finally, the fifth best performing ASX transport share for the month of October was none other than Dalrymple Bay Infrastructure.

Over the course of last month, the Dalrymple Bay Infrastructure share price gained 1.33% to end the month trading at $2.28

While there was no news from the coal transportation company in October, it did continue its ongoing on-market buy back.

The post Which ASX transport shares were the best performers during October? appeared first on The Motley Fool Australia.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM).

There's also one called WAM Microcap Limited (ASX: WMI) which targets small cap ASX shares with a market capitalisation under $300 million at the time of acquisition.

WAM says WAM Microcap targets the most exciting undervalued growth opportunities in the Australian microcap market.

The WAM Microcap portfolio has delivered gross returns (that's before fees, expenses and taxes) of 24.2% per annum since inception in June 2017, which is superior to the S&P/ASX Small Ordinaries Accumulation Index average return of 12%.

These are the two small cap ASX shares that WAM outlined in its most recent monthly update:

Silk Logistics Holdings Ltd (ASX: SLH)

WAM explains that Silk Logistics is one of the largest third-party logistics suppliers in Australia.

Over the last several years, the business have been active with making acquisitions. The business has been successful at this, according to the fund manager. Silk Logistics has benefited from industry consolidation.

The business recently listed, in July 2021. The Silk Logistics share price increased by 25% on the first day of trading.

WAM explained that Silk Logistics is a beneficiary of the tailwinds in the logistics sector triggered partly by the COVID-19 pandemic, which has led to a surge in demand for delivery services.

The fund manager likes the long-term outlook for the ASX share, targeting industries less impacted by economic downturns such as food and packaged agriculture products.

It was also pointed out that Silk Logistics is investing in tracking technology that "gives visibility" to the inefficiencies in a supply chain, adding to its customer service offering and improving its competitive position.

Swoop Holdings Ltd (ASX: SWP)

Swoop is the other ASX share that WAM Microcap noted.

This business is an Australian internet provider that is headquartered in Victoria and has expanded into South Australia. It listed onto the ASX a few months ago – there was apparently a lot of demand from both institutional investors and retail investors for the capital raising which was $20 million in size.

Talking about the bull case for the business, the fund manager said that it's a beneficiary of the increased demand for home internet in a world where many more people are working from home because of COVID-19.

WAM believes Swoop's growth potential has increased after the acquisition of the South Australian based wireless broadband provider Wan Solutions, which trades as Beam Internet. The deal means Swoop can use Beam's recently upgraded network to grow well in the South Australian market.

The post Wilson Asset Management believes these 2 leading small cap ASX shares are a buy appeared first on The Motley Fool Australia.

Silk Logistics shares were exchanging hands at $2.50 apiece at the close of trade today. Let's take a quick look at what went down in today's session.

Who is Silk Logistics?

Formed in 2014, Silk Logistics is a Melbourne-based company operating in the domain of supply chains.

The company aims to align itself with recession-resistant sectors, such as specialised retail, light industrial, or food.

In its prospectus, the company says its business model is based on the concept of 'port to door'.

This involves collecting goods from a shipping port on behalf of the customer and distributing these to any specified location from its own central warehouses.

Silk's value proposition, however, is its technology that tracks a delivery through a "single visibility layer", permitting several freight streams to a single hauler, and reducing errors.

From its website, the company states:

SCL provides three distinct services across two primary divisions: our Port Logistics division provides wharf cartage services, whilst our Contract Logistics Division offers warehousing and distribution services. SCL's long-standing blue-chip customer base spans several key industries, including FMCG, light industrial, food, specialised retail, and containerised agriculture. 

What happened to Silk's share price after IPO?

An IPO is much like the new and used car markets. First, shares are first sold on the primary market (the new car) and then afterwards are sold to investors on the secondary market (used car market).

The company's shares were initially priced at $2 per share in the primary market.

From the IPO, the company successfully raised $70 million dollars, and its shares entered the secondary market just after 12pm at a price of $2.20 per share.

Immediately following, the Silk Logistics share price soared to an intraday high of $2.49 in afternoon trading.

Foolish takeaway

Silk Logistics completed its IPO today, meaning it is now listed on the ASX as a publicly-traded company.

At the current market price, the company has a market capitalisation of $189.4 million.

The post Silk Logistics (ASX:SLH) share price rockets 25% after IPO appeared first on The Motley Fool Australia.