Wellnex, formerly Wattle Health Australia Ltd, returned to the ASX under the new ticker yesterday after an 18-month suspension.

On the re-listing, Wellnex shareholders were quick to unload shares at a rapid pace, resulting in a 75% loss on the day.

However, following an investor presentation from the company today, the Wellnex Life share price enjoyed a turnaround in fortunes.

Let's take a look at the contents of Wellnex's presentation in a bit more detail.

But first — a quick recap on Wellnex

The newly named Wellnex is engaged in health and wellness. It has products in nutrition, skincare, and nutritional health supplements.

It labelled itself an "Australian brand and distribution company" in today's presentation, with the mission of offering "innovative, sustainable Australian health and wellness brands throughout the world".

Wellnex was formed following Wattle Health's acquisition of Brand Solutions and Pharma Solutions Australia.

At the time of writing, it has a market capitalisation of $36 million.

Today's investor presentation

Wellnex chief executive George Karafotias presented at the ShareCafe Small Cap "Hidden Gems" Webinar this afternoon.

Karafotias detailed how Wellnex intends to grow its market share, while highlighting the company's existing brand portfolio.

The global health and wellness market was on display, which Karafotias explained is a $5.6 billion industry.

Attendees also observed the company's growth vision, built on efficiency and revenue growth.

Wellnex's top executive also gave FY 2021 guidance for consolidated revenue of $18.3 million, calling for 18% growth from FY 2020.

Investors pounced, driving the Wellnex Life share price higher.

Foolish takeaway

In summary, Wellnex will be a name to watch over the coming periods as it has been re-listed as of yesterday.

Already the Wellnex Life share price has had a choppy two days, however, investors seem to favour today's presentation.

The post Here's why the Wellnex Life (ASX:WNX) share price jumped 37% today appeared first on The Motley Fool Australia.

Wattle Health is now known as Wellnex Life Limited (ASX: WNX) and returns to trade after the ASX provided conditional approval for the reinstatement of its securities.

Unsurprisingly, after such a long time in suspension, investors have been finally able to offload shares this morning at long last.

This has led to the Wellnex Life share price crashing to 12.5 cents. This is down 75% from its pre-suspension share price of 50.1 cents.

What's changed?

Wellnex Life calls itself an Australian brand and distribution company of customer-focused health and wellness products. It was established when Wattle Health acquired the Brand Solutions Australia and Pharma Solutions Australia businesses.

Management notes that the combined company is now on a mission to deliver health, wellness and vitality solutions to consumers worldwide.

These acquisitions mean the company has an existing portfolio of consumer brands already in stores and on shelves and a pipeline of new brands that are ready-to-ship. These include Uganic nutritional milk, Iron Gummies, Little Innoscents skincase, Simply7 Lentil Chips, Wagner Ibuprofen and paracetamol, and Wakey Wakey energy gummies.

Management also highlights that it has ~$20 million in annualised revenue and a 10-year agreement with Chemist Warehouse.

Wellnex Life is targeting the Australia vitamin and dietary supplements market, which is currently worth an estimated $3.1 billion. It also has plans to expand into the $1.3 billion sports nutrition segment in the future.

Though, it is worth remembering from its lack of success in the infant formula market, that just having a large market opportunity doesn't guarantee sales. For example, prior to the rebrand and acquisition, Wattle Health recorded cash receipts of just $0.5 million during the third quarter of FY 2021.

Wellnex Life returns to the ASX board today with a total of 321,730,670 shares outstanding. Based on the current Wellnex Life share price, this gives it a market capitalisation of $40.2 million.

The post Why the Wellnex Life (ASX:WNX) share price is crashing 75% lower on Thursday appeared first on The Motley Fool Australia.

What did Wattle Health announce yesterday?

The Aussie group announced a new share offer to raise $39.7 million in new shares to fund its purchase of Blend and Pack.

Blend and Pack is an Australian dairy products processing and packaging group with a global client base. Wattle Health is seeking to acquire the group to improve its supply chain and penetrate the lucrative Chinese market.

According to yesterday's announcement, the new Wattle Health shares will be offered at $0.40 per share. That's a steep discount to the group's $0.53 closing share price from Friday 27 September 2019.

The infant formula group's shares haven't traded since that date, as Wattle Health looks to tie up its Blend and Pack acquisition.

What else did the group announce yesterday?

The announcement of new Wattle Health shares wasn't the only one from the group on Thursday.

Wattle Health will start selling its Uganic's infant formula range across Chemist Warehouse's retail network in March.

The group will also sell its Little Innoscents organic skin care range in Chemist Warehouse stores. Wattle Health issued 4,103,208 fully paid shares under the Chemist Warehouse agreement as per yesterday's announcement.

It's also been a busy few weeks for the ASX infant formula group with senior leadership changes taking effect.

The group appointed Dr Tony McKenna as the Group CEO and Managing Director on 13 January 2020. He replaces co-founder Lazarus Karasavvidis, who resigned from the board and stepped down from the CEO role.

This comes as the group looks to kickstart its growth and return to trading on the ASX. Wattle Health's deal with Blend and Pack has been at a standstill as the group looked to raise the required capital under the terms of the deal.

Foolish takeaway

Wattle Health shares will certainly be worth watching when they return to trading on the ASX. There's no indication just yet of when that will be, but it looks like wholesale changes are being made to facilitate the group's growth going forward.

It's been a big year for the sector with Bellamy's Australia being snapped by up China Mengniu Dairy Company. Bubs Australia Ltd (ASX: BUB) and A2 Milk Company Ltd (ASX: A2M) have also enjoyed a strong 12-month period. 

The post ASX infant formula group Wattle Health to raise $39.7 million in new shares appeared first on The Motley Fool Australia.

The A2 Milk Company Ltd (ASX: A2M) share price is up 2,400% since early April 2015, in a sign of strong growth. Bellamy's Australia Ltd was recently bought by China Mengniu Dairy Co for $13.25 per share after several years of climbing higher on the ASX.

But is this strong run set to continue in 2020? What's the outlook like for the ASX infant formula companies as we enter a new decade?

Why ASX infant formula companies can climb higher

Success for ASX infant formula shares in the 2020s could well be defined by market penetration in Asia and India. India has a fast growing population and is quickly becoming a trade superpower in the region.

a2 Milk remains the largest player and the incumbent in the sector, in my view. The New Zealand dairy group already has strong operations in China, which is a big advantage.

We've also seen recent deals in Asia for Bubs Australia Ltd (ASX: BUB), which makes it one to watch in my books. The Bubs share price has more than doubled in the last 12 months alone in a good year for shareholders. An ASX infant formula group with decent financials, Bubs could be in the buy zone at its current share price of $0.98.

Turning to Wattle Health Australia Ltd (ASX: WHA), the recent news that its capital raising fell short is interesting timing. However, I don't think that reflects investors' demand for listed dairy companies. In my view, there are still good fundamentals driving the industry in 2020.

If you're looking for some more conservative options, a2 Milk is hard to beat right now. a2 Milk shares are trading near the middle of their 52-week range, meaning now could be the time to buy.

Growing demand from China and India is the biggest factor that will impact these shares, in my opinion. If this demand is strong, ASX infant formula shares could be well worth watching in 2020.

The post Can ASX infant formula shares soar in 2020? appeared first on The Motley Fool Australia.

What did Wattle Health announce?

This morning the infant formula and baby food company provided the market with an update on its rights issue and proposed acquisition of CNCA accredited manufacturing facility, Blend and Pack.

Blend and Pack is the largest (by volume) independent, nutritional dairy processing and packaging business in Australia. It was also one of the first Australian manufacturers to obtain Certification and Accreditation Administration of People's Republic of China (CNCA).

And in January 2019, the company successfully renewed its CNCA accreditation for a further 4-year period.

Wattle Health has been trying to raise funds to acquire a majority interest in Blend and Pack since February of last year.

However, several attempts to raise funds have failed, leading to significant delays in closing the transaction.

Wattle Health hits another brick wall.

Wattle Health's most recent attempt to raise funds was through a rights issue.

It was aiming to raise a total of $55 million to fund the transaction, but failed miserably once again.

According to today's release, Wattle Health received a total of ~$11.7 million from existing eligible shareholders. This meant a total shortfall amount of $50.6 million.

And although the rights issue was partially underwritten for $20 million and it was in discussions with a number of interested parties for the shortfall funding, the company was unable to secure the $55 million required as the minimum offer amount under its prospectus.

As a result, the underwriting agreement with Claymore Capital lapsed on December 31.

What now?

Wattle Health advised that Mason Financial Holdings has agreed to extend the "sunset date" of the proposed transaction to January 7.

This will allow both parties to further negotiate on a potential amended proposal following the failure of the rights issue offer. However, management warned that there is no guarantee that a new agreement will be reached with Mason. Its shares will remain suspended pending a further update on the transaction.

This news appears to have gone down well with the shareholders of infant formula rivals Bubs Australia Ltd (ASX: BUB) and Nuchev Ltd (ASX: NUC). They are both up over 1% in early trade.

The post Infant formula company Wattle Health to remain suspended after failed rights issue appeared first on The Motley Fool Australia.

The struggling infant formula company's shares last traded on the ASX at the end of September.

What did Wattle Health announce?

This morning Wattle Health announced that it has entered into a 10-year supply agreement with Chemist Warehouse for its full certified organic nutritional dairy range.

This includes its premium range of Uganic infant formula and the Little Innoscents organic skin care range.

According to the release, Chemist Warehouse will commence with nine product SKUs across the Uganic and Little Innoscents product ranges.

Under the agreement, all the Uganic and Little Innoscents product range will be sold across its retail stores and its online Tmall stores.

This is a promising agreement for the embattled Wattle Health. Chemist Warehouse is the largest pharmacy chain in Australia by total sales. It generates over $5 billion annually from more than 450 stores in Australia, New Zealand and China.

Chemist Warehouse also operates the largest Tmall store in the world based on gross merchandise volume.

Wattle Health Australia Limited CEO and co-founder, Lazarus Karasavvidis, was very pleased with the agreement.

He said: "It's an important addition to Wattle Heath's vertical integrated supply chain which extends from securing supply of Australian certified organic fresh milk through to a dedicated organic spray drying facility, and the proposed majority owned blending and packing plant all the way to the end consumer."

"We launched Uganic in September 2019 with a powerful proposition for the discerning consumer, offering them a certified organic, traceable and highly nutritious range of dairy products. The early reception from consumers at trade shows and from direct sales has been extremely positive and with Chemist Warehouse we will have Uganic prominently positioned in one of Australia's biggest sellers of infant formula."

A deal with a cost.

It is worth noting that this deal comes at a cost. Wattle Health is essentially paying Chemist Warehouse in shares for the supply agreement.

It will issue the retailer 3 million ordinary shares on the signing of the long-term supply agreement.

Wattle Health will then issue a further 5 million shares when Chemist Warehouse provides equivalent value in marketing support and the ranging of the Uganic infant formula range across its retail network.

A further ~10.9 million shares will be issued after it provides equivalent value in marketing support and the ranging of its proposed A2 Milk Company Ltd (ASX: A2M) rival a2-only infant formula range. Another ~1.1 million shares will be issued for professional services.

In addition to this, over the first five years of this arrangement, Wattle Health has committed to spend ~ $1.2 million annually in marketing support to build brand awareness, sales and brand loyalty.

However, all this remains subject to shareholder approval and the company completing its proposed acquisition of Blend and Pack. This acquisition rests on the company raising a minimum of $62 million via a rights issue by December 31.

It is also worth noting that Chemist Warehouse has a very similar deal in place with Bubs Australia Ltd (ASX: BUB). So there is no exclusivity here and it will continue to compete with its larger rivals.

The post Wattle Health announces deal with Chemist Warehouse appeared first on The Motley Fool Australia.

What did Wattle Health announce?

This morning Wattle Health announced that it has signed a collaboration agreement Nouriz Fine Food, backed by China Animal Husbandry Group. The latter is a Beijing-based State-Owned Enterprise.

According to the release, the agreement will see Nouriz and Wattle Health set up a 50/50 joint venture for the manufacture and sale of a range of certified Australian organic nutritional dairy products. These will be sourced from Wattle Health's other joint venture, the Corio Bay Dairy Group.

Wattle Health's executive chairman, Lazarus Karasavvidis, said: "With this agreement we have secured an exceptional and experienced partner to market and distribute in China a range of certified organic premium milk powder products. "

"Nouriz has a strong on the ground presence and deep experience in selling premium dairy products in the China market. With the Corio Bay spray drying facility on track for completion in the first half of 2020, the new JV will have access to a range of high-quality organic powders for sale into the China market," he added.

Why is the Wattle Health share price halted?

Wattle Health requested a suspension at the start of October pending an update in connection with its proposed acquisition of the majority stake in Blend and Pack. It is the largest independent nutritional manufacturing facility by volume and one of the first facilities to obtain CNCA accreditation.

The company's request suggested that its shares would be ready to return to trade on October 9. But one month later they look no closer to returning.

Elsewhere in the industry today, the A2 Milk Company Ltd (ASX: A2M) share price is up 0.5% and the Bubs Australia Ltd (ASX: BUB) share price has continued its slide and is down a further 1.5%.

The post Wattle Health announces new China-based joint venture appeared first on The Motley Fool Australia.

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

The Clinuvel Pharmaceuticals Limited (ASX: CUV) share price has fallen almost 5% to $24.32 despite there being no news out of the skin disorder-focused biopharmaceutical company. This latest decline means that the company's shares have now shed over 38% of their value since peaking at $39.85 in June.

The Newcrest Mining Limited (ASX: NCM) share price has come under pressure and dropped almost 3% to $34.90 after the spot gold price tumbled lower again. The catalyst for this appears to have been easing trade war concerns after the United States and China agreed to hold trade talks in Washington next month.

The Starpharma Holdings Limited (ASX: SPL) share price is down 2.5% to $1.15. This appears to have been driven by profit taking after the dendrimer products developer's shares surged higher on Thursday following a positive announcement. That announcement revealed that the U.S. Food and Drug Administration has authorised the use of AstraZeneca's DEP Bcl2/xL conjugate AZD0466 in clinical trials under an investigational new drug application. AstraZeneca believes this product has the potential to be a best-in-class agent in this field with a broad combination opportunity in solid and haematological tumours.

The Wattle Health Australia Ltd (ASX: WHA) share price has continued its slide and is down a further 8% to 53 cents. This latest decline means that the infant formula company's shares have now dropped almost 26% since this time on Monday. Investors appear to have been taking profit after its shares surged higher following the Bellamy's Australia Ltd (ASX: BAL) takeover approach from a Chinese dairy company.

The post Why Clinuvel, Newcrest, Starpharma, & Wattle Health shares dropped lower appeared first on The Motley Fool Australia.

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

The Beach Energy Ltd (ASX: BPT) share price has dropped 5% to $2.55. A number of energy shares have come under pressure today after oil prices sank lower overnight. Traders were selling oil after comments out of President Trump sparked concerns of an escalation in the trade war. Trump criticised China's trade practices at the UN General Assembly overnight and warned that he would not accept a bad deal.

The Pro Medicus Limited (ASX: PME) share price is down almost 6% to $28.09 despite there being no news out of the healthcare software company. However, a number of tech shares have come under pressure today after the Nasdaq index sank lower overnight. The technology-focused index fell 1.5% due to trade war concerns and the launch of an impeachment inquiry targeting President Trump.

The South32 Ltd (ASX: S32) share price has fallen 3% to $2.57. The catalyst for this appears to have been a broker note out of the Macquarie equities desk. According to the note, the broker has downgraded the diversified miner's shares to an underperform rating and cut the price target on them to $2.60. Its analysts made the move after adjusting their commodity forecasts.

The Wattle Health Australia Ltd (ASX: WHA) share price has dropped almost 6% to 57 cents. Investors appear to be taking profit again after the infant formula company's shares rocketed higher following the Bellamy's Australia Ltd (ASX: BAL) takeover approach. Despite falling heavily over the last couple of days, Wattle Health is still valued at ~$110 million. I think this is excessive given that in FY 2019 it posted a 30% decline in revenue to a lowly $1.1 million.

The post Why Beach, Pro Medicus, South32, & Wattle Health tumbled lower today appeared first on The Motley Fool Australia.

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

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

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

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

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

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

In afternoon trade the infant formula company's shares have rocketed 36% higher to 74 cents.

This latest gain means that Wattle Health's shares have now gained a remarkable 95% in the space of a week.

Why has the Wattle Health share price almost doubled in value in a week?

Investors have been scrambling to get hold of the company's shares since rival Bellamy's Australia Ltd (ASX: BAL) received a takeover approach.

Last week Hong Kong-listed China Mengniu Dairy Company offered $13.25 per share offer, which values Bellamy's at approximately $1.5 billion.

This may have led to some investors believing that Wattle Health's shares were undervalued in comparison to peers such as A2 Milk Company Ltd (ASX: A2M), Bellamy's, and Bubs Australia Ltd (ASX: BUB).

Though, with the company reporting a 30.5% decline in revenue in FY 2019 to just $1.1 million, its current market capitalisation of $142 million looks hard to justify. This is still the case even when accounting for its proposed acquisition of CNCA accredited dairy manufacturer, Blend & Pack.

Alternatively, some investors may believe that Wattle Health is a potential takeover target along with Bellamy's. Though, once again, I would be surprised if this were the case given the limited sales of its Uganic infant formula range.

At this stage the Uganic brand has limited brand power and is likely to require a material marketing budget if it is to challenge the big boys in the lucrative China market.

In light of this, I would suggest investors stay well clear of Wattle Health's shares. I suspect that once the momentum drops, there's a very good chance they will come crashing back down to earth with a bang.

The post The Wattle Health share price is up 95% in a week appeared first on The Motley Fool Australia.

Four shares that have climbed more than most today are listed below. Here's why they have started the week on a high:

The Clover Corporation Limited (ASX: CLV) share price has zoomed a further 8% to $2.76. The shares of the provider of ingredients for infant formula and nutrition products have been on fire since the release of its full year results. In FY 2019 Clover reported a 21.8% increase in revenue to $76.7 million and a 33.1% lift in net profit after tax to $10.1 million.

The IOOF Holdings Limited (ASX: IFL) share price is up almost 11% to $6.64. The catalyst for this appears to have been a broker note out of Macquarie this morning. According to the note, the broker has upgraded its shares to an outperform rating with a $7.00 price target. It made the move after the Federal Court held that IOOF's APRA regulated entities and five individuals did not contravene the Superannuation Industry Act.

The Premier Investments Limited (ASX: PMV) share price has continued its positive run and is up a further 7% to $19.42. Its shares have been strong performers since the release of its full year results last week. One broker that liked what it saw was Macquarie. This morning its analysts upgraded Premier Investments shares to an outperform rating with a $20.00 price target after it outperformed the broker's expectations in FY 2019.

The Wattle Health Australia Ltd (ASX: WHA) share price has raced 34% higher to 73 cents. This infant formula company's shares have rocketed notably higher since Bellamy's Australia Ltd (ASX: BAL) received a takeover approach last week. It appears as though some investors believe the company behind the Uganic infant formula range could become a takeover target for other Chinese dairy companies. Wattle Health's shares are now up 92% in the space of a week.

The post Why Clover, IOOF, Premier Investments, & Wattle Health surged higher today appeared first on The Motley Fool Australia.

The A2 Milk Company Ltd (ASX: A2M) share price has rocketed more than 2000% higher in the last 5 years and remains the incumbent amongst the ASX-listed dairy companies.

Just a week ago we saw the Bellamy's Australia Ltd (ASX: BAL) share price surge 48.7% higher last Monday morning (16 September), after receiving a $1.5 billion takeover offer from the Chinese group China Mengniu Dairy Company Limited.

So, is it too late to get in on the ASX infant formula action, or are there still buying opportunities available for the keen-eyed Fool?

What's the deal with Bellamy's?

The potential takeover of Bellamy's took investors by surprise over the weekend with Mengniu offering $12.65 per share and a $0.60 special dividend per share – a hefty premium on Bellamy's pre-takeover price of $8.32 per share.

While the Bellamy's board has unanimously recommended the deal, I'd expect to see the deal to be scrutinised by the Foreign Investment Review Board (FIRB) given the current concerns over foreign ownership in Australia.

Bellamy's has been seeking approval from the Chinese regulator to sell its products into China for some time, and this partnership with Mengniu would increase its capabilities to challenge a2 Milk's dominance in the Asian market.

Is there time to buy ASX infant formula shares?

When looking to invest in Aussie infant formula groups, a2 Milk and Bellamy's remain the largest and most well-known companies on offer.

However, if you feel like you've missed the astronomical share price growth from either of these two groups, there is still hope for your ASX portfolio.

Bubs Australia Ltd (ASX: BUB) is primarily a goat milk infant formula group and another contender in the industry, with the Bubs share price nearly doubling in the last 12 months alone.

In June 2019, Bubs announced a new Chinese partnership of its own with leading Chinese baby retailer Kidswant and saw its shares surge higher in May as it announced it would be venturing into cow milk infant formula as well.

Bubs currently boasts a market cap of $624.3 million, which pales in comparison to the size of a2 Milk ($9.26 billion) or Bellamy's ($1.46 billion), but is larger than the $87.5 million Wattle Health Australia Ltd (ASX: WHA).

Foolish takeaway

Time will tell if the Bellamy's takeover will be approved, but there is no doubt the race to capture the Chinese infant formula market is heating up.

It's worth keeping an eye on some of these top Aussie infant formula stocks in 2020 to see if there are tactical buying opportunities in the early part of the year.

The post How to ride the ASX infant formula boom in 2020 appeared first on The Motley Fool Australia.

Four shares that have climbed more than most today are listed below. Here's why they have stormed higher:

The Appen Ltd (ASX: APX) share price is up 3% to $22.20. A number of tech shares have charged higher on Thursday, leading to the S&P/ASX 200 Info Tech index climbing 1.1%. Appen may be climbing more than most due to its heavy decline in recent weeks. Some investors appear to believe this left its shares trading at an attractive level.

The Brickworks Limited (ASX: BKW) share price is up over 6% to $17.51. Investors have responded very positively to the conglomerate's full year results release this morning. For the 12 months ended July 31, Brickworks posted a 17% increase in total revenue from continuing operations to $919 million and a a 4% lift in underlying net profit after tax from continuing operations to a record of $234 million. The key driver of its growth was its Property division.

The Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) share price has climbed 3% to $23.01 following the release of its full year results. Although the investment house posted a 7.2% decline in adjusted profit from continuing operations to $307.3 million, investors appear to have been expecting an even softer result. Pleasingly, despite the profit decline, it hasn't stopped the company from increasing its full year dividend to 57 cents per share. This means it has now lifted its dividend each year since 2000.

The Wattle Health Australia Ltd (ASX: WHA) share price has jumped 9% to 43 cents. The junior infant formula company's shares have been on fire this week thanks to news that Bellamy's Australia Ltd (ASX: BAL) has received a takeover approach. It appears as though some investors may believe Wattle Health could become a takeover target for other Chinese dairy companies given its sharp share price decline this year. Wattle Health is the company behind the Uganic infant formula range.

The post Why Appen, Brickworks, Soul Pattinson, & Wattle Health stormed higher today appeared first on The Motley Fool Australia.

Four shares that have not let that hold them back are listed below. Here's why they have surged higher today:

The Alcidion Group Ltd (ASX: ALC) share price has zoomed 13% higher to 23.2 cents after the health Informatics company announced a three-year agreement with Australian private healthcare provider Healthscope. The two parties will work together to support Healthscope's vision for using data to drive transformation in the way that healthcare is managed and delivered.

The Helloworld Travel Ltd (ASX: HLO) share price has jumped 7% to $4.60 after providing an update on its guidance for FY 2020. According to the release, subject to no material change in trading conditions, management expects EBITDA to be in the range $83 million to $87 million for the 12 months ending June 30 2020. This will be an increase of approximately 7.5% to 12.5% on the $77.3 million EBITDA Helloworld achieved in FY 2019.

The Nearmap Ltd (ASX: NEA) share price has pushed 3% higher to $2.63 despite there being no news out of the aerial imagery technology and location data company. However, with its shares down significantly from their 52-week high, I suspect that bargain hunters could be swooping in today on the belief that they have now bottomed. Even after today's gain the Nearmap share price is down 39% from its high.

The Wattle Health Australia Ltd (ASX: WHA) share price has surged 12% higher to 41.5 cents. This gain appears to have been triggered by yesterday's news that Bellamy's Australia Ltd (ASX: BAL) has received a takeover approach. Some investors may believe that the junior infant formula company could potentially become a takeover target for other Chinese dairy companies. Wattle Health is the company behind the Uganic infant formula range.

The post Why Alcidion, Helloworld, Nearmap, & Wattle Health shares surged higher today appeared first on The Motley Fool Australia.

If the takeover is successful, Bellamy's shares will no longer trade on the ASX. However, for Australian investors looking to gain exposure to the growing infant formula market there are still plenty of other options. These include A2 Milk Company (ASX: A2M), Bubs Australia Ltd (ASX: BUB), Synlait Milk Ltd (ASX: SM1) and Wattle Health Australia Ltd (ASX: WHA).

Is it the right time to invest in infant formula?

Prior to the Bellamy's takeover announcement, I did not believe the market price for Bellamy's shares constituted good value and therefore I would not have recommend investing. I hold a similar view for the remaining infant formula companies listed on the ASX. I am also concerned by the level of competition present in this industry.

The ASX listed infant formula companies must compete with a host of international competitors including Nestle, the world largest producer of infant formula. This is bad news for investors as competition usually drives down prices, margins and earnings of competing companies. Smaller companies can also be driven out of business by larger companies, which can survive for longer on lower margins.

Some of the ASX listed infant formula companies have attempted to distinguish themselves from the competition and I believe this is a smart move. a2 milk, for example, specialises in A1 protein-free milk products while Bubs' infant formula is derived from goats' milk. Unfortunately, it's hard to know at this stage if this product differentiation will lead to any form of long-term competitive advantage.

Foolish takeaway

ASX listed infant formula companies do have an opportunity to grow sales and earnings as they expand overseas. However, I would not recommend investing due to shares prices which, in my opinion, do not accurately reflect the challenges these companies face from heavy competition.

Investing in Clover Corporation Limited (ASX: CLV) might be a worthwhile alternative investment if a sensible price becomes available. Part of Clover's business is selling nutritional powders for use in infant formula. An investment would therefore offer exposure to this growing industry but from a slightly different perspective.

The post Is the Bellamy's takeover a signal to invest in infant formula? appeared first on The Motley Fool Australia.

This latest decline means the infant formula and health and wellness company's shares are down almost 60% since the start of the year.

Why has the Wattle Health share price crashed lower in 2019?

Investors have been heading to the exits in their droves this year after the company's financial performance underwhelmed the market.

Last year investors were fighting to get hold of its shares on the belief that Wattle Health could be the next A2 Milk Company Ltd (ASX: A2M) or Bellamy's Australia Ltd (ASX: BAL).

But at this stage this doesn't look likely to be the case. In fact, rather than growing sales, in FY 2019 the company reported a very disappointing decline in sales.

For the 12 months to June 30, Wattle Health reported a 42% decline in sales revenue to just $0.89 million. And on the bottom line the company posted a loss of $10.3 million. This means for every $1 of product it is selling, it is losing approximately $11.60.

In addition to this, the company signed an US$85 million debt facility term sheet Gramercy Funds Management to fund the acquisition of Victoria-based manufacturing and packing facility Blend and Pack.

Investors may be concerned with the sizeable debt the company is taking on, especially given how it has yet to prove that there is sufficient demand for its products from consumers.

Should you buy the dip?

Whilst things could still come good for Wattle Health, given how competitive the market is, I'm not overly confident that the company will turn things around in the near term.

In light of this, I would stick with the bigger players in this hyper competitive market or consider a small investment in the fledgling Bubs Australia Ltd (ASX: BUB).

The post The Wattle Health share price is down 60% in 2019 and at a two-year low appeared first on The Motley Fool Australia.

What did Wattle Health announce this morning?

Wattle Health advised that following shareholder approval at the extraordinary general meeting (EGM) held yesterday for the proposed acquisition of 75% interest in Blend & Pack (B&P) from Mason Holdings, the company is now working towards completion of the acquisition.

As previously announced to the ASX on 2 July 2019, Wattle Health reached an agreement with Mason to extend the completion date to 31 July 2019.

As the company has now obtained shareholder approval for the acquisition, Wattle Health and Mason have agreed to further extend the completion date to 31 August 2019.

According to this morning's release, this extension will allow time for all parties involved in the acquisition to complete the required steps to give effect to the acquisition and satisfy the pre-conditions required for it to proceed.

Wattle Health did note that the acquisition involves multiple jurisdictions, and subsequently a higher level of complexity, which increases the length of the time required for the completion.

The company said that a further update will be provided to the market regarding the status of the acquisition as it proceeds in due course.

What's been happening to the Wattle Health share price?

The Wattle Health share price surged 4.35% higher on the ASX yesterday after the company provided its latest quarterly activities update, to pull back slightly this morning in early trade.

Despite reporting higher cash outflows and lower sales, positive updates from the quarter including the development of its Uganic brand were enough to send its share price surging higher.

Management said the company will be distributing fresh organic milk and organic A2 fresh milk in the first quarter of 2020 as it continues its operational expansion.

The company said its first delivery of organic A2 fresh milk is expected to be received in the first quarter of 2020 with volumes for FY20 expected to total 2.5 million litres, increasing to around 7.5 million litres in FY21 and growing each following year.

Despite surging higher yesterday, the Wattle Health share price remains at almost half its start-of-year valuation at $0.47 per share, while competitors including Bellamy's Australia Ltd (ASX: BAL) have seen their share prices climb higher.

The post Wattle Health share price on watch after acquisition update appeared first on The Motley Fool Australia.

What did Wattle Health announce this morning?

Wattle Health today provided its quarterly update, which was largely a rundown of its quarterly highlights rather than any quantitative insight into the group.

Wattle Health's share price has halved since the start of the year, despite the company making significant strides in its journey towards becoming a serious player in the Aussie baby formula industry.

On 15 April 2019, Wattle Health announced the proposed acquisition of leading Chinese-accredited manufacturing facility, Blend and Pack (B&P).

The company also said that the Corio Bay Dairy Group (CBDG) has continued the construction of Australia's first dedicated organic nutritional spray dryer in Geelong, Victoria.

Planned completion of the spray dryer is anticipated in the first half of 2020 with Wattle Health having the first right to all certified organic nutritional powder for use across its nutritional dairy product ranges.

In a pleasing development for Wattle Health, CBDG has received numerous enquiries from domestic and international brands looking to secure potential off takes for certified organic nutritional powder and ingredients.

During the June 2019 quarter, Wattle Health also secured a 5% holding in Remarkable Milk Company (RMCO), a company which is broadly focused on retail for the Asia-Pacific region.

Another big development for the company during the quarter was its development of the Uganic brand, which management said will be distributing fresh organic milk and organic A2 fresh milk in the first quarter of 2020.

As announced on 25 March 2019, the company has secured the only available commercial quantity of organic A2 fresh milk to be used across Wattle Health's nutritional dairy range and fresh milk sales through its CBDG affiliation.

The first delivery of organic A2 fresh milk is expected to be received in the first quarter of 2020 with volumes for FY20 expected to be circa 2.5 million litres, increasing to circa 7.5 million litres in FY21 and growing each following year.

It wasn't all good news for Wattle Health

Despite noting several strong development highlights, the company also noted low sales for the quarter, which it said can be primarily attributed to the transition from conventional nutritional dairy products to Wattle Health's new organic range.

Wattle Health also said cash outflows for the quarter were primarily higher due to preparations for the launch of Uganic and one-off costs associated with the proposed acquisition of B&P.

While the company remains well and truly in its development phase, I'd expect to see the company's share price fall further this morning, particularly given the recent performance of Bubs Australia Ltd (ASX: BUB), which rocketed on its latest quarterly update.

The post Wattle Health share price could fall on quarterly cash outflows, low sales appeared first on The Motley Fool Australia.

So while the ASX infant formula companies are performing strongly this year, can the a2 Milk share price keep posting gains and push towards the $20 mark by the end of 2019?

Why the a2 Milk share price surged higher yesterday

Yesterday's surge in the a2 Milk share price came despite the New Zealand-based dairy group reporting no news to the market, with the big catalyst being Bubs Australia Ltd (ASX: BUB).

The Bubs share price exploded in early trade and surged 12.7% at market open after the Aussie dairy group recorded a record quarter to close out the 2019 financial year (FY19).

Bubs reported a 179% increase in yearly revenue to $51.3 million as the company's busy year in the M&A space, combined with significant sales agreements, saw it post a bumper result ahead of the August reporting season.

The company entered into a joint venture with China-based dairy group Beingmate in March 2019, which was the key to unlocking Bubs' organic food products growth in its Q4 2019 results.

The company also acquired Australia Deloraine Dairy for $35 million in the last few months and most recently signed a 4-year agreement with Chemist Warehouse to expand its product outlets throughout the pharmacy chain's 450 stores across Australia.

What's all this got to do with a2 Milk?

The strong Bubs result saw gains across the board for the Australian and New Zealand infant formula groups, with the a2 Milk share price surged accompanied by minor gains for Wattle Health Australia Ltd (ASX: WHA) and Bellamy's Australia Ltd (ASX: BAL).

a2 Milk remains the incumbent in the sector with strong fresh dairy products combined with its good footing in the lucrative Asian infant and baby formula market, ahead of its competitors (for now).

While we wait and see what a2 Milk produces in its full-year results in August 2019, if we see similar trends and strong margin protection from the group then I'd expect the a2 Milk share price to smash its current $17.25 record high.

However, with a significant number of competitors snapping at its heels and headwinds building in Chinese regulatory conditions, I'd also expect to see some volatility in the short-term, particularly if the company's August result misses analyst estimates.

The post A2 Milk share price hits new 52-week high – can it surge higher in 2019? appeared first on The Motley Fool Australia.