The anticipation was beyond high going into NVIDIA’s 2Q 2023 earnings result last week. Artificial Intelligence, or AI, has been the phrase on everyone’s lips in the investment community since the launch of ChatGPT late last year, and stocks set to benefit from the AI boom have seen significant returns this year. NVIDIA is the poster child for this AI fascination, and its previous earnings announcement generated incredible hype. Management’s guidance that revenue for the second quarter would be 50% higher than consensus estimates helped propel the stock to more than three times its level at the start of the year, and eclipse the well-publicised trillion-dollar market capitalisation.
ASX Small Cap Analysis: Positive Earnings from ClearView Wealth & Centrepoint Alliance in 202328/8/2023
In the recent ASX reporting season, two small-cap companies, ClearView Wealth and Centrepoint Alliance, showcased promising results. Although their earnings may not dominate headlines like tech giants such as Nvidia (NASDAQ: NVDA), the progress they're making is noteworthy for investors and market analysts alike. In the competitive landscape of Australian financial services, how did the closely-linked Clearview Wealth (ASX: CVW) and Centrepoint Alliance (ASX: CAF) distinguish themselves with their 2023 achievements?
As we discussed in the recent article Second-Level Thinking and US Homebuilders, we’re currently going through a very interesting time in the U.S. housing industry. Renovating and remodelling activity boomed during the pandemic as people confined to their homes made the most of the opportunity to improve their living space–with a little help from their stimulus cheques.
There have been constant questions about whether this level of activity could be sustained, particularly given higher interest rates (which are expected to dampen economic activity) and the threat of a slowdown in consumer spending–at least on goods anyway (spending on services such as travel and concerts continues to hit record highs, as the likes of Booking Holdings (NASDAQ: BKNG), Helloworld Travel (ASX: HLO) and Taylor Swift can attest). Earnings season rolls on and this week we take a look at one of our company’s results from the portfolio in Reckon Limited (ASX: RKN) and another who has been in the process of rebranding in FleetPartners Group Limited (ASX: FPR) formerly known as Eclipx Group Limited.
Viva Leisure Limited (ASX: VVA) a market leader in the personal wellness industry, announced last Friday an impressive set of full year 2023 results.
Despite cost of living and inflationary pressures, revenue increased 55% to $141 million and Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) increased by 429% to $29 million. The share market lapped up the numbers with the share price increasing 11.54% on the day to a 52 week high of $1.45. You can read up on our previous commentary around the business here. Despite facing a raft of challenges including higher interest rates, inflationary pressures and a cooling global economy, the share prices of technology companies have shot higher this year. Electric vehicle pioneer Tesla Inc (NASDAQ: TSLA) has more than doubled year-to-date, while chip-maker NVIDIA Corp (NASDAQ: NVDA) share price has tripled, owing to investor enthusiasm for artificial intelligence.
The financial world often stands still, watching behemoths like Apple Inc (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) manoeuvre. Given their gargantuan size, these market titans inevitably cast wide ripples across the broader investment landscape with every price fluctuation - particularly during reporting season. Yet, beyond the limelight and the vast echo of these large caps, there’s a realm of potential in the business performance of small caps where valuations remain grounded.
The mega cap technology companies have roared back to life in 2023, with the NASDAQ 100 rising 40% in the first half of the year. The “magnificent 7” (Apple, Microsoft, Tesla, Meta, Alphabet, Nvidia and Amazon) have performed even better, rising a staggering 61%. They now account for a whopping 27% of the S&P 500 index (which is weighted by market capitalisation, or put simply, market value), while the other 493 stocks in the index contribute 73%. Compared to their 61% return over the first 6 months, the remaining 493 of the S&P 500 were up about 6% (bringing the index return to June 30 of 16.9%).
As we discussed in an article just last month, Symbio (ASX: SYM) is the latest in a string of small cap ASX companies to receive a takeover offer.
We highlighted Symbio as a possible acquisition candidate because of its growing and profitable business (a rarity among small ASX companies), rock-solid balance sheet (with $30 million in cash compared to a market capitalisation of $150 million), predictable and recurring revenue, and high insider ownership among the Board of Directors. |
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TAMIM Asset Management provides general information to help you understand our investment approach. Any financial information we provide is not advice, has not considered your personal circumstances and may not be suitable for you.
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