The Match Out: ASX ends April on the front foot, Megaport (MP1) shows shorts are for the beach! Have a great weekend all...

A solid end to a positive month for the ASX with 60% of the market finishing higher, although there were some fireworks happening under the hood with Megaport (MP1) up ~40% on better guidance. For the month, the ASX 200 put on +1.83% and it was the sectors that benefit from lower interest rates that saw the best of it, namely Property & IT while the Material’s were the only group to end April in the red.

• The ASX 200 finished up +16pts/ +0.23% at 7309
• The Property sector was best on ground (+1.12%) while Financials (+0.62%) & Communications (+0.59%) were also strong.
• Healthcare (-0.97%) and Consumer Staples (-0.77%) the weakest links.
• Westpac have changed their view around interest rates, and now expects the RBA to sit tight next week, while they say cash rates will now peak at 3.6%, i.e. current levels following this weeks inflation data. They are now aligned with MM’s thinking.
• Megaport (ASX: MP1) +41.46% was the best performer today after saying they expect FY23 earnings to be “materially above” market consensus as they pull the profitability levers. Short covering a plenty today.
• Lithium stocks were interesting with Pilbara (ASX: PLS) +7.07% the star while IGO (ASX: IGO) ended 2% higher despite a quarterly production report that was operationally weaker across the board which pushed costs higher – a typical trend in the sector of late. We tweaked our exposures to Lithium today in the Flagship Growth Portfolio.
• ResMed (ASX: RMD) -0.06% was flat after reporting higher revenue in the March quarter although margins were lower.
• Coles (ASX: COL) -1.41% declined after reporting a 6.5% uplift in sales to $6.97 billion.
• Mirvac (ASX: MGR) +3.43% was higher despite cutting settlements guidance.
• PointsBet (ASX: PBH) -6.06% fell after reporting weaker growth in US turnover – they are looking to jettison this part of their business given cash burn remains too high.
• Iron Ore was ~1% lower in Asia today.
• Gold was back down at ~US$1985 by our close.
• Asian stocks are higher, Hong Kong up +0.63%, Japan +1.50% while China was up +1.12%
• US Futures are lower, down around -0.20%

ASX 200 

Megaport (MP1) $5.63

MP1 +41.46%: shares in the network connection service company ripped higher today on the back of a strong 3Q update, tearing up some profits for the short sellers which accounted for ~11% of shares on issue. Revenue for the quarter was in line, however, price hikes put through in March lifted their exit Monthly Recurring Revenue (MRR) run rate to $14.1m, up 14% from December thanks to lower-than-expected churn following the increase. There have been a number of management changes over recent months and now the new CEO looks to be getting to work, aiming to cut the headcount by 50, renegotiate cloud fees and reduce their costs by a total of $30m a year. Guidance was strong with FY24 numbers 25-30% ahead of consensus expectations.

Sectors This Week

Stocks This Week

Broker Moves

• Marley Spoon GDRs Cut to Market-Weight at Wilsons
• Blackmores Cut to Negative at Evans & Partners Pty Ltd
• Sandfire Cut to Accumulate at Ord Minnett; PT A$7.50
• Helloworld Cut to Lighten at Ord Minnett; PT A$2.62
• Champion Iron Raised to Buy at Laurentian Bank; PT A$7.78
• Newcrest Cut to Hold at Morgans Financial Limited; PT A$25.80
• Regis Resources Raised to Add at Morgans Financial Limited
• Reliance Worldwide Raised to Neutral at Citi; PT A$4.10
• Northern Star Cut to Neutral at Credit Suisse; PT A$13.70

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