World News – AU – Here’s why Bubs (ASX: BUB) and this ASX stock are underperforming in 2020

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The Motley Fool Australia Share Fallers Here’s why Bubs (ASX: BUB) and this ASX stock are underperforming in 2020

James Mickleboro | 15th. December 2020, 7:07 am | More about: APT BUB BVS XRO

Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO) may have just hit record highs, but not all stocks are doing well too.

Below are two ASX stocks that performed significantly worse in 2020. Here’s why their shares are in the landfill:

Bravura Solutions’ share price is down 37. 5% since the beginning of 2020. The provider of software products and services to the wealth management and fund management industries has come under pressure after providing compelling guidance for fiscal 2021. Bravura has warned the pandemic could result in flat profits this year.

While that forecast doesn’t sound too bad given the disruption associated with COVID-19, investors seem concerned about how much of this gain is expected in the second half of the year. Bravura Chief Executive Tony Klim said: “… the UK second wave lockdown and the delay in Brexit negotiations have increased uncertainty and slowed the progress of pipeline opportunities in the UK. As a result, Bravura expects the NPAT for Fiscal Year 21 to be weighted approximately 80% in the second half of Fiscal Year 21. ”

One broker who believes investors should look past these short-term headwinds and take advantage of the weakness in Bravura stock price is Goldman Sachs. It recently reiterated its buy recommendation and staked $ 4. 50 Target price for its shares. It believes the company is well positioned for long-term growth once those headwinds wear off.

The price of the Bubs share has fallen by a disappointing 37% and by 48% since the start of the year. 7% from May’s 52-week high. Investors sold the infant formula, baby food, and vitamins company’s shares after COVID-19 impacted sales in the first quarter of fiscal 2021.

In the three months to the 30th. September Bubs reported gross sales of $ 9. 4 million. That was a 34% decrease from the $ 14. It reached 21 million in the previous corresponding period. Management attributed the decline to a COVID-related contraction in the Daigou Canal.

But perhaps worst of all was free cash flow. After seeing positive cash flow at the end of fiscal 2020, Bubs suddenly started burning his cash again. For the quarter, the company had an operating cash outflow of $ 10. 146 million, which was more than its sales for the period. This has led to fears that more capital will be required next year, which will further dilute shareholders.

A little-known Australian IPO has doubled since January, and renowned Australian moonshot stock picker Anirban Mahanti sees a potential millionaire waiting. . .

With ‘Doc’ Mahanti believing this fast-growing company has all the hallmarks of real moonshot potential, forget ‘buy now, pay later’, this stock could be the next hot stock on the ASX.

Doc and his team released a detailed report on this tiny ASX stock. Find out how to get your NEXT Afterpay today!

James Mickleboro, a contributor to the Motley Fool, has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended shares in Bravura Solutions Ltd and BUBS AUST FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). . Authorized by Bruce Jackson.

In this FREE SHARE REPORT, Scott Phillips just revealed what he thinks are the 3 ASX stocks for the post-COVID world that investors should buy now while they still can.

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ASX, Afterpay, ASX: APT