Welcome once again to our top stock highlights where we feature interesting snippets from businesses.
Singtel (SGX: Z74)
There’s optimism swirling around Singtel’s share price as it approaches its 52-week high.
The telco has just given another good reason for investors to feel good about its business prospects as its wholly-owned subsidiary, NCS, announces an acquisition.
NCS will acquire 100% of IT services consulting company Dialog Pty Ltd for a total sum of A$325 million.
A$290 million will be paid out upon completion, which is expected to take one month, while the remaining A$35 million will be paid out in tranches within two years after the transaction is completed.
Dialog is Australia’s largest privately-owned IT services company with a team of 1,000 IT specialists that serve customers in the government, healthcare, transportation, and technology sectors.
Mr Ng Kuo Pin, CEO of NCS, believes that this acquisition can help combine Dialog’s IT capabilities with NCS’ NEXT digital services to beef up the areas of innovation, cloud, artificial intelligence and data analytics.
The purchase will triple Singtel’s IT specialist numbers in Australia to 1,300 and expand the numbers of sectors its unit can support.
This deal is the third for NCS NEXT after it acquired two fast-growing technology companies last year.
The first, Riley, is a cloud consultancy business with expertise in Google cloud applications while the second, Eighty20 Solutions, has capabilities across Microsoft’s (NASDAQ: MSFT) cloud platforms.
AEM Holdings Ltd (SGX: AWX)
Temasek recently increased its stake in the semiconductor and test solution specialist from its original 9.56% to 10.02% through open market purchases.
The investment firm paid an average of S$3.9858 per share to increase its ownership level.
Meanwhile, AEM Holdings has reported its fiscal 2021 (FY2021) earnings.
Revenue for the group increased by 9% year on year to S$565.5 million while net profit dipped by 5.6% year on year to S$92.1 million.
For the second half of FY2021, however, AEM saw its revenue surging by 52.2% year on year and net profit jumping by 47.5% year on year due to the strong uptake of its new generation equipment and tools.
The group declared a final dividend of S$0.05 per share, bringing the total FY2021 dividend to S$0.076.
AEM’s shares offered a trailing distribution yield of 1.8%.
The group has offered revenue guidance of between S$670 million to S$720 million for FY2022, representing a growth of 18% to 27% year on year.
Amazon.com (NASDAQ: AMZN)
E-commerce behemoth Amazon is flying high after announcing an impressive set of earnings for FY2021.
Net sales jumped by 22% year on year to US$469.8 billion while operating profit increased by 8.7% year on year to US$24.9 billion.
Net profit soared by 56.8% year on year to US$33.4 billion from US$21.3 billion a year ago.
The company will continue to invest in its streaming TV service Amazon Prime by adding more original movies and TV series.
There are also plans for Amazon to raise the prices of Prime membership in the US.
Monthly memberships will go up from US$12.99 to US$14.99 while annual memberships will cost US$20 more at US$139.
In a move that has not happened since 1999, Amazon announced a 20-for-1 stock split to make its shares more affordable.
The US$1.5 trillion company’s shares last closed at US$2,936.35, and if successful, this split will bring the share price down to a more palatable US$146.82.
The lower share price may attract a wider investor base for the company while also potentially allowing it to be included in the Dow Jones Industrial Average.
At the same time, Amazon also announced a US$10 billion share buyback programme.
The last major company to announce a stock split, also 20-for-1, was Alphabet (NASDAQ: GOOGL) earlier this year.
As a reference, iPhone giant Apple (NASDAQ: AAPL) underwent a 4-for-1 stock split in August 2020 while electric car manufacturer Tesla (NASDAQ: TSLA) announced a 5-for-1 stock split in the same month.
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Disclaimer: Royston Yang owns shares of Apple and Alphabet.