Here’s why EML (ASX:EML) shares have surged 33% this week

It has been a great week for the payment solution company’s share price.
The post Here’s why EML (ASX:EML) shares have surged 33% this week appeared first on The Motley Fool Australia. –

Shares in EML Payments Ltd (ASX: EML) took off in a vertical fashion yesterday after the payments solutions provider confirmed an end to its investigation with the Central Bank of Ireland (CBI).

EML shares were on the down this week just prior to the announcement. They have reversed course over the past 2 days and now trade 32% higher at $3.62. Investors are piling in today as well, with today’s trading volume at 144% of their 4-week average volume so far.

Here are more details.

Go ahead, EML, do your thing

In the update, EML advised that the CBI has given the green light for it to establish a base and start signing customers in Ireland.

EML’s subsidiary, PFS Card Services (Ireland) Limited (PCSIL) was under the Irish regulator’s microscope after it voiced regulatory concerns with the company back in May.

At the time of the announcement, investors punished EML, wiping around half its value off the table in the days afterwards. Its share price had yet to make a recovery – until yesterday’s sprout from the soil of its 52-week lows.

Another positive from the CBI’s ruling is that no controls are set to be imposed on any of PCSIL’s new programs. The subsidiary has also agreed to work with the regulator and ensure all compliance measures are met with certainty.

One limit that was imposed, however, was a growth cap on PCSIL’s total payment volumes. The growth limitation will be in place for a year but could be removed beforehand if PCSIL verifies it is complying with all relevant measures.

The EML share price was catching bids like feeding tuna yesterday, as investors sent its share price flying from a low of $2.75 to close at $3.61.

The frenzy has since cooled off somewhat today, however shares are now up 18% on the month, and are starting to claw back some gains from the longer-term downtrend.

For comparison, just prior to the CBI’s investigation which started in May, EML had just reclaimed its losses from the March 2020 selloff, brought on by COVID-19. Back then it was posting record highs again, right before the news broke.

However, yesterday’s update has commentary shifting back to a more bullish tone. A recent note out of UBS updating its clients suggests that there is more life in the EML share price.

The broker retained its buy rating in the note and values EML at $4.40 per share following the update out of EML’s corner.

UBS reckons that the go ahead improves EML’s company risk profile, which in turn improves the risk and reward prospects for investors. The firm also believes it could re-rate at higher multiples in the future if European profits are high.

EML share price snapshot

These gains are welcomed for the EML share price, having posted a loss of just 1% in the past 12 months now. Despite this, it is still down 13% this year to date.

After wiping half of its value back in May, the EML share price was trading flat until October, where it began losing popularity.

It reached a 52-week closing low on 23 November, just before the CBI’s resolutions were announced, which sent EML shares back north.

The post Here’s why EML (ASX:EML) shares have surged 33% this week appeared first on The Motley Fool Australia.

Should you invest $1,000 in EML Payments right now?

Before you consider EML Payments, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and EML Payments wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Brokers name 3 ASX shares to buy today

These 3 ASX 200 shares are topping the volume charts this Thursday

Why Adairs, EML, Fisher & Paykel Healthcare, and NRW are storming higher

ASX 200 (ASX:XJO) midday update: EML rockets, NAB given ACCC green light

EML (ASX:EML) share price rockets 17% on new programs green light from regulator

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended EML Payments. The Motley Fool Australia owns shares of and has recommended EML Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!