This tech share is ending the month in the red…
The post Is this why the Appen (ASX:APX) share price is sinking 5% today? appeared first on The Motley Fool Australia. –
The Appen Ltd (ASX: APX) share price is ending the month on a disappointing note.
In late afternoon trade, the artificial intelligence data services company’s shares are down 5% to $13.60.
This latest decline means that the Appen share price is now down 47% since the start of the year.
Why is the Appen share price sinking today?
With no news out of the company, the decline in the Appen share price appears likely to be related to today’s date – 30 June.
As today is the final day of the tax year, investors will often do some tax-loss selling. This involves selling shares that have incurred a capital loss, which may then offset capital gains that have been realised throughout the financial year.
And given how poorly the Appen share price has performed this year, it certainly would be a candidate for this practice.
Is this a buying opportunity?
While opinion remains largely divided on the company, one leading broker that sees value in the Appen share price is Ord Minnett.
In response to its reorganisation update last month, the broker has put a buy rating and $24.75 price target on its shares. This price target implies potential upside of almost 82% over the next 12 months.
According to the note, the broker is pleased with its plans and expects the changes to lead to more clarity on the drivers of its growth.
In addition to this, Ord Minnett notes that Appen has reaffirmed its earnings guidance for FY 2021. And while this comes with a sizeable second half skew, it appears quietly confident the resumption of some deferred projects will help it get there.
All in all, while the last 12 months have been very disappointing for Appen shareholders, the broker appears to believe the next 12 months will be a different story.
Should you invest $1,000 in Appen right now?
Before you consider Appen, 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 Appen 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 May 24th 2021
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.