Day: January 10, 2021

Broker thinks these 6 ASX energy shares could go higher

Energy shares higher

Commodity prices across the board have surged in recent months, and energy commodities are no exception. Crude oil, thermal coal and liquified natural gas (LNG) have pushed higher, but ASX energy shares seem to be lagging behind. 

Energy commodities bouncing back

Brent crude oil has staged a significant recovery to the US$52 per barrel level. This compares to being range bound around the US$40 mark since June 2020.

Thermal coal prices have increased over 50% during the December 2020 quarter, brought on by China ramping up imports on non-Australian thermal coal. 

LNG prices have also surged to a six-year high of around US$15 per million British thermal units (MMbtu), from US$2/MMbtu in mid-2020. 

A number of supply-demand, weather and political forces continue to work in favour of sturdy energy prices. Since March 2020, key energy producers including OPEC+ and Glencore have focused on managing supply and curbing greenfield and expansion projects.

More recently, a number of regional economies have also emerged from COVID-19-related lockdowns, which could help demand-side fundamentals.

Bell Potter upgrades ASX energy shares 

Bell Potter reiterated buy recommendations for a series of ASX energy shares on 7 January 2021.

Beach Energy Ltd (ASX: BPT) had a share price target of $2.29, or an 19% upside to its closing price on Friday of $1.92.

The Cooper Energy Ltd (ASX: COE) share price target was 47 cents. This represents an upside of 17.5% compared to its closing price last week of 40 cents. 

Finally, Senex Energy Ltd (ASX: SXY) also received a buy recommendation with a price target of 40 cents. The Senex share price closed at 33 cents last week. 

These companies received buy recommendations on the basis that they each had uncontracted medium- to long-term production and are positioned to expand their existing assets to meet increased demand.

Other preferred ASX energy shares that received speculative buy ratings from Bell Potter included Byron Energy Ltd (ASX: BYE) with a price target of 42 cents, Comet Ridge Ltd (ASX: COI) with a 17 cent price target and Blue Energy Limited (ASX: BLU) with a 17 cent price target as well. These companies are far more speculative in nature, with market capitalisations of less than $200 million. 

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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

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Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Got money to invest? Here are 3 ASX shares to buy

Small sack with dollar sign on front, stack of coloured blocks representing share price chart, and hourglass timer

There are some ASX shares that could be worth looking into.

Businesses that are growing may be able to deliver satisfactory investment returns over the longer-term.

Not every business is growing, particularly during this difficult COVID-19 period.

Here are three ASX shares to think about:

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

This is an exchange-traded fund (ETF) ASX share which is focused on high-quality businesses that are listed in the United States.

VanEck, which is the ETF provider, says that the ETF gives investors exposure to a diversified portfolio of attractively priced US companies with sustainable competitive advantages according to Morningstar’s equity research team. In other words, the businesses have “wide economic moats.”

The target companies of the ETF must be trading at attractive prices relative to Morningstar’s estimate of fair value, with the research used being Morningstar’s rigorous equity research process.

At the end of December 2020, its largest positions were John Wiley & Sons, Charles Schwab, Corteva, US Bancorp, Wells Fargo, Constellation Brands, Bank of America, Boeing, Yum! Brands and Cheniere Energy.

Despite the ETF’s management fees of 0.49% per annum, VanEck Vectors Morningstar Wide Moat ETF has delivered net returns of 16.6% per annum over the past five years, outperforming the S&P 500.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is an ASX share which specialises in facilitating electronic donations. Its key client base is large and medium US churches. These churches receive a large amount of donations each year. The company is aiming for a 50% market share of this sector, which could see it generate US$1 billion of annual revenue eventually.

In the most recent result, the FY21 half-year report, Pushpay processed US$3.2 billion of donation volume – this was growth of 48%. Its operating revenue grew 53% to US$85.6 million in the same result.

Fund manager Ben Griffiths from Eley Griffiths said: “Over the last 12 months it has become clear Pushpay is at an inflection point for both cashflow and earnings. Under the stewardship of CEO Bruce Gordon, Pushpay has transitioned from a founder-led investment phase into an optimize/monetization phase. What is more surprising is the very conservative nature of the accounts (a rarity in small cap tech, outside Iress Ltd (ASX: IRE)). We believe the next few years for Pushpay will be rewarding and that COVID-19 will accelerate the already entrenched trend to digital giving/engagement from cash.”

In FY21 Pushpay is expecting to more than double its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) to a range of US$54 million to US$58 million.

According to Commsec, the Pushpay share price is valued at 22x FY23’s estimated earnings.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is one of the businesses that have grown strongly since the onset of the pandemic and the rise of online shopping.

The ASX share revealed that growth has continued in FY21. It said that in FY21 between 1 July 2020 to 19 October 2020, revenue was up more than 138%. October’s revenue growth was more than 100%. The FY21 first quarter EBITDA was $8.6 million, which was more than the EBITDA from the whole of FY20.

Management plan to keep expanding its range, including the private label products. It will also keep investing in its technology, data and marketing. As it gets bigger it can invest even more into its customer proposition and advertising. The company described this as a virtuous cycle.

The ASX share is also bullish about its trade and commercial division over the long-term, which grew by 68% over FY20 despite a tough fourth quarter where many businesses reduced spending.

Temple & Webster wants to keep its customer satisfaction rates very high. It had a net promoter score of around 70% in FY20.

The company is committed to a high growth strategy to take advantage of the structural shift towards online, capitalising on both organic and inorganic opportunities.

According to Commsec, the Temple & Webster share price is valued at 39x FY22’s estimated earnings.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX and Temple & Webster Group Ltd. The Motley Fool Australia has recommended IRESS Limited, PUSHPAY FPO NZX, Temple & Webster Group Ltd, and VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Why the Gascoyne (ASX:GCY) share price is racing 6% higher

treasure chest full of gold

The Gascoyne Resources Ltd (ASX: GCY) share price is surging today after the company released its latest production update for its Dalgaranga Gold Project.

At the time of writing, the gold miner’s shares are up 6.38% to 50 cents. In contrast, most gold mining companies have seen their share price fall today due to the weakening price of gold overnight.

How did Gascoyne perform?

The Gascoyne share price is breaking the trend today after the company delivered a robust result, reaching the upper range of its previously forecasted guidance.

For the December quarter period, Gascoyne achieved production of 20,381 ounces of gold. This represents a total of 40,695 ounces of the precious metal for the entire first-half of the 2021 financial year.

Gascoyne noted that it is likely to reach the upper-end of its guidance range of 70,000 to 80,000 ounces, based on its latest result. All-in sustaining costs is expected to come between $1,200 to $1,300 per ounce.

In other news, Gascoyne said that it has started additional drilling within 1.5km of the Dalgaranga gold processing facility. The resource extension program is aimed at extending the current 7-year mine life.

During the quarter, the company engaged into new gold hedges to service its debt obligations. Around 40% was hedged over the last 18 months, translating to a $7.5 million position at the end of 2020. In total, 53,722 ounces is currently hedged at an average price of $2,611 per ounce until June 2022.

Gascoyne recorded cash on hand of $37.3 million, and bank debt of $36.5 million at the end of the December period.

What did management say?

Gascoyne managing director and CEO Richard Hay welcomed the progress, saying:

Dalgaranga has achieved three consecutive quarters producing in excess of 20,000 ounces, resulting in 80,086 ounces being produced in calendar year 2020. This consistent performance is largely as a result of mining transitioning through the oxide zone and into fresh rock in the Gilbey’s pit over the past 18 months.

Combined with a growing net cash position and a $7.5M in the money hedge position, Gascoyne is well placed to pursue its growth ambitions.

Gascoyne share price overview

The Gascoyne share price been up and down since being reinstated on the ASX in October last year.

Reaching as high as 67.5 cents on the day its shares were available for trading, the company’s shares have been erratic since. The Gascoyne share price hit a low of 40.5 cents on 24 December 2020.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Leading brokers name 3 ASX shares to buy today

Buy ASX shares

With so many shares to choose from on the ASX, it can be hard to decide which ones to buy.

The good news is that brokers across the country are doing a lot of the hard work for you.

Three top shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Nuix Ltd (ASX: NXL)

According to a note out of Morgan Stanley, its analysts have initiated coverage on this investigative analytics and intelligence software provider’s shares with an overweight rating and $11.00 price target. The broker appears to be a big fan of Nuix and believes it is a long term structural growth story. And while it sees some risks from much larger competitors, it isn’t enough to dampen the broker’s bullish view. The Nuix share price is trading at $8.88 this afternoon.

Oil Search Ltd (ASX: OSH)

A note out of Ord Minnett reveals that its analysts have upgraded this energy producer’s shares to a buy rating with an improved price target of $4.58. According to the note, the broker has lifted its oil price forecasts for the coming years and its earnings estimates accordingly. This resulted in the price target upgrade and its rating change. Though, it is worth noting that Santos Ltd (ASX: STO) remains its top pick in the sector. The Oil Search share price is fetching $4.24 on Monday.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

Analysts at Morgans have retained their add rating and lifted their price target on this airport operator’s shares to $6.95. According to the note, the broker is expecting Sydney Airport to benefit from COVID vaccine rollouts in 2021 and is forecasting a sustained recovery over the coming years. However, it is worth noting that the broker isn’t expecting any dividends from Sydney Airport until 2023. The Sydney Airport share price is trading at $6.25 on Monday.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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