Day: January 24, 2021

The Ecograf (ASX:EGR) share price is surging 9%. Here’s why

A hand holds a green lithium battery with a leaf, indicating positive share price movement for clean ASX lithium miners

Shares in Ecograf Ltd (ASX: EGR) are storming higher today after the company announced positive developments regarding a project debt facility application. During the opening minutes of trade, the Ecograf share price reached an intraday high of 42.5 cents.

However, after some profit taking, the company’s shares have retreated to (at the time of writing) 41.5 cents, up 9.2%.

What’s driving the Ecograf share price?

The Ecograf share price on the rise today on the back of the company’s latest news.

Ecograf highlighted that during the recent quarter, it applied for a $45 million project debt facility from Export Finance Australia. The company submitted development reports and an engineering study report to secure funds to construct a new battery graphite facility.

According to its release, Ecograf is compiling additional reports to support its loan application. It expects that final credit approval will be received from Export Finance Australia within the next two months.

As a result, Ecograf has begun finalising plans for the construction of the new state-of-the-art processing facility in Western Australia. Once built, the battery graphite facility will manufacture graphite products for export to Asia, Europe and North America.

The company further revealed it has received considerable interest from anode cell, battery and electric vehicle manufacturers.

Quick take on Ecograf

Based in Australia, Ecograf is engaged in the exploration and development of graphite and nickel projects in Tanzania. The company uses innovative technologies to recover graphite from recycled batteries, thus reducing waste and environmental impact.

Ecograf share price snapshot

Over the past 12 months, the Ecograf share price has accelerated over 425%. These strong gains reflect growing positive sentiment among investors regarding the lithium-ion industry with many of Ecograf’s fellow ASX-listed producers also posting whopping gains over this time.

In January alone, Ecograf shares are up more than 140%, reaching a new multi-year high of 44 cents last week.

Based on the current Ecograf share price, the company has a market capitalisation of around $142 million.

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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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Top broker says the South32 (ASX:S32) share price is in the buy zone

asx brokers

The South32 Ltd (ASX: S32) share price has come under pressure on Monday and is dropping lower.

At the time of writing, the mining giant’s shares are down 1.5% to $2.73.

Is this a buying opportunity?

One broker that would see today’s weakness in the South32 share price as a buying opportunity is Goldman Sachs.

At the end of last week, the broker released a positive note which revealed that its analysts have retained their buy rating and lifted the price target on South32’s shares to $3.10.

Based on the latest South32 share price, this price target implies potential upside of 13.5% excluding dividends. Including dividends, this potential return increases to approximately 16% over the next 12 months.

Why does Goldman Sachs think South32 shares can go higher?

According to the note, South32 delivered a reasonably mixed second quarter update last week.

It commented: “S32 reported an 8% drop in Cu Eq production for the Dec Q, 2% below GSe, with lower than expected coal production from both Illawarra and South Africa offsetting a very strong performance from the high margin Worsley alumina, Aus manganese and Cannington lead/zinc assets.”

And while the broker has reduced its FY 2021 earnings estimates to reflect this, it has upgraded its estimates for the medium term enough to warrant remaining positive on the company.

Goldman said: “Our FY21 EPS is down 13% (but just US$59mn) however, our FY22-24 EPS is up 15-50% after incorporating our commodity team’s recent nickel, zinc and aluminium price upgrades, along with a significant upgrade to Cerro Matoso nickel’s production following the development approval of the higher grade Q&P deposit.”

In addition to this, it believes South32’s shares are great value at just 0.85x net asset value. The broker also feels that its free cash flow is recovering and expects a free cash flow yield of 5% over the next two years.

The latter bodes well for dividends, with the broker forecasting ~3.8% dividend yields in both FY 2022 and FY 2023.

This could make the South32 share price one to watch over the coming years.

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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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Why the Fortescue (ASX:FMG) share price is storming higher today

boost in mining asx share price represented by happy miner making fists with hands

The Fortescue Metals Group Limited (ASX: FMG) share price has started the week strongly.

In afternoon trade the iron ore producer’s shares are up 5% to $25.51.

This latest gain means the Fortescue share price is now up 120% since this time last year.

Why is the Fortescue share price charging higher today?

Investors have been buying Fortescue shares on Monday after a leading broker responded positively to its update at the end of last week.

That update revealed that Fortescue has been benefiting greatly from the sky high iron ore price.

So much so, the mining giant revealed that, based on unaudited management accounts, its net profit after tax for the month of December came to a whopping US$940 million.

To put that into context, that monthly profit is more than the market capitalisation of fellow iron ore miner Mount Gibson Iron Limited (ASX: MGX).

The company also provided guidance for the first half ahead of the formal release of its results on 18 February.

It advised that its net profit after tax for the six months ended 31 December 2020 on an unaudited basis will be in the range of US$4 billion to US$4.1 billion.

This will be an impressive 60% to 64% increase on the net profit after tax of US$2.5 billion it achieved in the prior corresponding period.

What did the broker say?

According to a note out of Ord Minnett, Fortescue’s guidance was in line with its expectations for the first half.

In light of this, the broker has retained its buy rating and $29.00 price target on the company’s shares.

Based on the current Fortescue share price, this price target implies potential upside of almost 14% over the next 12 months.

In addition to this, the broker is expecting the company to generate significant free cash flow this year. This is likely to be returned to shareholders through generous dividend payments.

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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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Leading brokers name 3 ASX shares to buy today

3 asx shares to buy depicted by man holding up hand with 3 fingers up

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

Fortescue Metals Group Limited (ASX: FMG)

According to a note out of Ord Minnett, its analysts have retained their buy rating and $29.00 price target on this iron ore producer’s shares. The broker notes that Fortescue is expecting to report a first half net profit of US$4 billion to US$4.1 billion in February. This is in line with what Ord Minnett was forecasting. In addition to this, it notes that the company has plans to build a steel plant and is looking into clean energy opportunities. The Fortescue share price is trading at $25.46 this afternoon.

IDP Education Ltd (ASX: IEL)

Analysts at UBS have retained their buy rating and lifted the price target on this student placement and language testing company’s shares to $23.00. According to the note, the broker believes trading conditions are improving for the company and has lifted its earnings forecasts to reflect this. Looking ahead, the broker believes IDP Education is well-placed for growth thanks to market share gains and its computer-based IELTS offering, which has higher margins. The IDP Education share price is fetching $21.53 on Monday.

Webjet Limited (ASX: WEB)

A note out of UBS reveals that its analysts have retained their buy rating and lifted the price target on this online travel agent’s shares to $5.40. According to the note, UBS acknowledges that the travel sector is still facing COVID headwinds and international travel looks unlikely this year. However, it believes the company is well-positioned to win market share from its rivals and take advantage of the pent-up demand when conditions improve. The Webjet share price is trading at $4.78 this afternoon.

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

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 Idp Education Pty Ltd. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. 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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