Day: January 28, 2021

What’s with the Vulcan (ASX:VUL) share price today?

asx share price fall represented by lady in striped tshirt making sad face against orange background

The Vulcan Energy Resources Ltd (ASX: VUL) share price is falling in afternoon trading, down 3.78% to $7.89 despite a flying start out of the blocks this morning.

The ASX miner announced its quarterly activities and cash flow report for the period ending 31 December 2020 to the ASX market today. Let’s take a closer look.

What is in the report?

In today’s release, Vulcan advised that its first zero carbon lithium pre-feasibility study demonstrated strong potential. The combined renewable energy and lithium hydroxide project, in the centre of Europe, has a positive net present value of €2.25 billion (AUD$3.56 billion). As such it is projected to be one of the cheapest lithium producers globally.

Vulcan also announced upgrades to a number of its resource estimations during the quarter. The company upgraded its estimation at its Taro site from 0.83 Mega tonnes (Mt) of lithium carbonate to 1.44 Mt.

More spectacularly, the company updated its resource estimation at its Ortenau resource in North Germany from 2.06 Mt to 15.85 Mt. This places it as the largest lithium resource in Europe. The project has since been integrated into the zero carbon lithium project mentioned above.

What’s more, Vulcan claims proposed new regulations by the EU on carbon footprint rules and responsibly sourced materials may be poised to help the company.

About the Vulcan share price

The Vulcan share price has gained an astounding 4,344% in the last year alone. It shares tore up the charts last week on the back of its announcement on plans to become the world’s first zero carbon lithium producer. 

To do this, Vulcan will use its unique lithium process to produce both renewable geothermal energy, and lithium hydroxide, from the same source. In doing so, the company aims to address EU market requirements by reducing the high carbon and water footprint of production. At the same time it creates a wider global marketplace for lithium with less reliance on imports from China.

The small cap ASX miner was among was among the most traded shares on the ASX last week as a result. The Vulcan share price is currently trading 1.95% higher.

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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 Daniel Ewing 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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Renergen (ASX:RLT) share price explodes 71% today

Colourful explosion to symbolise ASX share price growth

Renergen CDI (ASX: RLT) shares are on fire today. At the time of writing, the Renergen share price is trading at $2.62, up by 71%.

Renergen is an alternative and renewable energy business concentrating on helium and LNG. The company invests in early stage projects across Africa and emerging markets.

The company’s key focus, the Virginia Gas Project, is located in Free State, South Africa and contains one of the richest helium concentrations recorded in the world.

Let’s take a look at what the company has been up to recently and try to piece together the path that led to the Renergen share price soaring today.

Phase 2 of the Virginia Gas Project

This is the second time in the past two days that the Renergen share price has blasted off. On Wednesday, we were talking about Renergen shooting 24% higher following an announcement pertaining to phase 2 of the Virginia Gas Project.

The announcement revealed Renergen had contracted three companies to support the engineering studies of the project.

Saipem SpA is now responsible for the front-end engineering design (FEED) contract to develop the liquid natural gas and liquid helium processing facilities. EPCM Holdings will develop the phase 2 gas gathering pipeline, and Sproule will evaluate and certify the reserves.

The appointment of these three contracts will finalise the feasibility studies for the phase 2 development of the Virginia Gas Project.

With no new announcement today and the three new contract appointments having only come to light two days back, it looks like investors are still processing the news.

As mentioned in Renergen’s latest announcement, under the guidance of the three appointed companies Renergen expects the Virginia Gas Project feasibility studies to be completed “on or around” the second quarter or 2021.

After this is complete, the Renergen board will present its final investment decision.

What has the Renergen share price done over the past 12 months?

The Renergen share price has a 52-week range of 84 cents to $2.90, a touch away from where it’s trading today

Similar to many other companies, Renergen took a hit from the coronavirus and operations came to a dramatic halt, which sent the share price for a nose dive.

From 3 March to 24 March 2020, Renergen shares tumbled 88.5%, falling from $1.64 to 87 cents.

All in all, the Renergen share price has climbed around 140% over the previous 12-month period.

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.*

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Motley Fool contributor Gretchen Kennedy 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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Brokers name 3 ASX shares to buy right now

ASX buy

Australia’s top brokers have been busy adjusting their estimates and recommendations again, leading to the release of a number of broker notes.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Booktopia Group Ltd (ASX: BKG)

According to a note out of Morgans, its analysts have retained their add rating and lifted the price target on this online book retailer’s shares to $3.48. This follows the release of a first half trading update earlier this week. Morgans was pleased with Booktopia’s update and notes that it delivered very strong growth during the half. It also feels that management’s guidance is conservative and the company can outperform it. Looking ahead, Morgans believes the company is well-placed for growth thanks to market share gains and the growing online book market. The Booktopia share price is trading at $2.86.

ELMO Software Ltd (ASX: ELO)

Analysts at Morgan Stanley have retained their overweight rating and $9.70 price target on this cloud-based HR and payroll company’s shares following its second quarter update. ELMO delivered a result in line with the broker’s expectations and notes that management has reaffirmed its guidance for FY 2021. It appears confident the company will achieve its guidance and remains positive on the investment opportunity. The ELMO share price is trading at $6.79 today.

TechnologyOne Ltd (ASX: TNE)

A note out of UBS reveals that its analysts have upgraded this enterprise software company’s shares to a buy rating with an improved price target of $9.15. According to the note, the broker believes recent weakness in the TechnologyOne share price is a buying opportunity for investors. Especially given the potential for a quicker than expected conversion of its revenues to software-as-a-service revenue. Overall, it believes its shares offer a lot of value in comparison to its tech peers. The TechnologyOne share price is trading at $8.68 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.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Elmo Software. The Motley Fool Australia owns shares of and has recommended Elmo Software. 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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Chamath Palihapitiya defends WallStreetBets GameStop short squeeze

retail investor fighting with hedge fund short seller across table

The GameStop Corp (NYSE: GME) saga has brought the world’s attention to the ethics of hedge funds and their ability to short businesses into oblivion. On the other hand, it has also awoken Wall Street to the immense power communities like WallStreetBets on Reddit can wield. The debate continues to heat up over whether retail investors or hedge funds are in the wrong.

Don’t hate the player, hate the game

Hedge funds, Melvin Capital Management, and Citron Research have experienced substantial losses over the last few days as they covered their losing Gamestop short bets. As reported in Business Insider, Melvin Capital required an injection of capital from other hedge funds, totalling US$2.75 billion, to bail out the fund. Melvin will now have an obligation to share its future revenue with those that have supported it.

Some people are infuriated that a small community of ‘inexperienced investors’ could be allowed to conduct this level of price manipulation. However, there are many that have the polar opposite opinion – and instead, see this as hedge funds getting a taste of their own medicine.

Successful venture capitalist Chamath Palihapitiya appeared in an interview on CNBC this week. Host, Scott Wapner suggested that companies should exist based on their earnings. Chamath seemed to be in disbelief of this ‘right price’ notion, commenting:

Who says that? Do you want to make the same argument for Tesla? It’s gone 10X in a few months. You don’t know what it’s worth, let’s be honest. I have my own model for the company – I’m allowed to underwrite however I want to own it.

Chamath continued to outline the hypocrisy between the case being made for Wall Street hedge funds versus retail investors:

Everyone who bought that stock is also underwriting how they want to own it – and the point is, just because you’re wrong, doesn’t mean you get to change the rules. Especially when you [hedge funds] were wrong, you got bailed out the last time. That’s not fair.

Don’t discount GameStop retail investors

There has been this notion that people in the WallStreetBets community, and retail investors in general for that matter, are unequipped to make sound investing decisions. Chamath wanted to dismantle this idea after Mr Wapner made this statement:

It will be a retail investor who gets screwed because they think that this is the way this game works – that this is the new Wall Street. They’re new to this game, maybe they haven’t been in the game that long.

Chamath rebutted this, cautioning not to discount how smart a lot of these people are. The case being made is that the stock market is a free market. The rules are defined, and retail investors citing an opportunity in an over-leveraged short position and playing against that in no way lessens the professionalism of the strategy.

Could the free market become not so free?

This whole situation has become a contentious topic, amplified by a couple of significant recent developments. The first being brokers, including Robinhood and Interactive brokers, have imposed restrictions on trading some of these short-squeezed shares. The stipulation only allows positions to be exited.

Secondly, Discord, a chat platform used by WallStreetBets, temporarily removed the group; effectively eliminating the community’s ability to coordinate.

Since these actions, the GameStop share price has sunk 59%, from $469 to $193 in one day. This begs the question, could this be market manipulation in itself? It is worth noting that the brokerage fee-free Robinhood makes revenue from selling its customers’ order flows to hedge funds like Citadel (which funded Melvin Capital).

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.

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Mitchell Lawler owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. 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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