Day: October 12, 2021

Cannon (ASX:CNR) share price rockets 39% on first drill results

a man wearing old fashioned aviator cap and goggles emerges from the top of a cannon pointed towards the sky. He is holding a phone and taking a selfie.

The Cannon Resources Ltd (ASX: CNR) share price is racing to incredible highs following the company’s first drill results.

During morning trade, Cannon shares rose to an all-time high of 45 cents before being driven lower by profit takers. At the time of writing, its shares are now up 39.29% to 39 cents.

What were the results?

In today’s update, Cannon advised it has received assay results from its drilling campaign at the Fisher East Nickel Project in Western Australia.

The first 3 diamond drill holes have highlighted significant zones of high-grade nickel sulphides at the Musket prospect. They included the following:

  • 14.94 metres at 1.90% nickel from a depth of 366.15 metres in hole MFED083
  • 4.94 metres at 1.79% nickel from a depth of 559.77 metres in hole MFED084
  • 5.81 metres at 2.29% nickel from a depth of 584.35 metres in hole MFED088

Cannon stated that the drilling intercepted substantial thicknesses of mineralisation on the northern margin of the main channel (MFED083). This extended the mineralisation to roughly 100 metres below the existing Musket resource.

The drilling program successfully identified mineralisation trends and is expected to lead to future follow-up drilling.

Cannon CEO Steve Lynn commented:

The diamond drilling results and DHEM modelling are an excellent and significant development at Musket and highlight our ability to predict mineralisation trends and grow the orebody.

The assay results show that the mineralisation continues down-plunge at better than the average grade of the existing resource. The system is totally unconstrained at depth and laterally within the northern mineralisation trend. This current round of drilling confirms that significant resource growth can be expected with well targeted future drilling.

Cannon commenced a diamond drilling campaign at the Camelwood, Musket and Sabre prospects in August 2021. While drill results have been collected for Musket, assays are still pending for Camelwood and Sabre.

Down-hole electromagnetics surveys are currently underway on existing holes. It is anticipated that these will be completed over the next 10 to 15 days.

About the Cannon share price

Since listing on the ASX in August, Cannon shares have gained almost 90% for the period, reflecting positive investor sentiment.

Cannon presides a market capitalisation of about $25 million and has approximately 66.4 million shares on its books.

The post Cannon (ASX:CNR) share price rockets 39% on first drill results appeared first on The Motley Fool Australia.

Should you invest $1,000 in Cannon right now?

Before you consider Cannon, 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 Cannon 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

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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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Could renewed inflation fears rekindle these ASX 200 gold shares?

Rising gold asx gold shares share price buy represented by multiple hands grabbing at gold bullion

S&P/ASX 200 Index (ASX: XJO) gold shares haven’t been having the best of years so far.

A number of factors have been at play impacting the share prices of each individual gold producer. But the slumping gold price, as you’d expect, has been a major tailwind across all ASX 200 gold shares.

What’s been going on with gold?

The yellow metal hit an all time high of US$2,035 per troy ounce back on 7 August 2020. While some analysts were calling for gold to keep marching higher, it went the other way.

Gold began 2021 trading at US$1,899 per ounce. By 29 September it had slid down to US$1,726 per ounce, a loss of 9.2% for the year and down 15.2% from the record high.

Since then, gold’s been trending slightly higher, currently worth US$1,761 per ounce. But that hasn’t been enough to lift the top ASX 200 gold shares back into the green in 2021.

How have these ASX 200 gold shares been performing?

To give you some idea of the impact of the sluggish gold price, we’ll look at the price moves of 3 leading ASX 200 gold shares.

Newcrest Mining Ltd (ASX: NCM) kicked off 2021 trading for $27.01 per share. Today the Newcrest share price is $24.28, down 10.1% year-to-date. In line with the rising gold price in recent days, Newcrest’s shares are up 4.3% over the past 5 days.

Evolution Mining Ltd (ASX: EVN) opened the calendar year trading for $5.30 per share. The Evolution share price has since fallen 28.9%, currently trading for $3.75. As we saw with Newcrest, Evolution’s shares have gained 1.4% over the last 5 days.

Rounding out our list of ASX 200 gold shares is Northern Star Resources Ltd (ASX: NST). The Northern Star share price opened on 4 January at $13.29 per share. At time of writing Northern Star shares are worth $9.40, down 29.3% year-to-date. Northern Star is also in the green over the past 5 days, up 2.2%.

Which brings us to…

Could renewed inflation fears rekindle these ASX 200 gold shares?

Gold is often viewed as a hedge against inflation. Meaning that investors tend to see it as a stable asset to own when fiat currencies are losing value each year.

Although the correlation isn’t perfect, bullion prices tend to rise when inflation spikes. And a growing number of economists are speculating that the inflation the world is witnessing, particularly for energy and many essential metals (not to mention housing), could be longer lasting than first hoped.

That’s seen central banks from Europe to the United States and even Japan, mulling potential rate hikes sooner than planned.

As the Australian Financial Review reports, “the Bank of England [is] setting the stage to be the first major central bank to hike rates since the pandemic hit”. The article notes that:

Futures markets are betting the Bank of England will lift interest rates from 0.1 per cent on November 4 to 0.25 per cent, following South Korea, Norway and New Zealand. They are pricing in a 90 per cent chance of a 15 basis points rate hike by the BoE before the end of the year, and two more increases next year.

Inflation concerns and potential rate rises haven’t yet had a major impact on the gold price or ASX 200 gold shares. But they have seen US 10-year Treasuries reach a 4-month high of 1.62%. The Aussie government 10-year bond yields have ramped up to 1.77%.

Inflation is even impacting Japan, a nation which has long battled deflationary forces.

Bloomberg notes that, “Japan’s consumer prices stopped falling in August for the first time in 13 months, ending the country’s longest deflationary stretch since 2011.”

According to Katsutoshi Inadome, a strategist at Mitsubishi UFJ Morgan Stanley Securities:

Japan’s breakeven is unlikely to fall immediately as it typically tracks the US breakeven inflation rate which is also on the rise. US inflation worries are lingering with the rise in commodities prices and supply constraints.

As for gold?

Ole Hansen, head of commodity strategy at Saxo Bank said:

Gold remains stuck in neutral as attempts to catch a bid on the back of surging energy prices have so far failed. A bigger-than-expected CPI print could be the trigger needed to send it through resistance.

The consumer price index (CPI) print Hansen refers to relates to US inflation. That data will be out today (overnight Aussie time).

If inflation appears to be running hotter than forecast, gold prices could benefit. And that should come as good news for ASX 200 gold shares.

The post Could renewed inflation fears rekindle these ASX 200 gold shares? appeared first on The Motley Fool Australia.

Wondering where you should 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 could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 sell today

Business man marking Sell on board and underlining it

Yesterday I looked at three ASX shares brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below. Here’s why these brokers are bearish on these ASX shares:

Ansell Limited (ASX: ANN)

According to a note out of Macquarie, its analysts have downgraded this health and safety solutions company’s shares to an underperform rating with a $32.00 price target. The broker made the move on the belief that demand for PPE is softening. Unlike in FY 2021 when demand was very strong, Macquarie feels this will make it hard to lift prices to offset increasing costs. As a result, its analysts suspect that Ansell could fall short of the market’s earnings estimates in FY 2022. The Ansell share price is trading at $32.26 today.

Commonwealth Bank of Australia (ASX: CBA)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating and $90.00 price target on this banking giant’s shares. The broker notes that CBA’s total loan book has significant exposure to the housing market. In light of this, it has concerns that recent changes by APRA could lead to lower housing loan approvals and hit the bank’s revenue and earnings. The CBA share price is fetching $103.34 today.

Platinum Asset Management Ltd (ASX: PTM)

Analysts at Credit Suisse have retained their underperform rating and cut the price target on this fund manager’s shares to $3.20. This follows the release of Platinum’s latest funds under management update which revealed another sizeable outflow. Unfortunately, Credit Suisse believes this trend could continue for some time. It fears this could weigh on its earnings in the near term. The Platinum share price is trading at $3.27 on Wednesday afternoon.

The post Leading brokers name 3 ASX shares to sell today appeared first on The Motley Fool Australia.

Wondering where you should 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 could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

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. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ansell 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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What these top brokers are saying about the Westpac (ASX:WBC) share price

A young boy wearing a red blindfold knocks the stuffing out of a pinata.

The Westpac Banking Corp (ASX: WBC) share price is edging lower in afternoon trade. Westpac shares are now changing hands at $25.26.

This continues its struggles over the past month. Over that period Westpac shares are 1.46% in the red.

What’s up with the Westpac share price lately?

Westpac shareholders have been sailing choppy seas over the last few weeks. They have been watching their shares trade in a range of $24.91 to $26 since 16 September.

The company took a hit at the time, on the back of a third rates cut it made to its savings account products.

The banking giant trimmed the interest rates on its LifeSavings products by 0.5% for some account holders, and 0.1% for all others.

Investors punished the company on the back of the news, sending its share price 4% lower the following week.

After making a swift recovery to its former highs, the Westpac share price took another hit on 11 October. The company announced a series of items that are set to impact its performance in the second half.

These “notable items” will set the banking giant back $1.3 billion on its net profit and cash earnings guidance for H2 2022, according to the company.

Specifically, the impairments comprise a blend of asset writedowns in its institutional banking unit ($965 million); provisions for liabilities such as refunds and litigation ($172 million); and transaction costs associated with recent divestments ($291 million combined).

Westpac understands this will have a net 15 basis point effect on its CET 1 capital ratio requirements.

Will these headwinds continue to plague the company? These leading brokers have weighed in on the debate to offer their opinion on the Westpac share price.

Can Westpac rebound from these pressures?

Analysts at investment bank Macquarie Group think it might not be such smooth sailing for Westpac to get out of the current situation.

The broker was curious about Westpac’s decision to write down the value of its institutional banking unit’s goodwill as part of its earnings management.

Macquarie does note, however, that Westpac’s earnings have been on the slide over several periods. It reckons “earnings are likely to remain under pressure” for the company.

Morgan Stanley’s investment crew has also weighed in. They say Westpac’s earnings down step was substantially larger than its internal forecasts of $261 million.

The broker looks at Westpac’s FY22 earnings guidance and off-market buyback as key inflection points for Westpac’s share price. Morgan Stanley has wound back its price target by 1% to $28.90.

Despite this, it maintains an overweight rating on the company’s shares.

Finally, leading broker Citi has chimed in and believes Westpac’s announcement could be a roadblock for the company’s management outfit.

This is especially true given Westpac management’s efforts to re-establish credibility and lay out its growth vision for the future, Citi says. Citi downgrades its modelling by $1.3 billion, or 20%, as a result.

Westpac shares are up 31% this year to date, after sliding 2% into the red this past week of trading.

The post What these top brokers are saying about the Westpac (ASX:WBC) share price appeared first on The Motley Fool Australia.

Should you invest $1,000 in Westpac Banking Corp right now?

Before you consider Westpac Banking Corp, 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 Westpac Banking Corp 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

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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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