Day: August 21, 2022

2 excellent ASX growth shares that analysts say are buys

A couple are shocked and elated at the good news they've just seen on their devices.

A couple are shocked and elated at the good news they've just seen on their devices.

The Australian share market is home to a number of companies with the potential to grow at a strong rate in the future.

Two such shares that analysts rate highly are listed below. Here’s what you need to know about these ASX shares:

Allkem Ltd (ASX: AKE)

The first growth share that is rated highly is this leading lithium miner.

Allkem, which is the result of the merger of Galaxy Resources and Orocobre, owns a collection of high-quality assets including Olaroz, Mt Cattlin, and the Sal de Vida brine project.

Thanks to strong lithium prices due to growing demand and tight supply, Allkem has delivered significant sales and earnings growth in FY 2022. Pleasingly, this is expected to continue in FY 2023 thanks to ongoing strength in prices, the end of older supply contracts at much lower prices, and increasing production.

Looking further ahead, management intends to grow its production three-fold by 2026 and command a 10% share of global lithium production over the long term. This bodes well for its earnings growth in the future.

Morgans is a big fan of the company. It has an add rating and $16.72 price target on its shares. This compares favourably to the latest Allkem share price of $12.34.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Another ASX growth share to look at is this pizza chain operator.

Over the last decade, Domino’s has been growing at a consistently solid rate thanks to the popularity of its offering and the expansion of its footprint.

And while FY 2022 is likely to be a disappointing year due to a number of headwinds, its future remains very positive. Particularly given how it plans to more than double its ~3,000 store network over the next decade in existing markets.

Citi remains positive on the company and recently retained its buy rating and $92.95 price target on the company’s shares. This implies major upside potential from the current Domino’s share price of $70.26.

The post 2 excellent ASX growth shares that analysts say are buys 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 over ten 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

See The 5 Stocks
*Returns as of August 4 2022

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Motley Fool contributor James Mickleboro has positions in Allkem Limited. 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 Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Why has the Core Lithium share price rocketed 50% in a month?

A happy miner pointing.A happy miner pointing.

What a month it’s been for Core Lithium Ltd (ASX: CXO) shareholders.

After touching a low of 90 cents on 18 July, the ASX lithium producer’s shares rebounded to a record high of $1.665 on Tuesday.

Despite some retracement, the Core Lithium share price is still up by 47.3% in a month, after its shares closed on Friday at $1.40.

Let’s take a look at what’s been driving the company’s shares lately.

Core Lithium shares continue to surge

In mid-July, short bets against the sector were at their highest as economists forecasted a gloomy economic outlook. By 18 July, more than 8% of Core Lithium shares were being shorted.

However, a recent recovery in the market has prompted investors to close on their positions, which is positively impacting the Core Lithium share price.

Last week, the Australian Securities & Investments Commission (ASIC) released its short position report. It revealed that around 5.6% of Core Lithium shares were held in short positions.

Furthermore, an uptick across the lithium sector appears to be supporting Core Lithium shares.

Shares in lithium rivals Lake Resources NL (ASX: LKE) and Liontown Resources Ltd (ASX: LTR) are also up 94% and 63% in a month, respectively.

Core Lithium provided an update on its exploration activities this week, highlighting its progress at the Finniss Lithium Project and Anningie-Barrow Creek Project.

The news drove its shares 9.86% higher at the time.

With the company targeting the first production of spodumene concentrate by the end of 2022, this could bode well for its share price in future.

Core Lithium share price summary

Over the past 12 months, the Core Lithium share price has continued its upward trend to post a 324% gain.

In comparison, the S&P/ASX 200 Materials Index (ASX: XMJ) sector is flat over the same time frame.

Based on today’s price, Core Lithium commands a market capitalisation of roughly $2.42 billion.

The post Why has the Core Lithium share price rocketed 50% in a month? 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 over ten 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

See The 5 Stocks
*Returns as of August 4 2022

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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 Scott Phillips.

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How close is ASX tech share Novonix to becoming profitable?

Female worker sitting desk with head in hand and looking fed upFemale worker sitting desk with head in hand and looking fed up

Once upon a time, Novonix Ltd (ASX: NVX) shares were valued at $12.47. However, that was more than eight months ago — in a far different environment to what we know today.

Indeed, the battery technology company joined countless other unprofitable shares which were catapulted to all-time highs amid rampant speculation. Loose monetary policy, in the form of ultra-low interest rates, fuelled such investments into the stratosphere.

Yet, here we are less than a year later with a Novonix share price that is one-quarter of its former glory. Undoubtedly, the ‘cheap money’ tap has been turned off amid the reinstitution of interest rate increases by central banks.

Unremarkably, it’s companies caught without a positive cash flow machine of their own that have suffered the most. Unfortunately for Novonix shareholders, the once high-flying company is a member of that camp.

Cash earner or burner?

Considering profits hold greater importance in this environment, how close is Novonix to profitability? To answer that question, let’s take a look at the company’s latest quarterly activities report.

On 27 July, ASX-listed Novonix served up its accounts for the quarter ending 30 June 2022. According to the release, the battery and materials company collected $2.55 million in receipts from customers. This brought the value over the last 12 months to $9.03 million.

However, staff costs alone consumed $4.52 million in the quarter. Once other costs are added in, such as research and development, admin and the rest, Novonix’s operational cash flow for the quarter finishes up at a $7.96 million outflow.

In short, Novonix chewed through $4.75 million in the last quarter. Fortunately, the company has a considerable stash of cash, sitting at $207.08 million even after the June quarter.

Can Novonix become a profitable ASX company?

No one can predict the future, not even Novonix itself. But what is the game plan for potential future profitability? Well, it comes down to the success of the company’s synthetic graphite.

Ultimately, Novonix needs to scale its production of synthetic graphite over the coming years to increase revenue. If successful, there is some possibility that the business can achieve scale, and revenue will exceed expenses.

However, scaling takes time. At present, Novonix plans to produce 10,000 metric tonnes by 2023. Further plans would see production increase to 40,000 tonnes by 2025 and 150,000 tonnes by 2030.

As a result, ASX-listed Novonix will likely rely on its cash pile to see it through the near term. The Novonix share price is down 76% since the beginning of the year.

The post How close is ASX tech share Novonix to becoming profitable? 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 over ten 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

See The 5 Stocks
*Returns as of August 4 2022

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Motley Fool contributor Mitchell Lawler 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 Scott Phillips.

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Top brokers name 3 ASX shares to buy next week

Broker written in white with a man drawing a yellow underline.

Broker written in white with a man drawing a yellow underline.

Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Mineral Resources Limited (ASX: MIN)

According to a note out of Citi, its analysts have retained their buy rating and lifted their price target on this mining and mining services company’s shares to $76.00. The broker has become even more bullish on the company due to its belief that lithium prices will be higher for longer. This has led to Citi upgrading its earnings estimate materially for the coming years. And with Mineral Resources expected to provide an update on its lithium operations with its results next week, the broker suspects that consensus earnings estimates may need to be bumped higher. The Mineral Resources share price ended the week at $60.90.

Redbubble Ltd (ASX: RBL)

A note out of Morgans reveals that its analysts have retained their add rating but cut their price target on this ecommerce company’s shares to $1.65. The broker notes that Redbubble’s shares were sold off after its full year results following concerns about elevated operating expenses. While this is disappointing and the broker has adjusted its forecasts and valuation to accordingly, it still sees plenty of value in its shares at the current level. The Redbubble share price was fetching 93 cents at Friday’s close.

Treasury Wine Estates Ltd (ASX: TWE)

Analysts at Macquarie have upgraded this wine giant’s shares to an outperform rating with an improved price target of $15.00. This follows the release of a solid full year result for FY 2022 that was ahead of expectations. Macquarie was impressed with the success of Treasury Wine’s premiumisation of its portfolio and its transition away from China. This has led to the broker lifting its earnings estimates. It is now forecasting solid growth in the coming years. The Treasury Wine share price ended the week at $13.42.

The post Top brokers name 3 ASX shares to buy next week 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 over ten 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

See The 5 Stocks
*Returns as of August 4 2022

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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. has positions in and has recommended REDBUBBLE FPO. The Motley Fool Australia has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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