Day: August 30, 2022

Guess which ASX 200 company bought over $65 million of De Grey shares in August

Gold bars and Australian dollar notes.

Gold bars and Australian dollar notes.

The De Grey Mining Limited (ASX: DEG) share price is having a tough year.

Since the start of 2022, the gold developer’s shares have lost 27% of their value.

While clearly there have been a lot of sellers of its shares, recently there has been a notable buyer of them.

Who is buying De Grey shares?

This week it was confirmed that ASX 200 gold miner Gold Road Resources Ltd (ASX: GOR) has been topping up its holding in De Grey Mining.

According to the release, Gold Road, via its wholly owned subsidiary Renaissance Resources, acquired an additional stake in De Grey Mining earlier this week under an equity collar agreement with Credit Suisse. The company agreed to pay approximately $1.00 per share for the parcel of 65,938,098 shares.

This ~$66 million deal increased its interest in De Grey Mining to 19.99%.

Is a takeover looming?

While you could never rule out a takeover being made, that’s not the intention at this point. The company explained:

This intended acquisition of further shares in DEG is consistent with Gold Road’s stated strategy to grow and diversify its growth pipeline. At this stage, this shareholding is seen as a long-term investment and Gold Road does not intend to make a takeover bid or other offer for DEG, but Gold Road reserves its right to do so and to make further investments in DEG at any time.

Gold Road certainly is no stranger to takeovers. Earlier this month the company completed the acquisition of DGO Gold via an all-scrip deal valuing the transaction at approximately $250 million.

It was also chasing Apollo Consolidated last year before being outbid by fellow gold miner Ramelius Resources Limited (ASX: RMS).

The post Guess which ASX 200 company bought over $65 million of De Grey shares in August 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

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*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 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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Will this build value for NAB shareholders or alienate the bank’s customers?

a couple consider the advice from a man with documents laid out on a table and the man holding a tablet in his hand.

a couple consider the advice from a man with documents laid out on a table and the man holding a tablet in his hand.

National Australia Bank Ltd (ASX: NAB) shares are in focus as the big four ASX bank share looks to try to win over some new customers.

According to reporting by news.com.au, NAB has decided to reduce its variable home loan rate by 30 basis points. That means it’s a decrease of 0.30%.

However, that decrease isn’t for all customers. It’s reportedly just for new customers only. Existing customers are seeing their mortgage rates soar as the big four ASX bank shares pass on the Reserve Bank of Australia’s (RBA) interest rate rises.

Is this a good thing or a bad thing?

The media outlet news.com.au reported comments by Rate City research director Sally Tindall who implied that NAB (and others) may essentially be charging customers a loyalty tax for sticking with the bank.

Tindall said:

Log on to your banking app and check what rate you’re paying. While you’re there, work out the exact name of your loan.

Then look at your bank’s website to see what rate it’s offering new customers.

With refinancing at record highs and billions of dollars’ worth of fixed loans coming to an end, lenders are cutting variable rates to attract new borrowers.

If you think as a loyal, long-serving customer your bank is doing right by you, double check that’s actually the case. The results could surprise you.

But, for new customers, it could be a positive.

Is NAB losing market share?

According to research from Macquarie Research and APRA, NAB is the only big bank that gained housing market share over the 12 months to July 2022. Its housing market share increased by just under 20 basis points, while CBA’s housing market share dropped more than 10 basis points. At the same time, Westpac’s housing market share fell almost 100 basis points and ANZ’s market share has fallen more than 100 basis points.

The CEO of Liberty Financial Group Ltd (ASX: LFG), James Boyle, suggested that smaller lenders might be able to gain ground on the big banks. This comes as falling house prices could mean some customers are deemed too risky for major banks as they focus on the safest type of borrowers, according to reporting by the Australian Financial Review.

Boyle noted that there is “vigorous competition for mainstream customers with low loan to value ratios, strong earnings and who are a great credit”. He also suggested there could be even stronger competition for that type of borrower.

Is the NAB share price a buy?

Brokers are a bit mixed on the big four ASX banks at the moment. There is a general view that higher interest rates will help bank profitability, translating into better net interest margins (NIMs). However, there is also a concern that higher interest rates could lead to higher bad debts over time.

Morgan Stanley currently has an ‘equal-weight’ rating on NAB, with a price target of $27.20. That implies a drop of almost 10%.

But Ord Minnett has an ‘accumulate’ rating on NAB. The price target is $32.70 which implies a rise of around 9%. It thinks that NAB’s revenue can keep growing well in the short term.

The post Will this build value for NAB shareholders or alienate the bank’s customers? appeared first on The Motley Fool Australia.

Should you invest $1,000 in National Australia Bank Limited right now?

Before you consider National Australia Bank Limited, 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 National Australia Bank Limited wasn’t one of them.

The online investing service he’s run for over 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.

See The 5 Stocks
*Returns as of August 4 2022

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Motley Fool contributor Tristan Harrison 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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Why is the next IAG dividend not fully franked?

A woman has a thoughtful look on her face as she studies a fan of Australian 20 dollar bills she is holding on one hand while he rest her other hand on her chin in thought.A woman has a thoughtful look on her face as she studies a fan of Australian 20 dollar bills she is holding on one hand while he rest her other hand on her chin in thought.

Investors might wonder why the next Insurance Australia Group Ltd (ASX: IAG) dividend is not fully franked.

The 5 cents per share that is due to be paid to shareholders on 22 September will only be franked by 70%.

One possible reason why the IAG dividend is not fully franked is due to the ups and downs the general insurance company has gone through over the last couple of financial years.

In FY21, the business reported a $427 million loss. Earnings bounced back sharply in FY22, though, with net profit after tax (NPAT) reaching $347 million.

The company could therefore be in the process of returning value back to investors gradually as it recovers from the economic tremors of COVID-19.

Something to keep in mind, too, is that the interim dividend of 6 cents per share — giving a full-year dividend of 11 cents per share — paid out in March was unfranked.

In FY21, or the same year IAG recorded a huge loss, its full-year dividend of 20 cents was also unfranked.

In FY20, just after the peak of the pandemic, the company didn’t pay out a final dividend to investors at all, and paid a 10 cent interim dividend, 70% franked.

It should be noted that, until recently, it was unusual for IAG’s dividend to be partially franked, as its interim and final dividends have been fully franked from March 2001 up until August 2018.

The 5 cents per share dividend is also the lowest level since March 2012, with dividends normally fluctuating in the 15 cents to 20 cents range or higher from September 2013 to October 2018.

So FY22’s franking of 70% could be seen as a significant improvement over the last couple of years, at least from a franking perspective. And as life moves on from the new normal, investors may look forward to higher and fully franked dividends in the future.

IAG share price snapshot

The IAG share price closed 2.18% higher today at $4.69. That takes its gains in 2022 so far to more than 5%.

Meanwhile, the broader market is struggling, with the S&P/ASX 200 Index (ASX: XJO) down almost 8% over the same period.

IAG has a market capitalisation is $11.31 billion.

The post Why is the next IAG dividend not fully franked? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Insurance Australia Group Limited right now?

Before you consider Insurance Australia Group Limited, 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 Insurance Australia Group Limited wasn’t one of them.

The online investing service he’s run for over 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.

See The 5 Stocks
*Returns as of August 4 2022

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Motley Fool contributor Matthew Farley 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 positions in and has recommended Insurance Australia Group 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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The Hastings Technology share price has rocketed 24% in a week. What’s going on?

a man in a high visibility vest and hard hat holds a thumbs up at a mine site with heavy equipment in the background.a man in a high visibility vest and hard hat holds a thumbs up at a mine site with heavy equipment in the background.

The Hastings Technology Metals Ltd (ASX: HAS) share price has soared in the past week.

Shares in the rare earth explorer have jumped almost 24% from $4.39 at market close on 23 August to $5.44 at today’s close.

Let’s take a look at why Hastings Technology shares have leapt this past week.

Rare earths deal

Hastings Technology is a rare earths company exploring the Yangibana and Brockman projects in Western Australia.

Investors bought up Hastings Technology shares amid acquisition news and a $150 million investment from Wyloo Metals. Wyloo Metals is part of Andrew ‘Twiggy’ Forrest’s investment holding company Tatterang.

Hastings Technology is proposing to acquire a 22.1% share of Neo Performance Materials Inc (TSX: NEO). Neo is a rare earths processing company and permanent magnets producer listed on the Toronto Stock Exchange. Hastings has entered into a binding share purchase agreement to acquire 8,974,127 shares in Neo.

To fund this acquisition, Wyloo Metals has committed to invest $150 million in Hastings via exchangeable notes. These can be converted to Hastings shares for $5.50 each. Wyloo will also be able to nominate a director to the Hastings board as part of the deal.

Commenting on the news, Hastings executive chairman Charles Lew said:

The acquisition of the Neo stake represents an important strategic milestone for Hastings…

We are also thrilled to welcome the support of and strategic investment by Wyloo Metals.

Meanwhile, Datt Capital chief investment officer Emanuel Datt has recently named Hastings among five ASX shares that could rise if China restricts rare earths supply to countries it disagrees with in the future. China currently supplies 80% of the world’s rare earths.

Share price snapshot

The Hastings Technology share price has surged 36% in the past year, while it has climbed nearly 5% year to date.

In the past month, Hastings shares have lifted 33%.

Hastings has a market capitalisation of about $552 million based on the current share price.

The post The Hastings Technology share price has rocketed 24% in a week. What’s going on? 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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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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