Stock Pick

Month: October 2022

  • Why Bitcoin and Ethereum are rising today

    This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

    Green arrow with green stock prices symbolising a rising share price.

    This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

    What happened

    Several cryptocurrencies rallied Tuesday morning based on buyers’ hopes that the Federal Reserve, which has been aggressively raising interest rates this year, could ease back a bit from its hawkish monetary policy.

    As of 10 a.m. ET, the price of the world’s largest cryptocurrency by market cap, Bitcoin (CRYPTO: BTC), was up by 4.8% over the previous 24 hours, hovering around $20,000. The world’s second-largest cryptocurrency, Ethereum (CRYPTO: ETH), was 4.2% higher, and the price of XRP (CRYPTO: XRP) was up 6.8%.

    So what

    Investors have the Reserve Bank of Australia to thank for sending stocks and cryptos higher Tuesday morning after it raised its benchmark rate by 25 basis points (0.25 percentage points) when most experts had expected a 50-basis-point hike. Philip Lowe, governor of the Reserve Bank of Australia, attributed the smaller move to the fact that policymakers have already hiked rates “substantially in a short period of time.”

    Furthermore, Lowe and his colleagues are starting to get concerned about the economic outlook and how these rate hikes will affect consumers once their full impact is realized.

    “One source of uncertainty is the outlook for the global economy, which has deteriorated recently. Another is how household spending in Australia responds to the tighter financial conditions,” Lowe said in a statement. “Higher inflation and higher interest rates are putting pressure on household budgets, with the full effects of higher interest rates yet to be felt in mortgage payments.”

    Fast-rising interest rates have been a massive headwind for crypto and most other risky assets, and have prompted huge declines in their valuations. The U.S. Dollar Index, which tracks the U.S. dollar against other currencies, has also fallen in recent days. That’s another positive for crypto because Bitcoin tends to have an inverse relationship with the dollar.

    Despite the news out of Australia, the Federal Reserve is still expected to implement two more big rate hikes before the year ends, although it is possible that plan will change as new data on inflation comes in.

    In other news, XRP, the cryptocurrency developed by the founders of Ripple Labs, continues to make gains as it barrels toward what looks to be a favorable outcome in a nearly two-year legal battle that could soon be coming to a conclusion.

    The Securities and Exchange Commission (SEC) sued Ripple Labs in 2020 for not registering XRP as a security when it raised funds in 2013, and for not providing enough transparency to investors. But it seems like the SEC is starting to back off. Last month, both Ripple and the SEC submitted filings asking the U.S. District Court for the Southern District of New York to make a summary judgment on the case.

    Recently, Judge Analisa Torres ruled that the SEC needs to release documents from a former director, who may have previously written in a speech that he does not believe Ethereum is a security — a piece of evidence that Ripple believes is vital to its case.

    Furthermore, SEC Chairman Gary Gensler said at a recent conference that he thinks Bitcoin and Ethereum should be regulated by the Commodities Futures Trading Commission, which crypto advocates would prefer to them being regulated by the SEC.

    Now what

    While I am not convinced that the Reserve Bank of Australia’s smaller-than-expected rate hike means the U.S. Federal Reserve will ease up in its war on inflation, I’m hopeful that we’ll see a more positive inflation report on Oct. 13, which could help the narrative.

    Still, I’ve been impressed with Bitcoin’s ability to hang around the $20,000 level, and I ultimately think Bitcoin and Ethereum will prove to be good long-term buys. I also think XRP is headed toward victory in its nearly two-year-long legal battle, which bodes well for that token. 

    This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

    The post Why Bitcoin and Ethereum are rising today appeared first on The Motley Fool Australia.

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    Bram Berkowitz has positions in Bitcoin, Ethereum, and XRP. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.  

    This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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  • Go home, ASX. You’re drunk…

    A young man in a blue suit sits on his desk cross-legged with his phone in his hand looking slightly crazed.A young man in a blue suit sits on his desk cross-legged with his phone in his hand looking slightly crazed.

    Go home, ASX. You’re drunk.

    Frankly, I could have written that at many points in the last 6, 12 or even 18 months as shares ducked and weaved – lower – and been correct.

    But I’m a shares guy. And people assume if I’m taking exception to share price falls, I’m just talking my book, or cheering for my side, or whatever.

    I hope most of my readers know I’m a straight-shooter, but if you’re new around here, I wouldn’t blame you for thinking I could be as conflicted as the next guy or girl.

    So… I waited until a day like yesterday (and, probably today) to say it: Go home, ASX. You’re drunk.

    Not literally, of course (though maybe there should be random breath testing on trading floors after lunch!)

    But metaphorically.

    A jump of 3.7%, like we saw on the ASX yesterday, is… not rational. 

    (This chart was done before the market closed… and it went higher after that!)

    Sure, some of you are thinking ‘don’t question it, Phillips. Just take the money!’, and I can’t blame you.

    But if we cast an uncritical eye on the gains, we can get ourselves in all sorts of trouble.

    We can become the sort of people who take credit for the good times, but blame others for the bad.

    We can become people who think the only good outcomes are the ones we agree with, and everything else is a conspiracy.

    You get the idea.

    So while I’m always happy to see my portfolio grow in size (and doubly after the last 12 months or so of falling share prices, especially for growth companies), I want to keep balanced – and to help you do the same.

    So, let’s put a 3.7% gain in perspective.

    Over the last 30 years, the ASX has gained an average of 9.0% per year.

    In other words, in a single day, the ASX jumped by 41% of an average year’s return.

    (And when you consider that dividends are a large chunk of that 9% return, yesterday’s jump probably represents well more than half of an average year’s capital gain!)

    Does it seem logical to you that such a one-day gain would make sense, in the cold light of day?

    Me either.

    And yes, falls of a similar magnitude are usually overdone, too!

    Days like these have only one rationale: emotion.

    Sometimes irrational exuberance.

    Other times, irrational fear.

    But irrational, in either case.

    Because remember, a share price is – should be – the sum total of all future per-share cash flows, earned by a company, totalled up (and then discounted because $1 today is worth more than $1 in 20 years time, thanks to inflation and other things).

    So, when JB Hi-Fi Limited (ASX: JBH)’s shares jumped 6% yesterday, that implies that the total future cash flows of that business are going to be 6% higher.

    Not tomorrow. Not next week, next month or next year.

    Forever.

    Now, forever is a long time.

    So let’s wind it back a little.

    Last year, JB earned $5.50 per share in cash flow, according to CommSec.

    Let’s say it grows at a modest 5% per year, from here, over the next 10 years.

    I’ll save you the maths and just tell you that (without discounting it back) that’s $96 over the next decade.

    Does anyone really think that between 10am and 4pm yesterday, that jumped to $102?

    That somehow, something happened yesterday that’ll send 6% more people into one of their stores?

    Yes, yes, the RBA raised by less than expected.

    But the market was already up 2% by then.

    And do you really reckon that anyone who placed a trade for JB Hi-Fi’s shares yesterday can accurately predict what’s going to happen to interest rates over the next 9 years and 11 months?

    Me either.

    So, yeah. A 3.7% move in a single day is almost always silly.

    And it tells you more about the emotion of the market, than with the fundamentals of a business.

    By all means, enjoy the good days. And bear with the bad days.

    But don’t fall into the trap of letting them tell you anything about the quality or valuation of those businesses!

    Fool on!

    The post Go home, ASX. You’re drunk… appeared first on The Motley Fool Australia.

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    Motley Fool contributor Scott Phillips 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 JB Hi-Fi 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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  • Link share price jumps 7% on new buyout offer

    a woman drawing image on wall of big fish about to eat a small fish

    a woman drawing image on wall of big fish about to eat a small fish

    The Link Administration Holdings Ltd (ASX: LNK) share price is racing higher on Wednesday.

    In morning trade, the administration services company’s shares are up 7% to $3.12.

    Why is the Link share price racing higher?

    The Link share price is on the rise today after the company responded to speculation that it has received another proposal from Dye & Durham.

    According to the release, on this occasion, Dye & Durham wasn’t targeting the whole business. Instead, it has set its sights on the Corporate Markets business and parts of the BCM business.

    The suitor made a confidential non-binding, conditional, and indicative proposal of $1.1 billion in cash and on a cash and debt free basis. This follows a proposal from Dye & Durham last week to acquire Link’s Corporate Markets business for A$950 million.

    The release explains that the proposal was subject to due diligence, negotiation of transaction documentation, and regulatory approvals. However, unfortunately for Dye & Durham, Link wasn’t biting with this proposal or the previous one and rejected them both.

    Another new offer

    This morning, Dye & Durham returned the table yet again with an improved offer, which remains under consideration.

    A further confidential non-binding, conditional and indicative proposal has been made to acquire Link’s Corporate Markets business and all of the BCM business for total cash consideration of $1.27 billion on a cash and debt free basis.

    The Link board advised that it will consider Dye & Durham’s third proposal, including obtaining advice from its financial, legal and tax advisers, and will provide shareholders with an update during the next week.

    Third time lucky for Dye & Durham? Time will tell.

    The post Link share price jumps 7% on new buyout offer appeared first on The Motley Fool Australia.

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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 Link Administration Holdings Ltd. 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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  • If I’d invested $1,000 in Allkem shares at the start of 2022, here’s what I’d have now

    Young boy wearing suit and glasses counts his money using a calculator.Young boy wearing suit and glasses counts his money using a calculator.

    The Allkem Ltd (ASX: AKE) share price has been up, down, and back up again in 2022.

    But those who invested in the lithium producer at the start of the year have so far come out on top. Though, they might have experienced a few restless nights during that time.

    At its lowest point of 2022, Allkem shares had plunged 23% year to date. Luckily, that dip has since corrected itself. Indeed, the stock surged to a new record high of $16.08 in mid-September.

    But are Allkem shares a good investment?

    No pain, no gain

    Let’s imagine that I had invested $1,000 in Allkem shares on the first trading day of this year. That likely would have seen me walk away with 89 shares, having paid $11.20 apiece.

    So far, my pretend investment has been a good one. Those 89 shares would have been worth approximately $1,290 at Tuesday’s close.

    That’s a better result than if that same $1,000 had tracked the S&P/ASX 200 Index (ASX: XJO). The index has dumped 10.5% so far this year, meaning my initial investment would be worth just $895 today.

    However, at the Allkem share price’s February trough, my 89 shares would have been valued at around $770 – a notably disappointing short-term investment.

    It’s also worth noting that the company isn’t a dividend payer. Thus, investors haven’t received a portion of its profits to add to their investment’s returns.

    So, with my imagined investment having flourished this year, albeit with some notable rough patches, would now be a good time to buy into the stock in reality?

    Could Allkem shares offer more upside still?

    It hasn’t only been the Allkem share price posting a strong performance in 2022. The company has also been on a roll.

    It revealed record earnings in August, bringing in a US$605 million gross profit for financial year 2022. And more great things are expected for the company’s future.

    The lithium company plans to triple its production by 2026. On top of that, the Australian government expects lithium prices will surge in the near future amid increasing demand, as my Fool colleague Bernd reports.

    Thus, on paper, the future looks remarkably bright for the Allkem share price. And I’m not alone in thinking so.

    Allkem is broker Wilsons’ preferred lithium buy. The expert likes the company’s geographic diversity and its position as one of the world’s major producers, The Motley Fool Australia’s James reports.

    Meanwhile, Macquarie reportedly has an outperform rating and a $21 price target on the stock, representing a potential 44% upside on its previous close. And Bell Potter is said to be even more bullish, tipping Allkem shares to gain 49% to reach $21.58.

    The post If I’d invested $1,000 in Allkem shares at the start of 2022, here’s what I’d have now appeared first on The Motley Fool Australia.

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    Motley Fool contributor Brooke Cooper 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 Macquarie 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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  • Have falling ASX 200 share prices spooked the RBA?

    A man runs away from a large shadow on the wall reaching down with its arms as if to grab him.

    A man runs away from a large shadow on the wall reaching down with its arms as if to grab him.

    The S&P/ASX 200 Index (ASX: XJO) is off to another cracking start today, up 1.8% in early trade.

    This comes after blasting 3.8% higher yesterday.

    If you were following the market moves, you’ll have seen the ASX 200 was already posting one of its best days in years yesterday heading into the afternoon.

    Then, at 2:30pm AEDT, the Reserve Bank of Australia (RBA) gave the markets a huge boost. Rather than announcing a 0.50% interest rate hike, as most analysts had forecast, the RBA took a dovish turn and lifted rates by a more modest 0.25%.

    In response, the ASX 200 gained another 1.1% by the closing bell.

    Which begs the question…

    Did September’s ASX 200 plunge spook the RBA?

    The last two trading days have offered a welcome reprieve from what investors endured in September, when the ASX 200 dropped 7.3% over the month.

    The fall was largely driven by fears that aggressive tightening from the RBA and other leading global central banks would lead Australia and other major economies into a recession.

    And recessions, as you’re surely aware, don’t tend to be good news for equity markets.

    So, is the RBA trying to engineer a soft landing for the economy and the ASX 200?

    Here’s what the experts are saying.

    What the experts are saying

    Vanguard’s senior economist Alexis Gray points to the delicate trade-off the RBA is trying to balance.

    According to Gray (quoted by The Australian Financial Review):

    The RBA chose to slow the pace of rate hikes, acknowledging the bank’s desire to return inflation to target while keeping the economy on an even keel. This hints at the inherent trade-off the RBA now faces to tame inflation without knocking the economy into recession.

    Meantime, Mutual Limited’s chief investment officer Scott Rundell said, “The cash rate is now back around neutral and given the risks of stalling growth, or worse, the bank seems comfortable with smaller rate hikes going forward.”

    And Peter Esho, an economist at Wealthi, added:

    What we’ve seen today is the RBA sending a message that it’s raising rates in a sensible way. Inflation is not the only problem. There is also a growing sense that financial stability is important.

    If the RBA can indeed instil a sense of financial stability amongst skittish investors, the ASX 200 could shake off all the gloomy talk of an impending bear market.

    Of course, by slowing the pace of rate hikes this month, the RBA may be setting the market up for more tightening in 2023.

    Kicking the can down the road?

    ANZ Head of Australian Economics David Plank believes ASX 200 investors should be prepared for some more interest rate hikes next year.

    According to Plank (courtesy of The Australian):

    We remain of the view, however, that the cash rate will need to move into clearly restrictive territory of more than 3% to ensure inflation does return to target. The slower pace of rate hikes now points to the tightening cycle extending into 2023.

    Rate hikes into 2023 could throw up some fresh headwinds for ASX 200 investors.

    But for now, investor sentiment has taken a decidedly bullish turn.

    The post Have falling ASX 200 share prices spooked the RBA? appeared first on The Motley Fool Australia.

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    Motley Fool contributor Bernd Struben 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 Amazon stock popped Tuesday

    This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

    a man wearing spectacles has a satisfied look on his face as he appears within a graphic image of graphs, computer code and technology related symbols while he concentrates on a computer screen

    This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

    What happened

    Shares of Amazon (NASDAQ: AMZN) climbed higher on Tuesday morning, as much as 6.1%. As of market close in the US, the stock was up 4.5%.

    The broader markets rallied Tuesday, which no doubt added fuel to its rise, but another catalyst that helped send the e-commerce giant higher was some bullish commentary by an analyst.

    So what

    Despite the challenges wrought by current macroeconomic conditions, JPMorgan analyst Doug Anmuth noted “increasing interest in select names” across the internet group, as the recent market plunge has resulted in a number of compelling stock buys. One such opportunity is Amazon which remains his “best idea” in the sector. 

    Even with the macro backdrop, unfavorable exchange rates, and the overall underperformance of internet-related stocks, the analyst expects Amazon to deliver acceleration of its year-over-year revenue growth, margin expansion, and slower capital spending. These will combine to drive “significant” free cash flow growth into next year.

    In an unrelated note, Bank of America analyst Justin Post lowered his price targets on both Meta Platforms and Alphabet, citing increasing pressure from Amazon, as the company becomes a growing force in digital advertising. 

    Now what

    Both analysts make good points. Investors had largely written off any future growth by Amazon, following the company’s significant e-commerce gains during the pandemic. However, Amazon CFO Brian Olsavsky said during the second-quarter earnings call that the company had lapped this high-growth period, which should lead to easier comps and higher year-over-year growth rates going forward. 

    Additionally, Amazon is quickly becoming a powerhouse in digital advertising, as its ad revenue grew roughly 21% year over year during the trailing-12-month period, accelerating even as Alphabet’s ad growth slowed and Meta’s declined. 

    Finally, Amazon is selling for a song, at roughly two times next year’s sales, near the company’s cheapest valuation in more than seven years.

    Given Amazon’s dominant position in e-commerce and cloud computing, growing prominence in digital advertising, and bargain-basement price tag, Amazon stock is a clear buy.

    This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

    The post Why Amazon stock popped Tuesday appeared first on The Motley Fool Australia.

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    JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Danny Vena has positions in Alphabet (A shares), Amazon, and Meta Platforms, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, JPMorgan Chase, and Meta Platforms, Inc. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.



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  • Why the Life360 share price is up 17% in two days and could keep rising

    A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price

    A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price

    The Life360 Inc (ASX: 360) share price is charging higher for a second day in a row.

    In morning trade, the location technology company’s shares are up 8% to $5.57.

    This means the Life360 share price is now up 17% over the last two trading sessions.

    Why is the Life360 share price racing higher?

    There are a couple of reasons why investors have been scrambling to buy the company’s shares this week.

    The first is the market rebound, which has been most pronounced in the beaten down tech sector.

    For example, the S&P ASX All Technology index is up 4% today, which means it has rebounded almost 9% over the last two sessions.

    What else is boosting its shares?

    Also giving the Life360 share price a big lift this week was a bullish broker note out of Goldman Sachs on Tuesday.

    According to the note, the broker has initiated coverage on the company’s shares with a buy rating and $7.50 price target. This implies potential upside of 35% for investors over the next 12 months despite its recent rally.

    Goldman commented:

    Life360 is heading into its seasonally strongest quarter and is preparing to launch the integration of Tile within the core Life360 app. Execution risk remains (from a technological and go-to-market standpoint), however we are positive on the potential for an integrated Life360/Tile membership to grow subscriber penetration, pricing and retention over time. We see Life360 as reaching a volume/pricing inflection point, with potential structural profitability tailwinds on the horizon from a reduction in effective app store fees.

    We see scope for re-rating as Life360 demonstrates pricing leverage, improving unit economics and progress to cash flow breakeven in FY23. We value the Subscription business at 5.5x FY24 EV/GP (90% of our EV) in line with freemium app peers.

    All in all, Goldman appears to believe it isn’t too late to jump onboard with this one.

    The post Why the Life360 share price is up 17% in two days and could keep rising appeared first on The Motley Fool Australia.

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    Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Inc. 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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  • Here’s why the Block share price is jumping 9% today

    A woman with strawberry blonde hair has a huge smile on her face and fist pumps the air having seen good news on her phone.

    A woman with strawberry blonde hair has a huge smile on her face and fist pumps the air having seen good news on her phone.

    The Block Inc (ASX: SQ2) share price has been one of the best performers on the ASX 200 on Wednesday.

    In morning trade, the payments company’s shares are up 9% to $96.47.

    This compares favourably to a 1.4% gain by the ASX 200 index this morning.

    What’s going on with the Block share price?

    The Block share price is racing higher on Wednesday following an incredibly strong night of trade for the company’s NYSE listed shares.

    On Wall Street, the Afterpay owner saw its shares jump a whopping 12% last night. This was driven by a broad market rebound, with beaten down tech stocks among the biggest movers.

    For example, the PayPal share price jumped 6.5% and buy now pay later provider Affirm saw its shares rocket almost 14% higher.

    This helped drive the tech-focused NASDAQ index 3.35% higher for the session.

    What else?

    Also giving the Block share price a boost on Tuesday night was a bullish broker note out of Deutsche Bank.

    According to the note, as we reported here, the broker has put a buy rating and US$95 price target on the company’s shares.

    Deutsche Bank has been pleased with the progress the company has made connecting its three ecosystems – Afterpay, Cash App, and Square. It is expecting this to lead to wider adoption and stronger margins.

    Based on current exchange rates, Deutsche Bank’s price target equates to A$146 for its locally listed shares.

    This implies potential upside of 51% for the Block share price on the ASX even after today’s stellar gains.

    The post Here’s why the Block share price is jumping 9% today appeared first on The Motley Fool Australia.

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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 Block, Inc. The Motley Fool Australia has positions in and has recommended Block, Inc. 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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  • Fortescue share price higher on green hydrogen update

    A group of businesspeople hold green balloons outdoors.

    A group of businesspeople hold green balloons outdoors.

    The Fortescue Metals Group Limited (ASX: FMG) share price is pushing higher on Wednesday.

    In morning trade, the mining giant’s shares are up 2% to $17.59.

    Why is the Fortescue share price rising?

    Investors have been bidding the Fortescue share price higher today for a couple of reasons.

    The first is another very positive day of trade on the ASX 200 index following a strong night on Wall Street.

    This has seen fellow mining giants BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) push higher this morning as well, helping take the ASX 200 index 1.4% higher.

    What else?

    Also potentially giving the Fortescue share price a lift today was the release of an announcement relating to its Fortescue Future Industries (FFI) business.

    According to the release, FFI has entered into a global strategic collaboration with energy infrastructure developer Tree Energy Solutions (TES). This collaboration aims to accelerate the development of a world leading green hydrogen and green energy import facility in Germany.

    As part of the agreement, Fortescue will make a 130 million euros (US$127 million) investment. From this, 100 million euros (US$98 million) will be used for the construction of the TES terminal in Wilhelmshaven, Germany.

    FFI will also gain a shareholding in TES and a 30% stake in TES subsidiary Deutsche Grüngas und Energieversorgung. The latter is the project company that will build the TES Green Energy Hub in Wilhelmshaven.

    Fortescue’s executive chairman, Dr Andrew Forrest AO, said:

    The United Kingdom and Europe urgently need green solutions to replace fossil fuels and this investment will enable Europe to do exactly that. Not in 2050, but in four years from now.

    From the beginning of FFI, our philosophy was to drive performance across the entire new renewable GH2 value chain while delivering returns to our shareholders. This investment reinforces this commitment and is a significant step forward in FFI’s journey to become one of the world’s largest green energy producers.

    Where is the money coming from?

    This investment will be funded by FFI’s unutilised capital commitment of US$1.1 billion.

    However, to reflect this investment, the guidance for FFI’s anticipated capital expenditure in FY 2023 has been revised higher to US$230 million from US$100 million. The guidance for FFI’s anticipated operating expenditure of US$500 – US$600 million is unchanged.

    The post Fortescue share price higher on green hydrogen update appeared first on The Motley Fool Australia.

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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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  • Guess how much directors have been spending on AGL shares so far this week

    A young woman sits on her lounge looking pleasantly surprised at what she's seeing on her laptop screen as she reads about the South32 share priceA young woman sits on her lounge looking pleasantly surprised at what she's seeing on her laptop screen as she reads about the South32 share price

    The AGL Energy Limited (ASX: AGL) share price has been on a roll this week, and four of the company’s directors will be benefiting more than they previously would have.

    The insiders snapped up a combined total of 71,500 shares in the S&P/ASX 200 Index (ASX: XJO) energy producer and retailer on Friday.

    The AGL share price last closed at $7.18. That’s 12% higher than it was this time last week.

    The stock appears to have been driven higher as the market digests its $20 billion plan to ditch coal in favour of renewables.

    For context, the ASX 200 has also lifted 3% over the last seven days.

    So, how much have AGL directors poured into the company’s shares this week? Let’s take a look.

    AGL insiders snapped up 70,000 shares on Friday

    AGL directors have been on a buying spree, each directly or indirectly purchasing up to 30,000 shares in the company.

    Here’s a breakdown of all the insider buying that went on at the energy giant on Friday:

    • Newly instated chair Patricia McKenzie indirectly purchased 14,500 AGL shares for an average price of $6.797 a piece
    • New director Miles George led the buying, purchasing 30,000 shares for $6.68 apiece
    • Director Vanessa Sullivan indirectly bought 12,000 AGL shares, securing the best price at $6.60 per stock
    • Finally, Graham Cockroft purchased 15,000 shares for $6.89 apiece

    For those playing along, that means the four forked out a combined total of $481,506.50 for their additional holdings.

    Interestingly, the buying activity came just one day after the company revealed its new path forward.

    Its latest strategy will see it ditching coal by 2036. That’s up to 10 years earlier than was previously planned.  

    To flick the switch on coal, AGL plans to spend $20 billion to increase its renewable and firming capacity – a move that could see Australia’s largest emitter reach net zero.

    The newly revealed strategy follows the company’s failed plan to separate its coal assets from its energy retail arm.

    Based on the recent insider buying, the company’s directors appear hopeful the new plan could help bolster the embattled stock’s future value.

    The AGL share price has dumped 68% over the last five years. Though, it’s currently 14% higher than it was at the start of 2022.

    Comparatively, the ASX 200 has lifted 17% since this point in 2018. Though, the index has fallen 12% year to date.  

    The post Guess how much directors have been spending on AGL shares so far this week appeared first on The Motley Fool Australia.

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    Motley Fool contributor Brooke Cooper 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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