Stock Pick

  • Nio Completes $428M ADS Offering, Stock Now Up 70% YTD

    Nio Completes $428M ADS Offering, Stock Now Up 70% YTDChina’s electric-vehicle maker Nio Inc (NIO) has announced the completion of the offering of 72 million American depositary shares (ADS) at $5.95 per ADS, raising $428.4 million.The company has also granted the underwriters a 30-day option to purchase up to an additional 10.8 million ADSs.Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC and China International Capital Corporation Hong Kong Securities Limited are acting as the joint book-running managers for the ADS offering.NIO plans to use the net proceeds mainly to fund its cash investments in NIO China, as well as other working capital needs.The company “expects NIO China to use the cash investments for research and development of products, services and technology, development of manufacturing facilities and roll-out of its supply chain, operation and development of sales and service network and general business support purpose.”Shares in NIO surged 12% in Monday’s trading, and 2% after-hours following the announcement. This brings the stock’s year-to-date rally to an impressive 70%. As a result the average analyst price target of $5.40 now indicates 21% downside potential from current levels.This comes with a cautiously optimistic Moderate Buy Street consensus. Merrill Lynch’s Ming-Hsun Lee is taking a bullish stance, and has just reiterated a NIO buy rating while ramping up the price target from $5.50 to $7.30 (7% upside potential).According to Lee, Nio is now enjoying stronger orders and should benefit from China’s favorable EV purchase subsidy scheme. The analyst expects Nio to show vehicle gross profit improvement in Q2, as well as better free cash flow.Indeed Goldman Sachs’ Fei Fang expects NIO to break even in 2022 once it can deliver 10,000 cars per month. Encouragingly, the company recently revealed that it delivered 3,436 vehicles in May 2020, representing a strong 215.5% growth year-over-year. (See Nio stock analysis on TipRanks).Related News: Tesla Sales Triple For China Model 3 Vehicle In May Bankrupt Hertz Tanks 24% Amid Plans To Sell $500 Million In New Shares Can Tesla Provide the Million Mile EV Battery? Top Analyst Weighs In More recent articles from Smarter Analyst: * Delta To Add 1,000 Flights In July; Resuming China Flights Next Week * United Airlines Secures $5 Billion Loan To Shore Up $17 Billion Liquidity Chest * Apple’s App Ecosystem Generated Over Half A Trillion Dollars In 2019 * Bankrupt Hertz Tanks 24% Amid Plans To Sell $500 Million In New Shares

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  • Why I would buy CSL and these ASX blue chip shares

    Pile of blue casino chips in front of bar graph, asx 200 shares, blue chip shares

    Are you looking to add some blue chip shares to your portfolio this month? Then you could do a lot worse than the three ASX shares listed below.

    Here’s why I think these are blue chip shares to buy:

    CSL Limited (ASX: CSL)

    The first blue chip share I would buy is this biotherapeutics company. I believe a recent pullback in its share price has created a buying opportunity for investors. Especially those that are interested in making a long term investment. I believe CSL has an extremely bright future ahead of it thanks to its strong portfolio of therapies and its pipeline of lucrative products. Should some of the latter products hit the market in the future, I believe they have the potential to underpin strong sales and profit growth.

    Macquarie Group Ltd (ASX: MQG)

    Another blue chip ASX share I would buy is Macquarie. I’m a big fan of the investment bank due to the quality and diversity of its operations and its talented management team. And although its near term performance is likely to be impacted by the pandemic, I expect the company to bounce back once the crisis passes. This is just like it has done in the past through similar events like the global financial crisis. Another bonus is that the company’s shares offer a decent estimated forward yield of 3.75%.

    Transurban Group (ASX: TCL)

    A final blue chip share to consider buying is this toll road operator. Transurban owns a number of key toll roads roads in Australia and North America. As you would expect, the pandemic has had a negative impact on its performance this year, with traffic volumes falling heavily. However, with restrictions easing, I expect volumes to start to normalise over the coming months and for its earnings to rebound in 2021. I believe this makes it a good time to pick up its shares with a long term view.

    And here are more highly rated shares to consider adding to your portfolio in June…

    3 “Double Down” Stocks To Ride The Bull Market

    Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.

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    More reading

    James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of Transurban Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Why I would buy CSL and these ASX blue chip shares appeared first on Motley Fool Australia.

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  • UAE Says OPEC+ Deal Will Soon Restore Oil Prices to ‘Normal’

    UAE Says OPEC+ Deal Will Soon Restore Oil Prices to ‘Normal’(Bloomberg) — Oil-production limits adopted by a group of major crude suppliers will soon bring prices back to “normal,” according to the energy minister of the United Arab Emirates.When markets were collapsing as the coronavirus pandemic crushed demand in March and early April, the idea that crude could rise again to $40 a barrel was “a dream,” the UAE’s Suhail Al Mazrouei said during a conference call on Monday. That was before the OPEC+ alliance agreed unprecedented cuts in output.Prices could return to “normal” within a year or two as curbs approaching 10 million barrels a day drain excess barrels from the market, Mazrouei said during the call hosted by the Atlantic Council, a Washington-based research institute.“We have seen very good signs of demand picking up,” Mazrouei said. “We have seen numbers of driving vehicles are picking up,” he said, citing demand growth in China, India and Europe.Hinging on LockdownsStill, the direction of oil prices will hinge to a large extent on whether a second round of infections forces economies into lockdowns once again, he said.“Are we going to have a second wave or not?” he said. “I hope not. I hope we’re not going to limit travel and we will go back to at least a consumption level that is reasonable. Now we are back to the consumption level of 2013, believe it or not.”Mazrouei didn’t specify what he meant by “normal” prices. However, benchmark Brent crude averaged about $64 a barrel last year. OPEC+ producers negotiated cuts in April to counter the pandemic’s impact and this month extended the reductions through July.Led by Saudi Arabia and Russia, the group aims to support a rally that’s seen Brent more than double to around $40 a barrel since late April, paring its loss this year to 40%. For that success to continue, all OPEC+ members must adhere to their production quotas, while other suppliers must refrain from resuming output too quickly, Mazrouei said.“In previous deals we had countries cheat because there was no rule. Now there is a rule, so countries are coming and stating their commitments,” Mazrouei said. The OPEC+ agreement has effectively created a “permanent” group of nations — one bigger than the Organization of Petroleum Exporting Countries — that will coordinate to manage crude markets, he said.(Updates from fifth paragraph with quotes.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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