The Mexican food business Guzman y Gomez (GYG) is planning to list on the ASX this week with an initial public offering (IPO). As there is so much attention on the company, I am going to outline what attracts me to it and why I plan to buy shares.
It’s scheduled to trade on the ASX on Thursday, 20 June 2024, on a conditional and deferred settlement basis. Normal trading is expected on the ASX on a normal settlement basis on 25 June 2024.
The business is planning to raise $200 million in primary proceeds and $135.1 million through existing investors selling down some of their stake.
Strong sales growth and international potential
The Mexican food company has grown significantly in the last several years.
In FY15, the business generated $101 million of global network sales, which increased to $759 million in the 2023 financial year. That’s a compound annual growth rate (CAGR) of 29% over the period. Management is expecting further growth in the coming years.
Guzman y Gomez has forecast that global network sales can increase to $954.4 million in FY24 and $1.14 billion in FY25. That would be an increase of around 50% between FY23 and FY25.
I believe GYG can continue to grow its global network sales at a double-digit rate for years to come because of its growing Australian and international presence.
Some successful businesses have generated excellent returns by expanding their store networks. Just think about global winners like McDonald’s, Yum! Brands, and Chipotle.
I’m not suggesting GYG will do as well as those businesses. On the ASX, Collins Foods Ltd (ASX: CKF) has done very well for shareholders over the past decade. But GYG isn’t a franchisee business like Collins Foods, so GYG can benefit from franchisee sales growth locally or globally.
Guzman y Gomez has a hybrid restaurant ownership model with a mix of corporate and franchise restaurants. It has 185 restaurants in Australia, including 62 corporate restaurants and 123 franchise restaurants. The business has four corporate restaurants in the US.
GYG also has 16 restaurants in Singapore and five restaurants in Japan which are owned and operated by separate master franchisees. GYG earns royalty revenue from franchisee sales.
In Australia, GYG expects to open 30 new restaurants in FY25 and thinks it can increase its annual openings to 40 per year within five years. It thinks it can reach over 1,000 Australian locations over the “next 20+ years”. The Guzman y Gomez listing value may not be cheap, but I’m thinking about where the business may be in three years, five years and ten years, not just its position in June 2024.
The company plans to expand in the US, though it will “continually assess and adjust the pace of restaurant expansion to ensure it is underpinned by robust restaurant economics.” It’s expecting to have seven US stores in FY25, up from four now.
Becoming bigger can help drive the underlying profit margins and value of the business.
Rising margins
Investors often like to value a business based on how much profit it’s making now and what it can make in the future. Rising profit margins can help the bottom line grow even faster than revenue.
Guzman y Gomez showed in its prospectus that its EBITDA to global network sales margin was 3.8% in FY22 and 3.9% in FY23. GYG projects this to increase to 4.5% in FY24 and 5.3% in FY25. Rising margins are a promising sign of economies of scale.
In five years, the Mexican food business could be much bigger and earn even stronger margins (on much higher revenue), which bodes well for future profit.
Foolish takeaway
There could be a lot of volatility with GYG shares in the short term because some investors think they’re overvalued, and others think they have compelling long-term value. I’m planning to start with a minimal investment and then buy more on any weakness or buy more over time as the business executes its store rollout plan and delivers high margins.
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Motley Fool contributor Tristan Harrison has positions in Collins Foods. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Chipotle Mexican Grill. The Motley Fool Australia has recommended Chipotle Mexican Grill and Collins Foods. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
Elon Musk has been flexing his power as a political influencer in recent years, but the billionaire and his businesses have much to gain — or lose — depending on who the next president is.
Getty Images
Elon Musk has been flexing his power as a political influencer in recent years.
Whoever wins the White House could drastically impact the billionaire's businesses.
A political strategist told BI Musk needs to "be careful" what he wishes for in the next election.
In recent years, Elon Musk appears to have gone from lightly flirting with politics to having a full-blown love affair with growing his influence in Washington.
As the presidential election inches closer and the billionaire businessman continues teasing the idea of a Trump endorsement, it's becoming clear that Musk has a lot at stake depending on who next leads the country.
While Musk hasn't publicly endorsed any candidate, Business Insider previously reported he bonded with fellow billionaires over a shared distrust of Democrats and privately discussed how best to defeat them in this year's election.
According to a recent report from The Wall Street Journal, Musk has also talked with the Trump campaign about taking on a potential advisory role if the former president returns to the White House.
A representative for the Trump campaign declined to comment on The Journal report but acknowledged that Silicon Valley elites like Musk have lined up to support Trump's reelection campaign.
"It has been widely reported and is demonstrated in a number of ways that many of the nation's most important leaders in technology and innovation are concerned with the damage done to their industry by Biden's failures to handle our economy and his moves to overburden innovators with government bureaucracy and unrelenting regulation," Brian Hughes, a senior advisor to the Trump campaign, told BI in a statement.
While Musk is increasingly flexing his political power, whoever wins the White House could drastically impact the billionaire and his businesses. Here's how things could shake out for Musk under a second Trump administration versus a Biden win.
Elon under Trump
Musk previously served on business advisory groups under the first Trump administration but pulled out of the role over disagreements with Trump's 2017 decision to leave the Paris climate accord.
If he were to take on a more formal role in a hypothetical second Trump term, Musk would be taking a gamble on what'd be best for his numerous multi-billion-dollar businesses, Bradley Tusk told BI.
Tusk is a venture capitalist and political strategist whose VC firm, Tusk Venture Partners, advises startups in highly regulated industries. If he were advising Musk now, Tusk said he'd tell him: "You've got to really be careful what you wish for — for a bunch of reasons."
Under Trump, Tusk said tax cuts and deregulation could lead to a boom for Tesla, X, and SpaceX — especially given Trump's prior push to develop a Space Force. This could also come with a massive increase in political cache but possibly decreased stability in the markets, which Musk relies on to maintain his wealth and power.
"There is the potential to really have a tremendous amount of influence within Trump's administration," Stacey Lee, a law and ethics professor at the Johns Hopkins Carey Business School, told BI. "And when you look at the hallmarks of what Trump really respects — he's popular, he has a management style that is more singular in its voice — these are all of the things that Trump really admires, and so does Musk."
"In that regard," she said, "they may be rather odd kindred spirits."
Elon under Biden
In a world where Biden is elected again, Musk might not have the influence he appears to crave, but Tusk said he'd have something that markets and companies rely on for strong growth: stability.
"Musk just got a $55 billion pay package approved under Joe Biden as President — right now, his life's pretty good," Tusk said. "And now we have the choice of a president who genuinely believes in clean energy and someone who actively despises it. So, for those Tesla shareholders, it's a lot better for them if Joe Biden's president. And they just gave Elon $55 billion to do what's best for the company."
However, Lee told BI that a second Biden administration would also be prone to more regulation and pro-union policies, neither of which is very attractive to Musk as a businessman.
"Biden is very traditional in terms of his policies. He is committed to raising corporate taxes," Lee said. "Under Trump, we saw them go from 35% to 21%, and now Trump is saying, 'Hey, if I get in, I'll take it down to 20.' I think that would be music to Musk's ears.'"
A second Trump term could backfire for Musk
"My initial instinct — I think everybody's — would be like, 'Oh, of course, it'd better for Musk under Trump.' But I think ultimately, it'd be much worse," Tusk said.
While Musk might be seduced by the allure of amassing even more power, Tusk said it's a double-edged sword with Trump.
Tusk said Biden doesn't think of Elon as a rival — he probably doesn't think about him at all. But with Trump, as has happened with so many of his one-time allies, his affection for Musk could suddenly flip, making the Tesla CEO a target for his ire.
"On the Trump side, Musk needs to be careful and not go headlong into this. As seductive as it might seem, it really ends badly for basically everybody," Tusk said. "And all the things that he values, the things that sort of makes him happy — the attention and relevance — are the same things that make Trump happy."
"And the one guy you can't win a head-to-head war with is the President of the United States," he added.
Musk and Biden campaign representatives did not respond to requests for comment from Business Insider.
"House of the Dragon" season two premiered Sunday night.
The episode has new opening credits, a Stark appearance, and one extremely brutal death.
Daemon's decision to go over Rhaenyra's head for vengeance brings House Targaryen to the precipice of war.
House Targaryen's civil war is closer than ever after the events of the season two premiere.
"House of the Dragon" finally returned on Sunday night, two years after season one aired on HBO and became a smash hit. On season one of the "Game of Thrones" prequel, tensions rose between the Greens (those loyal to Alicent Hightower and her son Aegon II Targaryen, who backed his claim to the throne) and the Blacks (those loyal to Rhaenyra Targaryen, the king's oldest child and publicly named heir), culminating in Alicent's son Aemond killing Rhaenyra's son Lucerys Velaryon during a dragon fight.
The first episode of season two picks up shortly after that event, finding Rhaenyra seeking out the remains of her son, the Greens strategizing, and Daemon making some extremely poor decisions that push the two factions closer to all-out war.
Below, Business Insider reporters Eammon Jacobs and Palmer Haasch and senior entertainment editor Caralynn Matassa recap all the major events of the season premiere.
Rhaenyra is ready for vengeance.
HBO
The opening credits were changed for season 2
Caralynn: These credits are new, right?
Eammon: Have to say I do like the embroidery style over the board game approach.
Palmer: I really like the bleeding ink. Plus it feels thematically more in line with the whole "this is a historical text" aspect of it all.
A cold (very cold) open in the North, featuring… a Stark!
Cregan Stark makes his debut in the season premiere.
Ollie Upton/HBO
Eammon: Ah, the over-the-top northern accent. As the group's own northerner, I can confirm it is dumb.
Caralynn: Is this bowl-cut kid who gets picked to go to the wall supposed to be someone? They keep cutting to him in a way that feels purposeful, and on the "even by mine own kin" line…. Are they trying to imply he's some kind of important Stark? Is this a book thing I'm not getting?
Palmer: This is a net positive intro for Cregan, at least for me. Him versus Jacaerys is a very funny juxtaposition. Jace is kind of funny (doesn't know his brother has been brutally killed by Vhagar), but Cregan is soooooo serious.
Caralynn: This whole scene feels extremely "Game of Thrones" fan servicey. "The Starks!!! 'Memba them???"
Palmer: I agree, especially having just put on season one of "Game of Thrones." Once again, the entire "Southerners don't know anything about the North" schtick! But less fun without Tyrion Lannister.
I will say though, I don't hate it — I think it's good to do a little check-in with the prophecy/greater scope of the universe before we get really into it.
Caralynn: Extremely true! A good reminder of the real stakes here, aka, ice zombies.
Rhaenys v. Daemon
Daemon acts rashly in the premiere.
Theo Whitman / HBO
Caralynn: This is my favorite scene of the first episode. I love Rhaenys being deeply unimpressed by Daemon and all his posturing.
Palmer: I appreciate that Rhaenys is one of the people who has zero desire to take Daemon's shit.
Palmer: I appreciate Rhaenys so much here — I don't think there's any lost love between Rhaenys and Rhaenyra, and don't believe that she's fully absolved Rhaenyra of Laenor's fake death, but she also very intimately knows what it feels like to lose the child. Especially when Daemon was tangential to both of her children's deaths.
Corlys talks to a newbie who seems important
The show is unsubtly telling us to keep an eye on this guy.
Ollie Upton/HBO
Caralynn: This is one of those things that was tough for me with "Game of Thrones" too — where they're clearly introducing a character who's gonna be important down the line (Alyn, here) but I feel like I'm missing something as a non-book reader.
Palmer: Yes. This is a good introduction for Alyn, but reminds me of something that generally does irk me about this series — it's so difficult to keep up with characters that the show is signposting as plot relevant but we won't figure out what's going on with them for a while.
Helaena and Aegon's exchange foreshadows what will happen at the end of the episode
Helaena recognizes something bad is about to happen.
Ollie Upton / HBO
Palmer: Oh here we go, even worse. Arryk vs. Erryk. Which one is this?
Caralynn: Vhagar really is the most badass looking dragon.
Palmer: Yeah, Vhagar is sick. My beautiful large girl. There is nothing funnier to me though than Aegon suddenly wanting to be an involved father.
Eammon: Tom Glynn-Carney sets me on edge whenever he's around his family.
Palmer: Poor sister-wife Helaena, who seems unfairly implicated in all of this.
Caralynn: Helaena's line here about the rats was good foreshadowing for what happens later. But I think there's an even subtler moment of foreshadowing when Aegon goes to check which kid it is in the room because even he can't tell his own twins apart!
Alicole is a little icky
Ollie Upton/HBO
Palmer: Oh, this is the bit that's going to make so many people mad. Welcome to Alicole, everyone!
Caralynn: This sex scene might be the show's least sexy ever. They seem so dispassionate. Also, "we cannot again" — how many times do we think she's said this?
Palmer: When Criston and Rhaenyra have sex, he also seems surprisingly gentle and lets her get on top, which is much different from some of the other sex we've seen in this show.
It a little bit feels like Alicole is coming out of nowhere, but it was somewhat foreshadowed in season one — them suddenly having on-camera sex doesn't strike me as particularly egregious.
Eammon: Going from watching "Bridgerton" season three to this scene is the whiplash I did not expect this week.
Eammon: "House of the Bragon"? "Dragerton"? That second one sounds like a different show…
Palmer: Two very, very different series concerned with marriage, pregnancy, and lines of succession.
Rhaenyra, in mourning, needs to see her dead son for herself
Rhaenyra discovers the remains of Arrax, her son Lucerys' dragon, in the season two premiere of "House of the Dragon."
Theo Whiteman/HBO
Eammon: Emma D'Arcy deserves all the awards for their thousand-yard stare. They look utterly haunted.
Palmer: I loved Milly Alcock — loved! — but I am so happy that this season we really get to see Emma anchor the entire show.
This is one of my favorite moments of the entire episode — Emma is so on their game here, and it's heartbreaking to watch Rhaenyra have to pick up the pieces of Luke and Arrax's death.
We don't really see Rhaenyra break like this — even when she lost Visenya in the season one finale, I feel like. But I think the touch with Syrax also clearly feeling grief is very poignant. Bonus points to the sound engineers working on those dragon cries!
Eammon: It's the fact that Rhaenyra doesn't even have a proper body to bury. That sense of loss goes so much deeper and it's put across so well without needing to over-explain it with dialogue.
Aegon plays at being king (poorly)
Aegon put together the most inept possible Knightsguard.
Ollie Upton/HBO
Palmer: It's extremely, extremely funny to see Tyland Lannister get so irritated with a small child that he is obligated to be nothing but polite to. And Aegon is so deadly serious about it! What humiliation, though — getting talked down to by your boy king for trying to stop his child heir from bothering you.
Eammon: I know Larys is basically the new/old(?) Littlefinger, but I think Otto gets overlooked for all his scheming.
Palmer: I appreciate everyone explaining that dragons are actually essentially weapons of mass destruction to Aegon, and that they're more valuable as deterrence. But I also appreciate that his response is "My brother will simply nuke anyone who gets in our way on Vhagar."
Larys Strong act like a normal person challenge: failed.
Eammon: Well, at least he didn't make her get her feet out this time! Although it's telling that she instantly needs a bath after speaking to him.
Ollie Upton/HBO
Palmer: Aegon hearing petitions is so incredibly funny. Man has no idea what it takes to run a kingdom and just wants to please everyone.
Caralynn: This scene does a great job of showing how Aegon truly does not have any idea what he's doing. And also truly doesn't give AF.
Eammon: How many sheep does it take to feed a dragon?
Eammon: Aegon's never played RollerCoaster Tycoon or Farmville, and it shows.
Caralynn: Ah yes, Hugh, another THIS DUDE IS IMPORTANT long-held close-up.
Eammon: They're just hammering it home.
Palmer: You know who wields a hammer? Thor. You know who has the word Thor in their name? Vermi — [I am immediately yanked off stage]
For all of Otto's scheming, I do truly think that he just does not have game anymore. Larys is DESTROYING him. Alicent entertains Larys even though he uses her as his own personal WikiFeet, but she is sooooo done with her dad.
Alicent drives me a bit insane with this, and I know it's the point, but my god, I can't imagine that anything will go wrong with her plan to use Aegon as a puppet King when he gets tired of ruling!
Caralynn: I do think it's so interesting and effective how they keep showing Alicent and Rhaenyra as being of the same mind about this but each having no idea the other feels this way — Alicent really doesn't want all out war, and Rhaenyra needs to see her kid's charred body in order to accept it may need to happen.
Palmer: Yeah, it's unfortunate, because clearly neither of them want it. But they're in too deep!
Mysaria is revealed to be alive and Rhaenyra returns home
Palmer: I'm no great Mysaria fan, mostly because I feel like the show constantly deploys her to make half-hearted commentary about the common folk, but free this poor woman from Daemon.
Eammon: She's one of those, "Oh yeah, I forgot about her" characters.
Caralynn: I will say I'm curious about what they're going to do with her long-term.
Palmer: Yep, there's clearly a reason to bring her back, and I hope it's a good one!
Eammon: Can we all just take a moment to appreciate Rhaenyra's badass leather coat? I believe that's what the kids call "a look."
Palmer: She's ready to "slay." But yes, I really love the Rhaenyra leather fits.
Caralynn: The costuming on this show is always flawless.
Daemon makes an oopsie
Daemon (Matt Smith) and Rhaenyra (Emma D'Arcy) in "House of the Dragon" season 2.
Ollie Upton/HBO
Caralynn: And ope, here's the moment that sets this whole mess in motion. Rhaenyra: I want Aemond. Daemon: actively misunderstanding the assignment
Palmer: But this moment is so impactful — show up, say you want your half-brother killed, walk off. Rhaenyra, one episode ago in season one, would not have hit that point, and it really underscores the impact of Lucerys' death.
Caralynn: Ah, this moment of mourning with Rhaenyra and Jace — so unexpected and heartwrenching. They both do such a great job here.
Eammon: This is the bit that got me a little bit. He's trying to maintain his sense of duty as a man, when he's still just a boy himself really.
Palmer: Yeah — I feel like we so rarely get to see Rhaenyra be a mother, and Jacaerys doing his best to step up is heartbreaking. He's still a child! One who hasn't really seen battle.
I feel like we wouldn't have gotten something like that in season one — the show was always moving at such a breakneck pace that there wasn't much time actually develop the kids too much.
Eammon: Yeah, I'm pleased they're letting moments like this breathe instead of just jumping straight into "HEY, LOOK IT'S THE DRAGONS.""
Palmer: This is a series that is at its core, about the grief of mothers, and these are moments where it's really well-executed (as opposed to, say, gratuitous childbirth sequences)
Eammon: Also Ramin Djawadi's score is beautiful here.
Palmer: If I were Daemon Targaryen, personally, I would not entrust a task like this to These Guys, recommended to me by my ex-lover who hates me.
Caralynn: This is like Taskrabbit from hell. Blood and Cheese have a 4.3 rating from 3 jobs and Daemon's like "Seems fine!"
Back in King's Landing, the assassins that Daemon sent after Aemond close in
Ewan Mitchell as Aemond Targaryen in "House of the Dragon" season two.
Ollie Upton/HBO
Eammon: Aemond correctly taking stock of his mom situation: "She blames me for starting this war." To be fair, mate, your dragon did make a midnight snack out of Lucerys.
Palmer: I do think it's funny because Aemond is not faultless, but he's also not particularly wrong — he does seem to have the clearest head out of the whole bunch.
Caralynn: Ewan Mitchell is great as Aemond. He has so much more insight than the others. It's interesting how he's the one to clock that Alicent still has love for Rhaenyra and it's holding her back.
Palmer: He's extremely perceptive! Criston, however, is a bitch.
Caralynn: Criston's long-held grudge is, at this point, a bit much. For him to still be this pissed that she didn't want to marry him is so unhinged. It's giving fragile male ego.
Palmer: I love Aegon and his shithead friends drinking on the Iron Throne. As the people intended!
Caralynn: They're like a bunch of frat bros.
Palmer: I was trying to think of a Westerosi frat house name but was not quick enough on the draw.
Eammon: Alpha Beta Valyria. And oh hey look, a rat. Symbolism!
Palmer: This entire Blood & Cheese bit is so silly, but not necessarily in a bad way? It's horrifying to watch these guys bumble their way into one of the worst inciting incidents of the entire war. They have no clue what they're doing. Ultimately, very effective.
Caralynn: This entire scene is so stressful, and the music is so effective.
Palmer: C'mon guys, does that child look like he has an eyepatch, or can hold his own in a fight?
Eammon: The realization about what's about to happen is just horrifying.
Palmer: Extraordinarily horrifying, and I feel like it's worse because it's Helaena, who is about as close to an innocent as we get aside from the literal children.
Caralynn: Her weakly trying to bargain with them and realizing it's pointless — Phia does phenomenal work here. You can practically see her dissociating.
Palmer: It's also so brutal that Helaena tells the truth when she points out her son — what do you even do? It just feels like the worst kind of gut reaction.
Caralynn: OK, not the vibe, but this bit with the running did make me laugh a little — she's so obviously running with a fake kid.
Palmer: I do think that these shots of her running down the hallway, limp baby aside, are very effective.
Olivia Cooke as Alicent in season two of "House of the Dragon."
Ollie Upton/HBO
Eammon: This moment, with Helaena interrupting Alicent and Criston during sex and blowing the cover on their affair, irritated me. It's so tonally mismatched — the goofiness of getting barged in on mid-intercourse, and the brutality of what just happened.
Palmer: I have yet to truly reckon with Helaena walking in on Alicent and Cole. It feels like it muddies the moment a bit, but I can also rationalize it as this transition point where the war really, truly becomes serious.
Caralynn: It also sets the stage for an interesting tension between Alicent and Helaena because wasn't Criston, the Lord Commander of the Kingsguard, supposed to be, y'know… guarding them? But he was too busy getting his rocks off with her mom!
Palmer: Probably! Him or someone else on the Kingsguard who was slacking off. But it is worse to see one of the family's protectors having an affair instead of protecting!
Eammon: Although, to be fair, this is the same franchise that ended its pilot with Jaime and Cersei having sex in a tower when Bran walked in on them.
Palmer: That is…. a very fair point. It is a kind of twist on that inciting incident.
Caralynn: That's a really good point. Sex really screws everything up!! Especially like, illicit sex that these people are definitely not supposed to be having
Palmer: Yes, this is the moral we should be taking from "Game of Thrones"/"House of the Dragon": Never Have An Affair.
Caralynn: Sex: Simply not worth the trouble (i.e., multiple wars).
With so many shares to choose from on the Australian share market, it can be difficult to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.
Three top ASX shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:
According to a note out of Goldman Sachs, its analysts have reiterated their buy rating on this steel products company’s shares with an improved price target of $30.10. The broker is feeling positive about BlueScope’s outlook thanks to its exposure to painted steel products. Its analysis indicates the US painted steel growth opportunity could deliver ~$400 million (~20%) EBITDA upside for the company. In addition, the broker believes that BlueScope’s shares are undervalued compared to their US steel peers. As a result, it thinks that this is a great opportunity for investors to pick up shares on the cheap. The BlueScope share price is trading at $20.18 today.
A note out of Bell Potter reveals that its analysts have retained their buy rating on this gold miner’s shares with an improved price target of $6.53. This follows news that Capricorn Metals has reduced its gold hedge book by 52,000 ounces. Bell Potter notes that the buyback of approximately half of its remaining hedge book mirrors the successful strategy of 2023, which resulted in a relative cash benefit of ~$13 million. And while this has resulted in the broker reducing its earnings forecasts for FY 2024 due to higher financing costs, it has lifted its future earnings estimates meaningfully and has boosted its valuation accordingly. The Capricorn Metals share price is fetching $4.63 at the time of writing.
Analysts at Morgans have initiated coverage on this gambling products and services provider’s shares with an add rating and $172.00 price target. According to the note, the broker has been impressed with the way the company’s restructuring and rebranding has resulted in the significant capture of land-based market share in Australia. But the real reason Morgans is bullish is that it believes Light & Wonder can replicate this in the massive United States market. In addition, the broker highlights that its digital segments are performing well with its social casino division, SciPlay, significantly outpacing the rest of the market. The Light & Wonder share price is trading at $140.15 on Monday.
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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 Goldman Sachs Group and Light & Wonder. The Motley Fool Australia has recommended Light & Wonder. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
ASX growth stock Close The Loop Ltd (ASX: CLG) is showing its growth potential today.
Shares in the company, which provides reuse, recycling, and sustainability solutions, closed on Friday trading for 34 cents. Shares leapt to 36 cents apiece shortly after market open today, up 5.9%.
After some likely profit-taking, shares are currently swapping hands for 35 cents, up 2.9%.
For some context, the All Ordinaries Index (ASX: XAO) is down 0.1% at this same time.
Here’s what’s spurring investor interest in the ASX growth stock today.
ASX growth stock expanding its reach
Investors are bidding up Close The Loop shares on Monday after the company reported on a range of potential growth opportunities.
The ASX growth stock said it is looking into opportunities to expand its footprint in the United States, Europe and the Middle East. Over the next 12 months, the company expects to establish new facilities in these locations to support its expanding operations.
The planned expansions are focused on providing enhanced IT refurbishment services and solutions. That includes a new IT refurbishment plant in Mexicali, Mexico. Close The Loop expects that plant will be operational by October.
The company also highlighted its growing HP Inc relationship, noting that IT refurbishment opportunities have been identified with HP Renew Solutions.
And in Europe, the ASX growth stock is expanding its European print consumables program, Circular Planet, into Spain and Portugal.
Commenting on the growth plans, Close The Loop CEO Joe Foster said: “We are excited about the potential opportunities that lie ahead and are dedicated to ensuring a smooth and successful implementation of this expansion plan.”
According to Foster:
We acknowledge the importance of effectively managing our resources to support our growth objectives without impacting on the FY 2024 guidance or expected financial results as previously advised to the market. As we move forward, we will diligently leverage our existing working capital and debt facilities to achieve our strategic milestones.
Foster added:
FY 2024 has seen Close the Loop focus and refine its growth strategy in the IT refurbishment space. We have an opportunity to expand into new geographies, work deeper into the consumer business electronic product lifecycle and nurture new OEM [original equipment manufacturer] relationships.
These growth opportunities are a validation and realisation of the ISP Tek Services acquisition and the synergies we expected to flow from the combined businesses.
Close the Loop share price snapshot
With today’s intraday moves factored in, the ASX growth stock is down around 7% in 2024.
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Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…
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 positions in and has recommended Close The Loop. The Motley Fool Australia has recommended Close The Loop. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
There are ways to invest in the property market beyond traditional real estate without incurring a significant amount of debt. One approach is to invest in ASX real estate investment trusts (REITs), which can provide exposure to various areas, including retail, office, logistics and distribution, manufacturing, storage units, childcare centres, healthcare and more.
ASX REITs have recently experienced significant challenges due to higher interest rates. However, it appears that interest rates may now be at or near their peak.
Hence, a fund manager has shared their perspective on whether this is the right time to invest in REITs. Funds management business Janus Henderson has discussed where it sees structural growth and if this is a turning point.
Is it time to invest in REITs?
Janus Henderson notes the commercial real estate sector has been through difficulties over the last two years as central banks tried to tame inflation.
The fund manager suggests a stabilisation of interest rates, with potential interest rate cuts, “should be good news” for ASX REITs.
Janus Henderson suggests the REIT market may be entering “the early innings of a potentially significant recovery”. If so, the cost of and access to capital, particularly debt financing, should “increasingly play a part in differentiating” between businesses and investors in this space.
Janus Henderson’s Guy Barnard, co-head of global property equities, said:
We are hitting an inflection point in underlying commercial real estate markets, where you will see people rebuilding their allocations as it becomes clearer that underlying real estate markets have bottomed.
Where to buy
The fund manager points out that the real estate market is evolving rapidly due to the growth in e-commerce, which has created “significant headwinds” in retail, while a shift to working from home is “creating challenges” in the office sector.
Barnard said:
We are trying to tap into those areas of structural demand from tenants, rather than trying to ride an economic cycle. We see the growth of digitisation as a great tailwind for tech real estate, including areas like data centres and cell towers.
While the fund manager didn’t name any particular stocks, I’ll point out a few. REITs with exposure to warehouses, logistics and distribution include Centuria Industrial REIT (ASX: CIP), Goodman Group (ASX: GMG) and Dexus Industria REIT (ASX: DXI).
Goodman is also rapidly growing its investments in data centres. While Nextdc Ltd (ASX: NXT) is not an ASX REIT, it is a way to play that theme on the ASX of building and owning data centres and generating revenue from them.
Janus Henderson also sees opportunities in demographics where baby boomers enter retirement and require underlying senior housing accommodation. Healthco Healthcare and Wellness REIT (ASX: HCW) can provide some of that exposure, though it has a diversified portfolio. Meanwhile, Ingenia Communities Group (ASX: INA) is a business that owns retirement communities.
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. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…
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 positions in and has recommended Goodman Group. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
Tom Glynn-Carney as Aegon II Targaryen in "House of the Dragon" season two.
Ollie Upton/HBO
"House of the Dragon" just teased a major character in its season two premiere.
Hugh is a blacksmith who petitions King Aegon II for a payment advance.
But in "Fire and Blood" he plays a major role — read ahead if you want to be spoiled!
Warning: Major spoilers ahead for the season two premiere of "House of the Dragon" and the book "Fire and Blood."
"House of the Dragon" is already keeping us on our toes in season two — and the premiere briefly introduced an important figure from George R.R. Martin's book.
In the season two premiere, Aegon II Targaryen hears petitions from common folk. Unused to making difficult decisions as ruler, he's generous in granting their wishes — that is, until his Hand Otto Hightower steps in to remind him that his dragons need to eat the sheep he just granted back to a shepherd.
One of these petitioners, however, is more important than the others: Hugh the blacksmith (Kieran Bew), who asks Aegon for an advance on the smiths' payment for weapons.
If you couldn't tell by the lingering, close-up shot of Hugh's face during his introduction, here's your PSA: You should remember his face. Assuming he's the same Hugh from "Fire and Blood," the book on which "House of the Dragon" is based, we'll see much more of him down the line.
In 'Fire and Blood,' Hugh is a dragonrider
During the Dance of the Dragons, as recounted in "Fire and Blood," Rhaenyra's son Jacaerys decides to recruit potential dragonriders from the breadth of Targaryen bastards. He puts out a call for recruits, promising rewards like knighthood, lands, and glory to those who are able to successfully mount a dragon.
Not everyone was able to do so. According to "Fire and Blood," Grand Maester Munkun (one historical source) recounted that 16 men died during the trials, while tens of them were injured. Hugh, a "blacksmith's bastard" with incredible physical strength, mounted the dragon Vermithor. Others also succeeded, mounting the dragons Silverwing, Seasmoke, and Sheepstealer.
Vermithor — we know him, right?
That you do. "House of the Dragons" viewers encountered Vermithor in season one. The previous mount of King Jaehaerys, Viserys' predecessor, and was riderless after his death.
Daemon Targaryen very briefly encounters Vermithor in the season one finale when he seeks him out underneath Dragonstone. Singing a song in High Valyrian, Daemon doesn't seem to get very far with Vermithor — but he doesn't get burnt to a crisp, which is still a net win.
Matt Smith as Daemon Targaryen standing in front of Vermithor.
HBO
Vermithor isn't the biggest dragon that we've seen in "House of the Dragon" — that honor goes to Aemond's big, beautiful girl Vhagar — but he's still pretty big.
Now, if you want potential major spoilers for the show…
What happens to Hugh in the books?
The fictional history of Westeros recounts how Hugh fought in the war as a dragonrider. In one battle, Rhaenyra's forces clashed with a naval fleet from the Triarchy, with whom Otto Hightower had engineered an alliance. During the battle, Hugh and Vermithor fought alongside the dragons Silverwing, Sheepstealer, Seasmoke, their riders, Jacaerys, and his dragon Vermax.
However, Hugh and Ulf White, Silverwing's rider, defected later in the war, though their motivations were disputed in the historical record. Later in the war, he made a play for the throne himself, but was killed during a battle.
"House of the Dragon" season two airs Sundays at 9 p.m. ET on HBO and is streaming on Max.
According to the release, firm commitments have been received for a $25 million equity raise at a weighted average price of approximately $1.00 per share.
Winsome Resources notes that it is taking advantage of Canadian flow through provisions with this equity raising before rules change next week. This essentially allows an exploration company to raise funds at a higher price thanks to favourable tax credits.
So much so, the ASX lithium stock was able to raise $13.2 million at $1.275 per new share. This represents a sizeable 32% premium to Winsome Resources’ last traded price.
However, there are some shares changing hands for a big discount. A share placement has been undertaken alongside the Canadian flow through financing to raise a further $11.8 million at a discount of 85 cents per share.
Why is it raising funds?
Management notes that the funds will be used to advance key project initiatives.
This includes the Adina Lithium and Renard project studies, which are on track for completion in the third quarter of 2024, and exploration and resource growth drilling to expand the current mineral resource estimate of 77.9Mt @ 1.15%.
It also notes that the equity raising means that the ASX lithium stock is in a strong financial position to continue its transition from lithium explorer to project developer.
Winsome Resources’ managing director, Chris Evans, said:
Winsome Resources is firmly committed to developing the Adina Lithium Project and is pleased to see the high level of interest from high conviction investors who believe in Winsome’s vision of integrating into the North American EV supply chain.
The flow through financing provisions under Canadian tax law mean we are again able to raise funds at a significant premium to the current share price and therefore at a lower cost of capital. The additional funds put Winsome in an enviable position, with one of the largest and growing lithium deposits in North America, an exclusive option to acquire the billion-dollar Renard operation and associated infrastructure and a clearly defined pathway to production.
Following today’s decline, this ASX lithium stock is down more than 50% over the last 12 months.
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Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…
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.
The All Ordinaries Index (ASX: XAO) is down 0.5% on Monday morning, but this ASX All Ords share isn’t making any moves just yet.
Shares in the New Zealand based company infrastructure investment company entered a trading halt before the opening bell this morning at the company’s request.
This came on the heels of a major AI related capital raise announcement earlier this morning.
Any guesses?
If you said Infratil Ltd (ASX: IFT), go to the head of the virtual class.
Here’s what’s happening.
ASX All Ords share tips hat for $1.1 billion
Infratil said it intends to raise NZ$1.15 billion (approximately AU$1.1 billion) to fund data centre operator CDC’s accelerating growth. The new funds will also be used to provide more flexibility for growth across the ASX All Ords shares’ global portfolio.
The equity raising comprises an underwritten1 NZ$1.0 billion placement of new IFT shares and a NZ$150 million non-underwritten retail offer of new IFT shares.
New shares will be issued for NZ$10.15 apiece. That’s 6.8% below Friday’s closing price.
“CDC continues to see a surge in demand for data centre capacity,” Infratil CEO Jason Boyes said. “Demand continues to accelerate on the back of cloud adoption and significant investments in generative AI.”
He noted that CDC has been one of Infratil’s top investments. The ASX All Ords share’s stake in CDC is valued at NZ$4.42 billion. That’s 10 times what the company first invested in 2016.
According to Boyes:
This rapid increase in demand has seen CDC enter advanced negotiations with customers for over 400MW of capacity at multiple sites across the CDC footprint with this capacity expected to come online over the next four to five years.
CDC expects at least 200MW of capacity to commence construction over the next 12 months. And Infratil said it expects to commit equity funding of around AU$600 million to the data centre developer over the next two years.
“CDC’s growth has accelerated considerably recently, driven by rapid growth in AI-driven data demand,” Boyes said.
CDC CEO Greg Boorer added:
We are seeing an unprecedented increase in the number of customer discussions, many of which are tied to AI-related workloads. CDC has been AI-ready for more than 15 years and is well positioned to capture strong share of AI-driven demand.
Infratil said there was no change to its FY 2025 guidance.
Infratril share price snapshot
If you look back at the chart up top, you’ll notice a remarkably stable long-term uptrend in the Infratil share price.
Over the past 12 months, the ASX All Ords share has gained 14.3%.
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. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…
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.
The market may be edging lower on Monday but that hasn’t stopped one ASX All Ords stock from rocketing.
In morning trade, the Capitol Health Ltd (ASX: CAJ) share price is up 20% to 29.5 cents.
Why is this ASX All Ords stock rocketing?
Investors have been scrambling to buy the diagnostic imaging modalities provider’s shares this morning after it accepted a merger offer from rival Integral Diagnostics Ltd (ASX: IDX).
According to the release, the two parties have entered into a process and exclusivity deed that will see Integral Diagnostics acquire 100% of Capitol Health via a scheme of arrangement.
The offer that was tabled was an implied exchange ratio of 0.12849 Integral Diagnostics shares for every Capitol Health share. Based on Friday’s close prices, this equates to an offer of 32.6 cents per share, which represents a 33% premium.
Capitol Health’s chair, Andrew Demetriou, commented:
The Indicative Proposal reflects attractive value for Capitol shareholders and the Board has determined that it is in the best interests of shareholders to engage with Integral.
Capitol Health advised that that each director intends to recommend shareholders to vote in favour of the proposed transaction. This is subject to entry into the implementation deed, the absence of a superior proposal, and the independent expert’s report.
Not the first offer
The release notes that this indicative proposal was not the first. It follows an unsolicited approach from Integral Diagnostics in late March regarding a potential combination.
However, while that was not accepted, the ASX All Ords stock’s board decided that it was in the best interests of shareholders to engage with Integral Diagnostics and provide non-public information on a confidential and non-exclusive basis to conduct a two-way value based due diligence process.
Following the conclusion of the process, Integral Diagnostics submitted the improved indicative proposal, which has now been accepted.
The ASX All Ords stock’s managing director, Justin Walter, commented:
Today’s proposed merger announcement with Integral, represents an exciting opportunity for all our valued radiologists, technicians, and staff to be part of Australia’s largest pure-play publicly listed imaging company.
This opportunity is a result of their dedicated hard work, particularly over the last five years. The merger will create further value for our shareholders by realising significant benefits through scale, enhanced internal capability, and organic growth.
All underpinned by market leading clinical standards and service to our referrers and their patients.
As things stand, Capitol Health shareholders do not need to take any action regarding the proposal. However, the company warned that it cannot be certain that the proposal will result in a binding transaction.
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. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…
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 Integral Diagnostics. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
