Author: openjargon

Owners of Rio Tinto Ltd (ASX: RIO) shares may like to know about a possible move with its corporate structure that could unlock enormous value.

There is no confirmation that the ASX mining share is working on a plan yet, but growing market noise could suggest it’s being considered.

Rio Tinto has an interesting corporate structure where Rio Tinto plc (LSE: RIO) – listed in London – and Rio Tinto Ltd are two separate companies.

Interestingly, Rio Tinto Ltd shares trade on a valuation that’s around 20% higher than the UK-listed entity. The Australian Financial Review suggested investors have been willing to pay more for the ASX-listed entity because of the benefit of franking credits, which are only available for Australian tax residents.

Should Rio Tinto copy its rival?

It wasn’t too long ago that BHP Group Ltd (ASX: BHP) decided to consolidate its corporate structure to Australia, and some investors believe Rio Tinto could benefit from doing the same.

According to reporting by the AFR, Blackwattle Investment Partners fund manager Ray David thinks Rio Tinto could unlock up to $40 billion in value if it copies BHP’s move.

Rio Tinto has made a number of changes in recent years including improving its relationships with government, traditional owners and shareholders after the Juukan Gorge incident.

David thinks Rio Tinto making a change to its corporate structure would be the “next step” in improving its corporate governance.

The AFR reported that David wrote a five-page letter to the Rio Tinto board in May, in which he said:

We contend that the dual-class structure is antiquated and advocate for a shift towards a single-class structure, in line with best corporate governance practices and the interests of all shareholders.

Blackwattle would profit if a restructuring occurred because it owns the UK-listed shares. UK Rio Tinto plc shares would benefit if Rio Tinto Ltd bought the UK-listed shares in an all-share deal, and every shareholder could gain from the improvement in capital allocation and simplification benefits that a combined Rio Tinto would deliver.

The AFR reported David said Rio Tinto’s dual-listed company structure is restricting its ability to pursue share/scrip-based acquisitions. About three-quarters of Rio Tinto’s shares are owned by Rio Tinto plc.

Rio Tinto also reportedly can’t do much with share buybacks at the moment because China’s Chinalco owns 14.6% of Rio Tinto plc and is restricted from owning more than 14.99% of Rio Tinto.

ASX mining share’s response

The AFR reported on comments of a spokesman from the ASX mining share who said:

We regularly look at a range of corporate and strategy topics with a focus on optimising shareholder value and delivering for our stakeholders, and we have a policy of open dialogue with all shareholders around these topics.

Time will tell whether that’s a hint that the ASX mining share is considering it.

Rio Tinto share price snapshot

Since the start of 2024, the Rio Tinto share price is down 12%, as shown on the chart below, compared to a rise of 2% for the S&P/ASX 200 Index (ASX: XJO).

The post Could this move unlock $40 billion for Rio Tinto shares? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Buy these ASX dividend shares for 5% to 6% yields
• What’s the outlook for ASX 200 mining shares in FY25?
• What’s happening with the big 3 ASX 200 iron ore stocks today?
• Buying Rio Tinto shares? Here’s why this ‘world-class’ lithium project could be back on track

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It has been another busy week for many of Australia’s top brokers. This has led to the release of a number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone right now:

Baby Bunting Group Ltd (ASX: BBN)

According to a note out of Morgans, its analysts have retained their add rating on this baby products retailer’s shares with an improved price target of $1.80. This follows the release of a trading update this week which saw the company reaffirm its profit guidance for FY 2024. However, the big positive was the improvement in the company’s sales performance since the end of April. It feels this bodes well for Baby Bunting in FY 2025. So much so, it is forecasting a huge rebound its profits. In addition, Morgans notes that its medium term growth will be supported by new exclusive supply agreements. The Baby Bunting share price is trading at $1.57 on Friday afternoon.

Universal Store Holdings Ltd (ASX: UNI)

A note out of UBS reveals that its analysts have upgraded this youth fashion retailer’s shares to a buy rating with a $6.00 price target. The broker made the move largely on valuation grounds following a recent pullback in the company’s share price. Outside this, it likes Universal Store due to its exposure to the resilient youth consumer and its successful marketing execution. And while its store rollout may be slower than originally hoped, it appears to see positives in this approach. UBS also highlights its strong balance sheet and positive medium term growth outlook as reasons to buy its shares. The Universal Store share price is fetching $4.96 at the time of writing.

Woolworths Group Ltd (ASX: WOW)

Analysts at Goldman Sachs have reiterated their buy rating on this supermarket giant’s shares with an improved price target of $40.20. The broker believes that concerns over margin weakness and regulatory reviews is overdone and created a buying opportunity for investors. In respect to margins, Goldman’s analysis and channel checks suggest resilient ~3% industry topline supermarket growth from improving volume. In addition, it sees ample levers for gross profit margin expansion through business model mix and margin optimisation opportunities. As a result, Goldman is forecasting an earnings per share compound annual growth rate of 8.2% between FY 2024 and FY 2027. The Woolworths share price is trading at $33.87 this afternoon.

The post Brokers name 3 ASX shares to buy now appeared first on The Motley Fool Australia.

More reading

• Supermarket concerns ‘overdone’: Buy Woolworths shares
• Why Arcadium Lithium, Baby Bunting, Cettire, and Qualitas shares are racing higher
• Why is this ASX retail stock rocketing 17% during today’s market selloff?
• 3 super strong blue chip ASX 200 shares to buy in July
• Where to invest your Westpac dividends

Motley Fool contributor James Mickleboro has positions in Universal Store. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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.

ASX All Ords healthcare stock Immutep Ltd (ASX: IMM) is down by 26% over the past two days, and one market analyst reckons it’s a golden buy-the-dip opportunity staring us right in the face.

Immutep shares are currently trading for 32 cents, down 5.97% on Friday. The stock plummeted 47% to an intraday 52-week low of 23 cents yesterday after the company released topline medical trial results.

Let’s investigate.

Is this ASX All Ords healthcare stock a buy?

The TACTI-003 Phase IIb Trial is investigating the use of a combination therapy as a first-line treatment for head and neck cancer in 171 patients.

The combined therapy involves Immutep’s MHC Class II agonist, eftilagimod alfa (efti), and anti-PD-1 therapy Keytruda (pembrolizumab).

Keytruda is a trademarked drug owned by Merck Sharp & Dohme LLC, a subsidiary of Merck & Co Inc.

In the first cohort of patients, the combined therapy led to a higher overall response rate compared to Keytruda therapy alone.

Results from the second cohort will follow next month, but management said they show an even higher overall response rate.

Sounds positive, so why did investors rush to sell the ASX All Ords healthcare stock?

As my colleague James explained in his coverage yesterday, the selling may have been driven by the absence of a p-value in the results.

The p-value is defined as the probability that the observed effect within the trial would have occurred by chance if there was no true effect.

Immutep has included p-values in study results in the past. So, investors may have wondered about their absence in the announcement.

What do the brokers say?

Wilsons reckons investors have made an error in judgement and punished the ASX All Ords stock unreasonably.

As reported in The Australian, Wilsons said:

The market has yet again misread Immutep and (this) should represent an obvious buying opportunity.

The broker added:

The market is also completely ignoring that Immutep have announced that data from Part B has substantially improved from early data release in April which already demonstrated more than five times vs. Keytruda monotherapy in this cohort.

Wilsons has an overweight rating on Immutep and a share price target of $1.13. This implies a potential 253% upside for this ASX All Ords healthcare stock over the next 12 months.

Bell Potter maintained its speculative buy rating on Immutep after the results were released.

The broker described the results as “a pleasing set of data and certainly supportive of further investment in clinical trials”.

Bell Potter reckons the ASX All Ords stock is worth 80 cents. So, it sees today’s price level as a steal.

Immutep share price snapshot

The Immutep share price has risen 13.2% over the past 12 months.

This compares to an 8.85% gain for the S&P/ASX All Ords Index (ASX: XAO).

The post ‘Obvious buying opportunity’: Top broker says beaten-up ASX All Ords stock has 253% upside appeared first on The Motley Fool Australia.

More reading

• Why Abacus, Bannerman Energy, Immutep, and Pilbara Minerals shares are falling today
• Why APA Group, Immutep, NAB, and Immutep shares are sinking
• Why did this ASX healthcare stock just crash 47%?
• This speculative ASX stock could almost double in value
• Why Brainchip, Immutep, Liontown, and Xero shares are tumbling today

Motley Fool contributor Bronwyn Allen 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 Merck. 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.

S&P/ASX 200 Index (ASX: XJO) stocks, taken together, moved higher in June.

In afternoon trade on Friday, with just hours left before the ASX closes shop for the month, the benchmark index is up 1.4% since the closing bell rang on 31 May.

But not all companies joined in the move higher.

Below we look at three ASX 200 stocks that tumbled as much as 23% over the month almost past.

We note that all three have a common factor, and we ponder whether after June’s big falls they may now present good value.

Three ASX 200 stocks falling hard in June

The third worst performer on our list is ASX 200 lithium stock Pilbara Minerals Ltd (ASX: PLS).

The Pilbara Minerals share price is down 3.1% in intraday trade today at $3.16 a share. The lithium miner closed out May trading at $3.79 a share, which sees the stock down 16.6% in June.

The only price-sensitive news out from the miner came on 21 June.

Pilbara updated the market on its pre-feasibility study (PFS) for expanded production at its Pilgangoora project. The PFS revealed that production capacity at Pilgangoora could increase to more than two million tonnes a year.

But the ASX 200 stock closed the day down 2.8% on the news. That may be due to the estimated $1.2 billion price tag for a new whole of ore flotation plant required for the expansion.

Moving on to the second worst ASX 200 stock performer on our list for June, we have lithium miner IGO Ltd (ASX: IGO).

The IGO share price is down 1.2% in intraday trade on Friday at $5.80. The stock closed out May trading for $6.99, which sees the IGO share price down 17.0% over the month.

The only price-sensitive news announced from the miner in June involved gold, not lithium.

On 21 June, IGO reported on the legal action being taken by South32 Ltd (ASX: S32) regarding disputed royalty payments from the Tropicana Gold Mine, located in Western Australia. IGO denies it has any royalty obligations to South32.

Which brings us to the worst ASX 200 stock performer on our list for June, Mineral Resources Ltd (ASX: MIN).

The diversified mining services company has mining operations primarily focused on lithium and iron ore. Mineral Resources holds a direct interest in two Western Australian lithium mines, Mount Marion and Wodgina.

Did you catch the common thread yet?

The Mineral Resources share price is down 0.7% in intraday trade today at $55.53. Shares closed out May trading for $71.66 apiece, which sees the mining stock down 22.5% for the month.

Atop being pressured by tumbling lithium prices, as with the two ASX 200 stocks above, Mineral Resources also didn’t get any help from the 9% retrace in the iron ore price in June.

On 20 June, the miner reported it would stop shipping iron ore from its Yilgarn Hub iron ore operation in Western Australia. With management determining the project is no longer financially viable, shipments will cease by the end of the year. The Mineral Resources share price closed down 1.0% on the day.

Time to buy the dip?

After June’s big falls for these ASX 200 stocks, it may be tempting to go bargain hunting.

But buyer beware.

I’d steer away from both IGO and Pilbara for the time being, with lithium prices widely forecast for more falls ahead.

June saw the price of the battery-critical metal tumble some 15%, currently trading near three-year lows of US$12,000 a tonne.

And the analysts at Citi expect the lithium price has further to fall before finding support. Pointing to building global inventories, the broker believes we “should see lithium prices fall another 15% to 20% to $US10,000 a tonne” over the next three to six months.

As for Mineral Resources, the ASX 200 stock has significant revenue potential outside of the lithium space. And with that diversity in mind, I’m in line to agree with the analysts at Bell Potter and say June’s big share price retrace could present a good ‘buy the dip‘ opportunity.

Bell Potter recently reaffirmed its buy rating on Mineral Resources shares with an $84.00 price target. That’s some 50% above current levels.

According to the broker:

Mineral Resources completes everything from engineering, to construction, to all aspects of operations in-house.

Our buy view is underpinned by MIN’s earnings diversification, strong insider ownership, clearly articulated strategies, expertise in contracting and internal growth options at Onslow as well as potential lithium expansions including into downstream.

The post These were 3 of the worst-performing ASX 200 stocks in June. Time to buy the dip? appeared first on The Motley Fool Australia.

More reading

• Why Abacus, Bannerman Energy, Immutep, and Pilbara Minerals shares are falling today
• Macquarie names 6 ASX shares to buy in July after tax-loss selling
• Down 25% in a month: Are Mineral Resources shares dirt cheap?
• Here are the top 10 ASX 200 shares today
• Is the Pilbara Minerals share price on track for a strong recovery in FY25?

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a decent gain. At the time of writing, the benchmark index is up 0.35% to 7,786.2 points.

Four ASX shares that are rising more than most today are listed below. Here’s why they are climbing:

Delta Lithium Ltd (ASX: DLI)

The Delta share price is up 13% to 26 cents. Investors have been buying this lithium explorer’s shares after it released an update on its 100% owned Mt Ida Project in Western Australia. That update revealed that the company has discovered a significant gold deposit, not lithium. Management revealed that its mineral resource estimate for gold at Mt Ida (inferred and indicated) is now 6.6Mt @ 3.5 g/t Au for 752,000 ounces. Delta Lithium’s managing director, James Croser, said: “This is a wonderful result for Delta shareholders, reaffirming our long-held belief that the gold system at Mt Ida has significant scale and upside.”

Insurance Australia Group Ltd (ASX: IAG)

The Insurance Australia Group share price is up almost 7% to $7.11. This morning, this insurance giant released an update and reaffirmed its guidance for FY 2024. In respect to the latter, its reported insurance profit and margin are on track to be around the upper end of guidance ranges. In addition, IAG announced that it has purchased reinsurance protection to mitigate natural perils volatility for the next five years, alongside securing adverse development protection for its $2.5 billion long-tail reserves. IAG CEO Nick Hawkins said: “Today’s announcement is an important milestone in our strategy to create a stronger, more resilient IAG.”

Mirvac Group (ASX: MGR)

The Mirvac Group share price is up 4% to $1.88. This follows the release a trading update from the property company this morning. Mirvac reaffirmed its guidance for operating earnings per share of 14 cents to 14.3 cents in FY 2024 and a distribution per share of 10.5 cents. In addition, Mirvac revealed that it has delivered on its ~$1 billion asset sales program. This includes 367 Collins Street, Melbourne (exchanged and deposit received), with settlement expected in July 2024.

Suncorp Group Ltd (ASX: SUN)

The Suncorp share price is up 3.5% to $17.41. This has been driven by news that ANZ Group Holdings Ltd (ASX: ANZ) has received a major boost in its quest to acquire Suncorp Bank for $4.9 billion. The Federal Treasurer has approved the proposed acquisition, paving the way for the deal to complete in July. Suncorp Group’s chairman, Christine McLoughlin, said: “The Suncorp Group Board remains committed to returning to shareholders the majority of net proceeds following completion of the sale.”

The post Why Delta Lithium, IAG, Mirvac, and Suncorp shares are climbing today appeared first on The Motley Fool Australia.

More reading

• IAG shares jump 7% after cutting a deal with Warren Buffett’s Berkshire
• Guess which ASX lithium stock is rocketing 37% on a golden announcement
• ANZ shares higher on ‘significant’ $4.9b Suncorp Bank acquisition approval
• 4 ASX 200 dividend giants to buy in July
• Which ASX shares to buy if interest rates rise (and which to avoid)

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 Commonwealth Bank of Australia (ASX: CBA) share price is marching higher on this last trading day of June.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday at $126.20. As we head into the lunch hour on Friday, shares are swapping hands for $126.46 apiece, up 0.21%.

Looking to last month, CommBank stock ended May trading for $119.53 a share.

With only half a day of trade left in this month, that sees the CBA share price up 5.78% in June.

For some context, the ASX 200 is up 1.2% over this same period.

Here’s what’s been happening with Australia’s biggest bank stock.

CBA share price keeps on giving in June

The CBA share price once more defied a chorus of bearish analysts who’ve labelled the big four bank as overvalued and recommended investors sell. Indeed, at a price-to-earnings (P/E) ratio of 22.12 times, CBA shares trade at the highest valuation of any of the ASX 200 bank stocks.

But we hope you didn’t take their advice.

Investor support comes in part because the FY 2025 stage 3 tax cuts and other government cost-of-living relief measures have mitigated concerns over rising bad loans and potentially fuelled more consumer and business borrowing.

This bullish assessment helped the CBA share price notch a series of record highs in June, most recently on Tuesday the 25th.

Slipping yields

The downside of the fast-rising CBA share price, at least for passive income-focused investors, is the lower accompanying dividend yields.

CommBank has long been favoured by passive income investors for its reliable, twice-yearly, fully franked dividend payouts.

While those payouts have held up over the years, the yield has come to be significantly higher amid the soaring share price.

For example, in 2018, investors could have bought CBA shares for $68 apiece and earned a fully franked yield of 6.3%.

Today, with the CBA share price defying bearish forecasts to soar to $126.46, CommBank stock trades on a dividend yield of 3.6%.

Almost the biggest company again

With another strong share price rally in June, CBA closed the gap with BHP Group Ltd (ASX: BHP) to retake the crown of the biggest company on the ASX.

BHP grabbed that title from CBA in November 2021. That came amid a massive iron ore rally, which saw the iron ore price top US$200 per tonne.

But with BHP’s share price dropping 3.22% in June (at the time of writing), the race for that title is heating up.

As its stands heading into July, CBA has a market cap of $211.77 billion compared to BHP’s market cap of $218.43 billion.

The post The CBA share price trounced the benchmark again in June! Here’s how appeared first on The Motley Fool Australia.

More reading

• Which ASX shares to buy if interest rates rise (and which to avoid)
• Here’s when CBA and these ASX 200 bank stocks are paying their dividends
• 3 reasons I think the CBA share price may crash!
• CBA shares hit another new high! Too late to buy?
• CBA share price outpacing BHP shares on Monday in the race for biggest ASX stock

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.

Well, Guzman y Gomez Ltd (ASX: GYG) shares’ first week on the ASX has been… interesting. Upon an explosive initial public offering (IPO) last Thursday, GYG shares rocketed well above their $22 IPO price to reach $30.99 soon after. 

But the rest of Guzman’s first week on the ASX was more muted. Over Friday and Monday’s session, the company steadily lost value, only to see a bump back up over the past few trading days. Well, until today, that is.

GYG shares are having an awful end to the trading week so far this Friday, currently nursing a loss of 3.41%, down to $28.64 a share at the time of writing.

So a wild and woolly first week for Guzman y Gomez on the ASX. Check out the shares’ performance for yourself below:

But enough on that.

Guzman insiders take advantage of IPO

Today, let’s take stock of GYG shares and how much of this company is still owned by its founders.

So Guzman y Gomez was founded by two people back in 2006: Steven Marks and Robert Hazan. Today, Marks remains Guzman’s co-CEO alongside Hilton Brett. Hazan no longer plays an active leadership role at Guzman, but still retains a significant ownership stake in the business.

As my Fool colleague Tristan covered earlier this week, many of Guzman’s early-stage investors have taken the opportunity of the company’s IPO to sell down their stakes in the company. Those include the company’s chair, Guy Russo, as well as TDM Growth co-CEO Hilton Brett and director Bruce Buchanan.

However, the holdings of several of GYG’s largest shareholders, including those of Marks, are still under voluntary escrow. This ensures that 25% of these investors’ holdings are under escrow until the company releases its first half-yearly results. The remaining 75% of these investors’ holdings will be locked up until Guzman’s full-year results for the 2025 financial year are released.

However, this escrow has not stopped Marks from offloading some of his GYG options. On 24 June, an ASX filing showed that Marks bagged around $8.1 million after converting 403,750 options into shares and selling them.

How many GYG shares are still owned by its founders?

But let’s get down to business.

So according to that filing, Marks retains 2.074 million GYG options. He also directly owns 1,212,000 GYG shares. In addition, Marks indirectly owns another 7,602,000 shares through both a family trust and a super fund. All up, that’s 8,814,000 shares to Marks’ name. Guzman has 101,352,914 outstanding shares in total, meaning Marks retains an approximate 8.7% stake in Guzman y Gomez today.

But what about the other co-founder, Robert Hazan?

Hazan doesn’t appear to have changed his stake in the company post-IPO. That means he still retains 4,527,500 shares indirectly through his family company RBH Ltd. That equates to a 4.47% stake in Guzman y Gomez.

At the current share price, Marks’ stake in Guzman y Gomez would be valued at $252.43 million. Hazan, meanwhile, is sitting on a $129.67 million fortune.

The post What percentage of GYG shares are owned by the company founders? appeared first on The Motley Fool Australia.

More reading

• Why are Guzman Y Gomez shares being shorted?
• Should I buy Guzman Y Gomez shares on the ASX?
• Over $100 million of GYG shares sold by insiders on day one. Should investors be worried?
• How rich are the Guzman Y Gomez founders following the company’s IPO?
• How does the Guzman Y Gomez ASX valuation compare to Domino’s?

Motley Fool contributor Sebastian Bowen 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.