Author: therawinformant

The A2 Milk Company Ltd (ASX: A2M) share price has surged up 4.30% to $14.30 today amid a broader market rise in the ASX. Let’s take a look at how the company has evolved in the last two years, and why the A2 Milk share price keeps coming back up.

Evolution of the A2 Milk share price

A2 Milk has experienced a bit of a roller coaster period in the last two years. At the beginning of 2019, the A2 Milk share price was trading around $10, and by the end of that year, had increased by 40% to $14. This momentum continued until March 2020 when it was trading as high as $16.60.

But then, global markets encountered a major shock as the coronavirus pandemic gripped the whole world – dragging A2 Milk’s share price back down to the $14 levels. The market eventually settled down, and by August the company’s share price has surged back to a YTD high of $20.05.  

In late September, however, the company announced a negative outlook for FY21. A2 Milk noted that sales to retail ‘daigous’ in Australia and New Zealand (ANZ) would be curtailed due to the pervailing pandemic restrictions and reduction of tourists and students from China. Note that tourists and students from China make up a big portion of A2 Milk’s export channel, as these so-called daigous fulfil orders from Chinese customers overseas.

Since that announcement, the company’s share price dropped as low as $13.24 before bouncing back in the last few days of trading to the current price of $14.32.

A2 Milk’s business model

A2 Milk differentiates itself from other brands by marketing its unique A2 protein content as a healthier and safer choice. A2 beta-casein is a type of protein found in milk. Some studies have found that it is a healthier option than the more common A1 type found in regular milk. Other companies have tried to produce A2 milk and imitate its business model, but their lack of success has only stamped A2 Milk’s superior position within the industry. 

The company has a strong demand in China for its infant milk formula product. To get around the daigou export problem, A2 Milk says that it is rapidly building its Chinese-based business by increasing its e-commerce presence, as well as expanding its physical distribution to more mother and baby (MAB) stores across mainland China. 

However, China is not the only export channel for A2 Milk. According to the company, its US liquid milk business is growing quickly, and Canada shapes up to be the next market frontier for A2 Milk. 

A2 Milk by the numbers

A2 Milk’s balance sheet is strong with debt comprising only around 22% of its capital structure. The company is also very liquid with its current assets representing 78% of total assets. Current assets are those assets that can converted into cash within one year. 

A2 Milk expects its total FY21 revenue to be around $1.9 billion, which would be a growth of close to 10%. 

On the earnings side, its revenue has doubled in just two years, while maintaining net profit margin at a healthy 22%. The rocket-like rise in its earnings per share (EPS) from 24 cents to 49 cents came from a low base in 2015, when it was a struggling company.

At the current price of $14.32, the A2 Milk commands a market cap of $10.2 billion.

More reading

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• 4 outstanding ASX 200 shares to buy with $4,000
• I plan to invest heavily in ASX shares next week
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• 3 explosive ASX growth shares to buy with $3,000

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. 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.

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The Impedimed Limited (ASX: IPD) share price rocketed by 13.41% today to close the day’s trade at 9.3 cents per share. This came after the company announced that its Sozo medical device has been selected by AstraZeneca for use in a phase 2 drug trial.

What did Impedimed announce?

Impedimed is a medical device company that produces a family of FDA-approved devices. It has been listed on the ASX since 2007.

According to Impedimed, pharmaceutical giant AstraZeneca has selected its Sozo device for a phase 2 trial in order to measure fluid volume in patients with chronic kidney disease. The AstraZeneca study will use the Impedimed device to evaluate the efficacy, safety and tolerability of a combination of 2 AstraZeneca drugs.

The trial will begin in January 2021 and run for approximately 18 months. According to Impedimed, the study will generate $2 million in revenue. The total expected revenue from this trial and a previously announced AstraZeneca trial, in which it is also using Sozo, is $4.5 million. 

An additional 200 Sozo devices will be leased across 24 countries for the trial, bringing the total Sozo devices leased for AstraZeneca studies to 375.

Impedimed managing director and CEO Richard Carreon commented: “There are millions of people today living with chronic kidney disease, and we look forward to learning more about the impact this trial will have on improving patient care.”

How has Impedimed performed recently?

In the first quarter of FY2021, Impedimed had revenue of $1.5 million, an increase of 11% on the prior corresponding period. Impedimed had $15.4 million cash on hand at 30 September 2020.

The Impedimed share price is up more than 187% since its 52-week low of 3.2 cents, however, it is down 38% since the beginning of the year. The Impedimed share price is down 34% since this time last year.

More reading

• The A2 Milk (ASX:A2M) share price is up 4% today. Here’s why.
• Why the Resapp (ASX:RAP) share price stormed 5% higher today
• The RPMGlobal (ASX:RUL) share price is up 9% in a week. Here’s why.
• ASX stock of the day: Elixinol Global (ASX:EXL) shares blaze new highs
• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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The Resapp Health Ltd (ASX: RAP) share price stormed higher today following the announcement of a new partnership.

During afternoon trade, shares in the digital health company reached as high as 9.4 cents, but later pulled back slightly. The ResApp share price closed out the day at 9.1 cents, up 5.8%.

Let’s take a look at what ResApp updated the market with.

Integration of ResAppDx

According to the release, Resapp advised that it has entered a six-month joint development and pilot agreement with Medgate. The new deal will see Medgate use Resapp’s smartphone-based acute respiratory diagnostic test, ResAppDx, in its telemedicine services.

Founded in 1999, Medgate is a provider of telehealth services, bringing physicians to where patients are needed via digital health bookings. The company operates Europe’s largest telemedical centre in Switzerland, employing over 500 people worldwide. Medgate has presence in Germany, the Philippines, the United Arab Emirates, and India.

Under the agreement, Medgate and Resapp will work together to build and pilot an integration of ResAppDx in Medgate’s services. The integration phase of the project is expected to take around two months. Thereafter, a three-month pilot will commence in early 2021, evaluating the performance of the new program.

During the initial stages, both companies will assess the impact that ResAppDx has on Medigate’s telehealth service. A number of key metrics will be applied as a benchmark to test its success.

Negotiations on the cost model of the integration will be finalised during the pilot period.

Resapp advised it will not see material revenue from the project. Either party may terminate the contract by providing 30 days notice.

What did management say?

Resapp CEO and managing director Mr Tony Keating commented on the partnership:

We are very pleased to have entered into this pilot agreement with such a high calibre partner. Medgate is a well-known and respected organisation and we look forward to working with them to deliver our ResAppDx product to their customers.

This partnership is ongoing validation of our offering and will potentially allow the company to pursue a large market opportunity in Europe, as well as in Asia and the Middle East where Medgate also has operations. I look forward to updating shareholders on the integration and commencement of the pilot initiative in the coming months.

Resapp share price summary

The Resapp share price has taken a hit over the last few weeks since revealing its quarterly earnings scorecard. Shares in the company fell to a 7-month low of 8.2 cents, but have since slightly recovered.

No doubt, today’s announcement has had a positive effect on the Resapp share price, however it still has some way to go to hit its former highs of 50 cents, reached back in September 2016.

More reading

• Why the ResApp (ASX:RAP) share price is falling 18% lower today
• Why the ResApp (ASX:RAP) share price is racing higher today
• Why the ResApp (ASX:RAP) share price is up almost 20% today
• The ResApp (ASX:RAP) share price is soaring 10% today. Here’s why.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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RPMGlobal Holdings Ltd (ASX: RUL) has seen gradual increases in its share price this week. Culminating in a 4.19% jump today, taking the 5-day share price rise to more than 9%. 

The company has been steadily consolidating its software and services portfolio, while trying to deal with the impacts of COVID-19.

At present, the mining software company currently has 11 of the 21 global offices either partially closed or fully closed, with previous positive COVID-19 cases in South Africa, Russia, the US, Chile and Indonesia. All of which have since recovered.

Regardless of the COVID-19 restrictions, the company has managed to acquire 3 bolt-on software products, bringing the tally to 9 in 6 years. The company’s software solutions range from physical asset management, to mine scheduling, through to sophisticated budgeting and simulation tools. 

The uniqueness of each product within the mining sector, means that there is potentially a longer tail of revenue. A long tail that is still growing for every customer. 

Inventory optimisation

In late October, RPMGlobal announced that it intends to acquire Canada-headquartered, inventory optimisation management software company, IMAFS. A Software-as-a-Service (SaaS) and cloud-delivered provider of inventory optimisation software, IMAFS has more than 20 years’ experience developing and selling its flagship product.

It connects to an organisation’s enterprise resource planning (ERP) system and utilises proprietary artificial intelligence (AI) algorithms to improve inventory management. Its sole purpose is for optimising the inventories of large capital intensive companies. 

Other RPMGlobal software growth

However, IMAFS is the company’s second SaaS product, with its first being launched as recently as 14 October. RPMGlobal launched its Haulage as a Service product. The product leverages the company’s TALPAC calculation engine, providing access online rather than on the desktop.

Commenting on the move, RPMGlobal CEO Richard Mathews said:

RPM’s cloud enabled SaaS solutions help to solve several key industry challenges, including the problem of siloed data. With HaaS, data is no longer trapped within individual desktop applications or siloed with individual users.

This cloud enabled approach enables operations to get the best overall haulage performance right across their operations irrespective of where the users or applications calling the cloud service are physically located.

According to IBM, there are many strong benefits of moving to an SaaS style application. Including, quicker implementation, scalability, ease of updates, and lower costs.

In other, organic software developments, RPMGlobal has released a scheduling and design tool for underground potash mines. This system provides sophisticated mine scheduling across all scheduling horizons. Lastly, the company has updated its AMT asset management product.

Specifically designed for asset lifecycle costing and budgeting, the latest updates have dramatically improved the speed and accuracy of maintenance budgeting. RPMGlobal claims the product is one of the only products on the market that is purpose-built for maintenance cost budgeting that works seamlessly with any miner’s ERP.

Foolish takeaway

So far in first quarter FY21, RPMGlobal has secured a total contract value of $3.3 million. This has raised the annual recurring revenue stream to $13.5 million, up from $12.7 million. Moreover, the company CEO and CTO have long track records in the enterprise software industry. Once the restrictions from the COVID-19 pandemic have eased, the company will emerge back into the market with more products and increased functionality. 

More reading

• RPMGlobal (ASX:RUL) share price falls despite product launch

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of RPMGlobal Holdings. The Motley Fool Australia has recommended RPMGlobal Holdings. 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.

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The Elixinol Global Ltd (ASX: EXL) share price is on fire today, up more than 55% at the time of writing to 22 cents a share. The Elixinol share price closed at 14 cents a share last week, but opened this morning at 16 cents a share and has appreciated even more as the trading day continues. So who is Elixinol? And why are these shares blazing to new highs today?

Who is Elixinol Global?

Elixinol Global is an ASX cannabis company with a portfolio of worldwide operations. Its Australian offerings are limited to its subsidiary, Hemp Foods Australia Pty Ltd. Hemp Foods Australia focuses on manufacturing and wholesaling hemp-based foods, materials and products. However, its global offerings are more extensive.

Elixinol makes and sells both hemp and cannabidiol (CBD) products across the United States, Latin America, Europe and the United Kingdom, as well as in Japan and South Africa. The legal status of CBD (a component of psychoactive cannabis, but not industrial hemp in meaningful amounts) varies around the world, which means that Elixinol can only sell these products in certain markets (which doesn’t include Australia at this time).

Elixinol is a dual-listed company, appearing on the ASX, as well as on the Over-the-Counter (OTC) markets in the US. It only IPOed on the ASX back in January 2018, where it hit the boards at $1.57 a share. Looking at that price, it’s not hard to conclude Elixinol has had a rough trot since then. The company did have a boom of sorts, rising from the IPO price to a high of $4.58 in May 2019. However, even after today’s rise, Elixinol shares are down roughly 95.5% from those highs.

Why is the Elixinol share price surging today?

Elixinol shares are not the only ASX cannabis shares on the rise today. It looks as though we are seeing a sector-wide move, which indicates some macro or external factors at play. To illustrate, Elixinol’s fellow ASX cannabis company Cann Group Ltd (ASX: CAN)’s shares are up 6.25% to 34 cents a share, whilst THC Global Group Ltd (ASX: THC) shares are up 7.14% to 22 cents and Althea Group Holdings Ltd (ASX: AGH) shares are up 14.81% to 46 cents.

The external factor could be that several US states legalised either recreational or medical cannabis use in last week’s elections. According to our Fool colleagues across the Pacific, the states of New Jersey, Arizona, Montana and South Dakota look to have successfully voted to legalise recreational use, while the conservative state of Mississippi has legalised cannabis for medical use only.

Following these results, it means that 15 out of the 50 states in the USA have now legalised recreational use, with 35 permitting medical use as well. Being the world’s largest economy, it’s not hard to view these developments as good news for ASX cannabis companies, and by extension, any cannabis company around the world.

An impressive quarterly update

However, the Elixinol share price is still vastly outperforming its peers in the cannabis space today. So what might explain this? Well, last week, the company posted a quarterly update to the markets, which might have gone unnoticed until today amidst the election drama.

In this update (covering the quarter ending 30 September), Elixinol told the markets that its quarterly revenue had grown by a hefty 18% compared with the previous quarter to $4 million. It also succeeded in slashing costs and cash outflow, which was at $3.5 million for the quarter, down from $6.2 million in the previous quarter, and down from $9 million in the quarter before that.

More reading

• Here’s why ASX cannabis shares are falling today
• How did ASX cannabis shares perform last quarter? 
• Why is the Althea (ASX:AGH) share price up 8% today?
• The Cann Group share price getting smoked after a strategic shareholder exits

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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With so many shares to choose from on the ASX, it can be hard 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 shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

CSL Limited (ASX: CSL)

According to a note out of UBS, its analysts have retained their buy rating and $346.00 price target on this biotherapeutics company’s shares. This follows the release of data on a study evaluating the efficacy and safety of CSL112 to reduce the risk of cardiovascular death, heart attacks, and stroke in acute myocardial infarction patients. Based on the data, it believes CSL may be targeting a population group with more severe cardiovascular disease. However, it hasn’t included the therapy into its forecasts just yet and will wait for further confirmation/approval. Outside this, the broker remains positive on CSL’s prospects and notes strong demand for flu vaccines because of the pandemic. The CSL share price is currently fetching $303.98.

Jumbo Interactive Ltd (ASX: JIN)

Analysts at Goldman Sachs have initiated coverage on this online lottery ticket seller’s shares with a buy rating and $14.50 price target. The broker likes Jumbo due to its belief that it is a capital light and high return on equity business operating as an online distribution arm within the high barriers to entry Lottery industry. Goldman is forecasting a 16% compound annual growth rate for its revenue over the next three years. This is expected to be supported by the lottery industry reaching an inflection point in digital penetration and the structural shift to online sales. The Jumbo share price last traded at $12.64.

Uniti Group Ltd (ASX: UWL)

A note out of Ord Minnett reveals that its analysts have retained their buy rating and $1.82 price target on this telco’s shares. The broker notes that its acquisition of OptiComm is due to settle on 20 November. It is a big fan of the deal and expects it to substantially increase the quality of its earnings. It also estimates that it will lift the company’s market share of the fibre-to-the-premises (FTTP) market to 12%. This makes it the number two player in this market. The Uniti share price is changing hands for $1.38 today.

More reading

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• Where to invest $1,000 into ASX shares this week

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’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. 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.

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The Thorney Technologies Ltd (ASX: TEK) share price is up 7.35% in late afternoon trading today. This comes following the company’s announcement on its $37 million capital raising plan.

Thorney’s shareholders were hit hard by the pandemic panic selling that hit the All Ordinaries Index (ASX: XAO) earlier this year. Thorney’s share price dropped more than 50% before bottoming out on 23 March.

Since the March lows, shares are up 157% for a year-to-date gain of 28%. By comparison the All Ords is down 4% so far in 2020.

What does Thorney Technologies do?

After re-listing on 18 January 2017, Thorney Technologies became an investment company focused on technology related investments., often at the pre-IPO level. The company is managed by Thorney Investment Group, a private business, under a long-term investment management agreement.

What moved the Thorney Technologies share price today?

This morning Thorney Technologies announced it had received commitments from institutional, sophisticated and professional investors to raise $27 million via a fully-committed two-tranche placement of ordinary shares at 35 cents per share.

Thorney welcomed Woodson Capital Management LP as a substantial shareholder.

The company also announced its proposal of a non-underwritten $10 million non-renounceable entitlement offer to eligible shareholders, also at 35 cents per share.

Bell Potter Securities Limited is acting as Lead Manager for both offers.

Thorney Technologies Chair Alex Waislitz said:

We are delighted with the support shown by new and existing investors, with bids received well in excess of amounts raised under the Placement. We are pleased to welcome Woodson Capital Management as a substantial shareholder in TEK.

The bulk of the capital raising will be used to invest in technology related companies in Australia and internationally. The company stated it will continue to focus on pre-IPO (initial public offering) opportunities, stating it, “continues to be inundated with exciting and potentially valuable pre-IPO investment opportunities, and the Board intends to continue to be at the forefront of access to these investment opportunities.”

The committed placement will be completed in two tranches. The first, approximately $13 million worth, is expected to settle this Thursday 12 November.

The second placement of some $14 million of new shares will be issued subject to Thorney Technologies’ shareholders’ approval.

More reading

• Leading brokers name 3 ASX shares to buy today
• Afterpay (ASX:APT) share price up 4% in today’s trading
• Here’s why the Ramelius (ASX:RMS) share price is zooming higher
• Latest 3 “buy” recommendations from top brokers
• 3 mid-cap ASX shares with recent price pullbacks

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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The Afterpay Ltd (ASX: APT) share price continues to climb today, up 4.44% to $104.96 at the time of writing. This is despite differing views on the buy now, pay later (BNPL) leader from two major banks over the past week, and comes after a 3.9% rise across last week.

Why the disagreement over Afterpay?

Westpac Banking Corp (ASX: WBC) CEO Peter King has defended the decision to provide Afterpay with access to the Westpac’s deposit and transaction accounts. Some analysts had disagreed with the move, believing the bank would lose its relationship with younger customers. But Mr King told shareholders at the Westpac AGM recently:

When we look at banking and how it is provided, we think it is fundamentally changing. Other banks are seeking to provide infrastructure to fintechs and this is a market Westpac wants to be in.

Westpac’s banking as a service platform will allow Afterpay to provide branded saving and transaction accounts. It will then be able to link these to customers’ existing Afterpay accounts. This provides Afterpay’s customers with an alternative to traditional banking, and gives Afterpay a scalable platform to expand globally. When this was announced the Afterpay share price spiked 7%.

Currently, National Australia Bank Ltd (ASX: NAB) is leading the banks in terms of warehouse finance arrangements, or debt funding for fintech companies. 

However, Australia and New Zealand Banking GrpLtd (ASX: ANZ) has a different view. In an interview with Ticky Fullerton of Sky News, outgoing chairman David Gonski declared his skepticism of the BNPL business. ANZ CEO Mr Shayne Elliot went further, saying that Afterpay’s 3.5 million customers were generally not high savers motivated to buy their own homes, and therefore were not a good fit with the bank.

Forces driving the Afterpay share price

Despite these differing viewpoints, Afterpay continues to display strong growth metrics in every quarterly update. The recent first quarter FY21 update saw sales grow by 9% than the record underlying sales of Q4FY20. Moreover, the company’s active users has increased to 11.2 million, with the US reaching over 6.5 million. 

Furthermore, 45% of like for like sales growth is driven by millennials. Gen X and Gen Z then form 25% and 24% respectively. Lastly, the company’s number of active merchants has increased to 63.8 k. An increase of 70% year on year. 

Foolish takeaway

The Afterpay share price has continued to grow despite the entrance of payments giants like Paypal Holdings Inc (NASDAQ: PYPL), or the views of senior financial players. The company continues to sign strategic alliances like the one with Westpac, while continuing to report solid results quarter on quarter.

More reading

• Why the ANZ (ASX:ANZ) share price is underperforming on Monday
• Why the CBA (ASX:CBA) share price and these ASX stocks could get a $100bn boost
• ASX 200 jumps 1.7%: REA Group surges to record high, bank shares push higher
• Is the NAB (ASX:NAB) share price a bargain buy?
• ASX 200 Weekly Wrap: US election special

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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.

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The Ramelius Resources Limited (ASX: RMS) share price has been a strong performer on Monday.

In afternoon trade the gold miner’s shares are up 4.5% to $2.33.

Why is the Ramelius share price charging higher?

There have been a couple of catalysts for today’s strong share price gains.

The first is a jump in the gold price on Friday night which has given most gold miners a lift today.

So much so, the S&P/ASX All Ordinaries Gold index is up a sizeable 1.6% at the time of writing even with investor risk appetite increasing.

What else is driving the Ramelius share price higher?

In addition to the above, a positive announcement by Ramelius this afternoon has supported its share price.

That announcement reveals that the results of its Penny Feasibility Study (Mt Magnet) have been strong and led to the company’s board giving the go ahead to expedite the project’s development.

The study found an all-in sustaining cost (AISC) of A$633 per ounce, down from previous estimates of A$703 per ounce.

As a result of compelling financial outcomes from the Penny Feasibility Study, the company has also approved a decision-to-mine to bring the project into production in the June 2021 quarter. This is slightly earlier than contemplated by the prefeasibility study.

Management commented: “The high grade Penny project will generate significant financial returns at the modelled gold price of A$2,300/oz and current spot prices of approximately A$2,650/oz. At an assumed price of A$2,650/oz, the project generates an AISC margin of just over A$2,000 per ounce.”

Edna May, Western Australia.

Furthermore, an updated mineral resource at Edna May has been completed successfully.

According to the release, the study has led to a 22% mineral resource increase from previous estimates.

Management notes that the option study for bulk underground versus narrow vein mining is progressing, and will also include consideration of Stage 3 open pit and potential interaction.

More reading

• Why market crashes are useful for buying ASX dividend shares
• ASX 200 down 1.2%: Blackmores jumps, Bendigo and Adelaide Bank’s update, Zip sinks
• Ramelius (ASX:RMS) share price lower despite smashing Q1 guidance

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

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The S&P/ASX 200 Index (Index:^AXJO) is surging higher and the good times are likely to roll on. Markets are embracing a Joe Biden US presidency and prospects of greater central bank stimulus.

It’s hard to see what could sink the ongoing rally – barring an unexpected black swan event. This should clear the way for a decent Santa Rally.

Here are the latest three ASX stocks that brokers are urging you to buy today.

Buy Macquarie for rebound potential

The Macquarie Group Ltd (ASX: MQG) share price is one to watch following its first half profit results.

The bank’s interim dividend of $1.35 was around 8% below consensus and the slightly better than expected profit result was driven by the “lumpy” divisions in the bank.

But Morgan Stanley isn’t perturbed and it reiterated its “overweight” recommendation on the Macquarie share price.

“We think 1H21 was a low point for earnings,” said the broker.

“The combination of a better outlook for gains on sale & performance fees, solid MIRA flows, and lower impairments should stabilise earnings in 2H21, with 30% recovery in FY22, in our view.”

What’s more, Morgan Stanley reckons impairment losses at the bank has peaked with better than expected outcomes for most divisions.

The broker’s 12-month price target on the stock is $148 a share.

Well wrapped for Santa Rally

Meanwhile, the Amcor CDI (ASX: AMC) share price is another to put on your watchlist following its quarterly results.

The analysts at Macquarie repeated the “outperform” rating on the packaging group as they describe Amcor as an attractive, resilient and defensive business.

“The US has been a strong point for most companies in Q3, and AMC was no exception, with North America flexibles vols up mid-single digit (vs low single digit in 2H20),” said the broker.

“Rigids also saw improved momentum, with vols +4% vs +1% in 2H20, driven by improved sequential demand in the US convenience channel and likely pantry-filling (again) of Gatorade.”

Despite these positives, the Amcor share price is trading at a discount to peers and its historical average.

Amcor is priced at a 20% discount to the ASX 100 when the 10-year average is a 7% premium. Macquarie’s 12-month price target on Amcor is $17.85 a share.

The good oil to fire up the NUF share price

The embattled Nufarm Limited (ASX: NUF) share price could make a comeback with Citigroup reiterating its “buy” call on the stock.

There is a close to 50% total return upside to the NUF share price based on the broker’s estimates. Earnings growth from the agri-business group’s omega-3 oil enriched canola seeds is a key driver for this bullish call.

“While the initial earnings contribution should be small, we see omega-3 canola as a material long term earnings driver for Nufarm,” said Citi.

“Based on our own bottom-up analysis of fish oil demand for the global aquaculture industry, we estimate a ~418kt pa demand deficit will emerge by 2028.”

The new omega-3 products is estimated to be worth up to $1.57 a share for Nufarm and Citi’s 12-month price target on the stock is $5.30 a share.

More reading

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• Why the CBA (ASX:CBA) share price and these ASX stocks could get a $100bn boost
• ASX 200 jumps 1.7%: REA Group surges to record high, bank shares push higher
• Why brokers are neutral on the Domino’s (ASX:DMP) share price
• 5 ASX 200 shares that rose by more than 15% last week

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited and Nufarm Limited. The Motley Fool Australia owns shares of and has recommended Amcor Limited and Macquarie Group Limited. 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.

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