Author: therawinformant

The Zenith Minerals Ltd (ASX: ZNC) share price is charging higher today on the back of promising initial reconnaissance sampling results at one of its Australian gold projects.

Zenith Minerals is a micro-cap ASX miner focused on advancing its portfolio of lithium, gold and base metals projects across Australia, the US, and Turkey.

What did Zenith Minerals announce?

This morning, Zenith announced that initial reconnaissance sampling has confirmed high-grade gold, silver and copper at surface at two prospects within its wholly-owned Flanagans gold project in Queensland.

Rock sample results included:

• Gold to 5.3 grams per tonne (g/t) gold, silver to 100 g/t silver and copper to 8.0% copper at the Flanagans prospect; and
• Gold to 3.4 g/t gold, silver to 273 g/t silver and copper to 13.9% copper at the nearby Great Blackall copper prospect.

According to today’s release, surface sampling confirms the historically reported local high tenor of gold, silver and copper mineralisation at both the Flanagans and Great Blackall prospects. Zenith believes these results endorse the requirement for further exploration activity.

The Flanagans project is located within approximately 100 kilometres of operating gold mines at Cracow and Mount Rawdon, and approximately 70 kilometres northeast of Zenith’s wholly-owned Red Mountain gold project.

Just last week, Zenith reported results from the maiden reverse circulation drilling program at Red Mountain. According to the miner, the program returned “highly encouraging near surface high-grade gold results”, which sent the Zenith Minerals share price rocketing 40% on the day.

Commenting on today’s update, chief executive Mick Clifford said:

“These are very early stage soil and rock-based results at the Flanagans Project. We are however encouraged by them particularly given that we were following up on some historical positive third-party results.”

The company noted that further work, including additional sampling, geological mapping and possible geophysical surveys, is required to determine the significance of surface geochemical samples at both prospects. Follow up field work is set to commence next week.

At the time of writing, the Zenith Minerals share price has jumped 9.52% to 11.5 cents. With this rise, the company’s market capitalisation currently stands at around $28 million.

More reading

• Zenith Minerals share price rockets 40% after intersecting high-grade gold

Motley Fool contributor Cathryn Goh 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 Oz Minerals Limited (ASX: OZL) share price has edged slightly higher in today’s trade. This comes following the company’s announcement it plans to acquire Cassini Resources Ltd (ASX: CZI). Under the transaction, which will take place via a scheme of arrangement, Oz Minerals will acquire all the share capital of Cassini Resources. This will consolidate the company’s ownership of the West Musgrave Project and surrounding tenements to 100%.

What does Oz Minerals do?

Oz Minerals is an Australian-based mining company with a focus on copper. It owns and operates the Prominent Hill copper-gold mine and the Carrapateena advanced exploration copper-gold project. Both projects are located in South Australia. The Oz Minerals share price has recovered strongly from its March low of $5.99, rising 74% to its current price of $10.43.

In the first quarter of 2020, Oz Minerals produced 20,231 tonnes of copper and 55,606 ounces of gold. The company has provided full-year production guidance of 83,000-100,000 tonnes of copper and 207,000-234,000 ounces of gold. It ended the first quarter with net debt of $89 million. However, the Aussie miner is expected to move to a net cash-positive position in Q2 and remain there for the rest of the year. Net debt was $2 million as at 14 April which is good news for the Oz Minerals share price.

More about the acquisition

The acquisition will give Oz Minerals 100% ownership of the West Musgrave project. This will optimise the development approach, timing, and funding for the project. The West Musgrave Project, located in Western Australia, is Australia’s largest undeveloped copper nickel deposit. A pre-feasibility study released earlier this year estimated the project had a Net Present Value of $800 million and an operational life span of ~26 years.

Regarding the acquisition, Oz Minerals’ CEO Andrew Coles said, “This is a promising project with strong sustainability credentials both in terms of the copper and nickel to be mined, being critical inputs for the renewable economy, and also in relation to its low carbon footprint with some 80% of power generated through renewable sources including solar and wind”.

What’s the outlook for the Oz Minerals share price?

Oz Minerals responded to the COVID-19 pandemic by identifying $150 million in cost savings and deferring all but essential metal production activities. The miner is heavily exposed to copper and gold prices which have moved in opposing directions of late. The copper price came under pressure as a result of reduced global activity due to COVID-19, falling over 12.5% in March. It has since substantially recovered, however, and should be a much needed commodity as the world rebounds from the crisis. The gold price has climbed over the course of 2020, reaching levels not seen since 2013. Only time will tell whether these trends bode well for the Oz Minerals share price moving forward.

More reading

• Cassini Resources share price sets new 52-week high following promising exploration update
• 4 ASX 200 shares for the silver bull market

Motley Fool contributor Kate O’Brien owns shares of OZ Minerals Limited. 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 ASX big bank shares have staged a U-turn and are trading higher as Morgans urge investors to buy these stocks with one exception.

The turnaround by the big banks helped the S&P/ASX 200 Index (Index:^AXJO) recover from morning losses with the index gaining 0.5% during lunch time trade.

But the big banks are outperforming the market. The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price is the best performer with a 1.7% jump to $19.06 at the time of writing.

The Commonwealth Bank of Australia (ASX: CBA) share price isn’t far behind with a 1.5% increase to $69.72, while the National Australia Bank Ltd. (ASX: NAB) share price and Westpac Banking Corp (ASX: WBC) share price added just under 1% each.

Not so bad debt

The positive sentiment coincided with Morgans’ report that stated too much bad news have been factored into the sector.

The market marked down the big banks on worries about rising bad debts due to the COVID-19 shutdown of our economy.

“We believe the bad debt damage being factored into current major bank share prices is overdone with the exception of CBA, which is one of the key reasons why CBA is our least preferred major bank,” said the broker.

“WBC is the only major bank where we believe the bad debt damage being priced in is greater than that experienced during the GFC, and this is one of the key reasons why WBC remains our preferred major bank.”

ASX big banks to buy now

The remaining two big banks are also rated as “add” (equivalent to “buy”) by Morgans with ANZ Bank only just getting upgraded from “hold”.

The headwinds the sector is facing due to the pandemic isn’t as severe as those experienced during the GFC, according to the broker.

This is because the federal government and the Reserve Bank of Australia (RBA) have moved quickly to support the economy and banking sector.

“We generally describe the current credit loss provisioning of the major banks as effectively being predicated on the assumption of a ‘squeezed-U-shaped’ recovery for the Australian economy,” added Morgans.

“At this stage this continues to look justified, particularly given the easing of lockdown restrictions being experienced in Australia.”

Lost dividends

But it isn’t all good news. The broker thinks that ANZ and Westpac won’t pay their interim dividends, and the banks will announce this bad news in August.

Both banks deferred their dividend decision when they reported their first half profit results one to two months ago.

The broker also believes that CBA will defer its final dividend decision cum August, but will make this payment in November.

The other three banks are tipped to declare their final dividends in the same month.

More reading

• Top brokers are urging you to buy these 3 ASX stocks today
• Leading brokers name 3 ASX shares to buy today
• Here are 3 ASX 200 shares with dividend yields over 8%
• ASX 200 flat: Altium update disappoints, Metcash posts full year loss
• Is the Domino’s Pizza share price a good buy at $68?

Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and Westpac Banking. 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:

Adairs Ltd (ASX: ADH)

According to a note out of Goldman Sachs, its analysts have retained their buy rating and lifted the price target on this homewares retailer’s shares to $2.80. Goldman likes Adairs due to its strong online business, improving supply chain, and attractive valuation. In respect to the latter, the broker estimates that Adairs’ shares are changing hands at just 10x FY 2022 earnings. It believes this offers a compelling risk/reward. I think Goldman makes some great points and Adairs could be worth considering.

Nick Scali Limited (ASX: NCK)

A note out of Citi reveals that its analysts have retained their buy rating and lifted their price target on this furniture retailer’s shares to $8.20. It believes that its strong order book is a sign that FY 2021 will be a solid year. In addition to this, the broker feels that Nick Scali’s target demographic are less likely to lose their jobs once the JobKeeper program ends. I think Citi could be on the money with this one and Nick Scali could be worth a closer look.

Westpac Banking Corp (ASX: WBC)

Analysts at Morgans have retained their add rating and lifted the price target on this banking giant’s shares to $22.50. According to the note, the broker believes that the bad debt damage being factored into its share price is overdone. Morgans doesn’t believe the bad debt experience during the pandemic will be as severe as that experienced during the GFC. I agree with Morgans on Westpac and would be a buyer of its shares.

More reading

• Here are 3 ASX 200 shares with dividend yields over 8%
• The NAB share price has fallen 24%. Should you buy?
• ASX 200 Weekly Wrap: ASX back in the green
• Beat low interest rates with Telstra and these ASX dividend shares
• Consider these blue chip ASX shares for strong dividend yields

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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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At the weekend I looked into how investments of $20,000 in a number of popular ASX shares fared over the last 10 years.

Given the success of these investments, I thought I would look at a few shares which I feel investors ought to consider investing $20,000 into today for the next decade.

Here why I think these three ASX shares could provide strong returns for investors:

Bravura Solutions Ltd (ASX: BVS)

I think that Bravura Solutions could be worth considering for a $20,000 investment. Bravura provides software and services to the wealth management and funds administration industries. Demand for its offering has been increasing other the last few years and has underpinned strong earnings growth. The good news is that it has added to its offering over the last 12 months through acquisitions. This has not only strengthened its portfolio, but opened up the company to new and lucrative markets.

iShares Global Healthcare ETF (ASX: IXJ)

Another option to consider investing $20,000 into is the iShares Global Healthcare ETF. I think this exchange traded fund could provide strong returns for investors over the 2020s thanks to the growing demand for healthcare services. This is expected to be driven by improvements in technologies, ageing populations, and increased chronic disease. The iShares Global Healthcare ETF gives investors exposure to the world’s biggest and best healthcare companies. This includes the likes of CSL Ltd (ASX: CSL), Johnson & Johnson, Novartis, and Pfizer.

REA Group Limited (ASX: REA)

A final option I would put $20,000 into is REA Group. It is a leading property listings company with real estate websites in Europe, Asia, the United States, and of course Australia. Although REA Group has experienced a sizeable reduction in listings during the pandemic, it has offset its weaker revenues through cost cutting. I believe this demonstrates the resilience of its business model and positions it well to accelerate its earnings growth when the headwinds it is facing ease.

More reading

• ASX 200 Weekly Wrap: ASX back in the green
• These fantastic healthcare ASX shares could make you wealthy
• How to turn $20,000 into $250,000 in 10 years with ASX shares
• How to become a millionaire in 25 years with $20 a day
• Why I’m desperate to add CSL and 2 other ASX shares to my portfolio in 2020

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 Bravura Solutions Ltd and CSL Ltd. The Motley Fool Australia has recommended Bravura Solutions Ltd and REA 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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The Blackmores Limited (ASX: BKL) share price has struggled to gain momentum in recent years. After sliding heavily from mid 2018 to early 2019, Blackmores has since failed to regain these share price losses. The company’s Chinese business, in particular, has underperformed, no doubt contributing to its lack lustre share price performance.

In a recent capital raising, Blackmores successfully raised $92 million at a fixed price of $72.50 per share. Around $50 million of these funds will be used to strengthen the company’s balance sheet. The remainder will be used to support Blackmores’ activities in the Asian market as part of its turnaround strategy.

So, is the Blackmores share price in the buy zone right now?

Rising demand for immunity products offset by other challenges

In a May 2020 market update, Blackmores revealed it has seen a significant increase in demand for its immunity products. However, this demand has been offset by weaker demand across other segments of the business. Furthermore, immunity products only constitute a small part of the company’s overall product portfolio.

Blackmores also reported that supply chain constraints have restricted the company’s ability to keep up with demand in some of its product segments. In particular, Blackmores has been experiencing difficulties accessing some of its internationally-sourced materials.

Ramp up of Asian growth strategy

Blackmores also recently provided an update on the company’s plan to further accelerate its Asian expansion strategy, particularly in China.

Blackmores will continue to expand both its organisational capabilities and partnership opportunities within this highly lucrative market. This will include driving innovation with a new ‘Modern Parenting’ product line.

The company will also inject more funds into its rapidly growing South East Asian business, including identifying new health and nutritional demand areas. Furthermore, Blackmores will increase investment in its IT capabilities, as well as its in-store product advisors across Indonesian operations.

India is another market in which Blackmores is ramping up investment. The company is allocating further working capital to initially target three large Indian cities. This will then act as a launching pad for further growth in this potentially huge market for the Aussie supplements manufacturer.

Lastly, Blackmores is looking to improve its digital capabilities throughout the entire Asian region.

Is the Blackmores share price a buy right now?

The Blackmore’s share price is in my buy zone right now. But only just…

I’m encouraged by the progress Blackmores is making with its Asian strategy. I believe India, in particular, offers Blackmores exciting potential for growth.

Having said that, I would want to see further evidence of its success in turning the business around before classifying Blackmores as a definite buy right now.

More reading

• Here’s where this ASX fund manager sees value for investors
• Here are all the ASX 200 companies that announced capital raisings in May
• ASX 200 rises again, ASX banks push higher
• Top brokers name 3 ASX 200 shares to sell today
• Why ANZ, Blackmores, IDP Education, & Nearmap shares are racing higher

Motley Fool contributor Phil Harpur owns shares of Blackmores Limited. The Motley Fool Australia owns shares of and has recommended Blackmores 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 Vortiv Ltd (ASX: VOR) share price is flying higher today after the ASX micro-cap delivered a business update.

At the time of writing, Vortiv shares have surged 29.73% to 24 cents. This takes the company’s current market capitalisation to around $33 million.

About Vortiv

Vortiv is a technology-based company focused on cybersecurity and the cloud services sector. It owns Decipher Works, a cybersecurity company that provides consulting, support and managed services to financial institutions and large corporations. It also owns Cloudten Industries, a cloud and cloud security company that helps businesses migrate, secure and manage their infrastructure in the cloud.

Additionally, Vortiv holds a 24.89% interest in TSI India, a company that provides solutions in the payments, electronic surveillance and managed services spaces. TSI India owns and manages around 14,000 ATMs in India.

What did Vortiv announce?

This morning, Vortiv revealed it is on track to deliver another quarter of record growth. This has been driven by cybersecurity requirements of government and financial institutions. 

Revenue from the company’s cybersecurity arm in the June 2020 quarter is expected to land between $3.6 million to $3.8 million. Meanwhile, earnings before interest and tax is expected to be in the range of $0.5 million to $0.6 million.

Vortiv believes its focus on government and financial institutions proves to be sound as both sectors continue to invest significantly to enhance their cybersecurity technologies, particularly in light of recent cyber threats. These sectors represent 24% and 48%, respectively, of Vortiv’s revenue.

TSI India valuation

On top of the trading update for its cybersecurity business, Vortiv also revealed it has completed the carrying value review of its holding in TSI India for the financial year ending 31 March 2020.

According to today’s release, an independent valuation completed by a top 6 global accounting firm estimated Vortiv’s 24.89% stake to be worth between $5.5 million and $8.9 million. This compares to a valuation of $9.7 million in FY19.

The company has elected to adopt the lower end of the valuation estimate in its FY20 balance sheet given the current global conditions. 

TSI India FY20 results

Vortiv also revealed today that while TSI India’s FY20 financial results were adversely impacted by the upgrade of ATMs and COVID-19, its underlying EBITDA performance benefitted from operational efficiency.

As a result, TSI India achieved unaudited full-year results of $51.3 million revenue and underlying EBITDA of $2 million. While revenue decreased slightly by 2.1% compared to FY19, EBITDA grew 11.1% over the prior year.

Looking forward, TSI India expects to benefit from higher ATM up-time as well as lower maintenance and asset replacement costs. The business is, however, experiencing disruption due to COVID-19 lockdowns.

More reading

• Leading brokers name 3 ASX shares to buy today
• Where to invest $20,000 into ASX shares immediately
• Is the Blackmores share price in the buy zone?
• ASX supermarket shares on the radar
• Why Altium, Australian Ethical, Flight Centre, & Transurban are dropping lower

Motley Fool contributor Cathryn Goh 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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Blue chips Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) are on many investors’ radars right now. The food retailer giants are striding through the pandemic with strong sales and revenues leading to the increased supermarket shares. 

Both companies are listed in the S&P/ASX 50 (ASX: XFL) and have a combined market capitalisation of close to $70 billion. Coles is the smaller of the 2, with a market capitalisation of $22 billion compared to Woolworths nearly $47 billion market cap. So, how are the 2 supermarket conglomerates performing? 

Coles 

Coles operates 2,500 retail outlets nationally, including 800 supermarkets, 900 liquor stores, and more than 700 fuel and convenience retailers. The Coles share price remained relatively robust in the March correction, losing around 17% from peak to trough. Shares are now trading at $16.68, relatively close to their high for the year of $17.17. 

Coles reported a 12.9% increase on its Q3 sales driven by panic buying at the start of the coronavirus pandemic. Supermarket sales increased by 13.8%, recording the division’s 50th consecutive quarter of comparable sales growth. Liquor sales were up by 7.2% and express sales up 4.3%. Coles Online sales revenue grew by 14% in Q3, despite home delivery being temporarily suspended in March. 

Coles Group reported sales revenue for Q3 at $9.2 billion. The Group responded to increased demand by hiring 12,000 extra workers. Beyond the initial panic buying, the fact that Australians are spending more time at home has increased consumption of home-cooked meals and their household items. 

Woolworths 

Woolworths is Australia’s largest supermarket chain, operating some 995 supermarkets across Australia. Including its liquor and Big W brands, Woolworths is behind some 3000 stores across the country. The Woolworths share price fell 20% in the March dip, but has since recovered somewhat and is currently trading down 16% from its 2020 high. 

Woolworths has benefited from the same forces driving increased sales at Coles. Overall, Q3 quarter sales grew by 10.7%. The Australian food business saw growth of 11.3%, Big W grew sales by 9.5%, and liquor also grew 9.5%. The hotels business saw a 12.9% drop in sales with the closure of venues. 

Sales growth continued in April although moderated from rates seen in March. Looking into the Q4, increased costs are expected to continue including costs associated with the temporary employment of 22,000 team members. These incremental costs are expected to be in the range of $220 – $275 million for Q4. The extent to which these costs can be offset will depend on the rate of sales growth over the remainder of the financial year. 

Foolish takeaway 

The supermarket giants saw increased sales as a result of the pandemic but each also incurred increased costs. The outcome of the changes will be revealed in Coles and Woolworths’ full-year results with a close watch on the supermarket shares. 

More reading

• ASX 200 Weekly Wrap: ASX back in the green
• 3 high quality ASX dividend shares for income investors to buy
• These 3 ASX ETFs are yet to recover from the market crash
• Australian retail sales up 16.3% in May
• Why the Wesfarmers share is beating the ASX 200

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths 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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