Category: Stock Market

Lendlease Group (ASX: LLC) shares are running in the opposite direction to the rest of the market today.

Shares in the embattled real estate investment group are down 1.8% to $5.59 in morning trade. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is ratcheting up 1.1% after Wall Street enjoyed another record high last night.

Only 27 of the top 200 companies included in the benchmark index are in the red today, and Lendlease is one of them. The nonconforming move follows an update from the Australian Competition and Consumer Commission (ACCC) this morning, throwing a cat among the pigeons at Lendlease.

Competition concerns

On 18 December 2023, Lendlease struck a deal with Stockland Corporation Ltd (ASX: SGP) and Thailand property company Supalai to sell 12 Australian masterplanned community projects for $1.3 billion.

The asset sale is subject to regulatory approvals, which might be a sticking point.

Today, the ACCC — Australia’s corporate watchdog — has raised preliminary concerns about the proposed sale. Specifically, the regulator is wary of a lack of competition in masterplanned community projects on a Lendlease exit.

ACCC commissioner Liza Carver detailed the competitive dynamics at play, stating:

We are concerned that the proposed acquisition would remove one of Stockland’s closest and largest competitors in the supply of residential masterplanned community housing lots in four regions — the Illawarra, North West Perth, Ipswich, and Moreton Bay.

The ACCC is concerned that the proposed acquisition may increase Stockland’s incentive to raise the price, delay the supply, or reduce the quality of housing lots in these regions, to the detriment of prospective homeowners.

Furthermore, Carver explained that the regulator was concerned that other developers may not compete sufficiently with Stockland following Lendlease’s sale.

Such concerns are possibly magnified by Australia’s ongoing housing crisis. The 2024-2025 Federal Government Budget highlights Australia’s below-OECD average housing supply of 420 per 1,000 people, as shown above.

The ACCC has yet to decide whether to allow, block, or amend the deal.

Are Lendlease shares walking a tightrope?

A snapshot of the Lendlease balance sheet on 31 December 2023 shows a business sitting in $3.74 billion of net debt.

The real estate group posted $331 million in negative cash from operations for the 2023 calendar year. If Lendlease is in a large amount of debt and not producing cash from its operations, how will it cover its interest payments?

Part of the push to liquidate some of the group’s assets might be due to the questionable financial position. So, if Lendlease was betting on a $1.3 billion payday, a hold-up by the ACCC might pose a financial threat to the company.

Fortunately for Lendlease shares, the group has other asset sales on the go. After a 49% fall in the share price over three years, the last thing a Lendlease investor would want is to raise capital now.

The post Lendlease shares crack as watchdog growls at $1.3 billion payday appeared first on The Motley Fool Australia.

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• Buy Woolworths and these ASX dividend stocks
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• Why Coronado Global, EML, Immutep, and Lendlease shares are storming higher
• Guess which ASX 200 share is pushing higher on $480m asset sale

Motley Fool contributor Mitchell Lawler 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.

Buying Australian Foundation Investment Co Ltd (ASX: AFI) (AFIC) shares comes with a lot of different underlying investments.

Although an individual company, a listed investment company (LIC) invests in other shares for shareholders. Some LICs invest in areas like Asian shares, global shares, or ASX shares.

AFIC is one of the largest and oldest LICs in Australia and primarily invests in ASX shares. It aims to provide shareholders with “attractive investment returns through access to a growing stream of fully franked dividends and enhancement of capital invested over the medium to long term.”

Which ASX shares is AFIC invested in?

The LIC has dozens of holdings, but AFIC tells the market its top 25 holdings every month, which amount to around 80% of the portfolio’s overall value.

Before getting to the individual names, let’s consider the sector allocations. At 30 June 2024, the business had the following weightings: banks (20.8%), materials (14.3%), healthcare (13.2%), industrials (10.8%), other financials (9.2%), consumer discretionary (7.9%), communication services (6.5%), real estate (5%), consumer staples (4.1%), energy (3.8%), IT (2.7%), and cash (1.7%).

The AFIC portfolio has a much smaller allocation to banks and miners than its benchmark, the S&P/ASX 200 Accumulation Index (ASX: XJOA), which has a weighting of around 50% to those two sectors.

I’ll now list each position in the portfolio with a weighting of at least 2%:

• Commonwealth Bank of Australia (ASX: CBA) – 10.1%
• BHP Group Ltd (ASX: BHP) – 8.1%
• CSL Ltd (ASX: CSL) – 7.8%
• Macquarie Group Ltd (ASX: MQG) – 4.7%
• National Australia Bank Ltd (ASX: NAB) – 4.6%
• Wesfarmers Ltd (ASX: WES) – 4.6%
• Westpac Banking Corp (ASX: WBC) – 4.1%
• Goodman Group (ASX: GMG) – 3.6%
• Transurban Group (ASX: TCL) – 3.5%
• Woodside Energy Group Ltd (ASX: WDS) – 2.4%
• ANZ Group Holdings Ltd (ASX: ANZ) – 2.4%
• Telstra Group Ltd (ASX: TLS) – 2.3%
• Woolworths Group Ltd (ASX: WOW) – 2.3%
• Rio Tinto Ltd (ASX: RIO) – 2.3%
• James Hardie Industries plc (ASX: JHX) – 2.2%
• CAR Group Limited (ASX: CAR) – 2.1%

Many of these stocks are some of the largest and strongest ASX blue-chip shares in Australia, so the portfolio is representative of Australia’s economy.

AFIC performance

According to AFIC, its net asset per share growth plus dividends return, including franking, over the past five years was an average of 9.3% per year, compared to 8.7% for the ASX 200 Accumulation Index, including franking.

Despite that outperformance, at the end of June 2024, the AFIC share price was trading at the biggest discount to the net tangible assets (NTA) of the past decade. That might imply there’s a bargain here.

The post Considering AFIC shares? Here’s what you’re buying appeared first on The Motley Fool Australia.

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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 CSL, Goodman Group, Macquarie Group, Transurban Group, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Macquarie Group, Telstra Group, and Wesfarmers. The Motley Fool Australia has recommended CSL, Car Group, and Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Santos Ltd (ASX: STO) share price is racing higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock closed yesterday trading for $7.68. In late morning trade on Thursday, shares are swapping hands for $8.16 apiece, up 6.2%.

For some context, the ASX 200 is up 1.08% at this same time, while shares in rival oil and gas giant Woodside Energy Group Ltd (ASX: WDS) are up 1.3%.

So, what’s sending the Santos share price soaring?

Santos share price takes off on Middle Eastern interest

ASX 200 investors are bidding up the Santos share price after Bloomberg reported that both Saudi Aramco and Abu Dhabi National Oil Co (Adnoc) are considering lobbing takeover bids.

Bloomberg noted that Middle Eastern energy companies were looking to increase their international gas exposure, citing people “with knowledge in the matter” who wished to remain anonymous.

The sources also revealed that “other potential buyers” could be interested in acquiring Santos.

As yet, there has been no comment from Santos, Adnoc or Saudi Aramco.

At the current Santos share price, the company has a market cap of just over $26 billion.

ASX 200 oil company’s near merger with Woodside

The latest takeover rumours come just six months after Woodside’s acquisition talks came to naught.

On 7 December, Santos responded to media rumours of the potential Woodside merger.

The company stated, “Santos confirms it has engaged in preliminary discussions with Woodside regarding a potential merger. Santos continuously reviews opportunities to create and deliver value for shareholders.”

Between 7 December and 7 February, the Santos share price rallied 15%, with investors expecting Santos would be the bigger beneficiary of any merger.

But on 7 February, investors learned that the deal was off.

And Santos shares fell 11% over the following two weeks.

At the time, Woodside CEO Meg O’Neill said:

We continue to be disciplined in our approach to mergers and acquisitions and capital management to create and deliver value for shareholders. While the discussions with Santos did not result in a transaction, Woodside considers that the global LNG sector provides significant potential for value creation.

Santos CEO Kevin Gallagher added, “Following an initial exchange of information, sufficient combination benefits were not identified to support a merger that would be in the best interests of Santos shareholders.”

Judging by today’s rocketing Santos share price, investors believe a potential merger with one of the Middle Eastern energy giants could well be in the best interest of shareholders.

However, should any concrete deals materialise, I’ll be keen to see what Australia’s Foreign Investment Review Board (FIRB) makes of this.

The post Santos share price smashing the benchmark amid new takeover rumours appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Thursday
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• Could beaten-up Woodside shares offer ‘Safe buying with limited downside’?

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 DroneShield Ltd (ASX: DRO) share price has surged to another new all-time high in early trade on Thursday. At the time of writing, the stock is around 4% higher, swapping hands at $1.98 apiece.

This marks yet another all-time high since April for the counter-drone technology company, extending its rally to a staggering 440% this year to date.

Just 12 months ago, in July 2023, investors valued the DroneShield share price at around 30 cents per share. The stock has since increased in multiples since then. Let me explain.

Why is the DroneShield share price soaring – again?

Investors continue showing strong interest in the DroneShield share price. This has been driven by a series of positive developments, including the company’s financial results.

The most recent catalyst was an announcement on 20 June. DroneShield advised it had secured a $4.7 million order from a “non-government Swiss international customer”.

DroneShield will provide multiple vehicle-based counter-drone (C-UxS) systems – it’s flagship technology – to this customer.

This will also offer protection for VIP personnel and convoys in what are known as “On-The-Move (OTM)” missions.

According to the US Army Corps, OTM missions are typically used in military operations, where communication is required whilst continuously moving. Given the nature of these missions, highly specialised equipment is needed. DroneShield’s technology was chosen in this instance.

CEO Oleg Vornik – who has made some seemingly bullish comments in recent weeks, including the prospect for growth to $500 million in annual revenues – was “excited” about the new customer.

Investors were excited too, driving the DroneShield share price to another record soon afterwards. The trend continues today.

Significant contracts and revenue growth

DroneShield’s drone detection and disablement technology has attracted global demand. For instance, in Q1 FY 2024, revenues were up 900% year over year to $16.4 million.

This extraordinary growth was fuelled by several contract wins. This includes a $5.7 million repeat order from a US Government customer and the first counter-small UAS procurement framework agreement from the NATO Support and Procurement Agency (NSPA).

DroneShield has also successfully raised capital in 2024 to support its growth. In April, it completed a share purchase plan, raising $15 million from investors. It was heavily oversubscribed.

It then completed a share placement and raised $30 million by selling around 38 million shares at 80 cents each. Already, these investors have locked in sturdy gains.

What’s next for DroneShield?

Analysts are optimistic about what’s in store for the DroneShield share price. Bell Potter rates DroneShield shares a buy, forecasting $97 million in sales and $24.4 million in earnings for FY24.

CEO Oleg Vornik is even more bullish, as mentioned. But it looks as if investors are the most optimistic. The 4-week average trading volume in DroneShield is over 12.03 million shares, equal to around 1.5% of its entire share float.

Additionally, recent price gains of other aerospace and defence stocks such as AML3D Ltd (ASX: AL3) suggests that investors are paying close attention to the broader space.

DroneShield continues to be a standout performer on the ASX. Investors are buoyed by the company’s strategic contract wins. The stock has climbed more than 730% into the green over the past 12 months.

The post DroneShield share price roars to yet another all-time high in 2024 surge appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow 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 DroneShield. 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.

A new month is here, so what better time for investors to look at making additions to their investment portfolios.

With that in mind, let’s take a look at three ASX 200 stocks that Morgans thinks are top buys in July.

It notes that these are stocks “offer superior forecast dividend yields and may be suitable investments for those seeking income.”

Here’s what its analysts are saying about them:

BHP Group Ltd (ASX: BHP)

Morgans is bullish on the Big Australian and sees it as an ASX 200 stock to buy this month.

It likes the mining giant due to its strong margins and attractive dividend yield. It explains:

BHP Group is the largest diversified mining company in the world. BHP has extensive iron ore, copper, nickel and coal operations, and will soon add potash to its portfolio once its massive Jansen project comes online in late 2026. Besides nickel, which has proven volatile, the rest of BHP’s basket of market exposures share the similar characteristic of typically boasting bumper margins throughout the cycle. Over the last decade BHP has shifted its corporate strategy toward streamlining its business, protecting its balance sheet, slowing its pace of investment and maximising shareholder returns. Despite an impressive shareholder performance over recent years, BHP’s dividend yield has remained above market.

Morgans has an add rating and $48.30 price target on its shares. The broker also expects fully franked dividends yields of ~5% this year and next.

Eagers Automotive Ltd (ASX: APE)

Another ASX 200 stock that Morgans is positive on its automotive retailer Eagers Automotive.

Although trading conditions are tough, the broker thinks it is worth sticking with the company due to its positive long term outlook. It said:

Eagers Automotive Ltd is the leading automotive retail group in Australia and New Zealand, operating for over 100 years and representing a diverse portfolio of OEM (original equipment manufacturer) brands. While current industry dynamics in the auto sector (margin pressure; cost of living impacts) are expected to persist in the near-term, we view the scale operators (such as APE) as best placed to navigate this challenging dynamic. Longer-term, we are positive on APE’s various strategic initiatives and expect it can continue to scale; and sustain a structurally higher return on sales through the cycle.

Morgans has an add rating and $14.35 price target on its shares. In respect to dividends, it is forecasting yields of approximately 7% in FY 2024 and FY 2025.

HomeCo Daily Needs REIT (ASX: HDN)

A third ASX 200 stock that could be a buy according to Morgans is the HomeCo Daily Needs REIT.

It likes the company due to its blue chip tenants, attractive dividend yield, and huge development pipeline. The broker said:

HomeCo Daily Needs REIT has a +$4.5bn real estate portfolio focused on daily needs retail (Large Format Retail; Neighbourhood; and Health Services) across +50 properties with the top five tenants being Woolworths, Coles, JB Hi-Fi, Bunnings and Spotlight. Most of leases are fixed. The portfolio has resilient cashflows, with the majority of tenants being national. Sites are in strategic locations with strong population growth. HDN offers an attractive distribution yield, with a +$600m development pipeline providing further growth.

Morgans has an add rating and $1.37 price target on its shares. As for income, it is forecasting 6%+ dividend yields this year and next.

The post Morgans names 3 ASX 200 stocks to buy in July appeared first on The Motley Fool Australia.

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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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Eagers Automotive Ltd and HomeCo Daily Needs REIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

CSL Ltd (ASX: CSL) shares have caught a bid lately and lifted almost 6% in the past month, outpacing the broader S&P/ASX 200 Health Care Index (ASX: XHJ), which is up 3.7% in the same period.

In mid-morning trade on Thursday, shares in the biotech giant are swapping hands 1.1% higher at $298.02 apiece.

Brokers are turning bullish on CSL shares, with the average analyst rating a buy, according to CommSec.

Citi has joined the club and revised its rating on the stock in a note on Thursday. Let’s take a look.

CSL shares revised higher

Citi upgraded its recommendation on CSL shares to a buy in a note today, setting an ambitious price target of $335 per share, according to The Australian.

If the investment bank’s 12-month projection is correct, a $1,000 investment in CSL shares today could be worth around $1,120 in a year. That’s around 12% upside potential.

Citi’s analysts might have been impressed by CSL’s growth trajectory. Profits grew 17% year over year to $1.9 billion in H1 FY24, with earnings per share (EPS) of $4.18. Management is calling for $3 billion at the bottom line for the full year.

Meanwhile, Baker Young analysts project CSL’s profits to compound by 21% annually in the coming three years.

Other expert opinions: The $500 club

This performance has attracted positive attention from several analysts. Macquarie also rates CSL shares a buy, with a similar price target of $330.

It highlights the strength of CSL’s Behring division and sees a potential $500 per share valuation by 2027. It, too, sees double-digit earnings growth as a catalyst for this valuation.

Similarly, Sam Byrnes from ECP Asset Management forecasts that CSL shares could reach $500 by 2027.

Morgans also sees more upside, giving CSL rating and a more modest 12-month price target of $315. Again, earnings growth is driving this view.

Finally, Wilsons Advisory recently noted that CSL’s earnings trajectory was stronger than the broader market, making its current valuation potentially attractive.

For reference, CSL trades on a forward price-to-earnings ratio (P/E) of around 38 times, so you decide that one.

Foolish takeout

Shares in the company have climbed by 7.7% over the past 12 months. With Citi’s upgraded rating and other positive broker views, the experts certainly think CSL shares are well-positioned for further growth.

However, as always, consider your financial circumstances and risk tolerance before making any investment decisions.

The post Broker upgrades CSL shares to ‘buy’ — could they hit $335? appeared first on The Motley Fool Australia.

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• Will CSL shares rise in value over the next 12 months? Here’s what the experts say

Motley Fool contributor Zach Bristow 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 CSL and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investors that are on the lookout for great value ASX shares might want to check out supermarket leader Woolworths Group Ltd (ASX: WOW).

That is because one leading broker believes the retail giant could be undervalued by the market.

What is the broker saying about this ASX share?

According to a note from last week, Goldman Sachs thinks Woolworths shares are such good value that they are one of only four from the ASX that feature on its coveted Asia-Pacific conviction list.

This list contains only the crème de la crème of financial markets in the Asia-Pacific region and currently contains a total of 29 companies.

The note reveals that Goldman has a conviction buy rating and $40.20 price target on its shares. Based on the current Woolworths share price of $33.48, this implies sizeable potential upside of 20% for investors over the next 12 months.

The retail giant is also a keen dividend payer and Goldman expects a growing income stream from its shares in the coming years. After paying a $1.04 per share dividend in FY 2023, the broker is forecasting this to increase to $1.07 per share in FY 2024, $1.13 per share in FY 2025, and then $1.22 per share in FY 2026.

This equates to fully franked dividend yields of 3.2%, 3.4%, and 3.6%, respectively.

Why is Goldman so bullish?

Goldman is a big fan of this ASX share due to its strong market position and consumer stickiness and loyalty. It believes this leaves Woolworths well-positioned to grow its market share and pass through any cost inflation.

In addition, it highlights that despite these qualities and its positive outlook, the Woolworths share price is trading on lower than normal multiples. It feels that this makes now an opportune time to snap up its shares. Goldman summarises:

WOW is the largest supermarket chain in Australia with an additional presence in NZ, as well as selling general merchandise retail via Big W. We are Buy rated on the stock as we believe the business has among the highest consumer stickiness and loyalty among peers, and hence has strong ability to drive market share gains via its omni-channel advantage, as well as its ability to pass through any cost inflation to protect its margins, beyond market expectations. The stock is trading below its historical average (since 2018), and we see this as a value entry level for a high-quality and defensive stock.

The post This retail giant could be one of the best ASX value shares around! appeared first on The Motley Fool Australia.

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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. 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 gold sector is booming on Thursday with strong gains largely across the board.

For example, Evolution Mining Ltd (ASX: EVN) and Newmont Corporation (ASX: NEM) shares are both up over 3% at the time of writing. This has helped drive the S&P/ASX All Ordinaries Gold index 2% higher during morning trade.

Why are these ASX gold share racing higher?

Investors have been buying gold miners today after the spot gold price raced higher overnight.

According to CNBC, the gold price rose 1.3% to US$2,364.2 an ounce in response to softer than expected economic data out of the United States.

This has boosted hopes of interest rate cuts in the United States in the near future, which would increase the appeal of gold with investors.

Not all gold stocks are rising

One ASX gold share that is crashing today despite this good news is West African Resources Ltd (ASX: WAF). Its shares are down 13% to $1.38 at the time of writing.

This is because this morning, the Africa-focused gold miner announced that it has received firm commitments from institutional and sophisticated investors for a placement.

West African Resources is raising approximately $150 million through the issue of 109.5 million new shares at a discount of $1.37 per new share.

Management notes that there was strong support from both domestic and offshore institutions for the placement, which will support development activities at the Kiaka Gold Project.

The Kiaka Gold Project is expected to be a long-life, low-cost project averaging 234,000 ounces per annum for 20 years with an all-in sustaining cost of US$1,196 per ounce.

With an estimated pre-production capital cost of US$447 million, combined with existing cash at bank and unsold bullion, West African Resources believes that it now has sufficient financial flexibility to fund project construction and ramp-up, supporting the pathway to commencement of gold production. This is expected in third quarter of 2025.

The ASX gold share’s executive chairman and CEO, Richard Hyde, commented:

West African continues to make significant progress towards development of the Kiaka Gold Project with development 50% complete and 75% of capital costs fixed. Proceeds from the placement are expected to provide West African with proforma cash at bank and unsold bullion proceeds of A$604m, 5 positioning West African to continue to rapidly progress the development of the Kiaka Gold Project. West African is currently on schedule to be a +420,000 ozpa gold producer from 2025.

The post 2 ASX gold shares going gangbusters (and one crashing 11%!) appeared first on The Motley Fool Australia.

More reading

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• Shares vs. property: Which delivered the best growth in FY24?
• 5 things to watch on the ASX 200 on Tuesday

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 Arafura Rare Earths Ltd (ASX: ARU) share price is flying higher today.

Shares in the S&P/ASX 300 Index (ASX: XKO) rare earths miner closed yesterday trading at 18 cents. In morning trade on Thursday shares are changing hands for 20 cents apiece, up 11.1%.

For some context, the ASX 300 is up 1.1% at this same time.

Investor interest appears to be stoked by another major funding announcement.

Arafura share price leaps on German funding news

The Arafura share price is soaring after the company announced that the German government has issued conditional approval for up to US$115 million (AU$173 million) in Untied Loan Guarantees from Euler Hermes.

The funds would support debt financing for Arafura’s rare earths Nolans Project.  

The agreement with Euler Hermes will secure neodymium and praseodymium (NdPr) supplies for German-based companies, including Siemens Gamesa. This further sets Arafura up as an important provider of rare earths outside of China.

The miner noted that the approval from Euler Hermes is the final German export credit agency (ECA) approval required to complete its senior debt structure. With this approval, Arafura can finalise its targeted US$775 million senior debt funding for the Nolans Project with commercial lenders.

Arafura must maintain ECA-linked offtake agreements for the term of the loan guarantee.

Commenting on the conditional funding approval sending the Arafura share price soaring today, managing director Darryl Cuzzubbo said, “Today Arafura reached another significant milestone in announcing conditional approval of US$115 million in untied loan guarantees from Euler Hermes.”

Cuzzubbo added:

We continue to demonstrate the increasing geostrategic importance of the Nolans Project and developing a diversified global NdPr supply chain, this time by securing German export credit agency support.

This agreement is linked to offtake with German-based companies, including our key customer Siemens Gamesa, who are global leaders in building wind turbines to advance the energy transition.

We look forward to working closely with Euler Hermes as we progress the Nolans Project.

Arafura said it has already completed an extensive legal, technical and financial due diligence program with financiers, adding that offtake discussions with potential counterparties are “well advanced”.

Arafura’s ore to oxide business model has enabled it to secure high-quality offtake counterparties.

The miner will update the market once the expected binding agreements are entered into.

How has the rare earths miner been tracking?

The Arafura share price has been recovering from a big sell-off in 2023. With today’s intraday gains factored in, shares in the ASX rare earths miner are up 17% so far in 2024.

The post Why did the Arafura share price just leap more than 11%? appeared first on The Motley Fool Australia.

More reading

• Why Arafura Rare Earths, Ora Banda, Superloop, and Whitehaven Coal shares are rising today
• Why Arafura Rare Earths, Bigtincan, Evolution Mining, and Galileo Mining shares are dropping

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.

I like buying ASX shares at really attractive prices. Some stocks are trading at levels that are currently undervalued, in my opinion, so I’m seeing appealing opportunities.

There are several different ways to spot good value in a company. These include whether it’s trading at a large discount to its underlying asset value, if it has a lower price/earnings (P/E) ratio, or if the market does not identify its growth potential.

One of the stocks below is valued at a big asset discount. The other ASX share has seen its share price decline, yet the earnings growth outlook is appealing to me.

Bailador Technology Investments Ltd (ASX: BTI)

This company invests in technology businesses seeking growth-stage investment. It usually invests in businesses run by the founders, with proven business models boasting attractive unit economics, international revenue generation, a huge market opportunity, and the ability to generate repeat revenue.

Every month, Bailador tells investors what the underlying value of its portfolio is, which includes a relatively conservative valuation of each investment and also the cash on the balance sheets.

The ASX share recently expanded its portfolio with two investments.

It invested $20 million in Venture Startups International, which owns Updoc, a digital healthcare platform that connects consumers who need medical services (advice, online prescriptions, referrals, etc.) with registered health practitioners through a telehealth offering.

The business also invested $20 million in financial advice and investment management platform DASH Technology Group.

At 31 May 2024 it had pre-tax net tangible assets (NTA) of $1.76, while the post-tax NTA was $1.61. The current Bailador share price is at a 26% discount to the post-tax NTA and a 32% discount to the pre-tax NTA. That’s an appealing discount for exciting technology businesses, in my opinion.

Collins Foods Ltd (ASX: CKF)

Collins Foods is a large franchisee operator of KFC outlets in Australia and Europe (Germany and the Netherlands).

I think the Collins Foods share price looks good value after falling more than 20% over 2024 to date.

Inflation and a high cost of living are disrupting the ASX share, but I think the long-term prospects look very promising.

The company is growing the number of KFC locations across both continents, which can add scale benefits and boost revenue in the longer term.

During FY24, Collins Foods added seven new restaurants in Australia, taking its national footprint to 279 locations. KFC Europe saw its network reach 75 restaurants, with the Netherlands seeing an increase of 11 locations after eight acquisitions and three new builds.

The FY24 result showed exactly what I wanted to see – double-digit revenue growth of 10.4% to $1.49 billion, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 12% to $230 million and underlying net profit after tax (NPAT) growth of 15.6% to $60 million.

I love it when profit rises faster than revenue, demonstrating strengthening profit margins. FY25 may not show as much earnings growth amid difficult economic conditions, but I think FY26 could be very promising.

The ASX share also grew its full-year dividend by 3.7% to 28 cents. The FY24 grossed-up dividend yield is 4.4%.

According to the estimate on Commsec, the Collins Foods share price is valued at 14x FY26’s estimated earnings.

The post 2 ASX shares to watch while they’re still dirt cheap appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Bailador Technology Investments and Collins Foods. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bailador Technology Investments. The Motley Fool Australia has recommended Bailador Technology Investments and Collins Foods. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.