Category: Stock Market

Assistant Federal Treasurer Stephen Jones says the government will “have a look at” feedback about proposed legislation to stop companies paying franked special dividends funded via capital raisings.

According to reporting in The Australian, Jones told Sky News in an interview that the government will “listen seriously” to feedback after the public consultation period via Treasury closed on Wednesday.

One of the key criticisms has been the retrospective element, with the new rules requiring investors and super funds to pay back franking tax credits attached to special dividends received since December 2016.

As my Fool colleague Brendon reported, the government says the measure will save $10 million a year. 

But fund manager Geoff Wilson, chair of Wilson Asset Management, reckons it “could run into the billions“.

Wilson has been a vocal opponent of the proposed laws. He has encouraged investors in his popular WAM funds to lodge their own objections to the draft law via Treasury.

In separate reporting, the Australian Shareholders’ Association says the changes could “panic” already nervous investors, especially retirees relying on dividends to pay for the cost of living.

The Association lodged a submission with Treasury during the public consultation period.

The proposed changes will not impact ordinary dividends. ASX dividend shares will still be able to pay special dividends without franking.

The Federal Treasurer, Jim Chalmers, has previously described the legislation as “a very minor measure” that closes a loophole that companies use to pay out excess franking credits on their books.

The previous Coalition Government initially proposed the measure in 2016 but never went ahead with it.

The S&P/ASX All Ordinaries Index (ASX: XAO) is down 0.61% at the time of writing.

The post Is the government getting cold feet on proposed changes to ASX dividend franking credits? appeared first on The Motley Fool Australia.

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More reading

• What’s the outlook for ASX 200 energy shares in Q2?
• Warren Buffett is getting a helping hand from a surprising source
• 4 ASX 200 directors who raised the stakes in their company shares in September
• The Zip share price rocketed 50% in the first quarter, but what now?
• As anxiety runs high, here’s how the stock market can rise from the ashes to roar higher once more

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Warren Buffett has been making a bold bet on oil prices over the past year. His company, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), has been buying shares of oil giants Chevron (NYSE: CVX) and Occidental Petroleum (NYSE: OXY) hand over fist to capitalize on the rise in crude prices.     

While oil prices have cooled off on fears that we’re about to enter a global recession, that slump has reversed recently thanks to OPEC. The group of oil-producing nations has surprisingly agreed to cut its production by a whopping 2 million barrels per day, giving crude prices a lift. That should provide a boost to Buffett’s oil stocks in the future. 

Taking matters into their own hands

Oil prices have been on a wild ride this year. The price for Brent crude, the global benchmark variety, started 2022 below $80 a barrel. It soon spiked to more than $120 a barrel following Russia’s invasion of Ukraine. It remained in the triple digits well into the summer before cooling off on concerns that the global economy was starting to slow. Brent recently bottomed out in the low $80s.

However, it surged above $90 a barrel on rumors that OPEC was about to cut its production. While initial reports suggested the group, along with other nations collectively known as OPEC+, would slash their output by 1 million barrels per day, they have since agreed to an even deeper reduction of 2 million barrels per day. It’s an astonishing development considering that analysts believe the market might not have enough oil supply to meet demand. 

The cut should at least put a firm floor under oil prices. Meanwhile, it sets crude up to rally sharply if there’s an unexpected supply issue or demand doesn’t cool, as many anticipate in a global recession.

Giving Buffett a helping hand

Stable to rising crude prices should be a boon to Buffett’s oil holdings. Berkshire Hathaway has gobbled up more than 163.5 million shares of Chevron, equal to 8.4% of the oil giant’s outstanding shares. That position is worth over $25 billion, making it Buffett’s third-largest stock holding at 8% of his portfolio.   

Meanwhile, Buffett took advantage of a decline in Occidental Petroleum’s stock price last month as oil prices cooled off to buy another 6 million shares. He now holds 20.9% of the company’s outstanding shares. That position is currently worth nearly $13 billion. Buffett has regulatory approval to take that position up to 50% in the future.

Chevron has capitalized on rising crude prices this year. It produced $21.8 billion of cash flow from operations during the first half, nearly double the $11.2 billion it generated during that same period last year. That gave it the funds to boost its investments in traditional and new energy by 50%, increase its dividend for the 35th straight year, raise the top end of its share repurchase range to $15 billion, and pay down additional debt.

Chevron’s cash flow ebbs and flows with oil prices. Because of that, it will likely see a boost from OPEC’s move to bolster crude prices. That would give it more money to allocate toward creating value for shareholders.

Occidental Petroleum is in the same boat. It has cashed in on higher oil prices this year. It generated a record $4.2 billion of free cash in the second quarter alone. That gave it the funds to repay more than $8 billion of debt by May, quickly exceeding its target. This achievement gave Occidental the confidence to significantly increase its dividend and launch a $3 billion share repurchase program while setting an additional $5 billion debt reduction target. 

The oil company is more likely to be able to repay debt and return capital to shareholders at a faster rate now that OPEC is making this surprising move to support oil prices. This catalyst could fuel a continued surge in Occidental’s share price this year.

Boosting Buffett’s bold oil bets

OPEC has had enough of crude’s recent slide. That’s evident in its surprising decision to slash its output by 2 million barrels per day. This move could drive oil prices higher in the coming months.

That likely rebound should be a boon to Buffett’s oil investments because it will enable Chevron and Occidental Petroleum to generate more cash. They can use those funds to reduce debt and return more money to investors, which should help boost their stock prices. That unexpected intervention makes Buffett’s oil stock bets look like they’ll continue to pay off.  

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Warren Buffett is getting a helping hand from a surprising source appeared first on The Motley Fool Australia.

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Matthew DiLallo has positions in Berkshire Hathaway (B shares). 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.   

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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It’s commonly understood in the investing world that when directors spend their own money buying more shares in the ASX companies they run, it’s usually a good sign.

No one knows a business like the company directors that are calling the shots. And just like us regular ASX investors, they also want to put their money to best use for long-term wealth generation.

Directors can buy more shares directly, in their own names, using personal cash savings. They can also buy through other vehicles such as super funds and family trusts.

Sometimes they raise their ‘indirect interests’ in company shares when entities they are involved with purchase more stock. Either way, these are all publicly notifiable trades to the ASX.

Regardless of the type of investment, an ASX 200 director increasing their personal financial ties to shares in the companies they run should indicate confidence in the stock. Arguably, it’s pretty much always a good sign.

So, let’s look at who raised their direct or indirect interests in their own ASX 200 companies last month.

Which ASX 200 directors have been raising their stakes?

In no particular order, let’s take a look at the following ASX 200 share purchases involving directors.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

On 30 September, Soul Patts chair and non-executive director Robert Millner told the ASX he had increased his indirect interests in the company with the purchase of 170,000 shares on market.

The cost was more than $4.5 million and the trades took place between 23 and 28 September.

On the same day, his son and fellow non-executive director Thomas Millner made the same declaration.

In both cases, the shares were purchased through three family entities — J S Millner Holdings Pty Limited, T G Millner Holdings Pty Limited, and Mary Millner Holdings Pty Limited.

The purchase was a “notifiable interest because of a power to exercise, or control the exercise of, a right to vote shares in securities” registered in these names.

Both men are also directors of New Hope Corporation and just raised their indirect interests there, too.

New Hope Corporation Limited (ASX: NHC)

Robert Millner and Thomas Millner declared the purchase of 300,000 New Hope shares last week.

The shares were purchased for about $1.86 million through a series of trades on 28 September.

The shares were purchased through three entities — T.G. Millner Holdings Pty Limited, J. S. Millner Holdings Pty Limited, and Hexham Holdings Pty Limited.

Once again, the purchase was notifiable due to “a power to exercise, or control the exercise of, a right to vote shares in securities” registered in these names.

Brickworks Limited (ASX: BKW)

Interestingly enough, Robert Millner is also a director at Brickworks Limited. His colleague there, the managing director and executive director, Lindsay Partridge, also made a declaration to the ASX last week.

Partridge reported he had increased his indirect interests in Brickworks in a number of ways.

One of them was purchasing 33,182 shares on market on 26 September. The purchase was made through CPU Share Plans Pty Ltd under the Brickworks deferred STI (short-term incentive) scheme.

Eagers Automotive Ltd (ASX: APE)

Eagers Automotive director Nicholas Politis AM has been buying more shares in his company for many months.

In September, Politis spent a tad over $230,000 buying 20,000 new Eagers shares. By the end of the month, he held more than 70.5 million shares.

As we previously reported, in July Politis spent $1.5 million buying Eagers shares. By the end of that month, he held more than 70.33 million shares.

He bought another 100,000 Eagers shares in August.

The post 4 ASX 200 directors who raised the stakes in their company shares in September appeared first on The Motley Fool Australia.

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More reading

• After a smashing first quarter, what’s the outlook for ASX coal shares in Q2?
• Why dividends matter
• 3 ASX 200 shares smashing all-time highs on Thursday
• These were the best-performing ASX 200 shares in the first quarter of FY23
• Government says Aussie coal exports will hit record levels. Here’s which ASX 200 shares are cashing in

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. 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 Zip Co Ltd (ASX: ZIP) share price was well and truly back on form during the first quarter of the 2023 financial year.

From the end of June through to the end of September, the buy now pay later (BNPL) provider’s shares rose a massive 57%.

That was despite the Zip share price having an utterly terrible time last month, slumping a sizeable 28% amid the tech selloff.

Why did the Zip share price race higher during the quarter?

The strong performance by the Zip share price during the first quarter appears to have been driven by bargain hunters swooping in on the belief that BNPL shares had been oversold.

For the same reason, the Openpay Group Ltd (ASX: OPY) share price rose 50% and the Sezzle Inc (ASX: SZL) share price rose 80% over the same period.

In addition, at the very start of the quarter, Zip announced that it was abandoning its merger with Sezzle. This is expected to help with its aim of reducing its cost base and helping it achieve its profitability targets.

Where next for its shares?

Opinion remains incredibly divided on where the Zip share price is heading from here.

For example, UBS has a sell rating and 45 cents price target on its shares. This implies potential downside of 34% for investors over the next 12 months from current levels.

Whereas over at Ord Minnett, its analysts have an accumulate $1.10 price target on Zip’s shares. This suggests that its shares could have potential upside of almost 60% for investors between now and this time next year.

Time will tell which broker makes the right call.

The post The Zip share price rocketed 50% in the first quarter, but what now? appeared first on The Motley Fool Australia.

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More reading

• Why Appen, De Grey Mining, Magellan, and Zip shares are dropping today
• Raising funds outside the ASX comes at a cost for Zip
• The Zip share price had another horror month. How much did it fall?
• Here are the 10 most shorted ASX shares
• Why is the Zip share price trailing the ASX 300 on Friday?

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 ZIPCOLTD FPO. 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.

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The early week stock market euphoria is dissipating as we come to the end of yet another dramatic week for investors.

As of lunchtime trade on Friday, a week that started out with rumours of the imminent demise of Credit Suisse is ending with a solid gain for the S&P/ASX 200 Index (ASX: XJO), up around 4.7%.

GFC mark II averted, again.

I may have lost count of the number of times we’ve been on the brink of GFC mark II over the past 14-odd years. Like the crash of 1987, it will likely take several decades before it is largely erased from memories.

That said, we haven’t been without stock market crashes since 1987… apart from the many  “mini” bear markets we’ve endured since then, we’ve had at least four major bear markets — the dot com bust, the GFC, the COVID crash and now this inflation inflection. 

In hindsight, all were great buying opportunities, when viewed with a five-year plus time horizon. But at the time, as with now, they are very painful.

The most painful aspect is the unknown duration of a bear market. If you are anything like me, you’ll buy stocks on the way down, but have shot most of your bullets well before the market bottoms. Then it becomes a case of having to sell one cheap stock in order to buy a cheaper and/or better stock.

Stating the obvious, making two decisions – what to sell and what to buy – leaves more room for error. We’ve all done it – the stock we sold does better than the one we bought with the proceeds. Painful indeed.

More painful is selling out of stocks completely because…

a) you can’t stand the pain of watching the value of your portfolio drain away;

b) you think you’ll be able to buy back in later at better prices; or

c) something you read made you think there’s a further major stock market crash just around the corner.

Rather like the Credit Suisse rumours over the weekend…

Or the prognostications of serial bears like Jeremy Gratham and Ray Dalio who, despite their billionaire status made from the investing industry, have this year previously predicted markets will crash another 20-25%.

Let me remind you, despite their bearishness, they didn’t make their fortunes by taking out short positions on individual stocks. Fear sells.

And now, this Friday, we collectively pause as markets anxiously await tonight’s US jobs report. Good news on jobs will send the stock market lower because it will need interest rates to rise further to combat inflation. Bad news on jobs = good news for stocks. Here in Australia, we’ll see the fall out at 10am Monday when the ASX opens for business.

One jobs report will not make or break your portfolio. 

Your portfolio is likely already ‘broken,’ unless you sold all your tech stocks a year or so ago and piled the proceeds into coal stocks and lithium stocks like Whitehaven Coal Ltd (ASX: WHC) and Core Lithium Ltd (ASX: CXO). 

With the benefit of hindsight, how easy is this investing lark?

The cycle continues

Here’s just about everything you need to know about interest rates…

Interest rates are going higher still. They’ll likely go higher into the middle of next year. The pace of rises will slow, with the Reserve Bank of Australia already ahead of that game. Then, with inflation coming under control as the global economy screams to a grinding halt, central banks will begin cutting interest rates.

It’s called an economic cycle.

For the past 30-odd years, Australians have been largely immune to economic cycles. And this time around, although the economy will slow as higher interest rates take their intended toll, we’re not expected to fall into recession. The Lucky Country indeed.

The stock market looks forward, not backwards. It’s already looking past this coming economic slowdown, desperately looking for signs of when the economy might turn.

Stock markets begin to recover well before the worst of the economic news, like earlier this week when world markets went nuts.

That doesn’t mean we’ve necessarily seen the bottom of this stock market cycle. We’ll only know that in hindsight.

But with foresight, we might look today at some beaten-down dirt cheap stocks trading on attractive fully franked dividend yields, knowing this economic cycle too shall pass, and in the fullness of time, the stock market will rise again from the ashes, like it has done over the course of history.

The post As anxiety runs high, here’s how the stock market can rise from the ashes to roar higher once more appeared first on The Motley Fool Australia.

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More reading

• The Zip share price rocketed 50% in the first quarter, but what now?
• Where is the Wesfarmers share price headed in October and beyond?
• Is there any stopping the Whitehaven share price?
• AVZ Minerals shares are scheduled to resume trading next week. Here’s what to watch
• Down 25% in a month, what’s in store for the Core Lithium share price in October?

Motley Fool contributor Bruce Jackson 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.

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The Wesfarmers Ltd (ASX: WES) share price has been through plenty of volatility this year. Are things going to pick up in October and beyond?

Well, October has already started with a bang as investors regained a little bit of confidence about the economic situation.

In the month to date, the Wesfarmers share price has risen over 4% and the S&P/ASX 200 Index (ASX: XJO) is also up by more than 4%.

What could impact the Wesfarmers share price in October and the coming months?

It’s hard to get away from inflation. There are a whole bunch of different impacts on the ASX retail share. Higher costs are being seen in areas like rent, wages, products and the supply chain.

Wesfarmers pointed out in its FY22 result that the Australian economy is starting from a strong base with low unemployment and high levels of household savings.

The company is actively managing inflation, “leveraging its scale and sourcing capabilities to mitigate the impact of cost increases.”

In fact, management thinks that many of Wesfarmers’ businesses can excel during this period as they offer strong value for customers. The company said:

The group’s retail businesses are well positioned as cost of living pressures impact household budgets and value once again becomes increasingly important to customers. The retail businesses will maintain their focus on meeting the changing needs of customers and delivering even greater value, quality and convenience. This will be supported by continued investment in divisional data and digital capabilities, as well as the additional growth and efficiency benefits provided through OneDigital.

I think that one of the main things that will impact the Wesfarmers share price movement over the next month is the upcoming annual general meeting (AGM) on 27 October 2022. This is a meeting of shareholders where management gets to review what has happened and tell investors about its plans for the future. Plus, it’s likely to give a trading update. Investors will, perhaps unfairly, substantially judge a business on how its most recent sales have performed.

Sales can obviously have a large influence on how much net profit after tax (NPAT) the company generates as well.

Latest trading update

In the Wesfarmers outlook statement for FY23, the company told investors how trading had gone in the first seven weeks of the new financial year. It said:

Sales growth has been particularly strong in Kmart Group, with sales significantly higher on both a one-year and two-year basis. Bunnings also continues to see positive sales growth, on a one-year and two-year basis. Sales in Officeworks were in line with the prior year.

The performance of the group’s industrial businesses remain subject to international commodity prices, foreign exchange rates, competitive factors and seasonal outcomes. WesCEF is expected to continue to benefit from elevated commodity prices and will continue to evaluate capacity expansion opportunities for its existing operations, and progress the development of the Mt Holland lithium project.

Wesfarmers can benefit in the first half of FY23 from the fact that retail stores aren’t being locked down. A year ago, Victoria and NSW stores were under restrictions. This will help the year-over-year growth rate.

I’ll highlight what was said about Bunnings because it generates the lion’s share of Wesfarmers’ profit. It said that there is still a “solid pipeline of renovation and building activity”. Bunnings is looking to do things like grow its online sales and deepen its relationship with commercial customers.

Opinions on Wesfarmers shares

I think that the Wesfarmers share price is attractive after dropping 25% in 2022 to date as it grows and diversifies its portfolio. Bunnings is a great business, in my opinion, and earning strong returns on shareholder money.

One of the brokers that rates the ASX retail share as a buy is Morgans. It has a price target of $55.60 – that’s suggesting that Wesfarmers shares could rise 25% over the next year. The broker thinks it’s a good long-term investment.

The post Where is the Wesfarmers share price headed in October and beyond? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX shares I’d buy with $500
• Down 9% in a month, could the Woolworths share price turn around in October?
• Own Wesfarmers shares? Here’s some good news on your dividends
• Why dividends matter
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. 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 Whitehaven Coal Ltd (ASX: WHC) share price is charging higher today.

Again.

Shares in the S&P/ASX 200 Index (ASX: XJO) coal miner are up 4.7% at the time of writing on Friday, currently trading for $10.96 apiece.

The ASX 200, meanwhile, is down 0.6% following a sell-off in US markets overnight.

With today’s gains factored in, the Whitehaven share price is now up an eye-popping 295% in 2022. That sees it command a market cap north of $10 billion.

And don’t forget the dividends.

Atop the massive share price gains, Whitehaven has paid out 48 cents per share in dividends this year. That works out to a current trailing dividend yield of 4.4%, fully franked.

And with revenues soaring amid record-high coal prices, the miner trades on a price-to-earnings (P/E) ratio of less than five times.

Which begs the question…

Is there any stopping the Whitehaven share price?

The Whitehaven share price has clearly benefited from soaring thermal and coking coal prices. The miner has a significant footprint in both, though it derives more revenue from thermal coal.

Thermal coal, primarily used to generate electricity, hit record highs this year and remains near those records, spurred higher by Russia’s invasion of Ukraine.

According to the federal Industry, Science & Resources Department’s latest quarterly Resources and Energy Report, the price outlook for coking coal, used to produce steel, could come under some pressure amid a weakening outlook for steel markets, with demand from China forecast to fall. However, wet weather conditions driven by the El Nina event could hamper new supplies and help support prices.

On the thermal coal front, the Whitehaven share price should continue to receive some strong tailwinds over the coming months.

Thermal coal prices hit US$450 per tonne in September and are currently trading for US$400 per tonne. Still, that’s more than double the price in early January this year.

According to the federal government report, “Thermal coal prices remain extremely high, driven by weather and COVID-19 disruptions, as well as market uncertainties linked to the Russian invasion of Ukraine.”

The report notes:

The exclusion of large quantities of Russian coal from markets in the Northern Hemisphere could inflate coal prices for years to come.

Australian thermal coal prices remain extremely high, as European nations look to build stockpiles ahead of the Northern Hemisphere winter.

Europeans embracing coal to keep the lights and heat on may not be great news for the environment. But it should continue to offer support to the booming Whitehaven share price.

The post Is there any stopping the Whitehaven share price? appeared first on The Motley Fool Australia.

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More reading

• After a smashing first quarter, what’s the outlook for ASX coal shares in Q2?
• Here are the top 10 ASX 200 shares today
• 3 ASX 200 shares smashing all-time highs on Thursday
• These were the best-performing ASX 200 shares in the first quarter of FY23
• Whitehaven shares are being pulled in all directions today. Is this why?

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.

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It has been some time since investors have seen any movement from the AVZ Minerals Ltd (ASX: AVZ) share price.

The embattled lithium developer’s shares were halted five months ago and have remained that way ever since.

Will the AVZ share price move any time soon?

As things stand, AVZ shares are scheduled to return to trade at the start of next week on 10 October.

However, the company has consistently named return dates for months, only to push them further back when they arrive.

That’s because AVZ shares can only return once the ownership dispute relating to the Manono Lithum Project is resolved.

What is the dispute?

AVZ is currently facing arbitration proceedings from Jin Cheng Mining in relation to the dispute.

This has caused significant uncertainty, as there are various potential project ownership scenarios that could ultimately have a major impact on the company’s valuation.

One positive, though, is that AVZ appears confident that a favourable outcome is coming. Last month it commented:

The Company is confident of a positive outcome for it’s (sic) shareholders, resultiung (sic) in the re-instatement of trading in its securities.

In addition, AVZ recently hit back at a short seller report, claiming that the short seller was making misleading or deceptive statements. It said:

The Boatman Report makes a large number of false, misleading and/or deceptive statements (including through omission) regarding AVZ and its ownership in the Manono Lithium and Tin Project (Manono Project), all of which are strongly refuted. In particular, the Boatman Report falsely seeks to contend that the Company does not hold legal title to a 75% interest in the shares in Dathcom.

Time will ultimately tell what AVZ’s ownership level ends up being.

The post AVZ Minerals shares are scheduled to resume trading next week. Here’s what to watch appeared first on The Motley Fool Australia.

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More reading

• 8 ASX 200 shares got kicked out of the index on Monday. How are they tracking?
• The ASX 200 is getting a shakeup today. Here’s the tea
• Out in the cold: How are the ASX 200 evictees faring on Monday?
• Will the AVZ Minerals share price ever resume trading?
• What’s going on with the AVZ share price?

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.

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The Core Lithium Ltd (ASX: CXO) share price has had a shocking 30 days, plunging by 24.8% in that time.

That’s despite the company releasing plenty of good news in that time.

The Core Lithium share price is back in the red on Friday, falling 0.86% right now to trade at $1.15.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has slumped 0.66% today.

With a rocky month’s trade under its belt, is the future still looking bright for the ASX 200 lithium favourite? Let’s take a look at what brokers are predicting for its future.

Could the Core Lithium share price offer 48% upside?

The Core Lithium share price has been the talk of the town recently as the company prepares to begin production at the Northern Territory’s Finniss Lithium Project.

It’s expecting to complete the first export of lithium from Finniss by the end of 2022.

However, the market’s been bidding the stock lower amid capital raising activities and despite positive exploration and development updates.

Core Lithium announced it had sold a shipment of its spodumene DSO product – housing 1.4% lithium – for US$951 per dry metric tonne last week.

It also released an update on drilling at its BP33 deposit, part of the Finniss Project, on Wednesday. Three deep diamond holes intersected spodumene mineralised pegmatite at depths below any previous drilling.

Topping off the recent exciting news was a $100 million institutional placement. That saw around 97.1 million shares offered for $1.03 apiece.

The funds are said to have strengthened the company’s balance sheet, allowing it to fast-track exploration programs, speed up capital development initiatives, and pursue growth opportunities.

Broker Macquarie agrees that the new cash will help bolster the company’s growth. It’s expecting big things from the ASX 200 lithium share in the near future, my Fool colleague James reports.

Its analysts have tipped Core Lithium shares to outperform, slapping them with a $1.70 price target – representing a 48% upside.

Additionally, the federal government has tipped demand for lithium to surge in the near future, driving the price of lithium hydroxide to US$51,510 in 2023. That will likely spell good news for Core Lithium’s future bottom line.

Thus, the future arguably looks bright for the company in October and beyond.

The post Down 25% in a month, what’s in store for the Core Lithium share price in October? appeared first on The Motley Fool Australia.

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More reading

• If you’d bought $2,000 of NAB shares at the end of FY22, here’s how much you’d have now
• 5 things to watch on the ASX 200 on Friday
• Why did the Core Lithium share price fall off a cliff in September?
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Motley Fool contributor Brooke Cooper 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 Macquarie Group Limited. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The Terra Luna (CRYPTO: LUNA) comeback continues. After blowing up spectacularly earlier this year, Terra Luna is back in the form of Terra Luna Classic (CRYPTO: LUNC), which was formed from the ashes of the original Terra blockchain. In September, Terra Luna Classic was one of the top-performing altcoins, and there are now petitions all over social media for exchanges Coinbase Global and Robinhood Markets to list Terra Luna Classic for trading. At one point in September, Terra Luna Classic was up 400%, bringing with it a lot of attention from speculators.

But is Terra Luna Classic right for your crypto portfolio? Keep in mind: The old Terra Luna went from $100 to nearly zero in a matter of days, dragging down the entire Terra blockchain ecosystem and contributing to the implosion of the crypto industry. Is it really possible that, less than five months after such an epic disaster, Terra Luna is ready for a comeback?

Financial alchemy

To answer this question, you first have to understand that a lot of financial machinations have taken place within a relatively short period of time. After the collapse of the Terra ecosystem in May, the team behind Terra Luna decided to “fork” the Terra blockchain into two different chains. There would be an entirely new chain called Terra 2.0, and the continuation of the original blockchain called Terra Classic. The naming convention was meant to evoke the split of the original Ethereum into Ethereum and Ethereum Classic. Plus, the term “classic” has a sort of warm and reassuring feel to it. It’s not really a word one associates with toxic financial products.

From this perspective, Terra Luna Classic is really just a clever rebranding of the old Terra Luna. Nothing new has really been created. It’s literally financial alchemy, or turning the equivalent of lead into gold. The goal appears to be to take a crypto worth close to zero ($0.0003, to be exact) and transform it into something that has some sort of value.        

If you’re a cynic, it’s easy to see this as a desperate ploy by people who lost their life’s savings on Terra Luna to get something — anything! — out of a failed investment. The old Terra Luna traded for close to $100 when disaster struck, so financial speculators everywhere are watching this saga closely. Even if Terra Luna Classic only makes it back to the $1 mark, it would be a huge financial gain for them. 

Can you rebrand a crypto?

There is an old saying on Wall Street that “You can’t put lipstick on a pig,” and yet, that’s exactly what the backers of Terra Luna Classic are trying to do. They are trying to take a piece of wreckage that’s worth close to nothing and convince other people that it is worth something. That might explain the coordinated social media campaign to get Coinbase to list Terra Luna Classic. 

If Coinbase decides to make Terra Luna Classic available for trading, that would provide greater liquidity for this crypto and give it a veneer of respectability. Or, if you prefer, it would be the lipstick on the pig. Right now, there are not a lot of major cryptocurrency exchanges where you can buy and sell Terra Luna Classic, and for good reason.

Good money after bad

When you add in the fact that the original founding team of Terra Luna is now facing legal jeopardy in jurisdictions around the world, including in Terra’s home country of South Korea, you can start to understand better why an investment in Terra Luna Classic is potentially so toxic. Even Interpol is interested in talking with Terra’s founder, Do Kwon. There is a distinct possibility that, even if Terra Luna Classic continues to pump — in crypto lingo — it could still all go to zero in a matter of days, just as the original Terra Luna did. 

There are plenty of other speculative cryptos out there that have a better chance of making a huge return for you. Don’t throw good money after bad. The great writer F. Scott Fitzgerald once remarked, “There are no second acts in American lives.” If he were alive today, he would probably agree, there are no second acts in the crypto industry, either.  

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Does Terra Luna deserve a second chance in your crypto portfolio? appeared first on The Motley Fool Australia.

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Dominic Basulto has positions in Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Coinbase Global, Inc., Ethereum, and Terra Luna Classic. The Motley Fool Australia owns and has recommended Ethereum and Terra. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.    

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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