Category: Stock Market

The Straker Translations Ltd (ASX: STG) share price is on a sharp rebound for the beginning of 2022. This comes after the company announced an acquisition to expand its presence in the multi-billion-dollar European translation market.

At the time of writing, Straker shares are zipping 8.71% higher to $1.685 apiece.

Straker to acquire IDEST

Investors are fighting to get a hold of the Straker share price after the company revealed its latest move.

According to this morning’s release, Straker advised it plans to purchase traditional translation provider, IDEST.

Based in Belgium, IDEST specialises in serving international institutions such as the United Nations and European Commission. Notably, the company has been supplying its services to these organisations for more than two decades.

The binding agreement will see Straker acquire IDEST shares for an initial consideration of €1.75 million (A$2.75 million). This will comprise €1.5 million (A$2.36 million) in cash and €250,000 (A$392,000) in shares at transaction completion. Straker shares will be at an issue price of $1.48 per ordinary share.

In addition, Straker will pay a deferred consideration to IDEST’s vendors of up to €2.5million (A$3.93 million) in cash over two years. However, this is provided that the newly-acquired business meets revenue growth targets that have been set out.

Straker highlighted that buying IDEST opens the largest translation market in Europe through its established relationships with leading global institutions.

Straker CEO, Grant Straker touched on the company’s latest deal, saying:

We have been talking to IDEST for several years as we recognised the strong standing, they have with global institutions and that their long experience and our technology solutions and global reach would be of value to their customers.

It’s fantastic that the stars have aligned to enable this transaction and for us to build on the great work of the founders over the past 30 years.

We have recently setup an office in Amsterdam and combined with IDEST in Brussels will give us a very strong offering in the Benelux region.

Straker share price summary

Over the past 12 months, the Straker share price is up 16%, with these gains coming from the last week. The company’s shares have noticeably been treading higher since 23 December.

Based on valuation grounds, Straker commands a market capitalisation of roughly $113.76 million, with 67.51 million shares outstanding.

The post This just caused the Straker Translations (ASX:STG) share price to leap 9% appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to buy
• Happy new high! Pilbara Minerals (ASX:PLS) share price up another 7%
• Why is the Neometals (ASX:NMT) share price rocketing 16% today?
• Up 232% in 1-year, why is the Podium Minerals (ASX:POD) share price rocketing today?
• 2 exciting ASX tech shares that could be buys

Motley Fool contributor Aaron Teboneras 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 Straker Translations. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3zl0FCy

With most brokers still taking a well-earned break, broker notes are few and far between at present.

In light of this, listed below are a few recent broker recommendations that remain very relevant today. Here’s are three ASX shares rated as buys:

Accent Group Ltd (ASX: AX1)

According to a note out of UBS, its analysts have put a buy rating and $3.00 price target on this footwear retailer’s shares. UBS is bullish on Accent due to its positive long term outlook which is being underpinned by the expansion of its store network across numerous brands. The broker is expecting operating leverage to support its earnings growth in the future as its network grows. The Accent share price is trading at $2.45 on Tuesday.

CSL Limited (ASX: CSL)

A note out of Citi reveals that its analysts have put a buy rating and $340.00 price target on this biotherapeutics giant’s shares. The broker made the move in response to CSL’s acquisition of Vifor Pharma for ~US$17 billion. Citi appears supportive of the acquisition and expects it to be accretive to CSL’s earnings. Its analysts also highlight that management presented the transaction as being strategically aligned with the existing business. The CSL share price is fetching $293.11 today.

Newcrest Mining Ltd (ASX: NCM)

Analysts at UBS also have a buy rating and $27.00 price target on this gold miner’s shares. According to the note, the broker has lifted its long term gold price estimate to US$1,500 an ounce. Combined with its belief that Newcrest is better positioned for growth than some of its peers due to M&A and reinvestments, it feels this makes it a good option for investors looking for exposure to gold. The Newcrest share price is trading at $24.50 on Tuesday afternoon.

The post Leading brokers name 3 ASX shares to buy appeared first on The Motley Fool Australia.

More reading

• Here are the 5 best performing ASX biotech shares of 2021
• Analysts name 2 top ASX dividend shares to buy now
• Why did the CSL (ASX:CSL) share price go backwards in December?
• 5 things to watch on the ASX 200 on Friday
• Brokers name 3 ASX shares to buy

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. owns and has recommended CSL Ltd. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3FSN2gi

The Pilbara Minerals Ltd (ASX: PLS) share price seems to be the gift that just keeps on giving to its shareholders.

As we covered this morning, Pilbara ended up claiming the crown of the S&P/ASX 200 Index‘s (ASX: XJO) best performing share of 2021. Beating out Lynas Rare Earths Ltd (ASX: LYC) and GrainCorp Ltd (ASX: GNC), Pilbara shares gave investors a very pleasing 268% gain last year.

But that gain could just be the start for Pilbara, going by what is happening today. At the time of writing, Pilbara Minerals shares are up a whopping 7.19% at $3.43 a share. That comes after the company hit a new all-time high of $3.50 a share earlier this morning. Its gains over the past 12 months now stand at 295.4%.

So what’s up with Pilbara’s massive appreciation today?

Pilbara share price spikes, should investors thank Tesla?

Well, unfortunately, it’s not entirely clear. There has been no official news or announcements out of Pilbara so far this Tuesday. Or any other official developments to speak of.

However, there is one possible reason why investors are flocking to Pilbara shares today. And that would be Tesla Inc (NASDAQ: TSLA), the US electric battery and vehicle manufacturer headed by Elon Musk.

Overnight (our time), Tesla shares exploded higher, climbing a hefty 13.53% to US$1,199.78 a share. The catalyst for this explosive move was the company’s fourth-quarter vehicle delivery numbers. As our Fool colleagues over in the US reported this morning, Tesla delivered a record 308,600 vehicles over its fourth quarter, a healthy 71% year-on-year growth rate. That was a significant beat on the 263,000 average analyst forecast.

Now, you might be wondering what Tesla’s vehicle deliveries have to do with Pilbara Minerals. Well, Pilbara is in the business of lithium processing. And lithium happens to be the primary ingredient in the batteries that power Tesla vehicles. It’s possible that Tesla’s delivery numbers overnight have been taken as a huge boost for lithium companies like Pilbara, and are what’s behind this dramatic shift in sentiment for Pilbara shares.

Or it could just be that investors are banking on more of the same from Pilbara after the company’s stellar 2021. Whatever the reason, this company has had one of the best starts to 2022 on the ASX boards thus far. No doubt shareholders will be hoping that Pilbara keeps it coming.

At the current Pilbara Minerals share price, this ASX 200 lithium company has a market capitalisation of $10.3 billion.

The post Happy new high! Pilbara Minerals (ASX:PLS) share price up another 7% appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Pilbara Minerals hits record high, energy shares rise
• These were the 5 best performing ASX 200 shares in 2021
• These were the best performing ASX 200 shares in December
• These were the best performing ASX 200 shares last week
• ASX 200 falls on Friday but records 13% gain in 2021

Motley Fool contributor Sebastian Bowen owns Tesla. 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3JDShCR

The Neometals Limited (ASX: NMT) share price is leading the majors today, trading 16% higher at $1.65 apiece.

While there’s been no price sensitive information out of Neometals’ corner today, investors have been riding the wave of momentum in its share price since late December.

After a collection of announcements, the Neometals share price closed the year almost 500% in the green at $1.42, jumping 40% in the final days of December alone.

Why is the Neometals share price charging higher today?

There’s nothing remarkable out of Neometals’ camp today although it seems momentum from the final session of 2021 is spilling over into the new year.

Early in the session today, the volume of Neometals shares traded is already at 123% of its 4-week average – and that figure has been climbing rapidly too.

Last week, investors reacted well to an announcement from the company regarding Primobius, its 50/50 joint venture (JV) with SMS group GmbH.

The company advised its JV has executed binding option and licensing agreements with Stelco, a subsidiary of Stelco Holdings Inc (TSX: STLC), a Canadian steelmaking company listed on the Toronto Stock Exchange.

Stelco is a leading supplier of steel to automotive markets and consumes scrap as part of its steel manufacturing process.

Neometals reckons the venture “presents the perfect opportunity for Primobius to enter the North American market as partners”.

The group had already entered into an agreement earlier in 2021 to evaluate lithium-ion battery recycling operations.

After reaching binding formal arrangements, Primobius has exclusively licensed its battery recycling technology to a special purpose vehicle (SPV) focused on end-of-life vehicle battery processing.

Primobius can also acquire a 25-50% equity stake in the SPV under certain stipulations through another option agreement.

Neometals claims the venture will help meet the demand for an anticipated surge in end-of-life electric vehicle batteries originating from the ”world’s fastest-growing cell making jurisdiction”.

Managing director Chris Reed said the company was “understandably excited” by Primobius’ commercial progress.

Neometals share price snapshot

The Neometals share price finished the year up more than 500% over the past 12 months and is now up almost 43% in the last single-month period.

Investors have latched onto the company this past week and have spiked shares more than 52% in that time.

The post Why is the Neometals (ASX:NMT) share price rocketing 16% today? appeared first on The Motley Fool Australia.

More reading

• Neometals (ASX:NMT) share price explodes 15% on battery recycling update
• Why Bega Cheese, Magnis, Mesoblast, and Neometals shares are pushing higher
• The Neometals (ASX:NMT) share price is on fire, up 10% today. Here’s why
• Why Betmakers, Centuria, Neometals, and Syrah shares are storming higher
• Why Australian Clinical Labs, Humm, Neometals, and Viva Energy are rising

The author has no positions 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3qJjLyc

The Podium Minerals Ltd (ASX: POD) share price is off to the races today.

At time of writing, shares in the ASX resource explorer are up more than 12%, having earlier posted gains of 20%.

Below we take a look at the latest drilling results that look to be stoking ASX investor interest.

What drilling results were announced?

Kicking of the new year on a high note, the Podium Minerals share price is surging after the company reported promising drill results at its 100% owned Parks Reef PGM (platinum group metals) project in Western Australia, alongside the appointment of its new chief executive officer.

Podium completed 2 of the 3 diamond drill holes it plans to test Parks Reef before Christmas. Cores from the 500 metre deep holes are now in Perth with preliminary lithological logging completed.

According to the release, initial core observations indicate both holes intersected “sulphide bearing stratigraphy of the layered intrusion”. Podium said that visual analysis provides it with additional confidence that mineralisation is continuing to significant depth.

Commenting on the results, newly appointed CEO Sam Rodda, who officially took the helm on 1 January, said:

This is a very exciting outcome for Podium, with the Stage 8 drilling so far confirming continuity of Parks Reef at depth and that it remains steeply dipping. This drill program has provided further confidence that we have yet to find the limits of the orebody at depth.

We intend to pursue an aggressive exploration strategy aimed at growing our resource base and also testing our orebody for rhodium and iridium to include the full 5E PGM suite of minerals in future resource estimate updates.

Podium Minerals share price snapshot

Podium Minerals shares have stormed higher over the past 12 months, gaining 232%. That compares to a 12 month gain of 13% posted by the All Ordinaries Index (ASX: XAO).

Over the past month, the Podium Minerals share price is up 13%.

The post Up 232% in 1-year, why is the Podium Minerals (ASX:POD) share price rocketing today? appeared first on The Motley Fool Australia.

More reading

• 2 exciting ASX tech shares that could be buys
• What happened to the Woodside (ASX:WPL) share price in 2021?
• Why has the Atomo Diagnostics (ASX: AT1) share price surged 50% since Christmas?
• Morgans names 2 ASX 200 dividend shares to buy
• Here’s why the ASX 200 miners’ 2022 outlook could be in for a boost

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3qRXzlM

There are a number of ASX tech shares that have exciting potential for growth over the coming years.

Some businesses are exposed to growth trends that are helping certain sectors power ahead.

With that in mind, here are two ASX tech shares with potential:

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

This investment is an exchanged-traded fund (ETF) which is invested in global gaming and e-sports businesses.

Some of the holdings that readers may have heard of includes Tencent, Nvidia, Nintendo, Activision Blizzard, Electronic Arts, Take-Two Interactive, Bandai Namco, Ubisoft, Zynga and Capcom. There are were a total of 25 holdings at the end of 2021.

Gaming earnings are generated across the world. Newzoo was expecting the Asia-Pacific region to generate gaming revenue of US$78.4 billion in 2020, accounting for around half of the global games market. The Middle East and Africa region was expected to be the fastest-growing market in 2020, with 14.5% year on year growth to reach US$5.4 billion.

By 2023, the competitive gaming audience is expected to reach 646 million people globally. E-sports revenue has seen an average increase of revenue of 28% per annum since 2015 according to VanEck. This is coming about from fast growth, as well as new revenue streams like advertising and media rights.

This ASX tech share ETF has an annual management fee of 0.55%.

Nextdc Ltd (ASX: NXT)

Nextdc is Australia’s largest data centre business, with operations in each of Australia’s largest cities, and plans for more centres.

It’s rated as a buy by several brokers, including Macquarie Group Ltd (ASX: MQG), which has a price target of $16.10 on the business. This price target suggest upside of around 25% over the next year, if the broker is right.

Both the broker and management are focused on the opportunity for the ASX tech share to expand its digital infrastructure platform into new locations. Nextdc is progressing its regional expansion plans and diversify by going to ‘edge’ locations in regional communities where demand is “expected to continue surging over many years”

One growth avenue is a new regional development in partnership with the Northern Territory Government to develop its first data centre in Darwin, D1. Macquarie thinks that these edge data centres could earn higher yields.

In FY22, the company is expecting data centre service revenue to increase between 16% to 20%, with earnings before interest, tax, depreciation and amortisation (EBITDA) growth of between 19% to 23%.

The post 2 exciting ASX tech shares that could be buys appeared first on The Motley Fool Australia.

More reading

• How the Macquarie (ASX: MQG) share price went in 2021
• 3 high quality ETFs for ASX investors in January
• Brokers name 3 ASX shares to buy
• 2 exciting tech ETFs for ASX investors in 2022
• Christmas highs: 3 ASX 200 shares hitting record highs today

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 recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3ELAXIx

The Woodside Petroleum Ltd (ASX: WPL) share price finished 2021 in the red despite a positive start to the year.

The oil and gas company’s share price fell 4.94% for the year, finishing at $21.93. For perspective, the S&P/ASX 200 Index (ASX: XJO) gained 13% in 2021.

At least this year’s result was greener than 2020, when the company’s shares slumped 33%.

Let’s take a look at what weighed on the Woodside share price during the year.

How did the year play out?

The year started with a bang for the Woodside share price which hit a yearly high of $27.40 on January 20, up 20%. A major reason for this was the surging oil prices in January. Also helping to boost the share price was news Woodside would expand its long-term LNG supply agreement with Uniper Global Commodities.

However, its shares then slid sharply at the end of January, falling more than 10% at the end of the month. A broker note out of UBS downgraded the energy producer’s shares to a neutral rating at the time.

The Woodside share price had its sharpest fall in August, dropping 11.67% between August 13 and 19.

That came despite positive half-year results from the company. Woodside revealed a $317 million net profit after tax compared to a $4 billion loss in 1H 2020.  Meanwhile, operating revenue jumped 31.3% to $2.5 billion 

However, a major announcement on a merger with BHP Group Ltd (ASX: BHP) was also weighing on investors’ minds. If approved by shareholders, Woodside will issue shares to BHP shareholders and create a new joint company. However, as my Foolish colleague Mitchell reported at the time, this was slammed by a key investor.

But while the Woodside share price may have slid slower, the company’s dividend increased by 14%. The energy company reported a US 30 cents per share distribution, equating to AU 41.6 cents.

In September and early October, its shares were surging again, jumping 23.71% between September 20 and October 11 despite no price-sensitive announcements from the company.

This came on the back of soaring energy prices. Brent crude prices surged 12.8% in 3 weeks from US$73.92 per barrel to US$83.33 

Then in November, the Woodside share price took another dive, falling nearly 9%. Investors received an update on the merger with BHP, providing a minor bump to the company’s stock. However, global oil prices crashed on the emergence of the Omicron COVID-19 variant. Oil prices sank 13% to $68.15 a barrel on the day of that announcement.

On the bright side, shares in the company jumped 2.33% in the final month of the year and climbed on news of a new energy plan. The company will invest $5 billion in emerging new energy markets by 2030.

December also saw the Australian Competition and Consumer Commission give the green light to its acquisition of BHP. The company also appointed Graham Tiver as the new chief financial officer and executive vice president.

Woodside share price snapshot

The Woodside share price fared roughly 18% worse than the broader ASX 200 Index in 2021.

The company has a market capitalisation of more than $21 billion based on the current share price.

The new year is also bringing some joy to Woodside. The Brent crude oil price is up 1.54% to US$78.98 a barrel. At the time of writing, Woodside shares are swapping hands for $22.45, up 2.37%.

The post What happened to the Woodside (ASX:WPL) share price in 2021? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• Morgans names 2 ASX 200 shares to buy
• 5 things to watch on the ASX 200 on Wednesday

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3FRyMnP

The Atomo Diagnostics Ltd (ASX: AT1) share price has surged through the festive period. It’s gained 50% since the ASX closed on Christmas Eve.

The stock’s recent boost could be due to its involvement with COVID-19 rapid tests. Rapid tests have been the talk of the town lately as Australia faces a record wave of COVID-19 cases.

At the time of writing, the Atomo Diagnostic share price is 31.5 cents, 5% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is up 1.3% right now.

Let’s take a closer look at what might be driving the company’s stock lately.

Atomo Diagnostics share price particularly festive

The Atomo Diagnostics share price has been on a roll lately. The company’s shares surged 26% on Wednesday, triggering the ASX to issue a ‘please explain’.

In its response, the company noted increased media attention on the topic of COVID rapid antigen tests. Indeed, rapid tests have been on many minds lately, including those of the country’s decision-makers.

The same day the Atomo Diagnostics share price experienced its major leap, Prime Minister Scott Morrison announced the federal government was bringing forward a national cabinet meeting to discuss implications of the Omicron outbreak, including testing arrangements.

That meeting occurred on 30 December. It led to the introduction of new orders stating rapid antigen tests will become the go-to COVID-19 test for most Australians, with PCR tests restricted to those with symptoms and close contacts.

Additionally, Atomo Diagnostics pointed to an article published by the Sydney Morning Herald the previous day as a potential catalyst for its shares’ gains.

The article discussed increasing demand from consumers and state governments for COVID-19 rapid tests.

In October, the company announced new terms to its supply agreement for COVID-19 rapid tests.

It can now purchase up to 10 million rapid tests to be used in professional settings in Australia and New Zealand and another 10 million to be sold commercially.

While the Atomo Diagnostics share price initially dived 11.7% on the new terms, the prospect of supplying more tests could be what’s got the market excited about the company.

However, despite the stock’s Christmas gains, the company’s share price is only 1.6% higher than it was this time last year.

The post Why has the Atomo Diagnostics (ASX: AT1) share price surged 50% since Christmas? appeared first on The Motley Fool Australia.

More reading

• What happened to the Woodside (ASX:WPL) share price in 2021?
• Morgans names 2 ASX 200 dividend shares to buy
• Here’s why the ASX 200 miners’ 2022 outlook could be in for a boost
• 5 worst ASX 200 tech shares of 2021
• ASX 200 (ASX:XJO) midday update: Pilbara Minerals hits record high, energy shares rise

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 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3FRyJs9

If you’re looking for dividend shares to buy, then you may want to check out the ones listed below that are rated as buys by the team at Morgans.

Here’s what its analysts are saying about these ASX 200 dividend shares:

Transurban Group (ASX: TCL)

The first ASX 200 dividend share that Morgans is bullish on is Transurban. It is a toll road operator with a portfolio of key roads in Australia and North America. Morgans likes Transurban due to its exposure to a number of growth drivers.

It explained: “We view TCL as a high quality pure-play toll road infrastructure portfolio benefitting from employment and population growth, urbanisation, and the value of time, with particular exposure to the east coast capital cities in Australia.”s

Its analysts are forecasting dividends per share of 35 cents in FY 2022 and then 55.3 cents in FY 2023. Based on the current Transurban share price of $13.87, this implies yields of 2.5% and 4%, respectively. Morgans has an add rating and $14.57 price target on its shares.

Westpac Banking Corp (ASX: WBC)

Another ASX 200 dividend share that Morgans rates as a buy is Westpac. Its analysts believe the recent weakness in the Westpac share price has created an opportunity for income investors.

Morgans commented:: “WBC shares have been sold off heavily following the FY21 result announcement, such that out of the major banks, WBC is now trading on the lowest FY22F P/NTA multiple, the lowest FY22F P/E multiple and the highest FY22F dividend yield. Such multiples or yields could only be justified if WBC is a value trap, which we think it is not. We believe the challenges facing WBC are not severe enough for WBC to be thought of as a value trap.”

The broker is forecasting fully franked dividends 123 cents per share in FY 2022 and then 162 cents per share in FY 2023. Based on the current Westpac share price of $21.51, this will mean yields of 5.8% and 7.6%, respectively. Morgans has an add rating and lofty $29.50 price target on the banking giant’s shares.

The post Morgans names 2 ASX 200 dividend shares to buy appeared first on The Motley Fool Australia.

More reading

• Top ASX shares to buy in January 2022
• These ASX mining, tech, and bank shares could be buys in 2022
• ASX 200 falls on Friday but records 13% gain in 2021
• Morgans names 2 blue chip ASX 200 shares to buy
• Is the Westpac (ASX:WBC) share price a buy for dividends?

Motley Fool contributor James Mickleboro owns Westpac Banking Corporation. 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 Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3eQ1KJ7

S&P/ASX 200 Index (ASX: XJO) listed miners broadly underperformed the index in 2021.

While the ASX 200 gained 13% in the year gone by, mining giant BHP Group Ltd (ASX: BHP) slipped 2%.

Rio Tinto Limited (ASX: RIO) had a more difficult year, seeing its share price fall by 12%.

Meanwhile, Fortescue Metals Group Limited (ASX: FMG) trailed the other big ASX 200 miners, closing the year down 18%.

There were numerous factors impacting the companies’ share prices over the year which go beyond the scope of this article. But the price of iron ore, a major contributor to their bottom line, was certainly a large one.

Iron ore kicked off 2021 trading for some US$158 per tonne. In July it hit record highs of US$220 per tonne before dropping sharply into November when it reached US$92 per tonne.

Despite some bearish analyst predictions, the metal bounced back in December and is currently worth US$120 per tonne.

That’s above consensus expectations for the average price in 2022. But those expectations may be on the pessimistic side, which would be welcome news to the ASX 200 miners.

ASX 200 mining shares eyeing iron ore prices

Ben Cleary is the portfolio manager at Tribeca Investment Partners’ Global Natural Resources Fund.

As the Australian Financial Review reports, Cleary “is confident iron ore majors such as BHP Group, Rio Tinto and Fortescue Metals Group will enjoy another strong year”.

That’s referring to their longer-term performance.

Over the past 5 years the ASX 200 has gained 31% while BHP is up 66%, Rio shares have gained 67% and the Fortescue share price has soared 223%.

Cleary’s optimistic outlook for the ASX 200 miners stems from his belief that consensus views for the iron ore price in 2022 are too low, just as consensus views came in well below the realised average price in 2021.

Consensus expectations for 2022, as measured by Bloomberg, are for iron ore to average US$90 per tonne.

But Cleary disagrees. He said (quoted by the AFR):

I think iron continues to rally in the first quarter to $US150 a tonne or higher, well above current consensus expectations of $US100 a tonne [for the quarter]. China’s credit impulse is starting to expand after mostly contracting in 2021 and infrastructure demand for iron ore should be particularly strong.

Advantage Fortescue

As mentioned above, Fortescue widely outperformed both the ASX 200 as well as BHP and Rio over the past 5 years, gaining an impressive 223%.

And Cleary believes the miner’s bull run could keep on going. Pointing to its advantages in the green hydrogen space, he said:

Fortescue is the pure-play iron ore exposure and comes with the added benefit of a green hydrogen call option that you are getting for free at current levels. Fortescue is well ahead of peers in terms of hydrogen and ammonia production, and this could be worth $50 a share or more if they execute.

The post Here’s why the ASX 200 miners’ 2022 outlook could be in for a boost appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Brokers name 3 ASX shares to buy
• Here’s why the Fortescue (ASX:FMG) share price has leapt 12% in December
• Analysts rate these ASX 200 dividend shares as buys
• Rio Tinto (ASX:RIO) shares are enjoying a Santa rally of their own this month. Here’s why

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3mTfhEi