Category: Stock Market

The Novonix Ltd (ASX: NVX) share price is roaring higher over the last month despite the company being relatively quiet.

Novonix’s one and only price-sensitive release of the last 30 days dropped last week. It detailed the company’s quarterly activities and cash flows.

On top of that, the Novonix share price had seemingly been riding a recent wave of enthusiasm for lithium. While Novonix doesn’t deal directly with lithium, it works in the battery technology space.

Finally, news of Telsa Inc (NASDAQ: TSLA) may have piqued the market’s interest in Novonix due to its leader’s ties with the electric car manufacture. Last week, Tesla celebrated a significant milestone when its value surpassed US$1 trillion.

On Thursday, the Novonix share price closed at $8.54, 1.78% higher than its previous close and 64.5% higher than it was this time last month.

Let’s take a closer look at what might be moving the graphite explorer and manufacturer’s stock lately.

What could be fuelling the Novonix share price?

The only release the market has seen from Novonix over the last month was its activities and cash flow report for the September quarter. The Novonix share price rallied 8.5% on the day the company released its quarterly results.

Over the quarter just been, Novonix saw a loss of $6.9 million. It ended the period with around $290.9 million in cash and approximately $48.8 million of drawn finance.

That’s enough to fund another 42.2 quarters if costs remain the same as the one just been.

Additionally, over the quarter just been, Novonix purchased a new battery anode production facility in the United States. It also saw Phillips 66 (NYSE: PSX) make a strategic investment in the company.

Excitingly, it also welcomed its new chief scientific advisor, Professor Jeff Dahn.

Dahn and his research group have an exclusive partnership with Tesla. For those who aren’t aware, Dahn is the second connection Novonix has with Tesla.

The company’s CEO, Dr Chris Burns, was previously Tesla’s senior research engineer.

Finally, the Novonix share price’s recent rally might be due to increased interest in battery technology companies and lithium producers.

Lithium stocks surged last week alongside the commodity’s price. While Novonix doesn’t deal in lithium itself, its stock tends to move alongside lithium shares, likely due to its involvement in the battery sector.

The continued upwards movement experienced by the Novonix share price could be a signal of the market’s lasting excitement in the battery sector.

The post Up 64% in a month, here’s why the Novonix (ASX:NVX) share price is supercharging right now appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• The market had a lousy day. So why did the Novonix (ASX: NVX) share price leap 4%?
• Why has the Novonix (ASX:NVX) share price rallied 32% in 3 weeks?
• Here are the top 10 ASX shares today
• Here are the top 10 ASX shares today

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. owns shares of and has recommended Tesla. 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.

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Today, the S&P/ASX 200 Index (ASX: XJO) followed the lead of Wall Street with another positive session. At the end of the trading day, the benchmark index finished 0.48% higher at 7,428 points.

Most sectors on the market finished in a better place than they started today. Exceptions to this included utilities, consumer discretionary, and energy. A fall in oil prices overnight left ASX-listed oil and gas companies feeling the pinch. In contrast, financials glowed a healthy tone of green on Thursday.

The question is: which shares delivered the biggest returns to investors on the ASX today? Here are the ten stocks that rose to the occasion:

Top 10 ASX shares countdown today

Looking at the top 200 listed companies, Nib Holdings Ltd (ASX: NHF) was the biggest gainer today. Shares in the private health insurance company gained 6.15%. The positive performance appears to be on the back of Nib’s annual general meeting with shareholders. Find out more about Nib Holdings here.

The next biggest gaining ASX share today was New Hope Corporation Ltd (ASX: NHC). Shares in the coal mining company pushed 5.56% after a rebound in coal prices. The reinstated strength in the energy-dense material follows a signal that China might begin to ease its pressure on the commodity. Uncover the latest New Hope details here.

Today’s top 10 biggest gains were made in these ASX shares:

ASX-listed company	Share price	Price change
Nib Holdings Ltd (ASX: NHF)	$7.165	6.15%
New Hope Corporation Ltd (ASX: NHC)	$1.995	5.56%
Chalice Mining Ltd (ASX: CHN)	$6.83	5.24%
Pexa Group Ltd (ASX: PXA)	$16.28	4.83%
CSR Ltd (ASX: CSR)	$6.28	4.67%
The Star Entertainment Group Ltd (ASX: SGR)	$3.89	4.29%
PointsBet Holdings Ltd (ASX: PBH)	$8.45	4.19%
Imugene Ltd (ASX: IMU)	$0.5775	4.05%
Pinnacle Investment Management Group Ltd (ASX: PNI)	$18.86	3.68%
Uniti Group Ltd (ASX: UWL)	$4.16	3.23%

Our top 10 ASX shares today countdown is a recurring end-of-day summary to ensure you know which companies were making big moves on the day. Check-in at Fool.com.au after the market has closed during weekdays to see which stocks make the countdown.

The post Here are the top 10 ASX shares today appeared first on The Motley Fool Australia.

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• Why the NIB (ASX:NHF) share price is one of the best performers on the ASX 200 today
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• These were the 5 best performing ASX retail shares in October
• Why the Amcor (ASX:AMC) share price is outperforming today
• ASX 200 (ASX:XJO) midday update: Zip’s record month, Domino’s crashes

Motley Fool contributor Mitchell Lawler owns shares of CSR Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended PINNACLE FPO and Pointsbet Holdings Ltd. The Motley Fool Australia owns shares of and has recommended PINNACLE FPO. The Motley Fool Australia has recommended NIB Holdings Limited, Pointsbet Holdings Ltd, and Uniti Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Monday was a very green day for shareholders of Step One Clothing Ltd (ASX: STP) as it made its debut on the Australian Stock Exchange. The largest shareholder, founder, and CEO Greg Taylor witnessed a cool $150 million in paper profits on its first day of listed life.

However, the entrepreneurial-minded Taylor has no plans of resting on his laurels after taking the bamboo fibre underwear company public. Instead, his plans describe bigger and bolder pursuits ahead.

What exactly could the future of Step One entail?

Only the beginning for ASX-listed Step One

To the astonishment of some, Step One was started by Taylor not too long ago, back in 2017. In the space of four years, the men’s underwear brand has gone from a simple solution to a $500 million company.

The concept was devised by Taylor after having his own qualms with traditional cotton underwear. Out of a desire for a better answer, the former elite rower landed on the bamboo alternative.

Clearly, the broader market has shared in Taylor’s own experiences. Since launching the direct-to-consumer online underwear the retailer has delivered over 1.25 million orders to more than 725,000 customers.

This incredible feat has been achieved through its operations in Australia and the United Kingdom. However, with fresh capital on the balance sheet, after Step One IPO’d on the ASX, Taylor now has his sights on more.

Out of the successful $81.3 million raised through the initial public offering (IPO), around $12 million is being allocated to a push into the United States. According to the company’s prospectus, the men’s underwear market across Australia, the UK, and the US was worth approximately $8.3 billion in 2020. Undoubtedly, Step One wants to have as much of that pie as possible.

Currently, Step One is estimated to have about 6% of the men’s underwear market in the land down under. Which indicates there’s plenty of room for domestic growth. However, Taylor’s brand is now looking to branch out a little further with entry into women’s underwear as well.

History of growth

While Step One’s ASX track record is short, its prospectus bares all the juicy historical performance details.

In FY19, the company achieved $7.7 million in revenue, fairly modest. But this figure quickly grew to $61.7 million in FY21. Unlike some high-growth companies, Step One is also already profitable. The last financial year banked $7.7 million in net profit after tax.

Finally, with high growth ambitions on the cards, the company is forecasting $10.5 million in profits for FY22.

The post ASX debut nets Step One founder $150m, but what’s next for the company? appeared first on The Motley Fool Australia.

More reading

• Step One (ASX:STP) share price surges 86% in 2 days following IPO
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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 Bruce Jackson.

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The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is inching higher this afternoon and is now up around 0.6% at $28.65.

With the bank releasing its full-year results last week, the analyst team at Macquarie Group Ltd (ASX: MQG) have chimed in with its opinion on the outlook for the ANZ share price.

But first – How did ANZ perform in FY21?

For the 12 months ended September 30 2021, the banking giant recognised a 72% jump in its statutory profit after tax at $6.16 billion.

This corresponded with a 65% year-on-year increase in cash earnings from continuous operations of $6.2 billion.

Another takeout from the year was ANZ’s CET 1 ratio gaining 100 basis points to now sit at 12.3%. This result means the bank has eclipsed the $6 billion mark in ‘surplus’ capital on its balance sheet, well above its base-level requirements.

From this result in FY21, ANZ’s board declared a fully franked final dividend of 72 cents per share, leading shareholders to relish in a $1.42 per share total dividend for FY21.

That’s a 136% year-on-year gain in dividend income for ANZ investors to sink their teeth into.

With these results, the stage is set for brokers like Macquarie to update and remodel their forecasts on ANZ’s outlook and its valuation.

Why does Macquarie think ANZ shares are worth $29.50?

The broker appeared to be pleased by ANZ’s 2H FY21 results, citing better-than-expected margins and income from markets.

It reckons that while home lending came in below expectations, the market has likely already priced these negative catalysts into the ANZ share price.

Macquarie notes that “the key question will be how much margin ANZ will need to sacrifice to restore balance sheet growth”, despite the bank’s impressive CET 1 ratio.

Analysts at the investment bank also raise questions about the impact ANZ’s increased spend on investments could have as a near-term headwind.

Nonetheless, the broker retained its outperform rating on ANZ shares, and reinstated its $29.50 price target.

It notes that “following the weak share price performance in the lead up to the result, we believe the balance of risks is skewed to the upside for ANZ”.

In effect, from its commentary, the broker believes the juice is worth the squeeze in ANZ’s investment debate.

ANZ share price snapshot

The ANZ share price has managed to outpace the benchmark S&P/ASX 200 Index (ASX: XJO) in the last 12 months. It has gained 48% during that time and 26% so far this year.

The post Macquarie tips ANZ (ASX:ANZ) share price to hit $29.50. Here’s why. appeared first on The Motley Fool Australia.

More reading

• What happened to the ANZ (ASX:ANZ) share price in October?
• Why is the ANZ (ASX:ANZ) share price having such a stellar day?
• Can the Macquarie (ASX:MQG) share price break new highs over $200?
• Brokers name 2 ASX 200 dividend shares to buy
• Top ASX shares to buy in November 2021

The author Zach Bristow 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 owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Archer Materials Ltd (ASX: AXE) share price is powering ahead on Thursday. This comes after the materials technology company provided a technical progress update to investors on its ‘lab-on-a-chip’ technology (biochip).

At the time of writing, Archer Materials shares are fetching $1.69 a pop, up 5.63%. In comparison, the All Ordinaries Index (ASX: XAO) is also higher, up 0.26% to 7,733.4 points.

Archer Materials progresses its biochip development

In its release, Archer Materials advised it has been busy developing a biochip that can analyse tiny amounts of liquid or gas such as saliva, blood, and breath.

To bring the biochip to life, the company used advanced fabrication techniques to achieve features like hair-thin microfluidic channels. These channels allow sample processing as well as transportation into smaller built-in sensors for analysing biochemical targets.

Archer highlighted the microfluidic channels are less than 20 micrometres in width (about 3 times thinner than a human hair). This gives a strong notion of the complexity of developing a biochip for the future.

The latest development marks the passing of a significant checkpoint in Archer’s quest to commercialise its biochip. The global semiconductor industry is one of the most important drivers of the global economy, with semiconductors used in almost all technological applications.

Best-in-class capabilities in nanofabrication is a global competitive advantage in the multibillion-dollar point of care medical diagnostics industry. One of the reasons there are few companies in the world developing and commercialising biochips is because it’s difficult to achieve precision engineering at the nanoscale.

Archer Materials CEO Mohammad Choucair commented:

The Archer team has been ultra-focused on strengthening and expanding our nano- and micro-fabrication capabilities, including for the development of Archer’s biochip, as this is one of the biggest challenges to potential commercialisation of lab-on-a-chip technology.

We have demonstrated miniaturisation with deliberate, precision control of nanosized components’ fabrication and positioning for integrating biosensing functions on chip substrates, which Archer ultimately aims to translate into a sophisticated and unique biochip technology.

Archer Materials share price snapshot

Shareholders are likely ecstatic over the performance of the Archer Materials share price in 2021. It’s gained more than 220% year-to-date, reflecting strong investor optimism in the company’s progress in developing its CQ chip.

Archer Materials presides a market capitalisation of $418.2 million with 247.5 million shares on issue.

The post Why the Archer Materials (ASX:AXE) share price is charging 5% higher appeared first on The Motley Fool Australia.

More reading

• Archer Materials (ASX:AXE) share price climbs on increased capital raise
• Archer Materials (ASX:AXE) share price leaps 11% on chip update

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 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.

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The S&P/ASX 200 Index (ASX: XJO) is well known for having a plethora of strong dividend-paying shares. And the companies that dominate the ASX 200, such as the big four banks, even more so. One of those companies is BHP Group Ltd (ASX: BHP), currently the second-largest ASX 200 share by market capitalisation.

As some investors may know, the BHP share price has not had a very pleasant 3 months. Exactly 3 months ago today, the ‘Big Australian’ was hitting a fresh new all-time high of $54.55 a share. Today, BHP is currently trading at $36.11, a drop of more than a third of its entire market cap in just 3 months.

But when the share price of an ASX dividend share falls, it pushes up a company’s dividend yield for any new investors buying the shares at the lower price. And as it stands today, BHP shares have a trailing dividend yield of 11.15%.

Does the BHP share price really offer a dividend yield of 11.15% today?

That’s a number that’s relatively gargantuan by dividend standards. By comparison, the highest yielding major ASX bank right now is Westpac Banking Corp (ASX: WBC), which has a yield of 5.1% on the table. What’s more, BHP’s dividends usually come fully franked. That means that its already-monstrous 11.15% trailing yield grosses-up to an almost-inconceivable 15.93% with the value of those full franking credits included.

So the share market is about as public and transparent an institution as you can get. All investors can see that BHP shares have this market-leading yield right now. Why isn’t everyone getting on board with an investment that will pay you back your capital in less than 10 years in dividend alone?

Well, let’s have a look at where this 11.15% yield comes from.

BHP’s last two dividend payments were the final dividend of $2.72 per share that investors received on 21 September. And an interim dividend of 1.31 a share that was paid out back on 23 March. Those two dividends together equate to $4.03 per share over the past 12 months. Plugging that into the current BHP share price and we get the yield of 11.15%.

Dividends are never guaranteed…

But here’s the thing. That yield is only based on BHP’s last two dividend payments. It’s not a guarantee that this company will continue to pay out cash at these levels. And investors know that those two monster dividends were funded by the record high iron ore prices that we were seeing across the first half of 2021.

Since hitting a high of roughly US$220 a tonne back in late July, iron ore has now cratered down to the current level of just under US$100 a tonne. That’s a huge adjustment to have occurred over just a few months. This is the most likely reason why the BHP share price has commensurately cratered alongside it.

So put another way, investors are probably assuming that BHP won’t be able to continue to fund 2021’s record dividend payments now that the iron ore price has come back to earth. Hence why BHP looks like it has a stupendously high yield right now.

Whether BHP will indeed be forced to slash its dividend payments next year to reflect the far lower iron ore price of today remains to be seen. But given the BHP share price’s plunge over the past 3 months, investors seem to think that the good times have passed.

At the current BHP share price, this iron ore miner has a market capitalisation of $106.03 billion.

The post Does the BHP (ASX:BHP) share price really have an 11% dividend yield right now? appeared first on The Motley Fool Australia.

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• Here’s why the BHP (ASX:BHP) share price is down 13% so far in 2021

Motley Fool contributor Sebastian Bowen 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.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another gain. At the time of writing, the benchmark index is up 0.3% to 7,415.7 points.

Four ASX shares that have failed to follow the market’s lead today are listed below. Here’s why they are sinking:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The Domino’s share price has sunk 18% to $116.98. Investors have been selling the pizza chain operator’s shares following the release of its trading update. That update revealed a severe deterioration in the performance of the Domino’s Japan business once COVID restrictions lifted. As a result, management warned that it can no longer forecast whether FY 2022 Japan sales and earnings would surpass those recorded in FY 2021.

Inghams Group Ltd (ASX: ING)

The Inghams share price is down over 5% to $3.59. This follows the release of the poultry producer’s annual general meeting update this morning. At the meeting the company noted that its performance is being impacted by sustained input cost pressures. These include high grain prices and increased international shipping costs.

Kogan.com Ltd (ASX: KGN)

The Kogan share price is down over 2% to $9.48. This appears to have been driven by a broker note out of UBS. Although the broker has retained its neutral rating on Kogan’s shares, it has slashed the price target on them by 33% to $10.00. UBS believes Kogan will fall well short of the market’s expectations in FY 2022. This is due partly to rising costs relating to the supply chain and customer acquisition.

Paradigm Biopharmaceuticals Ltd (ASX: PAR)

The Paradigm share price is down 6% to $2.38. The catalyst for this appears to be a broker note out of Morgans this morning. According to the note, the broker has downgraded the biopharmaceutical company’s shares to a reduce rating with a $1.68 price target. Morgans made the move on valuation grounds. Though, it also sees downside risk if Paradigm made changes to its US trial to gain FDA approval.

The post Why Domino’s, Inghams, Kogan, and Paradigm shares are sinking appeared first on The Motley Fool Australia.

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• ASX 200 (ASX:XJO) midday update: Zip’s record month, Domino’s crashes
• Why the Domino’s (ASX:DMP) share price is crashing 19% today
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• Why AMP, Eclipx, Paradigm, and Praemium shares are surging higher
• Paradigm (ASX:PAR) share price shoots 30% higher on FDA update

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 shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The CSL Limited (ASX: CSL) share price kicked up a notch in October, nearing its 52-week high of $320.42. While the global biotech didn’t release any market-sensitive news, investors appeared to be buying the company’s shares.

They gained around 4% during October to end the month at $300.49.

At the time of writing, the CSL share price is $310.93, up 0.03% on the day. This means its shares are around 3% off breaking a new 52-week high and are up around 8% over the last month.

How did CSL fare last month?

During early October, CSL released the commentary around its annual general meeting (AGM).

Almost all of the information had already been divulged in previous market updates such as its full-year results in August. However, it didn’t stop investors pushing up the CSL share price on the day to $292.68, a gain of 1.80%.

The surge came despite the S&P/ASX 200 Index (ASX: XJO) falling 0.26% to 7,280 points on the day.

CSL noted that it sees the current FY22 financial year as a transitional one. The board is confident the company can return to sustainable growth in the next 24 months. It has several major expansion projects underway along with developing its R&D pipeline products.

Nonetheless, there is still a strong demand for its portfolio of therapies and vaccines, which have offset plasma collection headwinds.

Plasma levels for FY21 were down about 20% on the previous year and these were collected at a higher cost per litre. This came from additional PPE and cleaning requirements, social distancing and labour costs as well as higher compensation paid to donors.

Most recently, a couple of brokers rated the company’s shares following CSL’s annual R&D day.

Multinational investment firm Goldman Sachs raised its price target by 1% to $305.00, while Jefferies had a more bullish outlook. The latter lifted its 12-month view by 3.1% to $338.00. Based on the current share price, this implies an upside of around 9% on Jefferies’ assessment.

CSL share price review

When looking over the last 12 months, the CSL share price has gained around 6%. Year-to-date it has fared slightly better, up almost 10% for the period.

CSL presides a market capitalisation of roughly $141.49 billion, and has approximately 455.67 million shares on issue.

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

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Motley Fool contributor Aaron Teboneras owns shares of CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. 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.

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The Woodside Petroleum Limited (ASX: WPL) share price is struggling on the ASX today. Though, it’s not alone in its struggles.

The S&P/ASX 200 Energy Index (ASX: XEJ) is the worst performing index on Thursday. It has fallen 2.09% so far.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently up 0.36%.

At the time of writing, the Woodside share price is $22.95, 2.86% lower than its previous close.

Not to mention, the price of oil is also tumbling. Let’s take a closer look at what might be putting pressure on the Woodside share price on Thursday.

What might be weighing the Woodside share price today?

The Woodside share price is tumbling alongside oil prices, which reportedly experienced their biggest single-day fall in more than 3 weeks overnight.

According to data from CNBC, the price of West Texas Intermediate oil is currently down 1.15%, trading at US$79.93 a barrel. Additionally, the price of Brent crude oil is down 0.83%, selling for US$81.31 per barrel.

As Reuters reports, the price of oil dropped as the United States’ weekly crude stocks increased by 3.3 million barrels.

Further, the publication claims the Organization of the Petroleum Exporting Countries and its allies, better known as OPEC+, plans on meeting on Thursday. The group is reportedly expected to continue with its steady approach to resupplying the world’s oil markets despite pressure to increase production.

Some of such pressure has come from United States’ President Joe Biden. Biden reportedly blamed OPEC+’s approach for surging energy commodity prices at COP26 earlier this week.

While on the topic of COP26, another Reuters report claims at least 19 countries are planning to pledge to end foreign investment in fossil fuel projects before 2023.

The pledge likely isn’t affecting the Woodside share price today, particularly as Australia hasn’t been named as one of the 19 countries. However, it could be weighing on the broader global energy market.

Those interested can find a map of Woodside’s global presence here.

The post Why is the Woodside (ASX:WPL) share price slipping and sliding today? appeared first on The Motley Fool Australia.

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• 2 more of the best ASX shares to buy in November according to this top broker
• 5 things to watch on the ASX 200 on Wednesday
• How did the Woodside Petroleum (ASX:WPL) share price perform in October?
• 5 things to watch on the ASX 200 on Tuesday

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.

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The Vulcan Steel Limited (ASX: VSL) share price has landed on the ASX boards this afternoon following the successful completion of its initial public offering (IPO).

At the time of writing, the steel manufacturer’s shares are up 1.5% from their listing price to $7.20.

The Vulcan Steel IPO

The Vulcan Steel share price commenced trade at midday after raising $371.6 million at $7.10 per share.

However, unlike other recent IPOs, the funds raised from the offering will not be used to support the company’s growth. Rather, these funds will go to existing shareholders that are selling down their holdings.

The release notes that this provides a liquid market for its shares and an opportunity for other investors to invest in Vulcan Steel. It also notes that listing on the share market provides Vulcan Steel with access to capital markets to enable additional financial flexibility to pursue growth opportunities.

Upon listing, Vulcan had a market capitalisation of $930 million. This has increased to just over $943 million following the rise in the Vulcan Steel share price.

In FY 2021, Vulcan Steel reported revenue of $731.5 million and net profit after tax of $61.1 million. This is expected to rise to $809.3 million and $73.7 million, respectively, in FY 2022. This means the company’s shares are trading at a touch under 13x estimated FY 2022 earnings.

“A momentous occasion”

Vulcan Steel’s CEO, Rhys Jones, said: “This is a momentous occasion and a pivotal step for Vulcan. On behalf of the Company, I would like to welcome all our new shareholders. We received strong support from institutional and individual investors in Australia, New Zealand and further afield. Our employees responded positively to the Priority Offer.”

“We are especially proud that many have decided to participate in the opportunity and that 20% of our employees are now shareholders in the company. We are excited about our prospects. Our team’s focus is unwavering when it comes to enhancing customer satisfaction, growing our business and earnings, and in the process creating more value for our shareholders,” he added.

The post Vulcan Steel (ASX:VSL) share price rises after completing IPO appeared first on The Motley Fool Australia.

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• Why is the ASX All Ordinaries lifting to a fresh 7-week high?
• Can the All Ords hit 8,000 points by the end of the year?

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 Bruce Jackson.

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