Category: Stock Market

The PPK Group Limited (ASX: PPK) share price is deep in negative territory today. This comes despite the group announcing a seemingly positive update to the ASX.

At the time of writing, the technology and mining equipment company’s shares are down 6.4% to $13.75, having earlier been as low as $13.40. It’s worth noting the PPK share price is now down more than 20% over the last week, and 30% in a month.

PPK signs collaboration agreement

In today’s statement, PPK advised its subsidiary White Graphene has entered into a research and development collaboration agreement with Sun Metals.

Established in 2018, Sun Metals is the operator of Queensland’s biggest zinc refinery. The company produces a special high grade of zinc metals and exports them throughout Korea, Australia, and the United States.

Sun Metals is an Australian subsidiary of Korea Zinc, the largest zinc, lead, and silver producer in the world.

Sun Metals produces around 450,000 tonnes per annum of 98% sulphuric acid at its Townsville refinery. The production and handling of this volume of sulphuric acid creates significant challenges. Pumps among other equipment often need to be replaced within months of installation.

Both companies will work together to create new composite protective coatings using boron nitride nanosheets (white graphene). These coatings are being developed to protect the interior surfaces of sulphuric acid pumps and other equipment. As such, this will expand the lifespan while operating in extremely difficult conditions.

Under the terms of the agreement, White Graphene will retain ownership of all intellectual property rights developed during the project.

There will be a full-scale testing stage on sulphuric acid pumps installed at the production facility at Sun Metals’ refinery.

PPK share price summary

Over the last 12 months, PPK shares have posted a gain of around 260%. They are also up 130% year to date. The PPK share price is hovering in the middle of its 52-week range of $3.70 and $21.95.

Based on today’s price, PPK commands a market capitalisation of roughly $1.2 billion and has approximately 89.3 million shares outstanding.

The post PPK (ASX:PPK) share price sinks 6% amid collaboration agreement appeared first on The Motley Fool Australia.

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• Why PPK (ASX:PPK) and Li-S Energy are this fund’s largest positions
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• PPK (ASX:PPK) share price wobbles on joint venture news
• PPK (ASX:PPK) share price storms 9% higher to an all-time high

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 Perpetual Ltd (ASX: PPT) share price is slipping around 4% into the red during afternoon trade today with its shares now changing hands at $36.06 at the time of writing.

Shares in the financial services company are trading down today despite there being no market sensitive news out of its camp today.

However, Perpetual has announced that it had completed an acquisition earlier today which may be weighing on its share price.

Here’s what we know.

What did Perpetual announce?

Perpetual advised it had completed the acquisition of Laminar Capital Pty Ltd, a “specialist debt markets and advisory business”.

According to Perpetual, Laminar has $8 billion in funds under management/advice (FUMA) alongside a specialist fixed income digital platform with $21 billion in assets under administration, known as Treasury Direct.

Acquiring Laminar Capital will also provide the company with access to new capabilities that it otherwise wouldn’t have access to.

For example, Laminar’s ESG Risk score is a specialised function that Perpetual highlights as supporting the public and mutual bank sector.

In terms of the structural components of the deal, Perpetual Corporate Trust (PCT)’s data and analytics solutions business will become a standalone division of the Trust, known as Perpetual Digital.

The company explains Perpetual Digital is to be Perpetual Corporate Trust’s “innovation company”.

These moves will roll all of PCT’s digital assets into one and fold in Laminar’s Treasury Direct platform to “create a specialist business focussed on providing digital, treasury debt markets and advisory solutions to clients”.

Perpetual itself appears to be satisfied with the acquisition, forming the view that it is accretive to the company’s earnings potential in years to come.

Speaking on the announcement, Perpetual CEO Rob Adams said:

In Laminar we’ve identified a fast-growing debt markets and advisory business with a compelling digital capability. A capability that provides us with a unique opportunity to accelerate Perpetual Corporate Trust’s (PCT) position as a specialist fiduciary and digital solutions provider to the banking and financial services industry.

Perpetual Corporate Trust’s group executive Richard McCarthy was equally as pleased to have nabbed the debt markets specialist Laminar, particularly noting its depth of management experience. He added:

Over time, we have seen Laminar successfully establish itself in the mid-markets sector, developing and delivering debt markets and digital solutions to key client segments. Since its inception in 2009, the team at Laminar has developed a strong reputation as trusted adviser, with deep client relationships and expertise as a treasury and debt markets specialist, leveraging their combined experience built over 30 years in the industry.

Investors are selling the company’s shares today, pushing the Perpetual share price to 4-month lows during trading today.

Perpetual share price snapshot

The Perpetual share price has been all over the place this year to date and has consequently posted a return of just 3.6% since January 1.

Over the past month, it’s given away a further 13% and has slipped 8% into the red this past week.

Despite this, over the last 12 months, Perpetual shares have climbed 23%, just behind the S&P/ASX 200 Index (ASX: XJO)’s gain of about 25% during this time.

The post Perpetual (ASX:PPT) share price hits 4-month low following acquisition news appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Friday

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 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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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.

What happened

Shares of social media titan Facebook (NASDAQ: FB) fell 10.5% in September, according to data provided by S&P Global Market Intelligence. The stock kicked off October with another 5% decline in the first two trading days as pressure mounts against the company’s accused use of data and control of information. A service outage in Facebook, Instagram, and WhatsApp on Monday, Oct. 4 didn’t help either.

So what

While the stock market overall has been dealing with potential economic risks (higher interest rates, supply chain woes, and a possible U.S. government debt default if the debt ceiling isn’t raised), Facebook’s problems as of late are of an altogether different nature. The company has been dealing with a Federal Trade Commission antitrust lawsuit that seeks to retroactively unbundle Facebook’s acquisitions of Instagram and WhatsApp, claiming the company has used its dominance to squash competitors.  

Additionally, a whistleblower (now revealed to be former employee Frances Haugen) who first started publishing documents taken from Facebook with The Wall Street Journal last month could add to the burden of evidence against the social media giant. The backlash against big tech’s data practices isn’t going away anytime soon, and it’s Facebook that continues to bear the brunt of accusations.

Now what

For all of its flaws and the angst voiced against it, Facebook’s popularity has been enduring. Its user base — which numbers over 3 billion worldwide across all of its apps — continues to grow, as does global advertising activity across its platform. Facebook is far from being unseated as the leader in social media anytime soon. 

Shares are up 25% over the last trailing-12-month stretch even after the recent tumble. Perhaps a breather was overdue, and recent news simply added fuel to the fire. While Facebook’s legal woes and impact on society at large are worth keeping an eye on, it’s the financial results that matter most — and Facebook is doing more than just fine financially right now. Sales and profits keep climbing, especially as the initial effects of the pandemic from a year ago are lapped. 

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

The post Why Facebook fell nearly 11% in September appeared first on The Motley Fool Australia.

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Nicholas Rossolillo and his clients own shares of Facebook. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Facebook. The Motley Fool Australia has recommended Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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The Whitehaven Coal Ltd (ASX: WHC) share price is up 0.3% in early afternoon trade, having earlier been up more than 2.3%.

This comes as the broader S&P/ASX 200 Index (ASX: XJO) is down 0.9%, with investor fears on inflation and an economic slowdown for China again taking hold.

But the ASX 200 energy share has been largely spared. Below we take a look at what’s supporting the Whitehaven share price.

Coal prices are hitting records

Surging coal prices have certainly provided strong tailwinds for the Whitehaven share price.

Australia’s high-quality thermal coal – the kind mostly used for power generation – has been a big beneficiary of global supply disruptions amid soaring energy demand.

Thermal coal selling out of Newcastle’s port in New South Wales has now hit US$203.20 (AU$278.30) per tonne. That’s a new record high for the benchmark price for coal shipped into energy hungry Asia.

China, in particular, is scrambling to secure enough coal to keep the lights on and the heaters cooking as northern winter begins to bite. Coal fired power supplies some 70% of China’s energy needs.

According to Mining.com:

Earlier this week, Chinese Vice Premier Han Zheng ordered state-owned energy giants to secure fuel supplies for winter at any cost. China consumes and mines half the world’s coal, and it’s also the largest importer. The government told miners to keep digging even if they’ve exceeded their annual quota.

But the government’s orders appear to have come too late to stop the surge in coal prices.

As Bloomberg reports, “China’s coal production grew by 6% in the first eight months this year, but the power output from coal-fired generators surged 14% in the same period, leading to a decline in inventories.”

High energy costs are one of the factors driving investors’ inflation fears, even as they’re helping support the Whitehaven share price.

Whitehaven share price snapshot

Whitehaven shareholders will have little to complain about over the past 12 months, with shares up a remarkable 212%. Over that same year the ASX 200 has gained 21%.

2021 continues to be a good year for the Whitehaven share price. It’s up 104% year-to-date.

The post Why the Whitehaven (ASX:WHC) share price is in the green today appeared first on The Motley Fool Australia.

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• Why Evolution, Northern Star, Weebit Nano, & Whitehaven Coal are rising

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 Fortescue Metals Group Ltd (ASX: FMG) share price is trading at fresh year-to-date lows on Tuesday, amid a broad-based market selloff.

At the time of writing, the Fortescue share price is trading at $14.00, the lowest its been since July 2020.

What’s driving the Fortescue share price lower?

A quiet week for iron ore

Iron ore prices are expected to remain stable this week following China’s National Day public holiday running between 1 to 7 October.

Fastmarkets MB reported that prices remain relatively unchanged, edging just US$1.33, or 1.1% higher, to US$117.12 a tonne on Monday due to limited trading activity and liquidity.

US markets crater amid inflation concerns

The Dow Jones Industrial Average and Nasdaq Composite both tumbled more than 300 points, or 0.94% and 2.14% respectively, last night driven by inflation-based fears as oil rallied to a seven-year high.

“Investors, in my mind, are realising or thinking through a wall of worry that includes the debt ceiling, higher oil prices and inflation, a weaker-than-expected earnings season, and a Federal Reserve that’s becoming less dovish,” Lindsey Bell, chief investment strategist at Ally Invest told MarketWatch.

The broad-based selling taking place on the S&P/ASX 200 Index (ASX: XJO) on Tuesday has dragged the S&P/ASX 200 Materials (INDEXASX: XMJ) 1.31% lower.

Utilities and energy were the only sectors in the green.

Weak near-term outlook for iron ore prices

The Australian government’s commodity forecaster, the Office of the Chief Economist (OCE), expects iron ore prices to average around US$150 a tonne in 2021 before falling to below US$100 a tonne in 2022, according to its recent September quarterly report.

“Efforts by the Chinese government to curb China’s total steel output also appear to be taking greater hold and are expected to persist for the rest of 2021,” the OCE flagged.

From a supply-side perspective, the OCE said that iron ore supply is expected to improve in the second half of 2021.

“Vale’s Brazilian operations are slowly returning to output levels last seen prior to the January 2019 Brumadinho tailings dam collapse,” it reported.

Fortescue share price in the deep red

It feels like the Fortescue share price came down as fast as it went up, currently down 43% year-to-date and down 14% in the last 12 months.

The post Fortescue (ASX:FMG) share price slides to fresh year-to-date low appeared first on The Motley Fool Australia.

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• Why did the Fortescue (ASX:FMG) share price have such a lousy month in September?
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• Why the Fortescue (ASX:FMG) share price was sold off in September
• These were the 5 worst performing ASX 200 shares in September

Motley Fool contributor Kerry Sun 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 Westpac Banking Corp (ASX: WBC) share price is down today despite no announcements from the company this month.

However, the bank has hit many a headline as one of its directors is caught up in the Pandora Papers. While the news probably hasn’t moved Westpac’s stock, it may put some heat on one of its leaders.

At the time of writing, the Westpac share price is $25.63, 1.23% lower than its previous close.

That’s pretty much in line with the broader market’s movements today. Right now, the S&P/ASX 200 Index (ASX: XJO) is down 0.92%. At the same time, the All Ordinaries Index (ASX: XAO) is down 1.07%.

Let’s take a closer look at the news that’s got many talking about Westpac.

But first, what are the Pandora Papers?

For those who haven’t been following the drama surrounding the Pandora Papers, here’s a brief recap.

The Pandora Papers are a collection of leaked files documenting tax havens and hidden assets of some members of the global elite.

According to the International Consortium of Investigative Journalists – the body that received the papers and dished them out to 150 media outlets – the papers detail some of the financial behaviour of more than 130 billionaires.

They also implicate more than 330 politicians and public officials from more than 90 countries, including the leaders of more than 35 nations.

One Australian who has been implicated by the leak is Westpac director Steven Harker.

Westpac’s director in the spotlight

The Westpac share price is sliding today. Meanwhile, controversy is beginning to surround one of its directors.

According to reporting by the Australian Financial Review (AFR), an offshore superannuation fund owned by Harker was included in the Pandora Papers.

The Samoan fund was reportedly made for Harker by a former employer. It was an attempt to avoid double taxation ahead of Harker’s planned move to the United Kingdom.  

However, according to the AFR, Harker also owned a second entity in Samoa. It’s said to have been “used to operate a discretionary trading account through a stockbroker”.

Harker has reportedly denied any wrongdoing. The AFR quoted Harker as saying:

None of these structures were used to avoid Australian tax at any stage. The ATO is fully aware of all my overseas assets and structures and I have never needed to pay any penalties in respect of these assets or income.

Harker was appointed to Westpac’s board in 2019. He was previously the CEO, managing director and, later, the vice-chair of Morgan Stanley Australia.

Westpac share price snapshot

Despite today’s dip, the Westpac share price has been performing well lately.

It has gained 31% since the start of 2021. It is also 48% higher than it was this time last year.

The post Own Westpac (ASX: WBC) shares? Here’s why the bank is making news appeared first on The Motley Fool Australia.

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• Why the ANZ (ASX:ANZ) share price has lagged the ASX 200
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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 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 De Grey Mining Limited (ASX: DEG) share price has leapt into the green during trade on Tuesday. At the time of writing, the De Grey share price is up 4.15% to $1.

Shares in the gold exploration company are lifting today after the company announced an update and made an investor presentation earlier today.

Here’s what we know.

What did De Grey announce?

The De Grey Mining share price is edging higher after the company presented the outcomes from the scoping study at its Mallina Gold Project, located in the Pilbara.

From the results, the company “has identified clear opportunities for improvement”, after completing an initial evaluation of the project.

These come after De Grey announced positive drilling updates at its Greater Hemi Corridor last week, where it intersected numerous gold-arsenic anomalies.

Key takeouts from the scoping study include that “average gold production ranges from approximately 473,000oz per annum for the first five years to approximately 427,000oz pa over the 10 year evaluation period”.

This places De Grey’s project within the top 5 Australian gold mines and “a top 3 global gold development proiect” based on its annual average output.

The study also points to an average all-in sustaining cost (AISC) ranging from $1,111/oz in the first 5 years to $1,224/oz over the 10 year study period.

As per the release, these figures place the project “in the lowest quartile of Australian gold producing peers”.

With respect to capital expenditures to get the project running, De Grey sees a cost of $835 million for the site and its infrastructure.

With its financial projections, it sees a pre-tax undiscounted free cash flow of around $3.9 billion over 10 years ($2.9 billion after tax).

This equates to a net present value (NPV) of about $2.8 billion before tax, meaning the valuation of the project as it stands today sits at $2 billion net of tax.

De Grey also presented its findings to investors in a briefing before the market open today.

What did management say?

Speaking on the scoping study outcomes, De Grey Mining CEO Glenn Jardine said:

The Scoping Study provides an initial evaluation of the Project’s physical and financial metrics, following the discovery of Hemi in February 2020 and the definition of Hemi’s maiden Mineral Resource Estimate of 6.8 million ounces in June 2021. The results of the initial evaluation of the Project are compelling and confirm its status as a Tier 1 gold asset.

De Grey Mining share price snapshot

The De Grey Mining share price has had a difficult year to date and has posted a return of only 0.25% this entire year.

As such, it is 14.5% in the red this past 12 months and has even slipped 12% in the last month alone.

Each of these results is well behind the S&P/ASX 200 index (ASX: XJO)’s gain of around 25% over the last year.

The post De Grey (ASX:DEG) share price jumps 4% on gold project update appeared first on The Motley Fool Australia.

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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 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 Rio Tinto Ltd (ASX: RIO) share price is edging lower on Tuesday. This comes despite the company signing a contract with mining solutions business K2Fly Ltd (ASX: K2F).

At the time of writing, the mining giant’s shares are down 0.69% to $96.83 apiece.

Let’s take a closer look at the announcement.

Ground Disturbance solution roll out

In today’s statement, Rio Tinto signed a deal for K2Fly’s ground disturbance solution to be implemented across its Pilbara operations.

The 5-year agreement is expected to generate annual recurring revenue (ARR) of around $620,000 for K2Fly. The total contract value is estimated to be $3.44 million (including non-recurring implementation fees) over the initial 5-year term.

Rio Tinto operates an extensive portfolio of iron ore mining assets across the Pilbara region in Western Australia. This consists of a network of 16 iron ore mines, 4 independent port terminals, a 1,700-kilometre rail network, and related infrastructure.

The ground disturbance solution provides a single source for applying, approving, tracking, reporting and submitting closure of permits, and rehabilitation commitments.

The latest addition further expands the number of K2Fly solutions used by Rio Tinto. Other suites include resource inventory & reconciliation, dams & tailings, community & heritage, and mine geology data management.

K2Fly CEO Nic Pollock commented:

We are delighted to continue to expand our relationship with Rio Tinto into ground disturbance. Effective ground disturbance systems are the glue for operations that want to ensure technical assurance around land management, maintain license to operate and ensure high ESG standards. We are pleased to be working closely with Rio Tinto across a number of key ESG solutions globally.

About the Rio Tinto share price

Over the last 12 months, Rio Tinto shares have moved in circles, remaining relatively flat for the period. However, its shares have fallen around 15% in 2021 due to a slump in iron ore prices. 

Rio Tinto commands a market capitalisation of roughly $36.18 billion, making it the fourteenth largest company on the ASX.

The post Rio Tinto (ASX:RIO) share price dips on new contract news appeared first on The Motley Fool Australia.

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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 Atomo Diagnostics Ltd (ASX: AT1) share price has come under significant pressure on Tuesday.

At the time of writing, the medical device company’s shares are down 9% to 30.5 cents.

Why is the Atomo share price sinking?

As well as being caught up in the market volatility, the Atomo share price is being sold down by investors following the release of an announcement.

According to the release, Atomo and Access Bio have restructured their commercial relationship to reflect the evolving structural changes in the COVID-19 diagnostics market.

What was the previous agreement?

In July last year, Atomo entered into an agreement with the US-based diagnostics specialist to supply its unique, integrated rapid diagnostic test (RDT) devices to Access Bio for use with its rapid test strip for detection of antibodies to COVID-19.

Under this agreement, Access Bio was obliged to sell a minimum of two million products by 30 September 2021.

The two parties then expanded the agreement a couple of months later. Under the expanded partnership, Atomo had non-exclusive rights to market and distribute Access’ COVID-19 rapid antigen test in Australia, New Zealand, and India. These were to be branded as the Atomo COVID-19 Antigen Test, subject to obtaining the required regulatory approvals in each jurisdiction.

What’s the latest?

Today’s announcement reveals that the new agreement, which is effective immediately and expires on 31 December 2022, will see Atomo receive a one-off fee from Access Bio to replace any payments due to Atomo under the existing agreements.

However, while management considers the fee to be “material”, it has not provided any colour on what that means in dollar terms. This could be weighing on the Atomo share price today.

In addition, the new agreement provides Atomo the right, but not the obligation, to purchase at a fixed price per unit up to 10 million Atomo branded COVID-19 Rapid Antigen tests between now and the end of 2022. These are for use in professional settings in Australia and New Zealand only.

This test was listed on the ARTG by the TGA in October 2020 and is currently being sold by Atomo in the Australian market in a number of channels.

What else?

Furthermore, the company has the right to purchase at a fixed price per unit up to 10 million Atomo branded COVID-19 Rapid Antigen Self-Tests. These self-tests will be able to be used in homes across Australia if approved by the TGA.

Management explained the logic behind the new agreement. It said: “The new agreement enables the parties to better align themselves to meet the opportunities resulting from changes in the diagnostic landscape in FY22.”

“The termination of Atomo’s OEM agreement with Access Bio will in no way affect Atomo’s current HIV business where Atomo is the listed manufacturer of its own Atomo HIV Self-Test and AtomoRapid HIV professional use tests across LMIC and developed healthcare markets,” it added.

The post Here’s why the Atomo (ASX:AT1) share price is crashing 9% today appeared first on The Motley Fool Australia.

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• These were the 5 top performing ASX shares in September
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• Why the Atomo Diagnostics (ASX:AT1) share price has soared 30% in a week

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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The Australian Foundation Investment Co. Ltd. (ASX: AFI) (AFIC) share price is down this morning amid concerns about China and inflation.

For readers that haven’t heard of AFIC before, it’s an old listed investment company (LIC) which invests in other shares for its shareholders.

The LIC is holding its annual general meeting (AGM) today and decided to give investors a detailed outline about its strategy, some of its holdings and the outlook.

Regarding the outlook, which seems to be getting a lot more investor attention at the moment, there were three elements that AFIC noted. It said it’s mindful of Chinese growth slow, it is noting the inflationary environment and potential end of rate easing cycle, and third it’s seeing that company dividends are recovering.

But the LIC is still positive. It said that the outlook for earnings growth remains solid, saying that companies with international earnings are relatively better positioned to deliver.

However, whilst the AFIC share price is down by around 0.4% right now, the S&P/ASX 200 Index (ASX: XJO) is down around 0.85%. So with that in mind, it’s actually beating the ASX benchmark.

International earnings?

AFIC is giving itself a few different ways to access international earnings.

It has started to invest some money into international shares – ones listed outside of Australia. The LIC invested $47 million in international shares in May 2021, which it called a small amount.

The international portfolio includes 39 companies. Performance from these shares has so far been “encouraging”.

It’s looking to build a consistent track record with this international portfolio. The LIC is applying the “AFIC way” of investing to its international portfolio.

At 30 June 2021, some of its biggest international positions included Alphabet, Microsoft, Nike, Netflix, Alibaba, Amazon, Chipotle, Facebook and HCA Healthcare.

It also has plenty of ASX shares that have international earnings.

What is the AFIC way of investing?

AFIC aims to provide shareholders with attractive investment returns through access to a growing stream of fully franked dividends and growth in capital invested.

Over the last year the AFIC share price has risen 31% and over the last five years it has gone up 45%.

Quality is a key focus.

There are a number of areas that AFIC looks at: uniqueness of assets, long-term sustainability, independence (from the government, suppliers etc.), people, earnings consistency and financial strength.

Further explaining its focus on long-term quality, AFIC said it’s a long-term investor in companies, not traders of share prices. It said it aims to identify quality companies with sound growth prospects that it can buy at a reasonable price. This supports its belief in the power of compounding returns from great businesses.

What ASX shares does AFIC think have long-term potential?

One of the main things that can impact the AFIC share price is the performance of the portfolio, being the underlying holdings.

Xero Limited (ASX: XRO) was one of the shares it pointed to, noting its strong market positions in Australia and New Zealand, with a growing presence in the UK and the rest of the world. The LIC also said that Xero’s software as a service (SaaS) model and economics deliver superior returns. AFIC also noted the strong subscriber and average revenue per user (ARPU) growth. The investment team thinks it has a long runway of growth with large growing global addressable markets.

Carsales.com Ltd (ASX: CAR) was another ASX share that AFIC likes. The LIC points to the dominant market position in used car classifieds in Australia with an audience of 4.4 million average monthly unique users, which was 4.5x bigger than the competitor. AFIC is also attracted to the growing contribution from international businesses, which now represents just over a third of the group profit.

The post AFIC (ASX:AFI) share price struggles amid inflation concerns appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Xero. The Motley Fool Australia owns shares of and has recommended Xero. The Motley Fool Australia has recommended carsales.com 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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