Category: Stock Market

Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Redpoint Investment Management senior portfolio manager Max Cappetta explains how a pair of growth stocks helped his income-focused clientele.

Hottest ASX shares

The Motley Fool: What are the 2 best stock buys right now?

Max Cappetta: We don’t necessarily field our strategy around a small number of big bets. We actually like to have diversification and have a large number of maybe smaller bets.

However, at the moment we do like two particular stocks — Domino’s Pizza Enterprises Ltd (ASX: DMP) and logistics software group WiseTech Global Ltd (ASX: WTC). 

Domino’s, whether you love or hate their actual product, they do remain a reliable and affordable provider of pizza with a very large and growing global footprint. They’ve been a beneficiary of the COVID lockdown. There’s no doubt about that. And we’ve actually seen their revenues reach $2 billion for the very first time in 2021. 

From an income perspective, we’ve seen that management [is] now guiding that they’re going to increase their profit payout to investors, to up to 80% going forward. And we can see that their annual dividend payments are on track in this fiscal year to be more than double their 2019 or pre-COVID levels. And quite frankly, that’s a feat that has been really unmatched in the marketplace.

In terms of WiseTech, they’ve performed very well after posting a strong result in August. The company definitely exceeded expectations, both on revenue and their profitability. I think what we liked most was that they were able to increase their profit margins by lowering their costs on the incremental growth in revenue. 

We still see the company’s really an industry leader. They’ve still got a lot of strong growth expected from their CargoWise solution. However, we will say, at its current price of $53, a 6 cent dividend in 2021 makes it a very low dividend yield stock versus even its earnings of 34 cents a share.

However, I think the good news here in this instance is that our fund investors have actually been rewarded with a 60% share price rise rather than a larger dividend. Given our focus on zero tax rate payers, retirees and charities, what this means is we can actually redeploy some of those gains to other income opportunities as they then present themselves in the months ahead.

MF: So just because your fund’s outcome is income-driven, doesn’t necessarily mean your portfolio is wholly dividend-focused? 

MC: Yeah, absolutely. One of the things that we’ve seen and understand is that the share price will rise before the earnings are delivered. And the earnings will be delivered before the dividend gets paid. 

So you just can’t sit there and wait and look backwards at what dividends have been paid to then build your portfolio. If anything, that actually probably leads to bad outcomes because the companies that are paying the largest dividends relative to their price may, in fact, be currently under stress. That’s why their share price is down. 

They might, in fact, may be in a period of low growth. And not have other meaningful investments to be able to deploy that capital — so they pay it out.

The ASX share for a comfortable night’s sleep

MF: If the market closed tomorrow for 4 years, which stock would you want to hold?

MC: Probably the key trend over the next 5 years is going to be looking at the path to net zero emissions for the global economy. 

Now, Australia, we think is really well placed to provide both the raw materials plus the engineering expertise that is going to be required to ramp up on renewable energy sources to support this sort of low carbon electrification of the economy. 

We do have the COP26 summit, which is just a few weeks away, and that’s going to be focused on how we achieve net zero by 2050 with an estimated investment of over $100 billion in each and every year, to get there.

This is a massive task and the transition is going to take some time. But I think we can look at how around the world we’ve come together to actually develop and roll out an effective COVID vaccine. And I think this is a standout trend for the decade ahead. 

So looking at stocks that, in the mining sector, that are going to be beneficiaries — looking at copper, lithium, even iron ore, and also cobalt that goes into batteries, that’s going to be a key area where I think there’s going to be a lasting trend and demand that will be beneficial for those companies involved in that space. 

Beyond that, we do have very successful engineering firms in Australia. I think one key that is supporting the building of wind farms is a company like Worley Ltd (ASX: WOR), and they should be very well placed to essentially be some of the leaders in this transition to a low carbon economy.

MF: It’s a bit of an irony, isn’t it? To get to net zero, we still need to dig up all these minerals out of the ground, which are non-renewable.

MC: Yeah, exactly right. 

But I think there are other opportunities, potentially, with carbon capture and even with hydrogen that could lead us [to] other places. So companies like Fortescue Metals Group Limited (ASX: FMG) are investing in that space. 

What we need now is that unified effort that we’ve seen with COVID… if we can have more of that aimed at climate change and decarbonisation, I think the next 10 years are going to be very exciting in this space.

Looking back

MF: Is there a move that you regret from the past? For example, a missed opportunity or buying a stock at the wrong timing or price.

MC: More recently, the fallback in the iron ore price, and the impact on the share price of iron ore miners, was probably faster than we would’ve expected or preferred. But I actually think it’s a great example of the fact that share prices always have more volatility relative to the company’s underlying profits and dividends paid.

I think regret in equities investment is mostly associated with price moves. And there’s no doubt that we definitely would’ve benefited by reducing that exposure sooner. But we also did have some winners through WiseTech and Domino’s.

So I really think that the most important thing for people to think about in [terms of] regrets from income investing, is to really look beyond the volatility of the share prices, and actually focus on the fact that what they actually own is a share in the underlying profits earned by the companies that they’re invested in. 

For people who are retirees, they’re hopefully looking at a 20-plus year retirement phase and charities are looking at an even longer time horizon. If you look over those long time frames, there’s some really attractive characteristics for earning income and getting a reasonably solid total return over the long term by looking at the Australian equity market as a source of capturing income.

The post 2 hot ASX growth shares that this income fund manager favours appeared first on The Motley Fool Australia.

More reading

• Why CSL, Domino’s, Temple & Webster, & Xero shares are tumbling
• Why the Fortescue (ASX:FMG) share price is down 5% today
• Domino’s (ASX:DMP) share price slips amid management restructure
• Technology shares are dragging the ASX 200 down on Tuesday
• Why the Collins Foods (ASX:CKF) share price is surging higher today

Motley Fool contributor Tony Yoo 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 WiseTech Global. The Motley Fool Australia owns shares of and has recommended WiseTech Global. 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 ResMed Inc. (ASX: RMD) share price has been a very strong performer in 2021.

Since the start of the year, the sleep treatment focused medical device company’s shares have gained 35% to $37.12.

This leaves the ResMed share price trading within sight of its record high of $40.79.

Can the ResMed share price keep rising?

The good news is that it may not be too late to buy ResMed shares.

According to a recent note out of Credit Suisse, its analysts have retained their outperform rating and lifted their price target on the company’s shares to $44.00.

Based on the current ResMed share price, this implies potential upside of 18.5% over the next 12 months.

What did the broker say?

Credit Suisse was pleased with the company’s investor day event this month.

It notes that ResMed is expecting to benefit from upwards of US$350 million in incremental sales in FY 2022 from the Philips product recall. The broker also suspects that sustained market share gains will be achieved because of the recall and feels the market is underestimating this.

Particularly given how management advised that it has seen a measurable elevation in mask sales arising from this issue.

In addition, ResMed has revealed plans to expand its patient reach with a new partnership with US pharmacy giant CVS Health. Credit Suisse suspects that these new channels will help sustain device growth rates above the industry average over the long term. This is because the CVS pharmacy network provides broad penetration across the community channel. Approximately 75% of the US population live within 5 miles of a CVS store.

All in all, it feels this makes the ResMed share price good value at the current level.

The post Top broker says ResMed (ASX:RMD) share price is a buy appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has recommended ResMed Inc. 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 City Chic Collective Ltd (ASX: CCX) share price has soared more than 116% in just 12 months.

Could City Chic shares still be good value after the plus-size clothing business has seen such a meteoric rise?

What has been driving the City Chic share price?

You’d need to ask all the buyers and sellers over the past year about their real reasons for transacting, but share prices often follow the direction of earnings over time.

Despite suffering from store closures, City Chic reported a lot of growth in FY21. It has also made some key strategic moves.

FY21 profit growth

City Chic saw sales revenue growth of 32.9% to $258.5 million. The global customer base grew by 61% year on year to 1.07 million active customers, whilst website traffic grew 68% year on year to 58.1 million visits. Online sales increased 49.3% and represented 73% of total sales.

But it wasn’t just revenue growing at a fast double digit rate, profitability also increased at the various profit lines, meaning profit margins also increased.

City Chic’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) increased 59.8% to $42.4 million. The underlying net profit after tax (NPAT) increased 80.6% to $24.9 million. Statutory profit rose 135.3% to $21.6 million.

At the end of the FY21, it finished with $71.5 million of cash, with no debt.

City Chic says that it’s well capitalised to deliver on its “strong” organic growth pipeline and well positioned for future inorganic opportunities to expand the global customer base. Keeping capital for those opportunities is partly why City Chic decided not to pay a dividend last financial year.

Another element that can affect the City Chic share price is the trading update and outlook. It said that in the first eight weeks of FY22, it had continued to deliver “strong” positive top-line and comparable sales growth.

Key strategic moves

City Chic is certainly no longer just a business focused on Australia and New Zealand.

It said it has negotiated new partnerships with multiple retailers including Debenhams, Walmart, Amazon, David Jones, The Iconic, Next, Curvissa, Zalando, Target and eBay.

City Chic has also launched the Avenue brand into the Australia and New Zealand market.

The biggest moves during last 12 months have been acquisitions.

One acquisition was the Evans brand, as well as the e-commerce and wholesale businesses, for around $40 million. Evans is the plus-size leader in the UK. Management said this provided it with an excellent foundation in a new geography and is part of the strategy to expand its global digital customer base. Acquired on 23 December 2020, it was profitable in the second half of FY21 with website sales of $13.5 million since acquisition, despite inventory being materially below commercial levels throughout the majority of FY21, lockdowns and disruption from moving website and warehouse.

In July 2021, it also announced it had signed and completed a deal to buy Navabi for almost $10 million. It’s a European, predominately Germany-based, business offering hundreds of plus-size brands for women. Navabi also has developed its own brands, which have grown to become the majority of sales.

Is the City Chic share price good value?

Brokers seem to think so. Morgan Stanley rates City Chic as a buy and thinks the business can continue to increase its market share. The broker also points to Torrid (a plus-size peer in the US) as a reason to be positive on City Chic’s US prospects.

According to Morgan Stanley, the City Chic share price is valued at 36x FY23’s estimated earnings.

The post Up 116% in a year, is the City Chic (ASX:CCX) share price good value? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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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On Tuesday the S&P/ASX 200 Index (ASX: XJO) was out of form and tumbled notably lower. The benchmark index fell 1.5% to 7,275.6 points.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 expected to sink again

The Australian share market is expected to drop again on Wednesday. According to the latest SPI futures, the ASX 200 is poised to open the day 81 points or 1.1% lower. This follows a very bad night on Wall Street which saw the Dow Jones fall 1.6%, the S&P 500 drop 2%, and the Nasdaq sink 2.8%. A spike in US bond yields due to rate hike bets spooked investors.

Webjet rated as a buy

The team at Goldman Sachs has retained its buy rating on the Webjet Limited (ASX: WEB) share price. In response to the online travel agent’s virtual investor meeting, the broker has put a buy rating and $6.40 price target on its shares. Goldman notes that the travel recovery remains positive on the international front.

Oil prices fall

Energy producers Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could be in the red today after oil prices pulled back. According to Bloomberg, the WTI crude oil price is down 0.85% to US$74.79 a barrel and the Brent crude oil price is down 1.2% to US$78.58 a barrel. The latter reached a three-year high before turning negative.

Afterpay shares to fall

The Afterpay Ltd (ASX: APT) share price looks likely to fall heavily on Wednesday. This follows a very poor night of trade for the Square share price. The payments giant’s shares fell 6% amid a selloff in the tech sector on Wall Street. And as Afterpay is being acquired in Square shares, any movements in its share price impacts the value of the takeover.

Gold price falls

Gold miners Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) could have a poor day after the gold price dropped overnight. According to CNBC, the spot gold price is down 1.1% to US$1,733.40 an ounce. The precious metal tumbled after bond yields jumped.

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

More reading

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• Here are the 3 most traded ASX 200 shares so far this Tuesday
• The healthcare sector is weighing on the ASX 200 on Tuesday
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO and Webjet Ltd. 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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If you’re looking for retirement portfolio options, then you may want to look at the shares listed below.

Here’s why these ASX shares could be good options for retirees:

Centuria Industrial Reit (ASX: CIP)

The first ASX retirement share to consider is this industrial-focused property company. Centuria Industrial owns a portfolio of high quality industrial assets that has been constructed with the aim of delivering consistent income and capital growth to investors.

The company’s portfolio is heavily weighted to areas of the economy that are growing fast and are in demand from tenants. This includes properties linked to the production, packaging, and distribution of consumer staples, telecommunications and pharmaceuticals.

One leading broker that is positive on the company’s outlook is Macquarie. It currently has an outperform rating and $4.22 price target on its shares. The broker is also forecasting dividends per share of 17.3 cents in FY 2022 and 18.4 cents in FY 2023. Based on the current Centuria Industrial share price of $3.78, this equates to 4.6% and 4.9% yields, respectively.

Lifestyle Communities Limited (ASX: LIC)

Another ASX share that could be a good option for a retirement portfolio is Lifestyle Communities. It focuses on building, owning, and operating land lease communities that provide affordable housing options to Australians over 50.

The company’s land lease model allows people to downsize their family home to free up equity in retirement whilst enjoying resort style living. This is proving to be very popular among Australia’s ageing population, which is underpinning solid growth.

The good news is that the team at Goldman Sachs expect this solid form to continue. This is due to its belief that demand for land lease will strengthen as older Australians looks to enhance retirement by releasing equity from the family home.

At present, the broker has a buy rating and $21.60 price target on its shares. It is also forecasting consistent dividend growth in the coming years. And while the yield is modest at current prices, it will grow in time.

The post 2 excellent ASX shares for a retirement portfolio appeared first on The Motley Fool Australia.

More reading

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• ASX 200 (ASX:XJO) midday update: Telstra buys Vita stores, Cochlear sinks

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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Are you interested in boosting your portfolio with some tech-focused exchange traded funds (ETFs) in October?

If you are, then you may want to look at these highly rated ETFs listed below. Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The BetaShares Asia Technology Tigers ETF was smashing the market earlier this year until regulatory and economic concerns in China led to a sharp pullback.

While this is disappointing, it could potentially be a buying opportunity for investors looking to make a long term investment in the Asian tech sector.

The BetaShares Asia Technology Tigers ETF allows investors to own a slice of many of the biggest and brightest tech shares in the region. This includes ecommerce giant Alibaba, search engine company Baidu, online retail platform Pinduoduo, and WeChat owner Tencent.

Over the last five years, the index the fund tracks has generated a return of 21.5% per annum for investors.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Another option for investors interested in tech shares could be the BetaShares NASDAQ 100 ETF. This hugely popular ETF tracks the performance of the NASDAQ 100 Index before fees and expenses.

This famous index comprises 100 of the largest non-financial companies listed on the NASDAQ stock exchange. This means you’ll be owning a slice of some of the biggest tech companies the world has to offer. These include Google parent Alphabet, Amazon, Apple, Facebook, Microsoft, Netflix, and Nvidia.

BetaShares notes that this area of the market is underrepresented on the Australian share market. In light of this, the fund manager feels the ETF could help balance out a portfolio that is heavily weighted to financial and mining companies.

Over the last five years, the BetaShares NASDAQ 100 ETF has also smashed the market. During this time, the ETF has generated a return of 27.9% per annum.

The post 2 top tech ETFs for ASX investors in October appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS and BetaShares Asia Technology Tigers ETF. 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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Founder-led companies have historically outperformed the rest of the market by some distance.

While there are a number of factors that are potentially behind this phenomenon, one of the key factors is the way founders approach the running of their companies.

Founders tend to take a long term approach with their company, whereas professional CEOs are often more focused on short term goals. And as it takes time to innovate, taking a long term focus appears to generate better results.

With that in mind, I have picked out two founder-led ASX shares that could be good long term options. Here’s what you need to know about them:

Airtasker Ltd (ASX: ART)

The first founder-led company to look at is Airtasker. It is the online marketplace for local services run by founder Tim Fung. The popularity of its platform has been increasing significantly over the last few years, leading to stellar sales growth. For example, in FY 2021, Airtasker reported gross marketplace value (GMV) of $153.1 million. This was up 35% year on year, exceeding its GMV prospectus forecast of $143.7 million. This was driven by a 13% increase in paying customers to 415,000 and a jump in its average price per job/task metric to $198.

The team at Morgans appear confident this strong growth will continue over the long term. As a result, the broker has an add rating and $1.30 price target on its shares.

Kogan.com Ltd (ASX: KGN)

Kogan is the growing ecommerce company led by founder Ruslan Kogan. Over the last 15 years, Mr Kogan has transformed the company from a small online website run out of his parents’ garage into one of Australia’s leading ecommerce sites with over 3.2 million active customers. In addition, Kogan has made acquisitions along the way, such as last year’s purchase of Mighty Ape. This business now has over 700,000 active customers as well. Pleasingly, this leaves Kogan well-positioned for growth over the next decade as the structural shift to online retailing continues.

Credit Suisse is positive on the company. It currently has an outperform rating and $14.06 price target on its shares.

The post 2 founder-led ASX shares to buy now appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. 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 Tesla Inc (NASDAQ: TSLA) share price climbed 2.2% last night, moving within reach of US$800 a share. Investor sentiment has largely been positive over the past month as the company takes steps towards full self-driving (FSD).

Recently, the US-based company snuck in a new bit of software for its drivers hoping to gain access to the FSD beta program.

The outcome was thousands of slow-moving Teslas littered throughout the United States. This might be strange at face value but there is a method to the madness.

See, the latest request to join the program came bundled with the company’s new “Tesla Safety Score”. This acts as a report card for driving habits and only the best scores will be rewarded with access to the beta program.

Beyond this, numerous Tesla commentators have speculated there may be more to the Safety Score than first thought.

Let’s take a closer look at the details.

What’s moving the Tesla share price?

Incentivising safer driving

Firstly, the introduction of a scoring system is a win for all motorists. Much like report cards in school, the scoring incentivises drivers to be on their best behaviour — or risk a scathing review. This is determined by 5 key safety factors being measured by the vehicle. These include:

• Forward collision warning per 1,000 miles
• Hard braking
• Aggressive turning
• Unsafe following
• Forced autopilot disengagement

These 5 factors are combined into a formula to calculate the driver’s ‘predicted collision frequency’ per 1 million miles. This means drivers are being led by the FSD carrot to attempt to drive more cautiously — great!

But, at the same time, Tesla owners have wondered whether a stick approach could come into effect as well.

I stopped hard to avoid running a yellow light that I always run. Now I’m heartbroken. $tsla pic.twitter.com/GzJuI27VD3

— Gary Black (@garyblack00) September 25, 2021

https://platform.twitter.com/widgets.js

For instance, Tesla offers its own vehicle insurance product and is making an effort to expand this offering. The implementation of the Safety Score could mean owners are given dynamic feedback on insurance prices based on their driving prowess.

This could see drivers paying lower premiums for exhibiting better driving practices. In turn, both the customer and company would win out as safer drivers usually mean fewer accidents, resulting in fewer insurance payouts.

Such use of technology in the insurance market could spell disruption for ASX-listed companies such as QBE Insurance Group Ltd (ASX: QBE) and Insurance Australia Group Ltd (ASX: IAG).

Building data for regulators

It is no secret that FSD has been a long-awaited ambition for Tesla followers and it’s still in the works. Furthermore, the latest iterations of Tesla FSD are on version 10 — with demonstrations showing cars able to navigate through city streets with minimal intervention.

Although, a big barrier to mainstream adoption awaits Tesla in the form of regulators. Hence, some commentators are speculating on the use of the Safety Score data to make a case for FSD. For instance, the company would be hoping to show that FSD would exhibit a higher score than the average human driver.

Analyst Daniel Ives of Wedbush has noted regulatory risk as a key concern for investors. Despite this, he holds a Tesla share price target of US$1,000.

The post Tesla share price climbs following latest disruptive development appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler owns shares in Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Tesla. The Motley Fool Australia owns shares of and has recommended Insurance Australia 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 Los Cerros Ltd (ASX: LCL) share price headed north today following the company’s latest diamond drilling results.

At the closing bell, Los Cerros shares ended the day up 7.69% to 14 cents a pop.

What did Los Cerros announce?

Los Cerros revealed a high-grade gold zone situated at the company’s 100% owned Quinchia Gold Project in Risaralda, Colombia.

According to the release, the Tesorito South gold porphyry discovery has netted significant intercepts from the surface. As such, Los Cerros highlighted the below results:

• Drill hole (TS-DH29) intercepted 107.6 meters at 1.1 grams per tonne of gold from surface
• Drill hole (TS-DH30) intercepted 144 meters at 1.2 grams per tonne of gold from 6 meters
• Drill hole (TS-DH28) intercepted 280 meters at 0.83 grams per tonne of gold from 148 meters

The results form a large part of a drilling program that aims to identify boundaries of Tesorito South’s gold mineralisation. Los Cerros noted that the latest findings continue to demonstrate a further expansion of the high-grade shallow gold zone.

Los Cerros managing director, Jason Stirbinskis added:

We continue to be encouraged by strong results from our Tesorito drill campaign, particularly the high-grade surface results in TS-DH29 and ’30 which add to the potential volumes of 2-3g/t gold extending from surface- which is always going be a positive when we ultimately consider mining economics.

The next steps for Los Cerros will be conducting a drone-based regional magnetic survey and deep IP (Induced Polarisation) geophysical programs over the Tesorito-Miraflores area.

The company has four drill rigs currently drilling at Tesorito South with three rigs pursuing extensions to the north of the established zones. The fourth rig has commenced testing southern extensions which remain open on a wide front.

Los Cerros share price summary

Despite today’s gains, Los Cerros shares have tracked almost 30% lower over the past 12 months. When looking at year-to-date, its shares have travelled the other way, up around 10%.

On valuation grounds, Los Cerros presides a market capitalisation of roughly $89 million, with approximately 635.6 million shares on issue.

The post Los Cerros (ASX:LCL) share price jumps 7% on gold update appeared first on The Motley Fool Australia.

More reading

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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 AGL Energy Limited (ASX: AGL) share price is having yet another day its investors would probably rather forget. AGL shares finished the day trading at $5.68 each, down a nasty 3.57%.

This latest move means AGL has now lost around 4.7% just this week alone. It’s no doubt a disappointing move for many shareholders to watch, especialy seeing as AGL looked to be putting the new 52-week low of $5.22 that the company hit just last Monday behind it.

Last week saw AGL hit its new all-time low on Monday, before the company quickly added more than 12% off of that low by Friday afternoon. However, this week’s moves back down have cut that gain. In saying that, AGL does remain almost 9% above its new all-time low at today’s pricing. 

So what’s gone wrong with AGL shares this week?

AGL share price comes under pressure

Well, it’s not entirely clear. There are no major news or announcements out of AGL this week, save for some routine paperwork. Indeed, most of the recent developments surrounding the company could be described as positive. My Fool colleague James discussed a recent broker opinion on AGL shares late last week. These included a buy rating from broker Ord Minnet. That came with a 12-month share price target of $7.55 a share (implying a potential upside of more than 33%). 

Fellow broker JPMorgan has also recently blessed AGL shares with a buy recommendation.

Further, AGL also avoided some strife last week when shareholders declined to give the AGL board a second strike at its annual general meeting, thus avoiding a board spill.

So, therefore, some hawkish investors may have decided that last week’s share price rally put AGL over the top in terms of valuation. Perhaps there are simply not enough buyers to keep AGL significantly above its new all-time low that we only saw last Monday.

Today’s sharp S&P/ASX 200 Index (ASX: XJO) drop probably hasn’t helped AGL out either. So another possible explanation is that investors didn’t want to pile into AGL shares in the midst of today’s market downturn. 

Whatever the reason for today’s hefty pullback in AGL shares, there will be a lot of disappointed investors out there today. 

At the current AGL share price, the company has a market capitalisation of $3.5 billion. It’s dividend yield stands at 11.46%.

The post Why is the AGL (ASX:AGL) share price down almost 4% on Tuesday? appeared first on The Motley Fool Australia.

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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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