Category: Stock Market

On Monday the S&P/ASX 200 Index (ASX: XJO) started the week on a subdued note. The benchmark index fell 0.3% to 7,299.8 points.

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

ASX 200 expected to fall

The Australian share market looks set to drop on Tuesday. According to the latest SPI futures, the ASX 200 is poised to open the day 9 points or 0.1% lower this morning. This follows a mixed start to the week on Wall Street. In late trade, the Dow Jones has dropped 0.3%, the S&P 500 has fallen 0.2%, and the Nasdaq is trading flat.

Iron ore price surges

It could be a good day for BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) shares after the spot benchmark iron ore price surged higher overnight. According to Metal Bulletin, the spot iron ore price has jumped 9.4% to US$135.03 a tonne. This was driven by supply concerns.

Oil prices charge higher

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could have strong days after oil prices charged higher overnight. According to Bloomberg, the WTI crude oil price is up 1.5% to US$80.56 a barrel and the Brent crude oil price has risen 1.5% to US$83.64 a barrel. Oil prices have hit multi-year highs amid a rebound in global demand.

Gold price falls

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) will be on watch after the gold price edged lower. According to CNBC, the spot gold price is down 0.1% to US$1,755.1 an ounce. A strengthening US dollar weighed on the price of the precious metal.

Newcrest rated as a buy

The team at Goldman Sachs see a lot of value in the Newcrest Mining Ltd (ASX: NCM) share price. This morning the broker retained its buy rating but trimmed its price target on the gold miner’s shares slightly to $30.50. This implies potential upside of 27% over the next 12 months. It commented: “NCM has the strongest balance sheet in over a decade, enabling it to fund value-accretive growth projects over the next 5-10 years and reducing project risk.”

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

More reading

• Here are the top 10 ASX shares today
• Here are the 3 heaviest traded ASX 200 shares on Monday
• Top broker tips BHP (ASX:BHP) share price to rise 48%
• ASX 200 energy shares rise amid market sell-off
• ASX 200 (ASX:XJO) midday update: Star shares crash, tech shares tumble

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 Treasury Wine Estates Ltd (ASX: TWE) share price has broken its 4-day losing streak on Monday. At the end of the session, shares in the global wine company were trading 1.08% higher at $12.18 apiece.

Prior to today, the Treasury Wines share price had taken a 2.9% trim off the top during last week’s allotment of trading. Though, it appears investors were feeling more bullish on the wine label today. With no announcements from the company, we are left to take a look at what else might have shifted sentiment.

Cheers to freedom

Are you more of a ‘social drinker’? Not too fond of blowing the froth off a cold one at home, or popping a bottle for a party of one? Well, today marked the so-called ‘Freedom Day‘ for residents of New South Wales after a painstaking 107 days of tight restrictions. In response, people have taken the opportunity to go and experience social interaction again.

Simultaneously, things are looking positive for Victoria as it surpasses 61% of people over 16 years old being fully vaccinated. With the vaccination rate moving towards the Federal government’s 80% target for phase C, investors are beginning to look more fondly on consumer staples, such as Treasury Wines.

Importantly, as restaurants and bars are allowed to resume operations, the likelihood of increased sales to such businesses begins to improve.

Treasury Wines has navigated COVID-19 conditions throughout the past 18 months. At the end of June 2020, the company reported a profit of $250 million on revenue of $2.684 billion. Although, these figures remain down from pre-pandemic levels.

What analysts think of the Treasury Wines share price

A few weeks back, the team of analysts at Morgans retained their add rating on Treasury Wines. At the same time, the broker put a $14.01 price target on the company’s shares.

According to the note, the analysts believed the full-year result produced by Treasury Wines in FY21 was impressive given the headwinds. In addition, Morgans expect that the long-term growth story for the company remains intact.

Finally, the price target reflects a further potential 15% upside to the Treasury Wines share price. Other investors might be thinking the same based on today’s price action.

The post Why is the Treasury Wine (ASX:TWE) share price in the green today? appeared first on The Motley Fool Australia.

More reading

• 2 ASX dividend shares that could be very reliable
• 5 things to watch on the ASX 200 on Friday
• Treasury Wine (ASX:TWE) share price lifts following sustainability update
• Top broker tips Treasury Wine (ASX:TWE) share price to rise 17%
• 2 ASX 200 (ASX:XJO) shares that brokers rate as buys

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 owns shares of and has recommended Treasury Wine Estates 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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As well as being home to countless blue chip shares, the Australian share market is home to a good number of promising small caps.

Two small cap shares that could be worth watching closely are listed below. Here’s what you need to know about them:

BlueBet Holdings Ltd (ASX: BBT)

The first small cap ASX share to watch carefully is BlueBet. It is a mobile-first online wagering provider. It allows users to bet on all Australian and international racing and sports through its website and app. BlueBet has been growing very strongly thanks to the increasing popularity of mobile sports betting.

The good news is that the company still has a long runway for growth in both the Australian market and the enormous US market. And while the latter will be a tough nut to crack, BlueBet is forming partnerships with industry players in an attempt to gain access.

The team at Morgans are very positive on BlueBet. So much so, they have an add rating and lofty $2.57 price target on its shares.

The broker commented: “We remain attracted to BBT’s opportunity to increase its Australian market share (currently just ~1.2%) and significant, long-term growth potential from its US market entry.”

Over The Wire Holdings Ltd (ASX: OTW)

Another small cap to watch is Over The Wire. It is a one-stop-shop for information technology and telco services including data networks, VoIP, hosting, security, and support.

Over The Wire has been growing at a strong rate in recent years and this continued in FY 2021. For the 12 months ended 30 June, the company reported a 29% lift in revenue to $112.7 million and a 36% jump in EBITDA to $23.5 million.

A big positive from the result was that almost all of Over The Wire’s revenue is now recurring. This gives the company a firm foundation to build on in FY 2022 and the years that follow. In fact, management is targeting organic growth of 15% in FY 2022.

Ord Minnett appears confident in its outlook and has put a buy rating and $5.06 price target on its shares.

The post 2 stellar small cap ASX shares tipped for strong growth appeared first on The Motley Fool Australia.

More reading

• These were the 5 worst performing ASX shares in September
• Why BlueBet, Gold Road, Li-S Energy, & Myer shares are dropping
• The Bluebet (ASX:BBT) share price is down 30% in a month. What’s going on?
• 2 top small cap ASX shares analysts rate as buys
• Why the BlueBet (ASX:BBT) share price has lost 8% 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. owns shares of and has recommended Over The Wire Holdings Ltd. The Motley Fool Australia has recommended BlueBet Holdings Ltd and Over The Wire Holdings 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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There are some ASX dividend shares that Aussies can pick that continue to grow dividend income for investors.

A business may not necessarily be worth thinking about just because a company pays a dividend.

But these two ideas have continued to pay growing dividends over the last few dividends, including through the COVID-19 pandemic:

Brickworks Limited (ASX: BKW)

Brickworks is a fairly diversified business. It has a large building products business that produces and sells a number of things like bricks, paving, masonry, stone, roofing, specialised building systems, precast and cement.

In the US it also has a large and growing network of brick manufacturing and distribution after acquisitions.

However, Brickworks is quite clear that it’s two other asset groups that fund the dividend. The Brickworks dividend has been maintained or increased every year since 1976. That means 45 years since the ordinary dividend was last decreased. In FY21, Brickworks increased its full year dividend by 2 cents per share to 61 cents per share.

The ASX dividend share also has a joint venture industrial property trust with Goodman Group (ASX: GMG). Brickworks develops properties on excess land. It is seeing “unprecedented” demand for its industries property facilities thanks to the rapid growth in online shopping and the increasing importance of well-located distribution hubs and sophisticated supply chain solutions.

To take advantage of this, it’s also going through a period of unprecedented development. Management say that there is significant land for further development across the different industrial estates. It has a large amount of pre-commitments already secured. The completion of these facilities over the next two years will result in gross rent within the trust increasing by around $51 million and the valued of leased assets rising by $1.2 billion.

Brickworks also owns a substantial amount of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares. Soul Patts is an investment conglomerate that is more than a century old. It’s invested across a number of sectors such as telecommunications, building products, resources, resources and agriculture, with investments like TPG Telecom Ltd (ASX: TPG), Brickworks itself and New Hope Corporation Limited (ASX: NHC).

At the current Brickworks share price, it currently has a grossed-up dividend yield of 3.6%.

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare is a large global pathology business in the healthcare sector.

It has operations across a number of countries including the USA, Germany, Australia, the UK, Ireland, Switzerland, Belgium and New Zealand.

There are three countries that make up a large majority of the revenue – the USA, Germany and Australia.

The ASX dividend share is doing a high level of COVID tests, which is adding significant levels of earnings. In FY21, the USA saw 34% organic growth with base revenue growth of 5%. Sonic pointed to increasing opportunities for commercial COVID testing here, such as travel testing.

In Germany, there was 50% organic revenue growth in FY21, with base business with of 5%. It’s the largest provider of COVID testing in Germany, with 30 laboratories.

Australian pathology saw organic revenue growth of 28%, with base business growth of 9%. It’s also the largest non-government provider of COVID vaccinations in Australia.

Sonic says that it has a progressive dividend policy and has increased its dividend for the last several years in a row.

In FY21 it paid a dividend of $0.91 per share, which was an increased of 7.1% compared to FY20. At the current Sonic share price, it has a partially franked dividend yield of 2.3%.

The post These ASX dividend shares keep giving investors a payrise appeared first on The Motley Fool Australia.

More reading

• Own Brickworks (ASX:BKW) shares? Here’s what you’re invested in
• Brokers name 3 ASX shares to buy today
• Top brokers name 3 ASX shares to buy today
• Why has the Brickworks (ASX:BKW) share price slumped 5% in 9 days?
• 2 ASX dividend shares that could be buys in October 2021

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Sonic Healthcare Limited and TPG Telecom 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 Centuria Capital Group Ltd (ASX: CNI) share price edged lower on Monday and finished 2.1% in the red at $3.26.

Centuria shares dropped during the day despite the company announcing a key acquisition update.

Here are the key points from Centuria’s announcement.

What did Centuria Capital announce?

The company advised that its subsidiary Primewest secured a $71.2 million shopping centre in Geraldton, Western Australia.

Geraldton is a major regional gateway town in WA. The Northgate Geraldton Shopping Centre – Centuria’s asset from the purchase – is the dominant shopping centre in the area.

The city itself is supported by mining, broadacre agriculture, aquaculture fishing, tourism and logistics industries, which Centuria sees as positives for its new asset.

The announcement notes that anchor tenants Kmart and Coles contribute 49% of the gross rental income at the site with the former recently commencing a new 10-year lease.

Including other tenants at the centre, the site “provides a 4.7 year weighted average lease expiry (WALE) and is 96.3% occupied”.

Centuria, via Primewest, secured the site for “a new single-asset, unlisted closed-ended wholesale fund”.

The Northgate Geraldton Trust (NGT) has an initial 5-year term and will be open to wholesale investors from 13 October.

It forecasts a 7.25% distribution within the first 2 years and has a target equity raise of $41.8 million.

What did management say?

Speaking on the announcement, Centuria joint CEO Jason Huljich said:

The acquisition illustrates how Centuria’s larger balance sheet can support the team’s expansion across large format and neighbourhood retail markets by securing quality, well performing assets. It adds to the Group’s strong retail real estate portfolio, totalling more than $2.6 billion.

Touching on the development area itself, Huljich added:

This is a rare opportunity to secure a retail asset that’s strategically located within WA’s fourth most populated area. It benefits from strong tenant covenants with 80% of the property’s gross income derived from ASX-listed, national and multinational tenants.

Centuria Capital share price snapshot

The Centuria Capital share price has slumped 6% into the red this past month but is still up 24% this year to date.

It’s also gained 47% over the past 12 months, more than double that of the S&P/ASX 200 Index (ASX: XJO)’s approximate 20% return in this time.

The post Centuria Capital (ASX:CNI) share price slides amid $72m acquisition update appeared first on The Motley Fool Australia.

More reading

• Why did ASX tech shares just have such a good FY22 first quarter?
• QBE (ASX:QBE) share price slips following Federal Court judgement
• Here are the top 10 ASX shares today
• Wesfarmers (ASX:WES) share price struggles amid latest API speculations
• Why the Webjet (ASX:WEB) share price has beaten the ASX 200 in the last 6 months

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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Here at the Fool, we’ve been taking the liberty of checking out how some of the major ASX share market indices and shares performed over the most recent quarter. FY2022’s first quarter officially ended on 30 September, meaning it’s a great time to check out how things went.

So today, let’s examine the ASX tech sector.

The ASX tech sector is perhaps best represented by the S&P/ASX All Technology Index (ASX: XTX). The XTX Index started the quarter on 1 July at exactly 2,963 points. By the time 30 September rolled around, the XTX was sitting at 3,093.1 points.

That puts this index’s gain at a decent 4.39%. That’s a lot better than what the broader S&P/ASX 200 Index (ASX: XJO) managed. The ASX 200 was only able to add approximately 0.26% over the same period.

So which ASX tech shares were mostly responsible for this outperformance?

WAAAX on for ASX tech shares?

Well, according to the BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC), which tracks the XTX index, its current top 3 holdings are Afterpay Ltd (ASX: APT), Xero Limited (ASX: XRO) and Seek Limited (ASX: SEK).

Well, as we discussed last week, Afterpay had a rather uninspiring quarter, going from $118.17 a share at the start of July to $121.32 by the end of September. That’s a return of 2.67% for investors.

Xero? The cloud-based accounting software provider began FY2021 at $137.10 a share and finished up the quarter at $139 – a gain of 1.39%.

Seek started the financial year at $33.14 but went backwards over the quarter, landing at $31.12 a share at market close on 30 September. That’s a decline of 6.1%.

However, the XTX’s next 2 ASX tech shares by index weighting helped carry the weight for the quarter. Computershare Ltd (ASX: CPU) shares went from $16.90 to $18.22 over the quarter, a gain of just over 7.8%.

But WiseTech Global Ltd (ASX: WTC) did one better. This WAAAX darling started July at $31.93, but ended up finishing last month at $53.65. That’s a whopping gain of just over 68%.

So it turns out WiseTech was the real ASX tech share winner over the FY22 first quarter. Who knows what surprises this quarter will bring!

The post Why did ASX tech shares just have such a good FY22 first quarter? appeared first on The Motley Fool Australia.

More reading

• Xero (ASX: XRO) subsidiary inks new partnership with CBA
• Why Afterpay, Platinum, Star, & Strike Energy shares are sinking
• ASX 200 (ASX:XJO) midday update: Star shares crash, tech shares tumble
• Why the Afterpay (ASX:APT) share price is down 3% today
• Here’s what happened to the Afterpay (ASX:APT) share price in the FY22 first quarter

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. owns shares of and has recommended AFTERPAY T FPO, WiseTech Global, and Xero. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, WiseTech Global, and Xero. The Motley Fool Australia has recommended SEEK 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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Shares in QBE Insurance Group Ltd (ASX: QBE) have spent all day in the red, closing 2.37% lower at $11.94 apiece.

The QBE share price was down today amid news that relates to a second business interruption test case heard in the Federal Court of Australia last Friday.

Here are the crucial details.

What went down to get us here?

To set the scene, we need to revisit the onset of the COVID-19 pandemic, when business and industry were forced to close due to government lockdown mandates.

The insurance industry has long distanced itself from paying up on its liabilities when it comes to pandemics. According to the Insurance Council of Australia, the industry believes “pandemics are not intended to be covered under most business interruption policies”.

But it came as a big surprise last year when policyholders found out they were ineligible for cover under their business interruption policies, as the insurers sought to exclude cover for pandemics.

The insurers’ group refused to act on its liabilities through a reference to the Quarantine Act. However, this legislature was repealed in 2016 and replaced by the Biosecurity Act.

Due to the discrepancies, a test case was held in 2020 to establish key definitions and criteria on how the new legislature would be applied in its first real-world case.

Back then, the NSW Court of Appeal heard the case and ruled in favour of policyholders, a decision upheld again in June 2021 by the High Court. Both agreed there were grounds to claim on business interruption.

As such, insurers can no longer rely on references to the Quarantine Act to deny liabilities as in the first test case, as it is an outdated piece of legislature.

QBE share price sinks after Federal Court judgement

Due to some confusion remaining from the first test case, a second test case was established to provide further clarification around the matter.

It seems as if the insurers’ wanted more clarity around what terms a business could claim under during a pandemic, particularly if a lockdown-based claim was substantiated.

From the Court’s rulings on Friday, it is now clear that businesses essentially cannot be compensated for losses that were sustained from the government lockdown only.

The Court ruled in favour of 8 out of 9 of the matters submitted by the insurers’, and upheld only 1 of the arguments put forward by the policyholders.

QBE has yet to formally comment on the matter. However, fellow insurance giant Insurance Australia Group Ltd (ASX: IAG) released a statement earlier today, stating it would review the judgement to determine whether an appeal was necessary.

Time has been set aside in November to hear any appeal in the Full Court to reach a final decision before the end of this year.

The QBE share price has been trading flat this past month, after gaining 40% this year to date and 30% in the past year.

The post QBE (ASX:QBE) share price slips following Federal Court judgement appeared first on The Motley Fool Australia.

More reading

• 2 ASX 200 shares surging this week despite inflation worries
• The most important catalyst for outperforming ASX shares: fund manager
• Why this broker sees 20% upside in the QBE (ASX:QBE) share price
• Broker names 2 blue chip ASX 200 shares to buy
• 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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Today, the S&P/ASX 200 Index (ASX: XJO) started the week off with a negative session. The benchmark index slipped 0.28% lower to 7,299.8 points.

In early trade, the Aussie index took a tumble below 7,260 points. However, throughout the afternoon ASX shares recovered somewhat from the fall. Unfortunately, tech shares were out of form on Monday, with Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO) falling 4.16% and 3.95% respectively. This was partially balanced out by strong showings among the miners and energy shares.

However, 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, Yancoal Australia Ltd (ASX: YAL) was the biggest gainer today. Shares in the coal producer soared 11.6% as energy crisis fears linger. Find out more about Yancoal Australia here.

The next biggest gaining ASX share today was Whitehaven Coal Ltd (ASX: WHC). Much like its larger-sized coal competitor, Whitehaven rallied 6.5% as investors look to take advantage of strengthening coal prices. Uncover the latest Whitehaven Coal details here.

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

ASX-listed company	Share price	Price change
Yancoal Australia Ltd (ASX: YAL)	$4.04	11.6%
Whitehaven Coal Ltd (ASX: WHC)	$3.44	6.50%
Fortescue Metals Group Ltd (ASX: FMG)	$15.03	5.47%
Coronado Global Resources Inc (ASX: CRN)	$1.595	4.93%
Zimplats Holdings Ltd (ASX: ZIM)	$20.46	4.28%
Liontown Resources Ltd (ASX: LIO)	$1.485	4.21%
Iluka Resources Ltd (ASX: ILU)	$9.40	3.87%
Insurance Australia Group Ltd (ASX: IAG)	$5.37	3.47%
New Hope Corporation Ltd (ASX: NHC)	$2.675	3.28%
Champion Iron Ltd (ASX: CIA)	$4.75	3.26%

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.

More reading

• Here are the 3 heaviest traded ASX 200 shares on Monday
• Which ASX 300 shares are making headlines on Monday?
• ASX 200 (ASX:XJO) midday update: Star shares crash, tech shares tumble
• 5 things to watch on the ASX 200 on Monday
• Here’s what happened to the CSL (ASX:CSL) share price in the FY22 first quarter

Motley Fool contributor Mitchell Lawler owns shares of AFTERPAY T FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Xero. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Insurance Australia Group Limited, and Xero. 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 Wesfarmers Ltd (ASX: WES) share price struggled today amid the latest news about the ongoing takeover fight for Australian Pharmaceutical Industries Ltd (ASX: API).

What’s going on?

The Wesfarmers share price went down more than 1% today. That’s on the same day that the S&P/ASX 200 Index (ASX: XJO) went down around 0.3%.

Both Wesfarmers and Sigma Healthcare Ltd (ASX: SIG) are interested in buying API. Each business has a different offer for the company.

Sigma has previously submitted an offer that was conditional, non-binding and indicative to merge with API. Sigma thinks that the rationale for a combination of API and Sigma is “highly compelling” with significant benefits accruing to both sets of shareholders.

Under the proposal, API shareholders would receive a consideration of 2.05 Sigma shares and $0.35 cash for each API share held. This put the total bid at a value of $1.57 per API share, before the expected synergies. The API shareholder base would own just under half of the business if the deal were to go through.

Sigma is bullish on what a combination of the two businesses could mean. Management think it would result in the diversification of revenue streams, product and customer. Another benefit could be significant synergies and other efficiencies being available for shareholders. It could create a stronger platform to operate in a changing industry landscape. An enlarged Sigma could also benefit from greater scale and balance sheet capacity.

According to reporting by The Australian, Sigma and its advisers are thinking about “a raid” on API. The newspaper noted that Sigma could buy a “large” stake in the business by acquiring shares on the market. It also suggested that Sigma is thinking about increasing its takeover offer for API.

Where does this leave Wesfarmers and the share price?

Last week, Wesfarmers acquired 19.3% of API from Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

As part of the announcement, it noted it’s still committed to buying API, with an offer of $1.55 cash per API share on the table. It’s currently progressing with its confirmatory due diligence to support its proposal.

Wesfarmers said it has the view that its proposal is superior to the Sigma proposal and is in the best interests of API shareholders. The retail conglomerate does not intend to support or vote its 19.3% holding of API in favour of the Sigma proposal.

Rob Scott, the Wesfarmers managing director, said the proposal would deliver an attractive premium and certain cash return to API shareholders:

Wesfarmers continues to see opportunities to invest in and strengthen the competitive position of API and its community pharmacy partners. Exercising our option to acquire 19.3% of API reflects the group’s commitment to the transaction and the continued progress of the Wesfarmers proposal.

Wesfarmers thinks that buying API would give it the basis of a new healthcare division and a platform from which to invest and develop capabilities in the growing health, wellbeing and beauty sector.

The post Wesfarmers (ASX:WES) share price struggles amid latest API speculations appeared first on The Motley Fool Australia.

More reading

• API (ASX:API) share price lifts following guidance upgrade
• Can the Wesfarmers (ASX:WES) share price reach $60 by Christmas?
• Wesfarmers (ASX:WES) share price lifts in latest push for API
• Australian Pharmaceuticals (ASX:API) share price lifts following Wesfarmers 19% stake
• The final Wesfarmers (ASX:WES) dividend will be paid out today. Here’s what you need to know

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. 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 Washington H. Soul Pattinson and Company Limited and Wesfarmers 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 Webjet Limited (ASX: WEB) share price has performed exceptionally over the past 6 months. Although the digital travel business has continued to be suppressed by restrictions imposed as a result of the COVID-19 pandemic, the company’s shares have surged.

Presently, shares in the $2.36 billion company are up 17% in the last 6 months. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has climbed a steady 4.6% over the same timeframe.

Considering that Webjet’s revenue remains severely impacted by the pandemic, investors are likely wondering why the Webjet share price is outperforming the index. While the exact answer is up for interpretation, there are a few likely influencing factors.

The reopening trade

Essentially, investors are beginning to see the light at the end of the tunnel for travel shares as vaccination rates near reopening levels. In fact, today marks ‘Freedom day’ for residents of New South Wales after the state batten down the hatches for 107 days.

This comes as NSW reaches 90.3% of the over 16-year-old NSW population receiving their first dose. Likewise, over 60% of Australians over 16 are now fully vaccinated. For reference, at 80% fully vaccinated, domestic travel restrictions will not apply to vaccinated residents. Additionally, outbound travel restrictions will be removed for those inoculated against the virus.

This daily infographic provides the total number of vaccine doses administered in Australia as of 8 October 2021

Stay up to date with COVID-19 vaccine information here: https://t.co/lsM33j9wMW pic.twitter.com/HtXuAozYh5

— Australian Government Department of Health (@healthgovau) October 9, 2021

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As a result, ASX-listed travel shares have gotten a boost recently as investors eye the eventual reopening of domestic and international travel. While the Webjet share price may have outperformed the benchmark index, other travel companies have outdone its performance in the past 6 months.

• Flight Centre Travel Group Ltd (ASX: FLT) up 22.6% to $22.35
• Corporate Travel Management Ltd (ASX: CTD) up 22.8% to $23.36
• Helloworld Travel Ltd (ASX: HLO) up 41.2% to $2.89

Webjet share price gets a buy rating

It is often supportive of a higher share price whenever an analyst considers it a ‘buy’. In this case, analysts at UBS recently rated the Webjet share price a buy with a price target of $6.85.

According to the note, the broker expects pent-up demand for travel will be considered once restrictions are lifted. Hence, UBS’ target suggests a potential 9.6% upside from the travel company’s current share price.

The post Why the Webjet (ASX:WEB) share price has beaten the ASX 200 in the last 6 months appeared first on The Motley Fool Australia.

More reading

• Can the Webjet share price fly to $7 by the end of 2021?
• It hasn’t been a great week so far for the Webjet (ASX:WEB) share price
• These are the 10 most shorted ASX shares
• Why ASX 200 travel shares are having a bumper day
• Up 5%, the Webjet (ASX:WEB) share price is back to March 2020 levels. Here’s why

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. owns shares of and has recommended Helloworld Limited. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited, Helloworld Limited, and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel 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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