Category: Stock Market

The Lendlease Group (ASX: LLC) share price is tumbling in morning trade today. At one stage it was down more than 5%. However, at the time of writing it has recovered slightly, with shares trading at $11.27 — down 1.66% on the previous close.

Below we take a look at the international property and infrastructure group’s latest market update.

What update did Lendlease report?

Lendlease’s share price is sinking after the company updated the market on the continuing impact of COVID-19 on its core operating business.

According to the update, the virus and subsequent lockdowns continue to affect each of the property group’s core global segments.

In addition, Lendlease is expecting a core operating profit of between $375 and $410 million after tax for FY21.

In its announcement, Lendlease said the pandemic’s resurgence in the UK has resulted in a delay in its expected timing to secure an investment partner for its International Quarter London.

Also in London, Lendlease said lower rents along with diminished demand on its recently completed residential buildings at Elephant Park were “impacting the profitability of our first two residential for rent buildings”.

On the positive front, in Australia Lendlease reported it had secured an investment partner for the second residential tower at One Sydney Harbour. In Melbourne, it signed an anchor tenant for the largest office tower at Melbourne Quarter. This was then forward sold.

And back in Europe, the company said it had secured another investment partner for the Milan Innovation District.

Lendlease forecasts statutory profit for the 2021 financial year in the range of $200 million–320 million after tax. In addition, it said its balance sheet and liquidity position “remain strong, with gearing expected to be below the bottom end of the target range of 10-20%”.

The company’s new global CEO, Tony Lombardo, is carrying out an extensive review of core business operations. Lendlease said it will update the market on the outcome when it announces its full financial year results on 16 August.

Lendlease share price snapshot

The Lendlease share price has been under pressure over the past 12 months, down 7.78%. By comparison the S&P/ASX 200 Index (ASX: XJO) is up 22.79% over that same time.

Year-to-date Lendlease shares have continued to struggle, down 14% so far in 2021.

The post Why the Lendlease (ASX:LLC) share price is tumbling today appeared first on The Motley Fool Australia.

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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 SEEK Limited (ASX: SEK) share price has been pushing higher again on Thursday.

In early trade, the job listings company’s shares rose 3% to a record high to $34.15.

This latest gain means the SEEK share price is up almost 17% since the start of the year.

Why is the SEEK share price pushing higher today?

Investors have been bidding the SEEK share price higher today following the release of an update.

According to the release, in line with previous announcements, SEEK’s co-founder Andrew Bassat has stepped down as Managing Director and Chief Executive Officer (CEO) today. Replacing him at the helm is former Commonwealth Bank of Australia (ASX: CBA) CEO, Ian Narev, who has commenced in the role this morning.

Andrew Bassat is expected to transition to a new role as Executive Chairman and CEO of an independent SEEK Investments entity in due course. In the meantime, the Board has appointed Mr Bassat as a non-executive director of SEEK, effective today.

SEEK’s Chairman, Graham Goldsmith, commented: “On behalf of all at SEEK and our shareholders, I would like to thank Andrew for his vision, leadership, passion and commitment. Andrew has led SEEK for more than 23 years and leaves the business in a strong position. We are fortunate to retain Andrew’s experience on the SEEK Board and his entrepreneurial drive in his new full-time role as Executive Chairman and CEO of SEEK Investments.”

“Over the last 2 years, Ian has led SEEK’s operating businesses including making a significant contribution through a challenging 2020. Ian has a strong track record in public company leadership, digital transformation and strategy and we are fortunate to have such a high calibre leader succeed Andrew. I am confident this will be a seamless transition,” he added.

SEEK Investments update

In February SEEK announced that it was undertaking a review of various options to provide SEEK Investments with a greater degree of independence, focus and access to third party capital, and to allow SEEK to retain significant economic exposure to SEEK Investments.

Today’s release explains that the review is progressing and SEEK will provide an update to the market with its full year results. This could potentially see SEEK become the latest ASX 200 share to undertake a demerger. We’ll find out in August.

The post Why the SEEK (ASX:SEK) share price just hit a record high appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns shares of SEEK 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 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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Pop the champagne! Let off the fireworks!

At midnight, an old year finished and a new one began.

Sing it with me… “Should old acquaintence be forgot…”

Huh? Not as excited as me? 

Didn’t even realise that Financial Year 2020/21 has just given way to Financial Year 2021/22?

Fair enough.

I can’t say I blame you.

Truth be told, I’m not that excited, either.

One arbitrary trip around the sun shouldn’t really be the basis for either decision-making or for determining success or failure.

Long term investing (which should be a tautology, given all investing should be long term!) isn’t measured in days, weeks, months, or even a year.

So, while you’ll read plenty of ‘the year that was’ articles today, they’re just not that important.

They are the equivalent of what political journos call ‘racecalling’ — focussing on the short term ‘winners and losers’, rather than the deeper, more important issues that actually matter.

Warren Buffett has had some terrible years. And some great ones.

But neither matters all that much — it’s the compound impact of all of them, combined, that determines success or failure.

He focuses on the process and lets the results take care of themselves.

And — spoiler alert — that’s the secret to investing success.

Not the ‘biggest winners of last year’. Not even the ‘biggest winners of next year’.

Not the trendy ‘FOMO’ stocks. (Or cryptos, or anything else).

Not the ‘hot new things’.

Disappointed? That’s okay.

See, here’s the thing: you can be the tortoise, or you can be the hare. We know how that turns out.

There are no shortcuts, I promise you.

Just sensible, long term investing.

Sure, you can wish it was different. You can pretend it’s different.

You can spend your time (and perhaps your money) trying to find some hot new thing, Some shortcut. Some ‘get rich quick’ scheme.

Good luck.

I hope most of you reading this are already members of the ‘get rich slowly‘ club, instead. 

The one that I think has much, much better odds of success.

The one that knows great investing results have always come from disciplined saving, regular investing in quality businesses, and… time.

See, despite some tough love earlier, this isn’t a doom and gloom message.

It is, instead, to let you know that I think there’s a better way.

That ‘better way’ is encapsulated in the list that follows.

See, I do this job because I want to help you achieve financial independence.

And that led to a list, first published many years ago, called “Foolish New Year’s Resolutions”.

I try to write something new in this space every time, but I make an exception for that list, which I repeat every six months,

It is, I hope, something of a wake-up call for some, and a touchstone to return to, for others.

So, without further ado, my list of resolutions that, I hope, can put or keep you on the path to financial independence:

13 Foolish New Year’s Resolutions

1. I will live below my means — spending less than I earn.

2. I will save money into a rainy-day fund so I’m ready for what life might bring.

3. I will pay off my credit card debt, and then only spend what I can pay off within the interest free period each month.

4. I will regularly add to my investment account.

5. I will invest money I don’t need for at least 3-5 years to build my nest egg.

6. I will learn more about investing, taking control of my financial future.

7. I will invest in quality businesses, buying a slice of the company, not just a code on a screen.

8. I will buy shares in a company with the intention of holding them for the long term.

9. I will sell when my investment thesis fails, the company is overvalued or I have a better idea.

10. I will avoid anchoring my decisions to the price I paid for my shares.

11. I will remember that the market can be moody and over-react, both on the upside and the downside.

12. I will expect volatility, and I won’t let it spook me into selling. Indeed, volatility can offer me great opportunities!

13. I will let the market offer me prices (be my servant), not dictate my mood or actions (be my master).

(Want a printable version? I’m glad you asked. Here it is!)

Happy New (Financial) Year, fellow Fools!

Fool on!

The post Happy New (Financial) Year! appeared first on The Motley Fool Australia.

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Motley Fool contributor Scott Phillips 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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ASX travel shares arguably copped the biggest blow from the COVID-19 pandemic.

Every country suddenly found itself fighting an invisible enemy. And one of the bluntest ways to control the spread of the virus was to close the borders.

Australia, as an island nation, was one of the first to go down this route.

Then Australia, as a federation, saw its constituent states shut their borders to each other. 

So not only did the travel industry find itself with no international revenue, domestic sales dried up as well.

But this catastrophe has also meant some travel businesses were in for a spectacular recovery out of the crisis over the 2021 financial year.

The 3 best-performing travel shares from the past 12 months out of the All Ordinaries Index (ASX: XAO) were:

• Sealink Travel Group Ltd (ASX: SLK): up 115.5% in the 2021 financial year
• Corporate Travel Management Ltd (ASX: CTD): up 111.5%
• Alliance Aviation Services Ltd (ASX: AQZ): up 53.2%

Eley Griffiths portfolio manager Nick Guidera told The Motley Fool that stocks like these showed just how productive it was to put money into travel the past 12 months.

“If you had invested in Sealink and Corporate Travel as the peak of the pandemic infection in Australia was subsiding (June 2020), you would have more than doubled your money,” he said. 

“The travel subsector has significantly outperformed both the consumer discretionary sector and the broader S&P/ASX 200 Index (ASX: XJO) by more than 90% during the past year.”

Sealink still presents a ‘significant opportunity’

Transport and tour provider Sealink enjoyed several boosts during the 2021 financial year, according to Guidera.

“Sealink has benefited from a number of factors including the renewal of its key bus contracts in [Western Australia], [South Australia] and Singapore, which the company acquired as part of the Transit Systems acquisition in late 2019,” he said.

“At the same time, its domestic tourism assets and government-backed maritime routes have seen a surge in demand as Australian’s have been forced to holiday at home.”

Despite doubling its value, Guidera reckons the stock has more climbing to do.

“I think there is a significant opportunity in Sealink. The Transit Systems earnings are broadly de-risked and a significant pipeline of future bus contract opportunities — more than $500 million — are expected to be potentially awarded in the coming months,” he told The Motley Fool.

“Tourism assets provide continued leverage to domestic tourism, as well as future upside when international tourists return. The stock is trading broadly in line with 12-month averages despite a significantly improved outlook.”

Corporate Travel looks expensive now

As the player with the best balance sheet in the industry, Corporate Travel was a darling among ASX investors, according to Guidera.

“[It] was and is in a position to reach a break-even point faster than its leisure competitors.”

The company even had enough money to acquire US player Travel & Transport Inc last year.

“CEO Jamie Pherous didn’t waste a good crisis and used his balance sheet to acquire a sizable business in the USA, which will bring scale to the existing operations at a very attractive price,” said Guidera.

“Corporate Travel is well placed to take advantage of the significant growth in US airline passenger numbers month-on-month, as a vaccinated US economy continues to reopen.”

But the doubling of the share price in the past year has put Guidera off somewhat.

“On near-term earnings forecasts, [travel] agents such as CTD look expensive,” he said.

“However, on FY23 numbers, which many are hoping is more reflective of 2019 conditions, valuations are more appealing.”

Alliance’s growth could come regardless of economy

The little airline services provider is a favourite of Montgomery Investment Management chief investment officer Roger Montgomery.

Like Corporate Travel, Alliance bought up useful assets last year at a pandemic discount.

“Last year, Alliance took advantage of slumping global travel, announcing it would spend just $197 million to acquire 30 Embraer E190 aircraft, lifting the number of planes in its fleet to 66,” he said in a blog post.

“These prices are cents on the dollar of the original capital cost of the assets. This is Alliance’s key competitive advantage, great operational on-time performance from the lowest capital cost aircraft in the market.”

The company ‘wet leases’ aircraft to the big rivals like Qantas Airways Limited (ASX: QAN) and Virgin Australia.

“Wet leases are agreements between two airlines, where the lessor agrees to provide an aircraft, crew, maintenance and insurance to the lessee in return for payment on the number of hours the aircraft is operated, irrespective of how many passengers are on the plane or the price they paid for their seat.”

Montgomery is convinced the stock will continue its ascent from the financial year end price of $4.55.

“We believe it is worth in excess of $5.00 per share.”

The post 3 best ASX travel shares of financial year 2021 appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo owns shares of Corporate Travel Management Limited and Qantas Airways 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 Corporate Travel Management 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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Not all shares can be winners, some have to come in last. And with so many mining and resource shares on the ASX’s All Ordinaries Index (ASX: XAO), there will no doubt be some poor performers in the pack.

There’s a clear pattern among the 2021 financial year’s biggest fallers – in fact, it’s etched in gold. Let’s take a look.

Worst performing mining and resource shares of FY21

Resolute Mining Limited (ASX: RSG)

The Resolute Mining share price was the worst performing mining and resource share of the financial year – dropping a whopping 58%. The Resolute share price has fallen from $1.22 to just 51 cents over the past 52 weeks.

The company is a gold miner with assets in Senegal, Mali, and Ghana. During FY21, the company’s lease on the Bibiani Mine was terminated and it was affected by the Mali military’s mutiny.

It has a market capitalisation of around $574 million, with approximately 1.1 billion shares outstanding.

Regis Resources Limited (ASX: RRL)

The Regis Resources share price was the second worst performer, falling 55% over the 2021 financial year. Regis shares are currently trading for $2.44 apiece – at the beginning of the financial year, Regis shares were $5.30.

In a case of unfortunate timing, its share price closed yesterday’s session at a new 52-week low.

Regis is a gold miner with assets in Western Australia.

It has a market capitalisation of around $1.8 billion, with approximately 754 million shares outstanding.

St Barbara Ltd (ASX: SBM)

The St Barbara share price fell 48% over the financial year just gone – it’s now $1.76. At the start of the 2021 financial year, shares in St Barbara were trading for $3.28.

The most recent hit to the St Barbara share price came in May, when it downgraded its production guidance and increased its expected costs.

St Barbara is another gold miner. Its operations are based in Australia, Canada, and Papua New Guinea.

The company has a market capitalisation of around $1.2 billion, with approximately 708 million shares outstanding.

AngloGold Ashanti CDI (ASX: AGG)

The AngloGold Ashanti share price also had a tough year. It fell 43% in the 2021 financial year to trade for $4.83.

The company is a global gold miner with a head office in South Africa and assets in 4 continents. It also produces silver and sulphuric acid as they’re by-products of its gold production.

The most recent news from AngloGold came late last month, when the company shared a rescue mission had begun after a contract worker was unable to be found after a fall of ground at one of the company’s mines in Ghana. AngloGold updated the market on the rescue mission 7 days later, but the missing worker was yet to be found.

AngloGold Ashanti has a market capitalisation of around $424 million, with approximately 2 billion shares outstanding.

SSR Mining Inc CDI (ASX: SSR)

The SSR Mining share price made the list of the worst performing mining and resource shares of the 2021 financial year despite only debuting on the ASX in September 2020.

Its shares have fallen 33% since then. They’re currently swapping hands for $20.53 apiece.

However, SSR Mining isn’t new to the ASX – it used to trade as Alacer Gold Corp.

The company is yet another gold producer. It has operations in the United States, Canada, Turkey, Mexico, and Peru. It also produces a small amount of silver.

SSR Mining shares have been falling lately despite the company releasing good news, including a positive first quarter report and news of increased debt facilities.

The company has a market capitalisation of around $375 million, with approximately 220 million shares outstanding.

The post These are the 5 worst performing ASX mining and resource shares of FY21 appeared first on The Motley Fool Australia.

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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 Rhipe Ltd (ASX: RHP) share price has returned from its trading halt with a bang this morning.

At the time of writing, the leading cloud and technology solutions provider’s shares are up a sizeable 21% to a 52-week high of $2.53.

Why is the Rhipe share price rocketing higher?

Investors have been scrambling to buy the company’s shares this morning after it confirmed that it has received a takeover approach.

According to the release, Rhipe has received a confidential, non-binding, conditional proposal from Norway-based Crayon Group to acquire 100% of the shares in Rhipe by way of a scheme of arrangement for $2.50 per share. This represents a 19.6% premium to its last close price.

It is worth noting also that Crayon’s offer will be reduced by any dividends or distributions declared by Rhipe after the date of the proposal.

What are the terms?

The release notes that Crayon’s proposal assumes a net cash position of Rhipe at closing of at least $31 million.

It also advised that the proposal states that any final, binding offer would be subject to a number of conditions. This includes the satisfactory completion of confirmatory due diligence and negotiation of a scheme implementation deed, unanimous and continuing recommendation of the Rhipe Board, and no material adverse changes occurring in relation to Rhipe.

There are also customary conditions including Rhipe shareholder approval, FIRB approval, and other requisite regulatory approvals.

What now?

Following a detailed consideration of the proposal, after consultation with its appointed advisors, the Rhipe Board has decided to allow Crayon to undertake limited confirmatory due diligence on a non-exclusive basis. This is being done to enable Crayon to present the Rhipe Board with a satisfactory binding proposal.

However, the company has warned that there is no certainty that Crayon will submit a satisfactory binding proposal. As a result, it has advised Rhipe shareholders to take no action at this time.

The post Why the Rhipe (ASX:RHP) share price is surging 21% higher today 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 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 National Australia Bank Ltd. (ASX: NAB) share price held relatively steady in June, despite the ASX continuing to rise.

The Australian banking giant provided the market with two important updates during the month, which impacted the NAB share price.

We take a look at the announcement and how the company’s shares reacted.

What happened to NAB in June?

Early in the month, the Australian Transaction Reports and Analysis Centre (AUSTRAC) had serious concerns about NAB’s financial crime compliance. The government agency revealed the bank may be breaching Anti-Money Laundering and Counter-Terrorism Financing rules.

As a result, AUSTRAC’s enforcement team initiated a formal investigation into the alleged matter. While no civil penalty proceedings have been taken to date, the review is ongoing.

The news shook investors when released, leading the NAB share price to fall more than 3% on the day.

Almost a week and a half later, the company provided an update in regards to the Bank Bill Swap Rate (BBSW) class action complaint. Although the claims were dismissed against NAB on jurisdictional grounds in February 2020, the bank agreed to a settlement.

No financial details were given and the deal is confidential, but the bank appeared happy to put the lawsuit behind.

Despite the positive news, NAB shares also fell around 0.50% when the announcement was made.

How is the NAB share price valued?

A recent broker note came two days after NAB’s release on the AUSTRAC matter.

Australia’s largest investment house, Morgans cut its 12-month price target for NAB by 5.2% to $27.50. The firm downgraded the bank from “add” to “hold” based on the continuing AUSTRAC investigation.

In addition, Standard & Poor revised its long-term credit rating outlook for NAB. Pleasingly, it issued a “Stable” rating from “Negative” in line with the quicker than expected economic recovery.

About the NAB share price

Over the past 12 months, NAB shares have gained more than 40% reflecting positive investor sentiment. The company’s share price reached a 52-week low of $16.56 in September last year before rebounding higher.

On valuation grounds, NAB presides a market capitalisation of roughly $86.4 billion, with close to 3.3 billion shares on issue.

At the time of writing, NAB shares are up 0.27% to $26.29.

The post Why the NAB (ASX:NAB) share price remained flat in June 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 REA Group Limited (ASX: REA) share price is trading lower today despite the release of an announcement.

In early trade, the property listings company’s shares are down 0.5% to $168.23.

What did REA Group announce?

Investors have been selling REA Group’s shares on Thursday despite it announcing the completion of its acquisition of Mortgage Choice Limited (ASX: MOC). This follows the approval of the scheme by the requisite majorities of Mortgage Choice shareholders.

REA Group is paying $1.95 per share to acquire the mortgage broker, which represents an enterprise value of approximately $244 million.

Mortgage Choice is a leading Australian mortgage broking business with more than 500 brokers, 380 franchises across the country, and over 30 lending partners. It currently has a loan book of $54 billion dollars and settlements of $11 billion dollars in the 12 months to December 2020.

The company reported net revenue of $22.2 million and a net profit after tax of $4.1 million for the first half of FY 2021.

Why is REA Group acquiring Mortgage Choice?

When announcing the proposal in March, REA notes that it aligns with its financial services strategy by leveraging its digital expertise, high intent property seeker audience and unique data insights across a larger network.

It also believes the acquisition of Mortgage Choice provides a compelling opportunity to establish a leading mortgage broking business with increased scale. This complements the existing Smartline broker footprint and results in greater national broker coverage.

This morning, REA Group Chief Executive Officer’s, Owen Wilson, commented: “The completion of the Mortgage Choice acquisition represents an exciting milestone for our combined businesses. We’re extremely pleased to welcome the Mortgage Choice team into REA. Together, we look forward to accelerating REA’s financial services strategy to become a leading player in the home loan market.”

The REA Group share price is up 57% over the last 12 months.

The post REA Group (ASX:REA) share price lower despite acquisition update 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA 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 Marley Spoon AG (ASX: MMM) share price is on the rise again on Thursday.

At the time of writing, the subscription-based meal kit delivery company’s shares are up 1.5% to $3.20.

This means the Marley Spoon share price is now up 33% since this time last month.

Why is the Marley Spoon share price pushing higher today?

Today’s rise in the Marley Spoon share price has been driven by the release of an announcement this morning.

According to the release, the company has signed and closed a committed senior secured credit facility of four years with Runway Growth Credit Fund.

The release notes that the facility will give Marley Spoon access to up to US$65 million to support it with its growth strategy.

What are the terms?

These funds are being made available to Marley Spoon in two tranches. The first tranche is for up to US$45 million, of which US$30 million has been drawn at closing. The company has the right to draw the remaining balance of US$15 million until 30 June 2022, subject to being in compliance with the facility agreement.

The second tranche is for US$20 million and is available to be drawn through to 30 June 2022. Access to this tranche is conditional upon Marley Spoon being in compliance with customary financial covenants as well as undisclosed net revenue and contribution margin-based performance milestones.

Marley Spoon’s Chief Executive Officer, Fabian Siegel, was pleased with the agreement.

He said: “We are pleased to commence this new loan agreement with Runway and look forward to a productive engagement with the team of this leading US debt provider. The Facility provides access to debt financing to fund our growth strategy.“

Why are its shares up 33% in a month?

The Marley Spoon share price has been a very strong performer over the last few weeks and is now up 33% in a month. This is due to the belief that the recent lockdowns in Australia will give its ANZ sales another major boost, just like they did a year earlier.

Not that its ANZ sales necessarily need boosting. During the first quarter, Marley Spoon reported a 51% increase in active ANZ customer to 123,000 and a 67% jump in meals to 4.6 million.

The post Why the Marley Spoon (ASX:MMM) share price is up 33% in a month 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Marley Spoon AG. 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 IGO Ltd (ASX: IGO) share price is pushing higher on Thursday morning following the release of an announcement.

At the time of writing, the clean energy focused mining company’s shares are up 3.5% to $7.91.

Why is the IGO share price pushing higher?

Investors have been buying the company’s shares after it announced the completion of its transformational transaction to form a new lithium joint venture with Tianqi Lithium.

This transformational transaction sees the company acquire a 49% non-controlling interest in Tianqi Lithium Energy Australia, providing it with a 24.99% indirect interest in world-class Greenbushes Lithium Mining and Processing Operation. It also gives IGO a 49% interest in the Kwinana Lithium Hydroxide Plant.

Both operations are located in Western Australia and come at a total cost of US$1.4 billion (A$1.9 billion). This is being funded by a capital raising which completed in January and the sale of its 30% interest in the Tropicana Gold Mine to Regis Resources Limited (ASX: RRL) for $903 million which completed in May.

The clean energy revolution

IGO’s Managing Director and CEO, Peter Bradford, commented: “Our new partnership with Tianqi promises to be truly transformational for IGO and delivers on our strategy focused on the clean energy revolution. We are incredibly excited to commence this journey with Tianqi as we build a globally relevant lithium business delivering high quality, responsibly produced lithium products to global customers while generating strong financial outcomes for shareholders.”

This sentiment was echoed by Tianqi’s Founder and Chairman, Mr Jiang Weiping.

He commented: “We are pleased to have now formed our new strategic partnership with IGO and, through the JV, look forward to growing a leading global lithium business and delivering on our shared vision for a clean energy future. Our new joint venture is ideally positioned in this market with quality upstream and downstream assets capable of generating strong financial returns for both IGO and Tianqi.”

What now?

The company notes that the commissioning process for the first lithium hydroxide plant at Kwinana has now commenced.

This includes the formation of the owner’s commissioning team and the appointment of a lead contracting firm to complete the remaining rectification work. First lithium hydroxide is expected to be produced in the second half of 2021.

In addition, the restart and ramp-up of Greenbushes Chemical Grade Plant 2 has commenced and the completion and commissioning of the Tailings Retreatment Project is expected in early 2022.

Is it time to invest?

According to a recent note out of Macquarie, its analysts believe the IGO share price is in the buy zone.

It analysts have put an an outperform rating and $8.70 price target on its shares. It is pleased with the company’s transformation into a clean energy-focused miner.

The post IGO (ASX:IGO) share price higher after completing $1.9bn transformational transaction 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 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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