Category: Stock Market

The Crown Resorts Ltd (ASX: CWN) share price is trading lower on Tuesday despite the release of an announcement.

At the time of writing, the casino and resorts operator’s shares are down 1% to $12.12.

What is happening?

This morning Crown revealed that Oaktree Capital Management has come back with an improved offer.

This follows its unsolicited, preliminary, non-binding and indicative proposal in April to provide a funding commitment of up to ~$3 billion to Crown via a structured instrument. The proceeds were to be used by Crown to buy-back some or all of the Crown shares which are held by James Packer’s Consolidated Press Holdings on a selective basis.

Today, Crown revealed that Oaktree has now revised its proposal and is offering a $3.1 billion facility consisting of two tranches. This comprises a $2 billion private term loan and $1.1 billion loan convertible into new shares to be issued by Crown. Once again, it proposes that the proceeds would be used to fund a selective buy back of Consolidated Press Holdings’ shareholding in Crown.

What are the terms?

Crown notes that the term of the proposed facility is seven years with a coupon of 6% per annum for the first two years and then 6.5% per annum for the remainder of the term.

In respect to the convertible component of the facility, it would give Oaktree the ability to convert the $1.1 billion tranche into new shares in Crown at a strike price of $13.00 in specified circumstances. This includes at any time after the first anniversary of the facility provided that the Crown share price is above $13.00 based on a 30-day volume weighted average price.

Furthermore, the number of new Crown shares which would be issued to Oaktree upon conversion would be capped so that Oaktree would hold 9.99% of the total number of Crown shares on issue. The remaining part of the convertible component would be cash settled by Crown.

What now?

The release explains that the Crown Board has not yet formed a view on the merits of the revised Oaktree proposal.

As a result, it has advised shareholders that they do not need to take any action in relation to the proposal at this stage. It also warned that there is no certainty that the proposal will result in a transaction.

Crown is also still considering a merger proposal from rival Star Entertainment Group Ltd (ASX: SGR).

The post Crown (ASX:CWN) share price lower despite Oaktree proposal appeared first on The Motley Fool Australia.

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James Mickleboro does not own any shares 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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An ASX-listed company that’s been a long-time favourite among investors still has plenty of legs, according to one fund manager.

T Rowe Price Group Inc (NASDAQ: TROW) Australian equities head Randal Jenneke said Resmed CDI (ASX: RMD) stocks are now ripe for the picking.

“The valuation is now back to its most attractive level in 5 years,” he told a T Rowe Price webinar last week.

“The sleep business is about to start to improve. As the US economy [improves] and there’s a product cycle to come.”

Resmed is a maker of medical devices that aid respiratory issues, especially in the area of sleep apnoea.

The Resmed share price had already climbed 7.18% over the week to Friday’s market close. At the start of the month, it was 2% down for the year.

The business has given its shareholders a great deal of joy over the decades. The stock started at less than $1 at the turn of the millennia and has provided excellent annual returns, especially in the last dozen years.

An oldie but a goodie

Sage Capital portfolio manager Sean Fenton told The Motley Fool that Resmed’s an old favourite.

“In various guises, we’ve owned [it] for well over a decade,” he said in last week’s Ask A Fund Manager.

“It had a few blips here and there from quarter to quarter but generally did very well and continued to grow and lead its segment.”

Fenton agreed with Jenneke that there was more to come from the US company.

“There’s still growth in its target market of sleep apnoea and improving sleep outcomes,” he said.

“[The company has] invested more and more in informatics and getting closer to the customer, and they really embedded themselves into having insurance payers and employing technology and improving their product and rolling it out.”

According to Jenneke, the worst economic hurdles for growth stocks would be over this year.

“We see growth in inflation peaking in 2021,” he said.

“What that means is that when we get into the later part of 2021 and into 2022, we should expect the market leadership is probably going to start to change.”

At the time of writing, the Resmed share price is trading at $29.87, up 5.29%.

The post This ASX darling’s price is now ‘most attractive in 5 years’: analyst appeared first on The Motley Fool Australia.

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Tony Yoo 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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Euro Manganese Inc CDI (ASX: EMN) shares are climbing in early trade today. This comes after the company made an announcement about its decommissioned pilot plant.

At the time of writing, the Euro Manganese share price is up 1.71% to 59.5 cents.

According to the release, the company will restart its pilot plant after being approached by prospective customers.

Let’s take a closer look at the news from Euro Manganese this morning.

Restarting production at the pilot plant

The Euro Manganese share price is in the green today after the company announced it will be refurbishing its pilot plant to produce small samples of high-purity manganese.

The manganese samples will be given to potential customers interested in using the company’s products to make electric vehicle batteries.

Giving potential customers samples means battery makers can complete supply chain qualification tests on the company’s manganese.

Therefore, Euro Manganese hopes battery makers will be ready to order the high-purity manganese when the company’s demonstration plant begins operating. Production at the demonstration plant is planned to begin in early 2022.  

Euro Manganese’s pilot plant produced manganese in 2018 as part of the Chvaletice Manganese Project’s preliminary economic assessment.

According to the company, its pilot plant will produce samples of manganese by the final quarter of 2021. The plant will produce around 50kg of high-purity electrolytic manganese metal and 150kg of high-purity manganese sulphate monohydrate.

During the refurbishing and production process, the company will be working with Changsha Research Institute for Mining and Metallurgy (CRIMM). CRIMM operated the pilot plant in 2018.

CRIMM is also the lead contractor for Euro Manganese’s demonstration plant.

The company’s demonstration plant will recycle tailings material from a decommissioned mine in the Czech Republic to produce battery-grade manganese products. The demonstration plant will be using the same process as is planned for the company’s commercial plant, which is expected to be delivered by early 2025.

Commentary from management

Euro Manganese CEO Marco Romero said:

Demand for sustainably produced, battery-grade manganese is increasing rapidly and there simply isn’t enough production capacity in the world to meet it today.

New producers need to come on stream soon and undergo rigorous supply chain qualification of their products. The restart of our pilot plant will help us better service several prospective customers’ near-term objectives to pre-qualify new producers like us.

Euro Manganese share price snapshot

Euro Manganese shares have been performing well on the ASX lately.

Currently, the Euro Manganese share price is almost 50% higher than it was at the start of 2021. It has also gained a whopping 587% since this time last year.

The company has a market capitalisation of around $148 million, with approximately 371 million shares outstanding.

The post Why the Euro Manganese (ASX:EMN) share price is rising today 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 Sims Ltd (ASX: SGM) share price has been a strong performer on Tuesday.

In morning trade, the scrap metal company’s shares are up 6% to a 52-week high of $17.69.

Why is the Sims share price charging higher?

Investors have been bidding the Sims share price higher today following the release of a very positive trading update this morning.

According to the release, the company’s businesses performed particularly strongly during the third quarter and are expected to continue this excellent form through the fourth quarter.

This is being driven by solid proprietary intake volumes, which have remained at around 95% of FY 2019’s average monthly volumes. In addition to this, the company is benefiting from gross margin per tonne improvements due to higher scrap prices and good margin management, and a significant contribution from SA Recycling. The latter is being underpinned by high prices for zorba linked products, good intake volumes, and good margin management.

Earnings guidance upgraded

The sum of the above is a significant increase in its earnings guidance for FY 2021.

The release explains that management is now expecting underlying earnings before interest and tax (EBIT) of $360 million to $380 million. This compares with its previous guidance range of between $260 million and $310 million.

Sim’s CEO and Managing Director, Alistair Field, said “In our April release we factored in justifiable concerns that the rapid rise in prices commencing in December 2020 contributed to exceptional EBIT that would not be sustained in the fourth quarter. It is pleasing that this is not the case and we are forecasting the fourth quarter to be as strong as the third quarter.”

However, it has warned that achieving the forecasted FY 2021 result assumes a successful June shipping schedule.

The Sims share price is now up 30% since the start of the year.

The post Why the Sims (ASX:SGM) share price is surging 6% higher today appeared first on The Motley Fool Australia.

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• Why ASX energy shares could outperform this morning

James Mickleboro does not own any shares 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 energy shares are have started the trading day on a positive footing as the oil price steadies at a more than two-year high.

The crude price jumped on Friday on a bullish report from the International Energy Agency (IEA), reported Reuters.

The Brent oil price benchmark rallied to over US$73 a barrel and is up by over around 85% from a year ago when COVID-19 devastated the market.

Despite this bullish backdrop, ASX energy shares aren’t shooting the lights out.

Muted ASX energy shares despite high oil price

The Woodside Petroleum Limited (ASX: WPL) share price increased by 0.7% to $23.78, Oil Search Ltd (ASX: OSH) share price added 0.5% to $4.12 and the Santos Ltd (ASX: STO) share price gained 0.4% to $7.70 in early trade.

In contrast, the S&P/ASX 200 Index (Index:^AXJO) improved by 0.7%. The lacklustre performance of the sector may be due to two countervailing factors.

Firstly, US shale oil production is on the increase thanks to higher commodity prices.

Supply increase counters bullish outlook

Unconventional oil output from the US crumbled along with the oil price in 2020. It is more expensive to produce oil from shale and most US producers could not do this profitably with the oil price under US$50 a barrel.

But with the commodity price hovering over US$70 a barrel, that’s a totally different matter.

The US Energy Information Administration is predicting that shale production will rise by around 38,000 bpd in July to 7.8 million bpd, according to Reuters.

Shale accounts for more than two-thirds of total US production.

COVID still haunting oil markets

What’s more and the UK and Victoria reminds us that economies can open and shut quickly. UK Prime Minister Boris Johnson just delayed plans to lift most of the country’s COVID restrictions by a month.

This is to combat the rise of the more infectious and deadly Delta strain of the virus. Ongoing restrictions dampen demand for oil.

These factors have taken some wind out of the ASX energy’s sails this morning. But investors should still be pleased that demand for oil is rebounding strongly.  

Oil price rise supports ASX energy shares

The IEA said last week that it is expecting global oil demand to recover to pre-COVID levels by end of 2022. This is faster than originally forecast.

Vehicle usage and the return of the dreaded peak hour traffic-jams are a testament to how quickly things are bouncing back. Air travel is also on an upward, although patchy, path to recovery.

Seasonal supply off-line

The seasonal refinery maintenance shutdowns in Canada and the North Sea are also supporting oil prices.

Rystad Energy estimates about 330,000 barrels of oil a day (bpd) of oil and condensate supply is offline at Canada oil sands projects, along with another 370,000 bpd offline in the North Sea.

The tug-of-war between bulls and bears will only add to the volatility in ASX energy share prices. The silver-lining is that the stagnation or easing in the oil price will take some of the edge off inflation worries.

The post Why ASX energy shares could outperform this morning appeared first on The Motley Fool Australia.

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Brendon Lau owns shares of Santos Ltd. Connect with me on Twitter @brenlau.

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 Suncorp Group Ltd (ASX: SUN) share price is pushing higher in morning trade.

At the time of writing, the insurance giant’s shares are up 1% to $11.34.

Why is the Suncorp share price pushing higher?

Investors have been buying the company’s shares this morning following the release of an update on recent severe weather affecting regions across metropolitan and regional Victoria.

According to the release, as at 6:30pm on Monday, Suncorp had received approximately 3,750 claims predominantly for property damage.

But it doesn’t expect the claims to stop there. Management notes that as the full extent of damage caused by the heavy rain, severe winds and flash flooding is still unfolding, claims are expected to rise further in the coming days and weeks.

Suncorp’s CEO Steve Johnston said: “Victorians have already been through a lot, and we are moving as quickly and as safely as we can to help our customers and communities affected by this severe weather. Our customer support teams are on the ground in Traralgon providing face-to-face support to all our affected customers including AAMI, Apia and GIO, and we have scaled up our flexible claims team to manage the increase in claims and calls from customers.”

Natural hazard costs

Suncorp’s total natural hazard costs across Australia and New Zealand year to date to 31 May 2021 were $955 million. This was approximately $40 million above the year to date allowance of $915 million. These estimates exclude any associated risk margin or claims handling expenses.

Positively, though, the company has a comprehensive reinsurance program in place and given its remaining covers, the maximum potential loss from this event will be $50 million.

What now?

Mr Johnston believes more needs to be done to prevent events like this from happening.

He concluded; “What we’re seeing in Victoria should again act as a reminder to the devastation which can be caused by severe weather events. More needs to be done to better protect homes in flood-prone regions across the country, including improved town planning and government investment in mitigation infrastructure.”

The Suncorp share price is up 15% since the start of the year.

The post Suncorp (ASX:SUN) share price pushes higher on claims update appeared first on The Motley Fool Australia.

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James Mickleboro does not own any shares 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 Bank of Queensland Limited (ASX: BOQ) share price is pushing higher on Tuesday morning.

In morning trade, the regional bank’s shares are up 1% to $8.86.

Why is the Bank of Queensland share price on the move?

The catalyst for the rise in the Bank of Queensland share price this morning has been the release of an announcement.

According to the release, the company’s imminent APRA Basel III Pillar 3 report for the period ending 31 May will include a decrease in its collective provision.

Bank of Queensland revealed that it expects to reduce its collective provision by a further total of $75 million. This is being driven primarily by Australia’s improved economic outlook, leading to improvements in data quality relating to collateral.

Pleasingly, the releases may not stop there. The bank advised that it continues to monitor the ongoing economic impacts resulting from COVID-19 and will assess its collective provision accordingly.

Bank of Queensland’s Managing Director and CEO, George Frazis, notes that business and consumer confidence continues to strengthen and drive Australia’s economic recovery.

He said: “Today, Australia is experiencing strengthening business and consumer confidence driving our economic recovery, supported by strong housing growth, lower unemployment rates and increasing business investment.”

“The reduction in the collective provision during the quarter reflects this improvement in the current economic environment. We continue to prudently manage our provisions to ensure we are well covered for any potential lifetime losses arising from COVID-19,” Mr Frazis added.

Are the company’s shares good value?

According to a recent note out of Goldman Sachs, which hasn’t taken into account today’s news, the broker has a buy rating and $9.83 price target on the company’s shares.

Based on today’s Bank of Queensland share price, this implies potential upside of 11% over the next 12 months. And if you include dividends, this stretches to over 15%.

The post Why the Bank of Queensland (ASX:BOQ) share price is pushing higher appeared first on The Motley Fool Australia.

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James Mickleboro does not own any shares 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 adding some ASX shares to your portfolio in June?

Four ASX shares that could be worth considering this month are listed below. Here’s what you need to know about them:

Appen Ltd (ASX: APX)

Appen has a team of over one million crowd sourced experts preparing the data that goes into artificial intelligence (AI) and machine learning models. It does this for some of the biggest tech companies in the world such as Google and Facebook. And although demand has softened during the pandemic, it is expected to rebound once the crisis passes. Especially given how spending on AI is forecast to grow materially over the next decade. Ord Minnett currently has a buy rating and $24.75 price target on its shares.

Cochlear Limited (ASX: COH)

Cochlear is one of the world’s leading hearing solutions companies. It has a long track record of delivering solid earnings growth thanks to its world class portfolio of products, ageing populations, and its high level of investment in research and development. Positively, all these drivers remain in place today, which appears to have put Cochlear in a position to continue its growth over the next decade. Macquarie has an outperform rating and $245.00 price target on its shares.

IDP Education Ltd (ASX: IEL)

Another ASX share to look at is IDP Education. It is a provider of international student placement services and English language testing services. While the company has been hit hard by the pandemic, it is expected to come out of the crisis in a stronger position and win further market share. It has also been tipped to resume its rapid growth once trading conditions return to normal. Last week, UBS put a buy rating and $28.25 price target on its shares.

Kogan.com Ltd (ASX: KGN)

Kogan is an ecommerce company which has been benefitting greatly from the shift to online shopping. And while inventory issues have brought its earnings growth to an abrupt end recently, this is only expected to be a short term headwind. After which, Kogan and its acquired Mighty Ape business appear well-placed to benefit from the structural shift online. Credit Suisse has an outperform rating and $17.93 price target on its shares.

The post 4 buy-rated ASX shares for June appeared first on The Motley Fool Australia.

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James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Appen Ltd, Cochlear Ltd., Idp Education Pty Ltd, and Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd and Kogan.com ltd. The Motley Fool Australia has recommended Cochlear 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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On Tuesday 8 June 2021, an article was published on Fool.com.au titled iCar Asia (ASX:ICQ) share price tumbles 6% on AGM Presentation.

It has been brought to our attention that this article contained factual errors regarding the EBITDA performance of iCar as referenced in slide 5 of the AGM Presentation as per this ASX release: https://www.fool.com.au/tickers/asx-icq/announcements/2021-06-08/3a568567/icar-asia-agm-presentation/

The Motley Fool incorrectly noted the company’s EBITDA loss as well as iCar Asia’s EBITDA performance.

The release actually states:

EBITDA losses improved by 34% to a loss of 1.8 million against FY20’s January to April period which saw a loss of $2.7 million. The EBITDA margin also improved to minus 31% in 2021, an improvement in EBITDA loss of 51% between the two timeframes.

Motley Fool Australia apologises for the error, and has removed the article from Fool.com.au.

The post Article Correction – iCar Asia (ASX:ICQ) 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 S&P/ASX 200 Index (ASX: XJO) shares in this article could be interesting ideas to look at.

Businesses in the ASX 200 might be market leaders in their category in Australia or even the world.

Here are two that might be worth thinking about:

TPG Telecom Ltd (ASX: TPG)

TPG is one of the largest telecommunications businesses in Australia. It’s the combined business of the old TPG as well as Vodafone Australia.

It’s currently rated as a buy by five brokers including Morgans.

Morgans believes that the short-term TPG share price decline is a possible opportunity, with a price target of $7.17. That suggests the potential upside is more than 25% over the next 12 months.

Over the last six months the TPG share price has fallen 22%.

TPG management said that the business is building momentum, continuing its merger integration plans, its 5G mobile network is on track to reach scale in the top six cities by the end of the year. It will begin offering 5G fixed wireless services in this half year period.

The ASX 200 share has made solid progress on merger integration activities and is targeting $70 million of cost synergies across the group in 2021, which excludes the contribution from fixed wireless services and revenue synergies from cross-selling.

While the business is in a stronger position to respond to aggressive competition in the market and mitigate headwinds, it will continue to be impacted by global travel restrictions, NBN margin erosion and the new RBS levy.

Morgans has projected that TPG is trading at 21x FY21’s estimated earnings.

Xero Limited (ASX: XRO)

Xero is a cloud accounting software ASX 200 share with a global subscriber base.

The company is growing at a healthy double digit rate in all of its major markets. In FY21, Australian subscribers grew 22% to 1.15 million. The UK saw subscriber numbers increased 17% to 720,000. New Zealand subscribers went up 14% to 446,000. North American subscribers rose 18% to 285,000. The rest of the world subscribers saw 40% growth to 175,000, with the largest growth in South Africa and Singapore.

A global subscriber base means that Xero has a larger total addressable market.

Xero continues to invest in its product as Xero balances short-term customer needs and investing for the long-term. Product spend increased from 31.4% of operating revenue in FY20 to 36.7% in FY21.

The ASX 200 share has been making acquisitions to improve its offering to clients. Recent names include Planday, Tickstar and Waddle. A key trait of the Xero offering is a large ecosystem of services and tools for business owners and accountants.

Xero CEO Steve Vamos said in the release of the FY21 result:

The past year has brought home to many people in small business the need to understand in real-time their financial position and how it may change. The value and importance our customers place on their subscription and connection to the broader Xero community is increasing.

In FY21, Xero saw operating revenue rise 18% to NZ$848.8 million, with annualised monthly recurring revenue increase 17% to NZ$963.6 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) went up 39% to NZ$191.2 million in FY21, demonstrating operating leverage.

The post 2 top ASX 200 shares that might be buys today appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Xero. The Motley Fool Australia owns shares of and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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