The S&P/ASX 200 Index (ASX: XJO) is back on form on Monday and pushing higher. In afternoon trade, the benchmark index is up 0.25% to 7,793.7 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are falling on Monday:

APM Human Services International Ltd (ASX: APM)

The APM Human Services share price is down 29% to $1.16. Investors have been selling this human services provider’s shares today in response to a takeover update. According to the release, CVC Asia Pacific has pulled the plug on its non-binding $2.00 per share offer following the completion of due diligence. And while APM has received another offer from Madison Dearborn Partners, the company has described it as “disappointing.” Nevertheless, the board intends to engage with Madison Dearborn Partners to see if it is possible for an improvement to its $1.40 per share offer.

Azure Minerals Ltd (ASX: AZS)

The Azure Minerals share price is down almost 9% to $3.26. Today the lithium explorer is holding its scheme meeting relating to the proposed takeover by SQM and Hancock Prospecting. The offer is $3.70 per Azure share with a fall-back conditional off-market takeover offer of $3.65 per Azure share. However, ahead of the meeting, the company revealed that the Foreign Investment Review Board has requested more time to decide on the deal. The company remains positive that approval will be granted. It said: “This is a standard extension request and Azure is not aware of any reason that the required FIRB approval will not be received.”

Beach Energy Ltd (ASX: BPT)

The Beach Energy share price is down 15% to $1.61. Investors have been selling the energy producer’s shares after it revealed a series of quality issues at its Waitsia joint venture project in the Perth Basin. Beach is now working to update the production schedule and cost estimates for Waitsia, advising that “the extent of additional quality issues is to a point where current guidance on schedule and cost needs to be updated.”

Elders Ltd (ASX: ELD)

The Elders share price is down 24% to $7.49. This agribusiness company’s shares have come under significant pressure today after it released a trading update. Elders notes that first half trading in FY 2024 has been significantly below expectations due to a number of drivers. This includes subdued client sentiment following an El Niño declaration by the Bureau of Meteorology. As a result, Elders expects EBIT to fall 18% to 30% in FY 2024 to between $120 million and $140 million.

The post Why APM, Azure Minerals, Beach Energy, and Elders shares are crashing today appeared first on The Motley Fool Australia.

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More reading

• APM shares collapse 30% as ‘disappointing’ bid lands in its lap
• Guess which ASX 200 energy share is imploding 18% today on cost blowouts
• Why is this ASX 200 share plunging 29% after a trading update?
• Here are the top 10 ASX 200 shares today
• APM share price freeze extended amid new takeover bid

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 APM Human Services International and Elders. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you owned S&P/ASX 200 Index (ASX: XJO) lithium stocks in 2021 and 2022, you likely enjoyed some outsized share price gains at the time.

That period saw a massive increase in lithium demand amid strong growth in global battery markets, particularly to power EVs.

With new supplies lagging that demand growth, lithium carbonite prices soared to all-time highs north of US$80,000 per tonne by November 2022.

Over the following year, as you’re likely aware, the price of the battery-critical metal fell off a cliff, tumbling more than 80% as demand growth slowed and new supplies flooded the market.

ASX 200 lithium stocks came under heavy selling pressure and continue to broadly underperform this year.

Here’s how these top producers have fared so far in 2024:

• Pilbara Minerals Ltd (ASX: PLS) shares down 4.7%
• Core Lithium Ltd (ASX: CXO) shares are down 43.7%
• IGO Ltd (ASX: IGO) shares are down 19.8%
• Liontown Resources Ltd (ASX: LTR) shares are down 29.5%

For some context, the ASX 200 is up 2.2% year to date.

But in potentially good news for ASX 200 lithium stocks, one leading fund manager believes the market is poised to rebound.

ASX 200 lithium stocks moving back towards balanced markets

As The Australian Financial Review reports, modelling by Ethical Partners indicates global lithium markets are heading “rapidly back” towards equilibrium. Contrary to more bearish forecasts from the likes of Goldman Sachs, the fund manager is even flagging the potential for demand to exceed supply again.

Part of the forecast stems from lower production targets among numerous lithium producers, who are looking to cut costs amid lower spot prices.

According to Sam Cox, an analyst at Ethical Partners, “Since November, we believe the lithium market has moved from an 8% surplus in 2024 to roughly in balance.”

In potentially good news for ASX 200 lithium stocks in the months ahead, Cox said, “While demand will still be a key driver of price direction from here, we see green shoots … The market has yet to identify this trend and is still looking backwards.”

Cox added:

From 2021 to 2023, lithium supply almost doubled. We estimate a quarter of this supply came from sources not producing in 2020.

But Ethical Partners already sees that trend reversing, with the lithium price rebounding around 10% so far in 2024.

Which ASX lithium producers are set to benefit?

While most ASX 200 lithium stocks should benefit from any rebound in the price of the battery-critical metal, Ethical Partners currently only owns IGO shares.

According to Cox (quoted by the AFR), that’s because IGO is the only miner that meets the fund manager’s cash flow requirements.

For its half-year results, IGO reported an underlying free cash flow of $434 million, up from $433 million in the prior corresponding half-year.

IGO held $267 million in cash with no debt at the end of the half-year.

The post The ASX 200 lithium stock this fundie is backing for the global lithium comeback appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• When will Pilbara Minerals resume paying dividends?
• Own ASX 200 mining shares? Here’s the 5-year forecast for commodity prices
• Here are the top 10 ASX 200 shares today
• Why Imugene, Liontown, Pointsbet, and Regis Resources shares are storming higher

Motley Fool contributor Bernd Struben 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 Scott Phillips.

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The Fortescue Ltd (ASX: FMG) share price has lifted today after the mining giant announced the opening of its Gladstone green energy facility.

Fortescue may be best known as an ASX iron ore share, but it’s also working on various green energy initiatives. At the time of writing, Fortescue shares are up 1.21%, trading at $25.08.

Fortescue opens electrolyser facility

The new electrolyser manufacturing facility in Gladstone, Queensland, is one of the first globally to house an automated assembly line, according to Fortescue.

It’s a 15,000 sqm manufactured facility with the capacity to produce over 2GW of “proton exchange membrane (PEM) electrolyser stacks annually.”

Fortescue teams in Australia and the United States designed the facility’s electrolysers in-house, making Fortescue an original equipment manufacturer (OEM).

The miner noted that the Queensland government supported the development site, including the provision of an electrical substation, road network, communications and local scheme water connection, as well as the allocation of land. The Australian federal government also contributed $44 million from the Collaboration Stream of the Modern Manufacturing Initiative.

This facility is the first stage of a wider green energy manufacturing centre being developed by Fortescue on the 100-hectare Gladstone site. The centre includes a hydrogen system testing facility and Fortescue’s PEM50 green hydrogen project. The facility and wider centre will underpin more than 300 direct and indirect jobs.

And the bigger the green energy division becomes, the larger the influence on the Fortescue share price it could have.

Management commentary

Fortescue executive chair and founder Dr Andrew Forrest welcomed the milestone, saying:

We are grateful for the Queensland and Federal Government’s vision and early support to help get us started.

Together we have laid the cornerstone for what will be a massive new manufacturing industry in Australia creating the potential for thousands of new green energy jobs.

Fortescue Energy Division CEO Mark Hutchinson explained the company’s hydrogen plans:

The process of splitting hydrogen and oxygen isn’t new – but the innovative ways the world is looking to use green hydrogen to decarbonise are, and that means demand for green hydrogen and for the electrolysers to produce it is growing rapidly.

This facility positions Fortescue and Gladstone as a large-scale producer of what will be an increasingly sought-after commodity in the global shift to green energy.

We’re strategically focussed on building out our Energy business. Not only are we developing a pipeline of green energy projects, we’re also now designing and manufacturing the specialised equipment and technology that will underpin our green hydrogen projects and that of others.

Hutchinson also said it would keep investing in new electrolyser technologies to give Fortescue the “best possible competitive position”.

Fortescue share price snapshot

The Fortescue share price has fallen 15% since the start of 2024, but it has increased 12% in the last 12 months.

The post Fortescue shares climb amid Australian first for clean energy appeared first on The Motley Fool Australia.

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More reading

• Own ASX 200 mining shares? Here’s the 5-year forecast for commodity prices
• Invest $6,000 in Fortescue shares and get $502 in passive income
• How this unexpected development in China could boost ASX 200 mining stocks
• Are your big ASX 200 mining dividends in for a chop?
• Here is the profit forecast to 2026 for Fortescue shares

Motley Fool contributor Tristan Harrison has positions in Fortescue. 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 Scott Phillips.

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A little-known ASX lithium share just lit up the boards on Monday morning.

Shares in the junior ASX lithium stock closed on Friday trading for 5.5 cents. In morning trade today shares rocketed to 7.2 cents apiece, up a whopping 31% after the miner reported on hitting an “outstanding” lithium intersection.

Any guesses?

If you said Cygnus Metals Ltd (ASX: CY5), go to the head of the virtual class.

Formerly known as Cygnus Gold, the ASX minerals explorer dove into the lithium space back in July 2022. At the time of writing, shares have given back some of those outsized gains, currently trading for 5.7 apiece.

Here’s what the explorer just reported.

ASX lithium share soars on drill results

Investors are bidding up the Cygnus Metals share price after an update on the first assays from diamond drilling at its Auclair lithium project, located in Quebec, Canada.

The results were said to confirm thick mineralisation within 50 metres of the surface at the Pegasus discovery in Auclair.

Top results include an intersection of 43.7 metres (true width) at 1.15% Li2O from 46.4 metres, including 4 metres at 3.0% Li2O, which includes 1 metres at 5.9% Li2O.

These substantial grades were returned from a zone of “intense spodumene mineralisation”.

The assays confirm the explorer’s visual estimates reported in February, which estimated significant intervals of up to 10-12% spodumene mineralisation.

The ASX lithium share is attracting investors’ attention after management highlighted that significant widths and grades received from one of the diamond drill holes indicate “substantial potential” for the larger system at Auclair.

What did management say?

Commenting on the results sending the ASX lithium share soaring on Monday morning, Cygnus managing director David Southam said:

This outstanding intersection shows exactly why we are on the hunt for lithium in James Bay. Despite its immense lithium potential, the area is still heavily underexplored when compared to more mature lithium terranes like Western Australia.

Southam said the assays results “puts Auclair on the map as potentially the next breakthrough lithium discovery in James Bay”.

According to Southam:

Auclair clearly demonstrates all the key ingredients for a significant discovery, with regional scale, high grades and significant thick intersections.

We have only scratched the surface through recent programs and look forward to getting back on the ground in May and continuing with prospecting around Pegasus and Lyra, which were discovered just days before the end of the season.

Lyra is only 1.6 kilometres north of Pegasus, and will be one of the high priority drill targets in June 2024.

The ASX lithium share only discovered the outcrops at Pegasus and Lyra in late 2023 during the final days of prospecting.

The post Guess which ASX lithium share just rocketed 31% on an ‘outstanding’ find appeared first on The Motley Fool Australia.

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More reading

• This ASX All Ords small-cap is soaring 33% on a takeover bid
• Ansell share price hits pause as company gloves up for $975 million acquisition
• APM shares collapse 30% as ‘disappointing’ bid lands in its lap
• Guess which ASX 200 energy share is imploding 18% today on cost blowouts
• Why is this ASX 200 share plunging 29% after a trading update?

Motley Fool contributor Bernd Struben 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 Scott Phillips.

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Qoria Ltd (ASX: QOR) shares are catching the eye on Monday with a very strong gain.

The ASX All Ords small-cap share is up 33% to a 52-week high of 42 cents.

Why is this ASX All Ords small-cap share soaring?

Investors have been fighting to get hold of the cyber safety company’s shares this morning after it received a takeover offer.

Qoria, previously known as Family Zone Cyber Safety, revealed that it has received an unsolicited, conditional and non-binding indicative proposal from K1 Investment Management to acquire 100% of the issued share capital of Qoria for $0.40 cash per share by way of scheme of arrangement.

According to the release, the indicative proposal is subject to a number of conditions. This includes satisfactory completion of due diligence and exclusivity over a 6-week time frame, a unanimous Qoria Board recommendation, a commitment from all Qoria directors to vote in favour of the proposed transaction, final approval from K1, and entry into a binding scheme implementation agreement subject to numerous conditions including FIRB approval.

K1 Investment Management has advised that it has entered into call option arrangements with two Qoria shareholders owning approximately 169 million Qoria shares. This equates to approximately 14.4% of the ASX All Ords small-cap’s outstanding shares. These arrangements can be exercised in the event that a competing proposal is announced.

Offer rejected

The ASX All Ords small-cap revealed that its board has concluded that the indicative proposal “significantly undervalues Qoria and has unanimously rejected the Indicative Proposal as not being in the best interests of shareholders.”

It believes the proposal does not reflect Qoria’s position as the global leader in both enterprise and consumer markets in child safety and wellbeing.

It also feels it ignores Qoria’s strong growth prospects in a highly supportive regulatory environment and is opportunistically timed. The latter relates to the company being at a cash profit inflection point and in the midst of its most productive annual sales quarter.

Overall, the ASX All Ord small-cap stock’s board does not intend to engage with K1 Investment Management and advised shareholders that they do not need to take any action in relation to the indicative proposal.

The board also warned that there is no certainty that a further proposal will be received from K1 Investment Management or any other third party. As a result, it urged shareholders not to place undue reliance upon such a proposal emerging.

The post This ASX All Ords small-cap is soaring 33% on a takeover bid appeared first on The Motley Fool Australia.

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More reading

• Ansell share price hits pause as company gloves up for $975 million acquisition
• APM shares collapse 30% as ‘disappointing’ bid lands in its lap
• Guess which ASX 200 energy share is imploding 18% today on cost blowouts
• Why is this ASX 200 share plunging 29% after a trading update?
• 3 lesser-known ASX dividend shares to buy for income

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 Scott Phillips.

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The trading week has kicked off on a positive note so far this Monday. At the time of writing, the ASX 200 has gained a decent 0.21% and is up to around 7,789.3 points at present. But Ansell Ltd (ASX: ANN) shares aren’t joining the party today.

Ansell shares closed at $23.89 each last Friday. And that’s where they’ll be staying, at least for a while. This morning, the ASX 200 glove and bodywear manufacturer announced that its shares would be placed in a trading halt.

The purpose of this halt was to allow Ansell to reveal a new acquisition, and accompanying capital raise to fund it.

ASX 200 stock announces major acquisition and capital raise

Yes, Ansell has revealed that it has entered into a binding agreement to acquire 100% of the assets of Kimberly-Clark‘s Personal Protective Equipment (KCPPE) business.

Kimberly-Clark is the US-based consumer staples giant behind popular products like Kleenex and Huggies.

Ansell will reportedly acquire this company’s PPE business for US$640 million ($974.6 million) in cash. This business includes brands like Kimtech and KleenGuard. As well as glove, mask, apparel and eyewear manufacturing facilities.    

This acquisition will be funded by a $400 million institutional share placement. That’s in addition to a $65 million share placement plan for retail investors.

Assuming all goes to plan with this acquisition, Ansell estimates that the merger will be completed by the first quarter of the 2025 financial year.

The company is expecting significant synergies to result from this merger. Ansell is estimating net cost synergies of approximately US$10 million per annum by the third year. That’s in addition to an expectation that it will provide a significant boost to the company’s earnings per share (EPS) and earnings margins.

According to Ansell, it will also see the company’s annual revenues double from roughly US$140 million to around US$300 million.

Ansell also told investors that its earnings guidance of 94-110 US cents in EPS for the 2024 financial year remains unchanged, “excluding the impact of the Acquisition and Transaction Funding”. Ansell is anticipating that the acquisition will see its EPS over the 2024 financial year reduced by 1-2 US cents though.

Here’s some of what Ansell CEO Neil Salmon had to say on this news today:

For many years, we have assessed a combination with KCPPE as one of our most attractive acquisition opportunities and I’m delighted that we have now reached agreement with K-C that the optimal path forward for this business is under Ansell ownership…

Our existing footprint, in addition to our global organisation and supply chain, creates the opportunity to generate significant synergy value from the acquisition while also enhancing our combined organic growth potential and we are excited about the benefits this will create for Ansell’s customers and shareholders.

Ansell share price snapshot

Ansell shares may be suspended today, but investors have not enjoyed a lucrative 2024 so far this year. Year to date, the Ansell share price remains down by 5.42%. Those losses stretch to 13.32% over the past 12 months.

The company also remains down around 44% from its 2021 highs of over $42 a share:

At the last Ansell stock price of $23.89, this ASX 200 stock had a market capitalisation of $2.98 billion, with a dividend yield of 1.92%.

The post Ansell share price hits pause as company gloves up for $975 million acquisition appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ansell. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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APM Human Services International Ltd (ASX: APM) shares have returned from suspension and crashed deep into the red.

In morning trade, the human services company’s shares are down 30% to $1.14.

Though, it is worth noting that its shares still remain up 40% over the last two months even after today’s decline.

Why are APM shares collapsing?

Investors have been selling the company’s shares this morning after the collapse of one takeover offer and news of another that was well short of expectations.

As a reminder, in February APM revealed that it received a revised conditional, indicative, non-binding offer of $2.00 cash per share from CVC Asia Pacific.

This was up from an initial offer of $1.60 cash per share and was enough for the company to grant CVC Asia Pacific with due diligence access.

However, as it recently revealed, following the conclusion of its due diligence, CVC Asia Pacific advised that it was unable to proceed to finalise a transaction on terms consistent with the aforementioned non-binding offer.

But the takeover news wasn’t over. Although CVC Asia Pacific pulled the plug on a deal, Madison Dearborn Partners (MDP), which currently holds an interest of approximately 29% in APM and has three directors on the APM Board, indicated its intention to put forward an indicative non-binding proposal to acquire the company.

This brings us to today. the company’s shares are in freefall today after MDP put forward an offer to acquire all APM shares which it does not already hold for $1.40 cash per share by way of a scheme of arrangement.

This is 30% lower than CVC Asia Pacific’s proposal and 14% below where APM shares were trading prior to their halt and suspension.

What now?

APM advised that its Independent Board Committee (IBC) will be responsible for engaging with MDP in relation to its proposal and other potentially interested parties.

Though, the proposal will be lucky to be given the thumbs up from the IBC after being described as “disappointing” by its lead independent director, Nev Power. He said:

The IBC is focused on achieving an outcome that is fair and reasonable and in the best interests of all shareholders. The IBC notes that the offered price per share under the MDP Proposal is disappointing.

The MDP Proposal does not require exclusivity and allows the Company to engage with other potential acquirers. The IBC together with its Advisors intend to engage with MDP and any other interested parties to determine whether an appropriate proposal can be put to shareholders having regard to other alternatives including remaining listed and pursuing the growth opportunities available to the Company.

Trading update

Based on early management accounts for the third quarter, and assuming that historical seasonal trends do not occur in FY 2024, the company anticipates FY 2024 underlying EBITDA and underlying NPATA to be in the range of $280 million to $290 million and $95 million and $105 million, respectively. This is based on no change in the operating environment for the balance of the year.

Positively, APM notes that it expects significant incremental earnings growth in FY 2025 through announced contract awards and corporate initiatives.

The post APM shares collapse 30% as ‘disappointing’ bid lands in its lap appeared first on The Motley Fool Australia.

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More reading

• APM share price freeze extended amid new takeover bid
• APM share price placed on ice as $1.8 billion deal goes dud

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 APM Human Services International. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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S&P/ASX 200 Index (ASX: XJO) energy share Beach Energy Ltd (ASX: BPT) is having a day to forget on Monday.

The Beach Energy share price closed on Friday at $1.89. In late morning trade today, shares are swapping hands for $1.55 apiece, down 18.2%.

For some context, the ASX 200 is up 0.1% at this same time.

In a better comparison of apples to apples, of ASX 200 energy shares to ASX 200 energy shares, Santos Ltd (ASX: STO) shares are down 1.3%. Meanwhile, the Woodside Energy Group Ltd (ASX: WDS) share price is down 1.1%.

Here’s what’s happening.

ASX 200 energy share hammered on rising costs

The Beach Energy share price is getting smashed today after the company reported on a series of quality issues at its Waitsia joint venture project in the Perth Basin.

Beach Energy owns 50% of the JV project; Mitsui E&P Australia owns the other half.

In February, the ASX 200 energy share reported on various quality issues during the pre-commissioning of systems at its Waitsia Gas Plant, including rebuilding compressors and replacing valves and flanges.

Beach Energy said those earlier problems have now largely been rectified.

However, in news that has investors scrambling for the sell button, management today said that “further quality issues are emerging as pre-commissioning activities progress”.

Beach and Mitsui are now working to update the production schedule and cost estimates for Waitsia. But the partners said that even before that’s completed “the extent of additional quality issues is to a point where current guidance on schedule and cost needs to be updated”.

And those, as demonstrated by the sharp share price fall today, have been revised significantly higher.

In the guidance updates for Waitsia Stage 2, Beach Energy now expects first gas from the Waitsia Gas Plant by early 2025. That’s been pushed back from the previous expectations of first gas production by mid-2024. The partners plan a three-month ramp-up of production thereafter.

And costs are up significantly. Beach forecasts total capital expenditure of $600 million to $650 million, up from $450 million to $500 million previously.

Additionally, the ASX 200 energy share noted that unavoidable processing costs based on its revised first gas target will also be incurred in FY 2025. Management said they will continue to assess options to partially mitigate unutilised capacity until production kicks off.

The JV partners also are looking to capitalise on potential time swap opportunities with Western Australia gas market participants who have excess gas prior to completion of the Waitsia Gas Plant, in exchange for returning these volumes when they need them most.

What did management say?

Commenting on the cost blowout pummelling the ASX 200 energy share today, Beach CEO Brett Woods said:

It is extremely disappointing to be continually encountering quality and execution issues given the late stage of the project. Having to redirect existing onsite labour to remedial works is slowing the progress of pre-commissioning activities, resulting in further delay and cost increases.

Beach is committed to driving the construction of Waitsia Gas Plant to its conclusion and will work closely with the operator and contractor to deliver this strategically important project.

The post Guess which ASX 200 energy share is imploding 18% today on cost blowouts appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• Is now the time to invest in these ASX 200 energy shares?
• 5 things to watch on the ASX 200 on Wednesday
• Why is the Beach Energy share price racing higher on Thursday?

Motley Fool contributor Bernd Struben 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 Scott Phillips.

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The Elders Ltd (ASX: ELD) share price is having a very tough start to the week.

In morning trade, the ASX 200 share crashed as much as 29% to $7.00.

The agribusiness company’s shares have recovered slightly since then buy remain down 25% at the time of writing.

Why is this ASX 200 share crashing?

Investors have been hitting the sell button in a panic on Monday in response of a trading update.

According to the release, first half trading in FY 2024 has been significantly below expectations due to a number of drivers.

The first is subdued client sentiment following an El Niño declaration by the Bureau of Meteorology. This has had a particularly negative impact during the first quarter of 2024.

Also weighing on its performance has been lower crop protection prices compared to the prior corresponding period. This is impacting sales revenue and margins.

But it doesn’t end there. Elders also highlights that cattle and sheep prices are significantly below the 10-year mean, which also impacted the first quarter.

Furthermore, subdued trading in March due to a later start to winter crop in Western Australia, which is a key broadacre market, and margin pressure in some key agricultural chemical products has weighed on its performance.

It isn’t all doom and gloom, though. Looking ahead, management advised that the outlook for the FY 2024 winter crop in most regions is improved. It notes that there are favourable soil moisture profiles across many winter cropping areas in the Eastern and Southern states.

Conditions remain dry and warm in some parts of Western Australia, which is expected to push sales to the second half of FY 2024 (April to September).

Earnings estimates

In light of the above, the ASX 200 share advised that underlying earnings before interest and tax (EBIT) is expected to be between $120 million and $140 million for FY 2024.

This represents a decline of 18% and 30% year on year from $170.8 million in FY 2023. Interestingly, that itself was down from $232.1 million a year earlier in FY 2022, meaning two consecutive years of sharp declines.

This poor performance means that its leverage is forecast to be above its target of 1.5 to 2.0 times through FY 2024. Though, it is forecast to return to within target in the first half of FY 2025.

One small positive is that Elders’ target cash conversion of greater than 90% of underlying net profit after tax is forecast to be achieved at 30 September 2024.

This ASX 200 share is down 14% over the last 12 months.

The post Why is this ASX 200 share plunging 29% after a trading update? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why Aurelia Metals, Elders, GQG, and Telix shares are storming higher today
• Here are the top 10 ASX 200 shares today
• 7 ASX small-cap shares that are cheaper than the ASX 200 in March 2024
• Why Beach Energy, Elders, Lake Resources, and Premier Investments are rising today

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 Elders. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Big ASX dividend shares like the Commonwealth Bank of Australia (ASX: CBA), for example, typically get a lot of attention. That’s why I’m going to tell you about three compelling picks with smaller market capitalisations.

A company can provide a good dividend yield, whether it’s worth $100 million or $100 billion.

The dividend yield depends entirely on how much of the profit the business pays (the dividend payout ratio) and its valuation. If the price/earnings (P/E) ratio is higher, then the dividend yield is pushed lower. If the P/E ratio is lower, then the dividend yield is usually higher.

Of course, there’s more to an investment than just its dividend yield. I want to show how less popular ASX dividend shares can also be great passive income ideas. So, let’s take a look at these three.

Duxton Water Ltd (ASX: D2O)

This company owns water entitlements that can be leased to farmers at various lease lengths. I view this business as an indirect investment in the agricultural sector.

Water prices can go up and down, so we can be tactical when we decide to buy at a point when Duxton Water shares seem to be at a weaker point.

Pleasingly, the company has grown its half-yearly dividend every six months since 2017. It’s trading at a discount to its net asset value (NAV) and expects to pay a grossed-up dividend yield of around 7%.

Bailador Technology Investments Ltd (ASX: BTI)

Bailador invests its millions in unlisted technology businesses that have several appealing elements, including a proven business model and international revenue generation.

The idea is that long-term capital growth of the value of the portfolio can help fund dividend payments to shareholders.

The ASX dividend share has committed to a dividend payout ratio of 4% of pre-tax net tangible assets (NTA).

However, the Bailador share price is valued at a discount of almost 30% to the February 2024 pre-tax NTA. That means the cash yield on the share price is 5.6% or 8% grossed-up.

Bapcor Ltd (ASX: BAP)

Bapcor is an auto parts company with several brands that service customers and a variety of other businesses.

It owns brands such as Burson Auto Parts, Precision Automotive Equipment, BNT (NZ), Truckline, WANO, Autobarn, Autopro, Midas, ABS, Shock Shop, and Battery Town.

Bapcor has grown its annual dividend in most years over the past decade, which is quite impressive considering the economic challenges that have occurred during that time. Having said that, the company advised a reduction in its latest dividend payout in the latest half-year results.

The number of vehicles on Australia’s roads continues to grow, which helps grow the number of potential customers for Bapcor’s various businesses.

According to the estimates on Commsec, the business is projected to pay a grossed-up dividend yield of 4.8% in FY24 and 6.1% in FY26.

The post 3 lesser-known ASX dividend shares to buy for income appeared first on The Motley Fool Australia.

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More reading

• 4 ASX All Ords shares with ex-dividend dates next week
• 2 ASX shares I have been buying in 2024!
• Brokers say these ASX 200 dividend stocks are buys
• These are my top high-yield ASX dividend share buys right now
• Why does Morgans rate these ASX dividend stocks as buys?

Motley Fool contributor Tristan Harrison has positions in Bailador Technology Investments and Duxton Water. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bailador Technology Investments. The Motley Fool Australia has recommended Bailador Technology Investments and Bapcor. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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