The BHP Group Ltd (ASX: BHP) share price is off to a strong start in April

Shares in the S&P/ASX 200 Index (ASX: XJO) iron ore miner closed up 1.4% on 28 March, the last trading day of the month, at $44.27. In lunchtime trade today, shares are swapping hands for $45.20 apiece, up 2.1%.

For some context, the ASX 200 is up just 0.06% at this same time.

As for the month just past…

BHP pays dividend and weathers iron ore storm

The BHP share price closed out February at $43.93.

That means shares in the ASX 200 mining giant gained a slender 0.8% in March.

But let’s not forget the dividend.

BHP paid a fully franked interim dividend of 72 US cents per share (AU$1.10 per share) on 28 March. The stock traded ex-dividend on 7 March.

If we add that back in, then BHP stock gained an accumulated 3.3% over the month, plus the potential tax benefits from those franking credits.

What now for the BHP share price?

BHP managed to weather the iron ore and nickel storms of March in good form.

Iron ore was trading for just over US$117 per tonne at the beginning of the month before briefly dipping below the psychologically important US$100 per tonne level mid-month.

The steel-making metal – BHP’s top revenue earner – has been on a bit of a rollercoaster since then.

After slipping back below US$100 per tonne yesterday, iron ore was trading for US$101.65 per tonne overnight.

Of course, that’s still well down from the more than US$140 that same tonne was worth at the start of 2024.

As for how iron ore will impact the BHP share price in the months ahead, much of that will depend on China.

The nation’s steel-hungry real estate markets remain depressed. But its industrial sector is heating up.

If China’s government ups its stimulus measures, iron ore prices could well rebound, boosting the bottom line for BHP.

But not everyone is convinced the industrial metal will return to early 2024 levels.

Katana Asset Management portfolio manager Romano Sala Tenna labelled the recent strength in iron ore prices as “abnormal” in the face of China’s faltering property markets.

According to Sala Tenna (quoted by The Australian Financial Review):

We think the drop has been very reasonable given how abnormal the price had remained before now. We wouldn’t be surprised to see it go lower.

This could impact higher-cost producers and eventually see a pullback in supply if prices don’t hold up.

“We may be starting to get close to the cost curve for some of the higher-cost Chinese producers, so we may start to see some pushback,” Sala Tenna added.

However, as the lowest-cost iron ore producer in the world, BHP is well-positioned for any weakness in prices.

Another headwind for the BHP share price in April to keep an eye on in the months ahead is nickel.

Last month the ASX 200 miner addressed the pressure from a global oversupply of nickel, fuelled by cheap ‘dirty nickel’ out of Indonesia, backed by Chinese companies.

This has impacted its Nickel West operations, with the miner planning to mothball the project until nickel prices recover.

“30% of the Australian nickel market has gone offline and another 30% is under pressure,” BHP’s retiring CFO David Lamont said.

It could be some time before BHP shares enjoy renewed tailwinds from higher nickel prices.

Over the weekend, Indonesia doubled down on its nickel goals, with the government aiming to quadruple the nation’s nickel output by the end of the decade.

The post The BHP share price was surprisingly resilient in March. Now what? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• 5 top ASX dividend shares to buy right now
• Why it’s a great day to own BHP shares
• 5 things to watch on the ASX 200 on Thursday
• Down 14% in 2024, why is the BHP share price sliding again today?

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 Mesoblast Ltd (ASX: MSB) share price shot out of the gates on Tuesday, opening at 80 cents per share and rising to an intraday peak of 88.5 cents within the first two hours of trading.

The intraday high represents a 59.45% gain over the closing price of 55.5 cents last Thursday, prior to the market shutdown for the Easter long weekend.

At the time of writing, the Mesoblast share price has settled back to 87 cents per share.

What’s the news from Mesoblast today?

The only news from the biotech company today is a non-price-sensitive announcement relating to a change in substantial holding.

That’s for United States investor Gregory George and G to the Fourth Investments.

The notice advised a collective stake increase from 10.23% to 11.99% last Thursday.

There’s no other news today.

However, Mesoblast did have a big announcement last week that sent its share price soaring.

Let’s recap.

What’s pushing the Mesoblast share price higher?

Mesoblast requested a pause in trading last Tuesday morning before releasing some big news.

The company announced that the US Food and Drug Administration (FDA) had informed it that after reviewing the clinical data from its Phase 3 study, there appeared to be sufficient evidence to support Mesoblast’s submission for remestemcel-L to treat kids with steroid-refractory acute graft versus host disease (SR-aGVHD).

Remestemcel-L is being developed for inflammatory diseases in children and adults, including steroid-refractory acute graft versus host disease, and biologic-resistant inflammatory bowel disease.

CEO Silviu Itescu said the company would now refile its Biologics License Application (BLA). This will happen in the June quarter after the company addresses outstanding product characterisation matters.

Silviu said:

The responses and guidance from FDA are clear and provide us with a high level of confidence to refile our BLA for remestemcel-L in children with SR-aGVHD.

What is remestemcel-L?

This is the drug that Mesoblast has been trying to get approved for the past three-and-a-half years.

There was much excitement in mid-2020 while Mesoblast was awaiting the FDA’s first decision on its flagship drug, also known as Ryoncil.

This can be seen in the Meosblast share price chart below.

Remestemcel-L has FDA Fast Track designation, a process to facilitate the development and speedy
review of therapies for serious conditions that fill unmet medical needs.

It also has Priority Review designation, which is given to drugs that treat a serious condition and provide a significant improvement in safety or effectiveness over existing treatments.

Survival outcomes have not improved for 20 years for children or adults with the most severe forms of SR-aGVHD.

As you can see, the Mesoblast share price was trading above $5 per share back in those days.

The market was shocked when the FDA knocked back the application in October 2020.

Mesoblast worked with the FDA for two years to address the issues. It resubmitted its Biologics License Application (BLA) resubmission for remestemcel-L in the treatment of children in March 2023.

But FDA knocked it back again in August. The Mesoblast share price spiralled down almost 60% after the FDA said it needed more data to support marketing approval for remestemcel-L for kids.

Mesoblast then sat down with the FDA in what is called a Type A meeting.

The FDA advised the company that the key remaining issue for pediatric approval was providing further evidence that the potency assay will assure the consistent efficacy of the commercial product.

Mesoblast later provided the FDA with new data from a second potency assay.

The company said:

The new data show that the RYONCIL product made with the current manufacturing process that
has undergone successful inspection by FDA, demonstrates greater potency than the earlier
generation product, providing context to its greater impact on survival.

Mesoblast has been waiting for the FDA to respond to the new data ever since.

Mesoblast share price snapshot

The Mesoblast share price is down 13.3% over the past 12 months.

However, in the year to date, it is up 174%.

The post Blast off! Mesoblast share price surging 60% appeared first on The Motley Fool Australia.

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More reading

• Top ASX shares to buy in April 2024
• Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping
• 3 ASX All Ords shares up 50%+ in March
• Why Mesoblast, Patriot Battery Metals, Sigma, and Zip shares are pushing higher
• Mesoblast share price rockets 36% on breaking FDA news

Motley Fool contributor Bronwyn Allen has positions in Mesoblast. 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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I hope you saw our press release, sent out yesterday.

The one talking about the launch of a brand new service, Motley Fool Alchemy: an offering to help politicians buy our votes, and to help Australians use Super for lots of things, including jetskis and, well, more. Maybe even retirement.

I hope you realised it was April 1; April Fool’s Day – The Motley Fool’s favourite day of the year. I’m pretty sure you did.

Because as is our tradition, each year we try to have a little fun with our announcements, starting off somewhat plausibly, then laying it on thicker and thicker until the joke is laid out so plainly that we hope our readers can’t avoid the realisation.

And we try to centre it around an important point: something we want to put into stark relief by making a joke that’s not all that far from reality.

This year, the target was simple: the ongoing temptation for politicians – from both sides of the House – to try to get their hands on Superannuation; either directly, or as a way to convince you to vote for them.

In the past couple of years, we’ve seen Super grabbed for discretionary spending during COVID (hello jetskis and flatscreen tellies) and earmarked for aged care spending, affordable housing investment, diversion to emergency funding for domestic violence victims, and – most recently – proposed to be used as a housing deposit for first home buyers.

Why do they do it? Because it’s there… and, for governments, it’s costless. They get to buy our votes (or, more generously, solve some societal problems) without using the Federal Budget.

And some of the time, we fall for it. The ‘well, it’s your money’ line is pretty convincing. But that ignores the concessional taxation on contributions and concessional tax on earnings, for a start. It also ignores the reality that the money has been set aside specifically for retirement.

But, more insidiously, they use it against us because we’re evolutionarily not prepared for thinking about the long term. Essentially, our biology means we’re very good at thinking about now, and Future Me is too abstract a concept. The flatscreen TV feels good, now, and the cost for our retirement is far less obvious… so we shortchange our future selves.

Not only because it takes money out of the account today, but also because it steals from future compounding, which would otherwise result in us having multiples of today’s account balance at retirement.

So, there are many worthy (and more than a few unworthy) things that a responsible government could fund. Including much of what I listed above, and more, besides.

But governments should resist the urge to take the easy option – the bait and switch of using our retirement savings to solve unrelated problems. Yes, a house is better than Super. But you know what’s better? Both. Yes, we should do everything in our power to assist those leaving abusive relationships. But we shouldn’t ask them to trade off their retirement savings for physical and emotional safety.

As a mature, wealthy country, we need to reject the notion that these things are ‘either/or’ decisions. They must be ‘and’ outcomes, instead. That’s what we’re asking our politicians to do, and what we’re making sure you’re aware of.

We hope you enjoyed our little joke, and we hope you also value the serious issues behind it.

Now, to start planning for next year…

The post Alchemy? Nah, Fool’s gold, instead! appeared first on The Motley Fool Australia.

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More reading

• Why March was a record-smashing month for the CBA share price
• How is the Vanguard Australian Shares ETF (VAS) falling almost 1% today?
• These are the 10 most shorted ASX shares
• Novonix share price booming 5% on cracking tax credit
• Why is this ASX mining stock sinking 47% to a record low?

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 Scott Phillips.

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The Commonwealth Bank of Australia (ASX: CBA) share price had a month to remember in March.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed out February trading for $116.41.

Despite numerous analysts labelling the bank as over-priced, trading at a significant premium to its peers, CBA finished March trading for $120.42 a share, notching a series of new record highs early in the month.

That strength saw the ASX 200 bank stock gain 3.4% over the month, handily outpacing the 2.6% gains posted by the benchmark index over this same period.

Australia’s biggest bank also outperformed many of its rivals over the month.

The VanEck Vectors Australian Banks ETF (ASX: MVB) is exclusively invested in ASX bank stocks. And the exchange-traded fund (ETF) trailed CBA’s performance, gaining 2.0% in March.

Eligible shareholders will also have received the boosted, fully franked interim CBA dividend of $2.15 a share on 28 March, the final trading day of the month. Though the stock traded ex-dividend in February, so this is unlikely to have had any impact on the CBA share price in March.

What’s been happening with the CBA share price?

Among the tailwinds for CBA, and indeed every ASX bank stock, is the rising expectation of a soft landing for the Aussie economy with interest rate cuts on the horizon.

A stronger economy would bode well for CBA’s books, ushering in higher lending with lower non-performing loan levels.

And March saw investors increasing their bets on interest rate cuts from the Reserve Bank of Australia (RBA) in 2024 amid signs inflation is coming under control.

A lower official cash rate could help boost the bank’s bottom line, and the CBA share price, if the bank decides not to pass the full level of those cuts on to its borrowers.

With an eye on costs, March also saw CBA announce that its Western Australian subsidiary, Bankwest, will become a digital-only bank in 2024. Forty-five Bankwest branches will be closed by October 2024. Fifteen other regional Bankwest centres will be converted to CBA branches.

ASX 200 investors shrug off broker warning

The CBA share price had a strong run in March despite some bearish sentiment on the broader ASX 200 banking sector from analysts at Macquarie.

On 14 March, Macquarie downgraded National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC) and ANZ Group Holdings Ltd (ASX: ANZ) to an underperform rating.

The broker already had CBA at an underperform rating with a price target of $95 a share. Or some 21% below the current CBA share price.

“Banks are trading at peak multiples without a clear fundamental reason,” Macquarie analyst Victor German said at the time.

“We believe the economic and stock-specific settings that underpinned banks’ outperformance during previous rate cut cycles are not evident,” he added.

Time will tell.

But with CBA smashing into new all-time highs in March, I wouldn’t be rushing to hit the sell button.

The post Why March was a record-smashing month for the CBA share price appeared first on The Motley Fool Australia.

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More reading

• Own CBA shares? It’s payday for you!
• 5 things to watch on the ASX 200 on Thursday
• Are CBA shares really worth $120?
• $19 billion in ASX dividends is being paid out this week. Are you getting your share?
• These 5 high-quality companies are now paying a better income than CBA shares

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 positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. 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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It’s been a decent, if not spectacular, start to the short trading week for most ASX shares this Tuesday. At the time of writing, the S&P/ASX 300 Index (ASX: XKO) has advanced by 0.12%, putting the index at just over 7,850 points. But let’s talk about what’s going on with the Vanguard Australian Shares Index ETF (ASX: VAS).

VAS units are seemingly not enjoying the same kind of goodwill as the ASX 300 index that it tracks. This exchange-traded fund (ETF) ended last week at $98.84 per unit. But this morning, those same units opened at $98.50, and have since fallen to just $98.05 each at present. That’s a drop worth a not-insignificant 0.8%.

This is rather strange at first glance. After all, VAS is an ASX index fund that just happens to track the ASX 300 index itself. That means that these two instruments should, at least in theory, mirror each other almost exactly. So to see a divergence like this is highly unusual.

Well, it would be, if we didn’t have a fairly simple explanation as to what’s going on in this particular situation.

Why are VAS units taking an ASX hit today?

Today is the Vanguard Australian Shares ETF’s ex-distribution day.

Last week, we warned that the latest dividend distribution from this ASX ETF was incoming. Vanguard recently revealed that the latest quarterly dividend distribution, covering the three months to 31 March 2024, would be worth 84.9 cents per unit.

That is a pleasing 47.1% rise over last year’s quarterly dividend of 57.7 cents that investors received for the same period.

It takes VAS’ full-year ASX payout to $3.74 per unit.

However, as we warned last week, the last day investors could buy VAS units on the ASX with the rights to this payment attached was last Thursday. Today is the day that Vanguard scheduled its index fund to trade ex-distribution for this upcoming payment.

This means that from this Tuesday, VAS units don’t come with the rights to receive this dividend distribution, and any new investors will have to wait for the next quarterly payout.

As such, those Vanguard units just became inherently less valuable. And as a result, we are seeing a bit of a fall in the fund’s value on the ASX this morning. This is a normal occurrence anytime an investment goes ex-dividend (in this case, ex-distribution).

Eligible Vanguard investors can now look forward to receiving their dividend later this month on 17 April.

At the current Vanguard Australian Shares ETF pricing, this index fund has a dividend distribution yield of 3.81%.

The post How is the Vanguard Australian Shares ETF (VAS) falling almost 1% today? appeared first on The Motley Fool Australia.

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More reading

• 3 excellent ASX ETFs for smart investors in April
• Want the latest dividend from the Vanguard Australia Shares ETF (VAS)? Here’s what you have to do
• How much would I need invested in the Vanguard Australian Shares ETF (VAS) for a comfortable retirement?
• Here are the next distribution dates for your Vanguard ETFs
• If you own the Vanguard Australian Shares ETF (VAS), make sure you’re doing this

Motley Fool contributor Sebastian Bowen has positions in Vanguard Australian Shares Index ETF. 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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At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Pilbara Minerals Ltd (ASX: PLS) continues its long run as the most shorted ASX shares after its short interest rose to 20.4%. Short sellers appear to believe that lithium prices will stay lower for longer and weigh heavily on profitability.
• Syrah Resources Ltd (ASX: SYR) has short interest of 13.6%, which is down sharply week on week. It isn’t just lithium that is under pressure. Graphite prices are also very weak, which is weighing on Syrah’s performance.
• IDP Education Ltd (ASX: IEL) has 13.4% of its shares held short, which is up week on week again. Short sellers have been targeting this language testing and student placement company due partly to regulatory changes to student visas.
• Liontown Resources Ltd (ASX: LTR) has seen its short interest rise to 10.1%. Short sellers aren’t holding back despite the lithium developer recently announcing debt funding for the Kathleen Valley Lithium Project in Western Australia.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest ease to 9.3%. Short sellers may believe that Flight Centre will have a tough second half to FY 2024 due to consumer spending pressures.
• Core Lithium Ltd (ASX: CXO) has short interest of 8.3%, which is up week on week. This lithium miner’s shares have crashed 80% over the last 12 months. Short sellers appear to believe they can keep falling.
• Genesis Minerals Ltd (ASX: GMD) has seen its short interest ease again to 7.8%. Much to the dismay of short sellers, this gold miner’s shares are nearing a new decade-high on Tuesday.
• Sayona Mining Ltd (ASX: SYA) has short interest of 7.8%, which is up week on week. This is yet another lithium miner that short sellers are targeting due to weak lithium prices.
• Deep Yellow Limited (ASX: DYL) has seen its short interest ease again to 7.2%. Short sellers seem to have been closing their position amid optimism over rising uranium prices.
• Australian Clinical Labs Ltd (ASX: ACL) has short interest of 7.2%, which is down week on week. This pathology company has been battling difficult trading conditions. Short sellers don’t seem to believe that things will improve any time soon.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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More reading

• Buy Pilbara Minerals and these ASX lithium shares for big returns
• Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping
• ASX mining in April 2024: The best stock to buy right now
• The Core Lithium share is down 27% in March: What’s next?
• Top brokers name 3 ASX shares to buy 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 positions in and has recommended Idp Education. The Motley Fool Australia has recommended Flight Centre Travel Group and Idp Education. 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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After releasing positive news this morning, the Novonix Ltd (ASX: NVX) share price is making headway on a three-month green streak.

Shares in the battery technology and materials company are 5% higher to 90 cents. For context, the S&P/ASX All Ordinaries Index (ASX: XJO) is broadly flat this morning. An earlier rally in the Novonix share price made it the fifth best-performing stock among index members.

Government gives $159 million

Novonix has landed a major tax credit from the United States Government. Following a recommendation by the US Department of Energy, the battery company has been selected to receive US$103 million (A$159 million) in tax credits.

The award is part of the government’s ‘qualifying advanced energy project tax credit’ program in the United States.

It was announced on 29 March that US$4 billion in tax credits would be provided to more than 100 projects to jumpstart domestic clean energy manufacturing and curb greenhouse gas emissions. Novonix is among the lucky few to nab a slice of the US$4 billion available.

According to Novonix’s announcement, the tax credit can offset income tax liability. In addition, a qualifying project can be monetized by way of sale for cash. However, the company must meet the requirements set out by the US tax code.

The company will have two years to fulfil the conditions and claim all A$159 million in tax credits.

Novonix CEO Dr Chris Burns commented on the company’s selection, stating:

In a period already filled with company milestones, the approval of our 48C application strengthens our financing strategy and demonstrates another significant landmark for Novonix. We are excited by Novonix’s participation in this program in furtherance of our commitment to innovation, sustainability, and the localisation of a battery materials supply chain in North America.

Reportedly, Novonix is one of the first to receive this tax credit allocation.

Novonix share price storming back

Both 2022 and 2023 were brutal years for the Novonix share price.

Shares in the battery tech company fetched $9.35 on the first trading day of 2022. Fast forward to the end of 2023, and suddenly investors are staring down a share price below 80 cents apiece.

Increasing interest rates and continued losses on the bottom line came down on Novonix shares like a 12-tonne hammer. However, sentiment appears to be turning around again this year.

The Novonix share price is up 22% this year (as shown above), buoyed by positive developments. In February, the company revealed it had entered into a binding off-take agreement with Panasonic Energy to supply synthetic graphite anode.

The post Novonix share price booming 5% on cracking tax credit appeared first on The Motley Fool Australia.

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More reading

• 4 ASX All Ords shares going gangbusters on Tuesday

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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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Genmin Ltd (ASX: GEN) shares have returned to trade on Tuesday after a seven-month suspension.

Unfortunately for its long-suffering shareholders, the return has not been a good one for this ASX mining stock.

In morning trade, the Africa-focused iron ore exploration and development company’s shares are down 47% to a record low of 9.8 cents.

Why is this ASX mining stock crashing?

This morning, the company’s shares returned to trade after it completed a $23.4 million capital raising.

This comprises a placement, which raised approximately $13.2 million, and an entitlement offer, which raised approximately $10.2 million.

The ASX mining stock advised that both its placement and entitlement offer were strongly supported by Genmin’s board, major shareholder Tembo Capital, and other sophisticated and institutional shareholders.

The company notes that it is now debt free and has received cash of approximately $13.2 million. This is after brokerage costs, repayment of the Tembo Capital loans, and other creditor offsets.

As a reminder, Genmin’s original suspension was requested pending further clarification of political circumstances in Gabon.

The good news is that businesses are now operating normally in Gabon with ongoing stability and a proactive new government actively promoting and streamlining timeframes for new economic development.

What now?

Its full focus now shifts to finalising project build financing and then develop the Baniaka operation in Gabon, with commencement of commercial production targeted for mid-2025.

The ASX mining stock plans to develop Baniaka at an initial production rate of 5 million iron ore tonnes per annum (Mtpa). Procurement of project build financing is the next major milestone that needs to be achieved. Genmin is engaged in discussions with several potential financing partners, including two of its Chinese offtake counterparties.

‘Delighted’

Genmin’s managing director and CEO, Joe Ariti, was very pleased that the company’s shares were finally returning to trade. He commented:

We are delighted our shares resumed trading on ASX today after a seven-month hiatus and also to have completed a $23.4 million fundraising. Today, we have the mining approvals needed to build and operate Baniaka, we have cleared all loan debt, and we have cash to support our operations whilst we concentrate on delivering the next major milestone of project financing to build Baniaka.

We deeply appreciate the patience of our existing shareholders whilst our shares were not trading, and welcome the new investors to Genmin and thank them, and our existing shareholders alike for their strong support in the fundraising. I also extend my thanks to Tembo Capital for providing working capital support when needed and my fellow board members and our team, who worked tirelessly to carefully navigate the external challenges we encountered during 2023.

The post Why is this ASX mining stock sinking 47% to a record low? 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 Scott Phillips.

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

In morning trade, the ASX 200 stock is down 16% to a 52-week low of $2.28.

Why is this ASX 200 stock crashing?

Investors have been rushing to the exits in a hurry on Tuesday after the packaging giant released a trading update.

As you might have guessed from the share price reaction, that update revealed that trading conditions have been tough for Orora.

Following a review of business unit forecasts for the second half, Orora has now updated its FY 2024 earnings forecast.

At a group level, excluding the earnings contribution from the Saverglass acquisition for the seven months in FY 2024, the ASX 200 stock expects earnings before interest and tax (EBIT) to now be slightly lower versus FY 2023.

This compares to its previous expectation for EBIT to be higher year on year in FY 2024.

According to the release, its revised FY 2024 group EBIT forecast excluding Saverglass is between $307 million and $317 million. This compares unfavourably to the $320.5 million that it achieved in FY 2023.

What’s going on?

Management advised that its North America business is largely to blame for its poor performance.

During the March quarter, the Orora Packaging Solutions (OPS) business has continued to experience volume softness, principally within Distribution, and the flow through impacts of price deflation to customers.

Furthermore, a decline in average daily sales during the February to March trading period means that the ASX 200 stock does not expect to see the normal seasonal uplift in June quarter daily sales.

As a result, second half revenue is forecast to be down ~3% versus the first half, with FY 2024 EBIT forecast to be in a range of US$102 million to US$107 million. This compares to US$112.6 million in FY 2023.

Another disappointment that could be weighing on the Orora share price today is the performance of the Saverglass business. Management notes that a weaker February and March trading result has confirmed that there is no noticeable improvement in forward customer demand as destocking is continuing. This is leading to a reduction in forecast sales tonnage in the second half, down ~11% versus the prior corresponding period.

Forecast Saverglass EBITDA for FY 2024 has been reduced to 88 million euros from the range of ~98 million euros to 84 million euros.

This ASX 200 stock is now down over 25% on a 12-month basis following today’s selloff.

The post Why is this ASX 200 stock crashing 16% to a 52-week low on Tuesday? 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 Orora. 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 ASX mining share Fortescue Ltd (ASX: FMG) could make a lot of profit in the next few years if it’s anything like the last few years. In this article, we’re going to look at what the business is projected to make each financial year to FY26.

As an iron ore miner, the price of iron ore will have a key impact on how much profit it’s able to make. If the iron ore price is significantly better, or significantly worse than what is expected, then the profit could significantly delight or disappoint.

With that in mind, let’s look at some of the forecasts from the broker UBS.

Projection for FY24

We’re three-quarters of the way through FY24, so there’s not much time left in this financial year.

The company itself has guided that it’s expecting iron ore shipments of between 192mt to 197mt, including 2mt to 4mt for Iron Bridge.

UBS suggests Fortescue could generate US$19.7 billion of revenue, make US$6.87 billion of net profit after tax (NPAT) and pay an annual dividend per share of $1.89.

Estimates for FY25

UBS is expecting the iron ore price to be lower in 2025, which could lead to lower financial results and hurt Fortescue shares.

FY25 revenue could amount to US$18.6 billion and NPAT could drop to $6.06 billion. The annual dividend per share is predicted to fall to A$1.47.

The broker notes that Iron Bridge is moving to replace its water pipeline, with installation scheduled by mid-2025 and it’s not expected to impact the run-up.

Forecast for FY26

UBS is currently expecting another step down in revenue and profitability in FY26 for Fortescue.

The ASX mining share is projected to make US$16.7 billion in revenue in FY26, with a lot of that lost revenue coming straight off the net profit. The FY26 profit is predicted to be US$4.6 billion, which would be a fall of around 24% if the forecasts end up being correct.

The potential fall in profit could lead to another large drop in the annual dividend per Fortescue share to $1.08.

Foolish takeaway

It’s quite possible that UBS’ estimates of falling profit may be correct – the Chinese construction sector is not as strong as it used to be and iron ore supply is growing, which could impact the iron ore price.

However, the iron ore price has regularly positively surprised investors over the last few years and it’s possible it could happen again. The green hydrogen efforts are interesting, but not expected to add much in the next few financial years for the company.

The post Here is the profit forecast to 2026 for Fortescue shares appeared first on The Motley Fool Australia.

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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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