Shares in Fortescue Metals Group Limited (ASX: FMG) have tumbled 5% over two trading days to trade slightly over the $20 mark, likely leaving many considering buying the dip.

The iron ore giant posted its quarterly update on Monday, as The Motley Fool Australia reported. That saw the market bid its share price 4.15% lower.

And it appears to be backing up that fall today. Right now, shares in Fortescue are down 1.18%, trading at $20.515.

So, has the recent slump put the stock in the buy zone? Let’s take a look.

Fortescue shares trading for around $20 apiece

At around $20, the Fortescue share price is trading close to its 2023 low. Though, it’s still higher than it has been in recent memory.

The stock is 4% above where it was this time last year and nearly 79% higher than it was three years ago. And it’s been a volatile road for investors. Fortescue shares soared 113% in 2020, plunged 18% in 2021, and recovered 7% in 2022.

The company behind the stock looks quite different today than it did in 2020. Fortescue is one of the ASX 200’s three iron ore majors, deriving most of its revenue from the steel-making ingredient. It also launched its hydrogen-focused renewable energy leg, Fortescue Future Industries (FFI) in 2021.

What might influence Fortescue shares in the near future?

The majority of Fortescue’s revenue is tied to the iron ore price. Thus, the material’s value has a significant influence on its share price.

It’s unfortunate, then, that the commodity has been struggling over the last month.

And while brokers’ opinions on where it could go from here are mixed, Citi thinks there might be more pain to come. The broker is said to have tipped the iron ore price to fall to as low as US$90 a tonne this year – 11% lower than current levels, my Fool colleague Bernd reports.

However, it’s also worth noting Fortescue is bolstering its production through its Iron Bridge project. The project is expected to produce 22 million tonnes of high-grade iron ore annually.

The pros and cons of FFI

Now to the company’s green energy division. In my opinion, FFI brings both mountains of potential and some serious risks.

I believe the green energy transition could be a maker or breaker of companies, and Fortescue may have positioned itself to be a leader in the space. However, investors hoping to see a profit from FFI could be in for a long wait.

In the meantime, FFI can demand up to 10% of Fortescue’s net profit after tax (NPAT). Not to mention, the ASX 200 company has revealed a $9 billion plan to decarbonise its Pilbara operations.

All that spending has the potential to cut into shareholders’ dividends in the coming years.

If I had $1,000 to invest…

I personally don’t think Fortescue shares are a buy right now due to the steep risk-to-reward ratio on the table. If I had $1,000 to invest I’d probably steer clear of the iron ore icon.

And I’m not alone. Goldman Sachs has a sell rating and a $15.80 price target on Fortescue shares – representing a potential 23% downside.

Meanwhile, the slightly more bullish CLSA is said to tip the stock to trade 1.5% lower at $20, slapping it with a reduce rating, as per The Australian.

The post Should I snap up Fortescue shares while they’re around $20? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Investing in ASX 200 mining stocks? Here’s Citi’s latest iron ore price forecast
• Invested in Fortescue shares during the July 2022 dip? Here’s the dividend yield you’re earning today
• Fortescue share price plummets 5% amid weaker production
• Fortescue shares: Bull vs. Bear
• ASX 200 mining shares sink as iron ore price nears 2023 low

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended Goldman Sachs Group. 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.

from The Motley Fool Australia https://ift.tt/VNmqI8k

The S&P/ASX 200 Index (ASX: XJO) has returned from the public holiday in a subdued fashion. In afternoon trade, the benchmark index is down 0.1% to 7,315.5 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are pushing higher:

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is up 2.5% to $1.00. Investors have been buying this lithium miner’s shares following the release its third-quarter update. It was a busy three months for Core Lithium. During the period, it completed the construction of its Dense Media Separation (DMS) plant and achieved its first revenue from the maiden DSO shipment of 15,000 tonnes of spodumene concentrate to a China’s Sichuan Yahua.

Kogan.com Ltd (ASX: KGN)

The Kogan share price is up 10% to $3.97. This follows the release of the ecommerce company’s quarterly update. Although Kogan reported yet another big drop in sales, it achieved three consecutive months of positive EBITDA. It also announced a surprise on-market share buy-back of up to 10% of its issued shares.

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price is up 3% to $13.96. Investors have been buying Northern Star and other gold miners on Wednesday following a rise in the gold price. This appears to have been driven by demand for safe haven assets amid banking sector concerns. The S&P/ASX All Ordinaries Gold index is up 2.6% today.

Pointsbet Holdings Ltd (ASX: PBH)

The Pointsbet share price is up 10% to $1.56. This is despite there being no news out of the sports betting company. However, the company is understood to be in the process of selling its US operations. Some investors may believe this will unlock value for shareholders.

The post Why Core Lithium, Kogan, Northern Star, and Pointsbet shares are storming higher appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Core Lithium share price pops on Q3 report
• Kogan share price jumps 10% amid plans for share buyback cash splash
• 5 things to watch on the ASX 200 on Wednesday
• Why are ASX lithium shares powering higher today as the resource sector bleeds?
• These are the 10 most shorted ASX shares this week

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

from The Motley Fool Australia https://ift.tt/AHJ8qPi

The BHP Group Ltd (ASX: BHP) share price opened sharply lower today.

At $42.74 per share, the S&P/ASX 200 Index (ASX: XJO) iron ore miner was down 3.3% from Monday’s closing price of $44.17 a share.

While the BHP share price has recouped much of those losses, the miner is still down 1.11% in intraday trading this afternoon. And shares are down a precipitous 7.6% since last Wednesday’s close.

What can ASX 200 investors expect next?

While BHP earns a significant slice of its revenue from copper and a sizeable amount from coal, iron ore remains the company’s biggest revenue earner.

As you’d expect, then, the iron ore price has a big impact on the BHP share price.

And the price of the industrial metal has been falling hard since hitting recent highs of US$132 per tonne on 15 March.

As for the past week’s steep decline in BHP shares, that was fuelled by a 15% fall in the iron ore price. It was just last Wednesday that the steel-making metal was trading for US$120 per tonne. Having dropped another 2% overnight, iron ore is currently trading for US$102 per tonne.

So, what can ASX 200 investors expect for the BHP share price next?

Well, if the analysts at Citi have it right, there could be some more headwinds ahead in 2023.

Citi analyst Wenyu Yao believes the iron ore price could drop to US$90 per tonne amid lower steel production and narrow profit margins at China’s iron ore hungry steel mills.

“We have been cautious on China’s steel demand and iron ore amid an uneven economic recovery and heightened policy risk, though things have unravelled sooner than our base case,” Yao said.

“We see potential risk for further downside below $100 a tonne, if steel demand fails to show meaningful improvement.”

Further downside would most likely see BHP, and the other ASX 200 iron ore shares, remain under pressure until demand picks back up.

That hasn’t appeared to dissuade Morgans though. The broker has raised BHP to an add rating, with a $50.40 price target.

BHP share price snapshot

As you can see in the chart below, the BHP share price is down 4% over the past 12 months.

However, investors who snapped up shares in the ASX 200 miner when iron ore was trading at recent lows on 1 November will be sitting on gains of 17%.

The post Down 8% in a week, is the BHP share price facing more headwinds in 2023? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Investing in ASX 200 mining stocks? Here’s Citi’s latest iron ore price forecast
• 5 things to watch on the ASX 200 on Wednesday
• Lowest ASX bank yield: Are CBA shares still worth it?
• Leading brokers name 3 ASX shares to buy today
• Why BHP, InvoCare, Lake Resources, and South32 shares are dropping 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.

from The Motley Fool Australia https://ift.tt/wIHdqFb

Australian Foundation Investment Co Ltd (ASX: AFI), or AFIC, is one of the largest listed investment companies (LICs) on the ASX. One of its key figures recently decided to buy more AFIC shares, which could be seen as a positive sign as he buys the dip.

Investors sometimes worry what it means when a leadership figure decides to sell – could it mean that bad news is coming?

However, an investment by a leadership figure is usually positive.

Let’s have a look at how heavily the insider has backed the business.

Director buys AFIC shares

AFIC director Craig Drummond is also the president of the Geelong Football Club, chair of Transurban Group (ASX: TCL), and former Medibank Private Limited (ASX: MPL) CEO. He has been an AFIC director since July 2021.

On 14 April 2023, he decided to add a total of 50,000 AFIC shares to his holding. He bought 18,000 shares for $7.26 per share and he bought 32,000 shares for $7.27 per share. This is a total investment of around $363,000. That’s a large investment considering he only had 13,721 AFIC shares before the investment.

Is this a good sign?

For AFIC, I think it definitely is. The AFIC share price is more than 10% lower than where it was 12 months ago, so investors are able to grab a slice of it for a cheaper price.

I think it’s an interesting sign that Drummond chose the price he did to buy at. It’s essentially where the current AFIC share price is sitting.

AFIC owns a portfolio of blue-chip ASX shares. Investors get a monthly insight into what the underlying value of the LIC is. At 31 March 2023, the before tax net tangible assets (NTA) was $7.10 per share. This means the current AFIC share price is at a premium of just 2% to this March 2023 figure.

This is essentially (close to) the lowest premium it has been at for at least the past two years.

While it would be preferable to buy AFIC shares at a discount to the NTA, it hasn’t been possible over the last few years.

AFIC has been an excellent provider of stable passive income in the form of dividends.

However, the AFIC net asset per share growth plus dividends, including franking, has underperformed the S&P/ASX 200 Accumulation Index (ASX: XJOA) (including franking) over the past year, three years, five years, and ten years.

For me as an investor, who is looking at a wide range of potential ASX shares, I’m not sure it makes sense to invest in an LIC that is trading at a premium even though it has underperformed the index.

But, it is cheaper than before and it provides an easy way for investors to invest in ASX shares while receiving good dividends. So, I wouldn’t put it at the top of my list today, but it does seem to be a decent long term option.

The post This director has been buying the dip in AFIC shares. Should you? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here’s how I’d dip my toe in the Aussie stock market with $500
• Are AFIC shares a smart investment for beginner investors?

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. 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.

from The Motley Fool Australia https://ift.tt/ZQ2cxYj

The Mesoblast Ltd (ASX: MSB) share price has taken a dive after the medicines developer announced the completion of a global private placement.

What is probably irking investors is that the placement offer price was 85 cents per share.

This is 14% below where Mesoblast shares were trading last Thursday when the company requested a trading halt.

Mesoblast tapped existing major shareholders in the United States, the United Kingdom, and Australia to raise approximately US$40 million.

Mesoblast share price falls in line with placement discount

The Mesoblast share price is currently down 11.6% at 87.5 cents.

Mesoblast told the market about the capital raise when it requested the trading halt last Thursday.

The plan was for the stock to resume trading either when a further announcement was made, or at the market open on Monday.

The company requested voluntary suspension before trading commenced on Monday, saying it needed more time to complete the placement.

Mesoblast will use the proceeds for three purposes.

Firstly, to launch and commercialise Mesoblast’s lead product, remestemcel-L.

Remestemcel-L is a treatment for children with steroid-refractory acute graft versus host disease (SR-aGVHD).

The US Food & Drug Administration (FDA) accepted Mesoblast’s resubmission for approval on 8 March.

This was a big step forward towards approval.

Excited investors bid the Mesoblast share price up 23% on the day of the announcement.

The FDA has set a prescription drug user fee act (PDUFA) goal date of 2 August.

The FDA has previously given remestemcel-L fast-track designation, which speeds up the development and review process for new therapies that treat serious conditions and unmet medical needs.

The drug also has priority review designation, which is given to drugs that are likely to be safer and more effective than current treatments.

SR-aGVHD has a mortality rate of up to 90%. There are currently no FDA-approved treatments in the US for children under 12 with SR-aGVHD.

Secondly, the monies will help fund the ongoing manufacturing of remestemcel-L at the Lonza Biosciences facility in Singapore. The FDA has scheduled a pre-licensure inspection there soon.

Thirdly, Mesoblast will use some of the proceeds to begin enrolling patients in the Phase 3 clinical trial of rexlemestrocel-L.

This treatment is for chronic lower back pain associated with degenerative disc disease.

The FDA gave rexlemestrocel-L a regenerative medicine advanced therapy (RMAT) designation in February, which sent the Mesoblast share price 11% higher.

RMAT designations speed up the development of therapies that address unmet medical needs for serious or life-threatening conditions.

What did management say?

Mesoblast CEO Dr Silviu Itescu said:

We appreciate the strong support from our major shareholders as we look forward to commercializing our platform technology and bringing the first FDA approved treatment to children with life-threatening SR-aGVHD.

Mesoblast share price snapshot

The Mesoblast share price is down 21% over the past 12 months and is trading flat so far this year.

This comes after the ASX biotech share hit a new 52-week high of $1.33 in February.

The post Why did the Mesoblast share price just dive 12%? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here’s why Mesoblast shares are in a trading halt today

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.

from The Motley Fool Australia https://ift.tt/suUPxwy

The Novonix Ltd (ASX: NVX) share price is slightly in the red today. The battery materials and technology company today released a quarterly report.

Novonix shares are currently down 0.8% and fetching 92.75 cents. For perspective, the S&P/ASX All Technology Index (ASX: XTX) is sliding 0.32% today. The S&P/ASX 200 Materials Index (ASX: XMJ) is also down 1.32%.

Let’s take a look at what Novonix reported to the market today.

What did Novonix report?

Highlights of the unaudited quarterly report ending 31 March 2023 include:

• Battery Technology Solution revenue of US$2.57 million (A$($3.877), up 93% on previous quarter
• US $6.95 million capital expenditures on Riverside facility
• Total cash balance of US$78.7 million

Novonix makes graphite anode materials used in lithium-ion batteries for electric vehicles (EV).

During the quarter, Novonix entered a joint venture with TAQAT development company (TAQAT).

This will enable the company to produce battery materials for EV and energy storage in the Middle East North Africa Region.

Another notable highlight was being selected to receive a $150 million grant from the Biden Administration.

At this stage, the Department of Energy has issued terms of conditions to grant awardees including Novonix.

Novonix also progressed site selection process for a new facility to produce up to 75,000 tpa of high-performance battery grade synthetic graphite.

The Battery Technology Solutions (BTS) division recorded strong revenue growth amid the expansion of hardware sales and research and development service offerings.

This division, along with Emera Technologies, advanced the development of a battery storage technology project.

Management commentary

Commenting on today’s report, Novonix CEO Dr Chris Burns said:

This quarter has seen extremely promising progress on all fronts of our business. We have demonstrated our Generation 3 furnace technology performance in meeting all specification targets for our GX-23 grade of synthetic graphite product while continuing to sample different volumes of materials to various customers.

Our cathode development team has also produced cathode material from our proprietary dry process that matches the performance of a leading commercial reference material in full cell testing.

Lastly, we continue to see that the U.S. IRA legislation has focused OEMs and cell manufacturers on localized supply in North America, which is benefiting us in our discussions with potential customers.

Novonix share price snapshot

The Novonix share price has lost nearly 83% in the last year. In the last month, Novonix shares have risen nearly 3%.

Novonix has a market capitalisation of about 448 million based on the latest share price.

The post Novonix share price slips despite “extremely promising progress” appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• The Novonix share price has crashed 23% this year! Should I buy?
• Here’s why the Novonix share price crashed 19% in March
• Why is the Novonix share price diving 7% on Thursday?
• Why Deep Yellow, Frontier Digital, Magellan, and Novonix shares are dropping today
• Chair says Novonix share price ‘will respond appropriately over time’

Motley Fool contributor Monica O’Shea 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.

from The Motley Fool Australia https://ift.tt/rP9HF0b

Exchange-traded funds (ETFs) have significantly grown in popularity over the last two decades. I think there’s a very important reason why ETFs are so good.

There are many different ETFs to choose from, such as the Vanguard Australian Shares Index ETF (ASX: VAS) which is invested in the S&P/ASX 300 Index (ASX: XKO), being 300 of the largest businesses on the ASX.

Investors can also choose ones like the iShares S&P 500 ETF (ASX: IVV), Betashares Nasdaq 100 ETF (ASX: NDQ) or the Vanguard MSCI Index International Shares ETF (ASX: VGS) which help investors gain exposure to the global share market.

There are several reasons to like the ETFs that I’ve already mentioned including the diversification of the portfolios and the low management fees. But, there’s a particular reason why I think they’re effective.

Portfolio evolution

When we look at the returns of the ASX share market or the US share market, the ultra-long-term returns have been impressive – the average return per annum over the decades has been around 10%. That’s a good rate for wealth compounding.

ETFs have a very useful model where they let go of the businesses that are suffering and getting smaller, while investing more in the ones that are growing and thriving. It’s not a perfect system, but it means that they don’t hold onto duds forever until they go bust.

But, If we individually bought shares of the 50 biggest businesses in the US or Australia today and held them for thirty years, I don’t think the overall returns would be very good because many of them could decline over time.

Think about names like Blackberry, Kodak and Yahoo that have significantly fallen from their peak powers. The ETF’s portfolio (and overall share market) is regularly updated to own the current crop of winning businesses.

While index-tracking ETFs may not shoot the lights out, they do enable investors to move on from any disappointing businesses.

In 20 or 30 years, I expect the Vanguard MSCI Index International Shares ETF will still be invested in many leading global businesses, even if the portfolio’s names are very different compared to the current crop of companies.

Foolish takeaway

I believe that passive investing is a very effective way to ride the share market’s returns. Having diversification and low fees is a major selling point, but I do believe that it’s an ETF’s ability to regularly shift its portfolio that can help it continue to perform over the long term.

The post I think this underrated reason is key for why ETFs can be great investments appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• I’m a dividend investor. Should I buy the iShares S&P 500 ETF (IVV)?
• 3 reasons why the Vanguard MSCI Index International Shares ETF (VGS) could be an excellent investment for beginners
• 3 quality ASX ETFs for investors to buy for the long term
• Buy and hold these 3 ASX ETFs for a decade
• The Vanguard Australian Shares Index ETF dividend is being paid today. Here’s the lowdown

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. has positions in and has recommended BetaShares Nasdaq 100 ETF and Vanguard Msci Index International Shares ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF and iShares S&p 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/CKE2crx

S&P/ASX 200 Index (ASX: XJO) bank stocks are holding their own in late morning trade on Wednesday.

Investors in the big four ASX bank shares will be keeping a close eye on the charts today following a 49.4% plunge in the First Republic Bank (NYSE: FRC) share price yesterday (overnight Aussie time).

We’ll look at the latest ructions to hit the United States’ banking sector in a tick.

First, here’s how the big four ASX 200 bank stocks are tracking at the time of writing:

• Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares are up 0.04%
• National Australia Bank Ltd (ASX: NAB) shares are down 0.49%
• Westpac Banking Corp (ASX: WBC) shares are down 0.34%
• Commonwealth Bank of Australia (ASX: CBA) shares are down 0.41%

For some context, the benchmark index is down 0.09% at this same time.

The ASX 200 bank stocks look to be getting plenty of support from their very strong common equity tier 1 (CET1) ratios. This is a measurement of the core equity capital of a bank compared to its risk-weighted assets.

As The Motley Fool reported earlier in April, Australia’s big four banks are the most capitalised in the world. That should offer Aussie investors some peace of mind amid the banking turmoil hitting the US and Europe.

Now, here’s why investors were hitting the sell button on First Republic Bank.

ASX 200 bank stocks resilient amid new US bank meltdown

The First Republic Bank share price crashed overnight following the release of the bank’s first-quarter results.

As you can imagine by the sell-off, those results fell well short of expectations.

Among the big negatives, the bank reported its deposits decreased by US$105 billion over the three months.

Investors are already on edge following the collapse of Silicon Valley Bank and Signature Bank in March. That financial contagion quickly spread to Europe, resulting in the takeover of beleaguered Credit Suisse by Swiss rival UBS.

While ASX 200 bank stocks escaped the worst of that fallout, shares in the big banks did slide during March. Today, however, they’re showing resilience.

Commenting on the deposit outflows that helped send the First Republic share price into a nosedive, chief financial officer of First Republic Neal Holland said:

With the closure of several banks in March, we experienced unprecedented deposit outflows. We moved swiftly and leveraged our high-quality loan and securities portfolios to secure additional liquidity. We are working to restructure our balance sheet and reduce our expenses and short-term borrowings.

With First Republic already having received US$30 billion in emergency funding from larger banks last month, it remains to be seen how this plays out.

The post <strong>First Republic Bank shares just crashed 50%. Here’s how ASX 200 bank stocks are responding</strong> appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Mineral Resources share price tumbles 9% despite record quarterly lithium shipments
• Own Westpac shares? What to expect from its half-year results
• 5 things to watch on the ASX 200 on Wednesday
• Analysts say income investors should buy ANZ and these ASX dividend shares
• Goldman Sachs says buy these ASX 200 shares for passive income

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

from The Motley Fool Australia https://ift.tt/JDtTm24

The Core Lithium Ltd (ASX: CXO) share price rose by 4.1% in early trading after the lithium miner released its Q3 FY23 activities and cash flow report this morning.

The Core Lithium share price hit a high of $1.015. It’s now settled at 99.5 cents a share, up 2.05%, at the time of writing.

Meantime the S&P/ASX All Ordinaries Index (ASX: XAO) is down 0.34%.

Let’s take a look at today’s news regarding this ASX lithium share.

Core Lithium share price gains on positive quarter

Pit and processing operations are in full swing today at Core Lithium’s flagship Finniss Lithium Operation on the Cox Peninsula in the Northern Territory.

Wet weather hampered some operations at Finniss during the quarter, including inundation at the Grants Open Pit.

The company drained the pit ahead of schedule and full mining activities have resumed. However, a portion of the previously estimated production had to be deferred to H1 FY24.

During the quarter, Core Lithium completed the construction of its Dense Media Separation (DMS) plant. It produced its first concentrate in February.

The lithium miner expects to provide formal production guidance to investors in 1Q FY24.

Core Lithium achieved its first revenue and first DSO shipment during the quarter, with a $20.1 million sale of 15,000 tonnes of spodumene concentrate to a Chinese client, Sichuan Yahua.

Last month, Core Lithium announced additional sales agreements with Yahua to supply 18,500 tonnes of spodumene concentrate.

The first parcel of 3,500 tonnes has already been delivered to the Port of Darwin.

Core Lithium has commenced production of the second parcel and expects to deliver it by the end of July.

The company finished the quarter with cash and cash equivalents of $97.8 million as of 31 March. This does not include the additional sales receipts from Yahua.

2023 drilling program twice the size of 2022

The 2022 drilling campaign was the largest in the company’s history. Core Lithium says the results “show significant potential for mine life extension at Finniss”.

To that end, the company is now working to produce an updated Ore Reserve Estimate.

On 18 April, the company announced a 62% increase to the total Finniss Mineral Resource inventory.

Core Lithium has now commenced a $25 million drilling program for 2023 — nearly double what it spent in 2022. The miner is targeting life of mine extensions and testing expansion potential.

What did management say?

CEO Gareth Manderson said:

Core is rapidly moving to lithium concentrate producer status.

Commercial agreements for first concentrate production with long term customer Sichuan Yahua assist our cash flow management.

The Core team is now focused on ramp up and establishing integrated mining and processing operations.

Core Lithium share price snapshot

The Core Lithium share price is up 27% over the past month while it is down 2% in the year to date.

It reached a 52-week high of $1.88 in November 2022.

The post Core Lithium share price pops on Q3 report appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why are ASX lithium shares powering higher today as the resource sector bleeds?
• These are the 10 most shorted ASX shares this week
• Should I buy the 30% dip on Core Lithium shares or have they got further to fall?
• Why did Pilbara Minerals shares charge higher today?
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bronwyn Allen has positions in Core Lithium. 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.

from The Motley Fool Australia https://ift.tt/J3yVobW

The Kogan.com Ltd (ASX: KGN) share price is racing higher following the company’s latest business update.

Shares in the online retailer are up 10% to $3.98 in Wednesday morning trade. The positive move comes amid the company’s plans to conduct a share buyback as its balance sheet returns to a healthy state.

Putting spare cash to work

The market is looking upon Kogan fondly this morning as the ship veers closer to its originally charted course. After fiercely focusing on right-sizing inventory levels and returning to underlying profitability, shareholders who have stuck it out are being rewarded.

Announced in its third-quarter update, management has made the decision to return capital via a share buyback. The decision comes as inventory levels further decrease to $78.3 million at the end of March, while net cash settled at $49.1 million.

Furthermore, the update revealed that all debt within Kogan had been repaid, with only a small advance on the books of its Mighty Ape operations.

The strong financial positioning has enabled the board to initiate an on-market share buyback program. As part of the program, up to a maximum of 10% of Kogan-issued ordinary shares can be purchased by the company.

As shown above, the planned reduction in share count follows a notable expansion during the pandemic. If the full 10% allocation were used, the company’s total shares outstanding would be roughly in line with pre-pandemic levels.

According to the release, the commencement of the buyback is set to be on 12 May and will come to an end on 10 May 2024.

What else is moving the Kogan share price?

In addition to the buyback news, the third-quarter update painted a reassuring picture for shareholders based on recent business performance.

Notably, inventories are now far below their abnormally high levels from a year ago. In stark contrast to the $193.9 million in the prior corresponding period, Kogan finished the quarter with $78.3 million worth of inventory on hand.

Another positive indicator noted in the release is continued growth in Kogan First subscribers, increasing 24.3% to 407,000.

On the flip side, gross sales declined 28% year on year to $188.7 million. The inflationary environment and rising interest rates were cited as reasons for the subdued market conditions.

Despite this, adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) came in at $4.4 million. Though, Kogan’s statutory EBITDA remained in the negative, coming in at a $4 million loss.

The Kogan share price is still approximately 20% lower than where it was perched a year ago.

The post Kogan share price jumps 10% amid plans for share buyback cash splash appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Kogan shares: Bull vs. bear
• Down 15% in 4 weeks: Is now the time to buy Kogan shares?
• Why Atlas Arteria, Kingsgate, Kogan, and Synlait Milk shares are dropping today

Motley Fool contributor Mitchell Lawler has positions in Kogan.com. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Kogan.com. The Motley Fool Australia has positions in and has recommended Kogan.com. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/FrbEylR