1) Despite a choppy session on Wall Street on Friday, the S&P/ASX 200 Index (ASX: XJO) rose in lunchtime trading on Monday in yet another show of resilience for the local stock market.

Once again, as has been the case for most of the year, materials and energy stocks are getting the job done today, with the Fortescue Metals Group (ASX: FMG) share price leading the way higher. It’s up 7.67% on the day so far after the iron ore price posted a hefty one-month gain. 

The ASX 200 index has fallen just 3.3% so far in 2022, an outstanding return given the Reserve Bank of Australia (RBA) has hiked the cash rate from just 0.1% in April to its current level of 2.85%. 

By contrast, although they’ve enjoyed a nice bounce since the beginning of October, US markets have endured a painful year, the S&P 500 Index down 15% and the Nasdaq Composite plunging almost 28%.

2) Local eyes are on the RBA’s final meeting of the year, with consensus expectations the central bank will tomorrow raise the cash rate by another 25 basis points as it continues the fight against inflation.

Financial markets are pricing a peak in the cash rate of about 3.6% early in the second half of 2023, although Bank of America expects the RBA to follow up tomorrow’s rise with four consecutive 25 basis point hikes, bringing the terminal rate to 4.1%.

According to the AFR, Bank of America thinks “the RBA is underestimating wage pressures and that its slow hiking pace means more work will need to be done to rein in inflation.”

Whichever way you look at it, we’re closer to the end of the heavy lifting on interest rates than the start. That’s good news for equity markets.

The bad news for equity markets is higher interest rates will put the brakes on economic growth. According to Rate City, monthly repayments on a $500,000 mortgage have increased by $834 since May. 

That’s a LOT less money that can be spent on discretionary items such as clothing, gadgets, and couches. It explains why the share price of JB Hi-Fi (ASX: JBH) trades on a fully franked dividend yield of 7% and a price-to-earnings (PE) multiple of just nine times profits. 

3) Although inflation may have peaked, a mild recession is the base case scenario for the US economy. It’s going to be hard for many companies to grow their profits, with many going into reverse as profit margins also come under pressure. 

It’s why investing into the teeth of a bear market is so hard. Companies like JB Hi-Fi might look cheap today, but less so based on next year’s earnings. As predicting the near-term future is virtually impossible, investing in individual companies today means taking a leap of faith.

Buying quality companies with strong balance sheets and minimal debt – and JB Hi-Fi certainly fits that bill – is one way to mitigate the risk. But will that stop you bailing out if/when: a) a bout of stock market volatility hits and b) a subdued trading statement smacks the share price lower?

Many investors fail to enjoy the attractive long-term returns on offer from investing in the stock market because they interrupt the effects of compounding. They may buy a stock with the intention of holding it for five years or longer, but there’s a heck of a lot that can happen to a company and its share price over that time period, likely including a peak-to-trough fall of around 50%.

Investing regularly into a few low-cost index-tracking exchange-traded funds (ETFs) is a great option for most stock market investors. It takes stock picking out of the equation, and volatility is greatly reduced. 

My favoured option is the Vanguard MSCI Index International Shares ETF (ASX: VGS). If you want to throw in a local flavour, consider adding the Vanguard Australian Shares Index ETF (ASX: VAS). You’ll get exposure to the big miners, the big banks, and the big supermarkets.

4) If you are a stock junkie like me, and you have ambitions of outperforming the market, investing in individual companies can be interesting, fun, and rewarding.

That said, it can also be very challenging, as it has been for many investors over the past 15-odd months. 

The very best stock pickers only get it right six times out of ten, because when they do pick a big winner, the upside is unlimited. Imagine putting $5,000 into one stock and 10 years later, look back and see it has appreciated 2000%, turning that one investment into over $100,000. 

Fun, right? 

Not so much fun are the inevitable losers, the four out of ten you’ll get wrong. Although a few of the stocks I highlighted a month ago have had good recent runs, I’m still in the hole on a number of my small and microcap holdings, including Plenti Group (ASX: PLT) shares and Bluebet (ASX: BBT) shares.

On those latter two, hopefully, it’s a case of waiting for the market to appreciate their growth prospects and modest valuations. Although it could also be a case of me being wrong and their share prices never recovering, or worse, declining further, ultimately potentially leaving me sitting on losses of around 80%. 

5) It’s why portfolio sizing is key. I try not to chase my losers, especially ones whose share price is declining at the same time as the growth of the underlying business is slowing. That’s the case with Plenti and Bluebet, and why I’m not adding to my holdings despite the share price weakness. 

It took me many years to realise I’m no investing genius like Warren Buffett, someone who takes huge high conviction bets on a very small number of companies. For mere mortals, hedge your bets by spreading your bets across 20 or 30 different stocks. The winners will inevitably rise to the top, the losers slowly disappearing into tiny, inconsequential holdings.  

I also realise I’m no Warren Buffett when it comes to investing returns. He’s compounded at an average annual return of 20% for 56 years. If you can do between 8% and 12% for 20 or 30 years – including regularly adding money to the market over that period – you’ll do very well as an investor.

The post It took me years to realise I’m no investing genius like Warren Buffett appeared first on The Motley Fool Australia.

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More reading

• The Fortescue share price is surging 6% today, but what’s next in December?
• I consider myself an environmentalist, but I still bought Fortescue shares. Here’s why
• The iron ore price just posted its biggest-ever monthly gain. What’s going on?
• Almost ready to retire? Why I’d buy undervalued ASX dividend shares right now
• 10 ASX dividend shares paying more than 10% yield right now

Motley Fool contributor Bruce Jackson has positions in BlueBet and Plenti Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Vanguard Msci Index International Shares ETF. The Motley Fool Australia has recommended BlueBet, Jb Hi-Fi, and Vanguard Msci Index International Shares ETF. 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 certainly has been a year for stock picking rather than index investing.

Although the ASX 200 index is on course to record a 3% decline in 2022, some ASX shares have absolutely smashed the market with supercharged returns.

This means that if you had one or more of these ASX index beaters in your portfolio, there’s a good chance that you’ll have outperformed the benchmark this year.

What are the ASX index beaters of 2022?

Five standout ASX index beaters are listed below. Here’s how they have performed in 2022:

Mineral Resources Limited (ASX: MIN)

The Mineral Resources share price is up 56% in 2022. This has been driven largely by the the company’s exposure to lithium and the sky high prices the battery making ingredient is commanding right now.

Myer Holdings Ltd (ASX: MYR)

The Myer share price has been an ASX index beater this year with its gain of 61%. Investors have been buying the department store operator’s shares following the release of an impressive full year result in September. Thanks to its successful focus on profitable sales, Myer reported a 103.8% increase in net profit to $60.2 million during FY 2022.

Origin Energy Ltd (ASX: ORG)

The Origin share price has been a strong performer in 2022 and is up 47%. The catalyst for this was the receipt of a takeover approach in November. The energy company received an indicative, conditional, and non-binding proposal from Brookfield Asset Management and MidOcean Energy to acquire it for $9.00 cash per share. This represents a premium of almost 55% to its share price at the time.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price is another ASX index beater in 2022 with a gain of almost 34%. This has been driven by the lithium miner’s strong performance and positive outlook. In fact, the company’s outlook is so positive thanks to production growth plans and high prices, that management expects to be able to pay its maiden dividend this financial year.

Sayona Mining Ltd (ASX: SYA)

The Sayona Mining share price is the best performer in the group. In 2022, this lithium developer’s shares are up 66%. Sayona Mining, the third ASX lithium share in the list, is an index beater thanks to excitement around its North American Lithium (NAL) project. Management expects NAL to be producing lithium in the first quarter of 2023.

Time will tell if 2023 is just as successful for these shares.

The post ASX index beaters: 5 shares that have supercharged portfolios in 2022 appeared first on The Motley Fool Australia.

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More reading

• Why is the Pilbara Minerals share price charging higher on Monday?
• Here are the 10 most shorted ASX shares
• 5 things to watch on the ASX 200 on Monday
• Can the Pilbara Minerals share price regain its lustre in December?
• Here are the 3 most heavily traded ASX 200 shares on Friday

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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November was a good month for AMP Ltd (ASX: AMP) share price. Indeed, it hit many 52-week highs throughout the course of the month.

After closing October at $1.26, shares in the financial services company rose 7.94% to finish November trading at $1.36.

Over the period, it hit a low of $1.245 and a high of $1.365. At the time, that marked the stock’s highest point since March 2021.  

So, what helped drive the AMP share price to outperform in November? Let’s take a look.

What went right for the AMP share price last month?

Shares in AMP took off alongside the broader market last month. While the stock soared 8%, the S&P/ASX 200 Index (ASX: XJO) lifted 6.13%, and the S&P/ASX 200 Financials Index (ASX: XFJ) – AMP’s home sector – rose 1.14%.

Interestingly, there was no price-sensitive word from AMP. Though, some non-price-sensitive news from the company might have pricked the ears of investors.

AMP revealed the sale of its Collimate Capital businesses would miss their previously predicted November completion due to regulatory delays on 15 November.

The company announced Collimate’s domestic business would be sold to Dexus Property Group (ASX: DXS) and its international business to DigitalBridge way back in April.

AMP shareholders are expected to receive most of the proceeds from the sales in the form of capital returns.

November also saw the company reveal the appointment of its new chief financial officer (CFO), Peter Fredricson. Fredricson has previously held CFO roles at former ASX 200 energy giant Oil Search and APA Group (ASX: APA).

Finally, as of the end of November, AMP has snapped up nearly $230 million worth of its own shares as part of the $350 million on-market buyback announced in August. The buyback is part of a $1.1 billion capital return.

Share price snapshot

Including last month’s positive momentum, the AMP share price is trading 33% higher year to date. It has also gained 45% since this time last year. The embattled stock is still 75% lower than it was five years ago, however.

For comparison, the ASX 200 has fallen 4% year to date, gained 1% over the last 12 months, and lifted 22% over the last five years.

The post Why did the AMP share price surge 8% in November? appeared first on The Motley Fool Australia.

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More reading

• Thank you Mr Powell! 7 ASX 200 shares cracking new 52-week highs on Thursday
• If you’d bought $10,000 of AMP shares at the start of the year, congrats! Here’s what you’d have now
• 3 ASX 200 shares hitting new 52-week highs on Wednesday
• Up 10% in a month, are AMP shares worth buying back into now?
• Is it finally safe to buy ASX shares now?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Apa 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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Core Lithium Ltd (ASX: CXO) shares are off to a mixed start in December after underperforming last month.

Shares in the S&P/ASX 200 Index (ASX: XJO) lithium developer fell 0.7% on Thursday then rebounded to gain 2.2% on Friday. After posting gains of 1.5% in early trade today, the Core Lithium share price has reversed to be down 3.65% at the time of writing.

That leaves the stock down 2.58% so far in December.

But could the Core Lithium share price be in for a Santa rally?

What headwinds has the ASX 200 lithium miner been facing?

December is traditionally a very strong month for stock markets.

However, with the ASX 200 having gained 6.1% in November, some analysts believe the broader market Santa rally may have come early this year.

Yet the same can’t be said for Core Lithium shares, which lost 2.1% last month. That came despite a strong initial two weeks, which saw the miner’s stock reach record highs on 14 November.

Core Lithium largely came under pressure over the following weeks on two fronts.

First, there were the COVID zero policy issues in China.

China is the world’s top producer of EVs and hence represents a huge market for lithium, a critical element in the batteries that power EVs. With the world’s most populous nation crippled by rolling lockdowns, investors sold off lithium stocks more broadly fearing a slump in demand for the battery-critical metal.

Second, a number of brokers, including Credit Suisse and Goldman Sachs, downgraded the stock in November. And Morgan Stanley reported it was bearish on lithium stocks more broadly, driven by the COVID protests going on in China.

Then there’s Macquarie. Citing concerns that Core’s flagship Finniss Lithium Project could be delayed, the broker downgraded Core Lithium shares to a neutral rating with a $1.80 price target.

Could Core Lithium shares be set for a Santa rally in December?

Now, here’s why I believe Core Lithium could well enjoy a healthy Santa rally in December.

While Macquarie analysts have their concerns over the Finniss Project, Core Lithium has given no indication of any pending delays.

The miner announced it had transported its first spodumene direct shipping ore (DSO) product last month. And CEO Gareth Manderson said this was “a very positive step towards our objective to export from Darwin Port before the end of the year”.

On 31 October, Core Lithium reported it was in a position “to safely advance Finniss towards first DSO shipments in Q4 CY22 and maiden spodumene concentrate in H1 CY23″.

Barring any negative announcements from the miner, investor interest could well increase if Finniss progresses on schedule.

The other reason I think Core Lithium shares could enjoy a Santa rally is news out of China over the weekend that the government is drastically rolling back its strict virus control policies.

This could well boost investor sentiment regarding near-term lithium demand and help drive Core Lithium shares to outperform in December. As it stands, the stock remains up 178% over the past 12 months.

The post Could Core Lithium shares be set for a Santa rally in December? appeared first on The Motley Fool Australia.

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More reading

• Why did the Core Lithium share price end the month lower after being up 35%?
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Can you guess which 3 ASX 200 lithium shares led the charge in November?
• 2 ASX lithium shares to buy, and 3 to sell: brokers
• Why has the Core Lithium share price crashed 30% in 12 days?

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 All Ordinaries Index (ASX: XAO) is climbing 0.24% today, but one mining share is soaring far higher.

The OreCorp Ltd (ASX: ORR) share price is surging 31% at the time of writing to 55 cents. In earlier trade, the company’s share price exploded nearly 43% to 60 cents.

Let’s take a look at what is going on with this ASX All Ords gold share.

What’s going on?

OreCorp is exploring the Nyanzaga Gold Project in Tanzania.

The spot gold price is up just 0.15% to US$1,812.30 an ounce, according to CNBC.

Recently, OreCorp received debt funding proposals to fund the development of this project.

OreCorp received non-binding expressions of interest from banks in Europe, Africa and Tanzania for more than US$400 million. This is US$100 million more than the company’s US$300 million debt target.

Commenting on this news, OreCorp executive chairman Matthew Yates said:

We are pleased with the strong interest we have received to date from banks with respect to
financing the project.

OreCorp is aiming to produce 242,000 ounces of gold per year for 10 years from this project at an all-in sustaining cost (AISC) of US$954/oz.

In early November, OreCorp announced changes to its board and management team. Henk Diedericks was appointed CEO and managing director, while Matthew Yates was appointed executive chairman.

The company is aiming for first gold production from the Nyanzaga project by 2025.

OreCorp share price snapshot

OreCorp shares have fallen 19% in the last year, while they have descended 31% in the year to date.

For perspective, the ASX All Ords has climbed 0.29% in the last year.

OreCorp has a market capitalisation of about $219.4 million based on the current share price.

The post Guess which ASX All Ords mining share is exploding 43% today appeared first on The Motley Fool Australia.

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• The Fortescue share price is surging 6% today, but what’s next in December?
• Guess which gold share is being booted out of the ASX 200
• 2 ASX ETFs trading ex-dividend tomorrow
• Warrego Energy share price leaps 12% as takeover battle continues
• Arafura share price sinks 12% as Gina buys up big

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.

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The Fortescue Metals Group Limited (ASX: FMG) share price is on a great run, up 25% since 10 November. It’s trading more than 6.5% higher today.

After such a strong run, can the iron ore ASX share keep the good times rolling?

Fortescue shares haven’t been much higher than the current level for most of the past 12 months. This comes at a time when the iron ore price isn’t anywhere near as high as it was earlier in the year – when it was above US$150 per tonne.

What’s the outlook for Fortescue shares?

The company generates almost all of its revenue from iron ore, so the performance of that commodity is key for its profitability.

China is the major buyer of Fortescue’s iron ore, so what’s going on in the country can have a key influence on the company’s fortunes.

The Asian superpower has been battling COVID lockdowns and restrictions for a long time, which has reduced economic activity and growth. However, there are signs that China is lightening its COVID rules.

A number of cities have recently eased some rules. For example, from this week, people will no longer need a negative COVID test to take public transport and visit parks. The latest easing, according to reporting by Reuters, is in Urumqi – the capital of the Xinjiang region. It has reportedly seen lockdowns for months but will reopen malls, markets, restaurants and other venues this week.

If the country continues toward ending COVID restrictions, this could be a useful boost for demand for iron, steel and the rest of the economy.

Fortescue’s current profitability is higher now, thanks to a stronger iron ore price.

Broker ratings

Despite promising developments in China, brokers are largely pessimistic about where the Fortescue share price is headed from here. A price target suggests where the Fortescue share price may be in 12 months from now.

Macquarie has an ‘underperform’ rating on the iron ore miner, with a price target of just $14.50. That implies a possible fall of around 30%, though the iron ore price is beating its conservative estimates for FY23.

The broker expects Fortescue to cut its dividend payout ratio so that cash can be redirected to capital expenditure. Macquarie is predicting a grossed-up dividend yield of only 6.5% from the company in FY23.

Citi rates Fortescue as a sell, with a Fortescue share price target of just $16.70. That suggests a drop of almost 20%. It’s concerned about elevated operating costs for the new Iron Bridge project as it builds up to full production.

The post The Fortescue share price is surging 6% today, but what’s next in December? appeared first on The Motley Fool Australia.

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• I consider myself an environmentalist, but I still bought Fortescue shares. Here’s why
• The iron ore price just posted its biggest-ever monthly gain. What’s going on?
• 10 ASX dividend shares paying more than 10% yield right now
• Fortescue’s green hydrogen ambitions: Prosperous or preposterous?
• How the Fortescue share price defied the bears and jumped 32% in November

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group. 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 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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The S&P/ASX 200 Index (ASX: XJO) is the most dominant index on the ASX. It tracks a basket of the 200 largest shares on our share market by market capitalisation. This means that it provides a useful benchmark covering the largest and most influential companies in Australia.

But the sizes of ASX shares change every trading day. Thus, over time, the index needs to be periodically rebalanced to ensure that it accurately reflects the state of the share market – and that the largest 200 shares are always in the index. In the ASX 200’s case, this occurs every three months.

So last week, S&P Global, the company that runs the ASX 200 Index, announced the results of its latest quarterly rebalancing. This will take effect on 19 December but, unusually, will only result in one addition and one removal from the ASX 200.

The lucky share to join the ASX 200’s prestigious club is Monadelphous Group Limited (ASX: MND). Monadelphous is an engineering company that provides industrial services across the energy and resources sectors.

But if one share is going in, it means that one share needs to get kicked out to make room. And that unlucky share is St Barbara Ltd (ASX: SBM).

Gold miner St Barbara gets the ASX 200 boot

St Barbara is (for the next fortnight) an ASX 200 gold miner. It’s not hard to see why it is in the ASX 200 firing line. This miner has had a shocking year, falling from over $1.40 at the start of the year to the 69 cents per share price tag we see today.

That leaves it with a market cap of just $563.4 million at today’s pricing, which is not enough to keep its spot in the ASX’s largest 200 shares. By comparison, St Barbara’s replacement, Monadelphous, has a market cap of $1.29 billion right now.

That said, St Barabara shares have been on a stunning run of late. Back in mid-October, the company was hitting a new 52-week low of 45 cents per share. Today, just six weeks later, it is at 69 cents per share, a gain of 53%. However, that hasn’t been enough to save St Barabara from getting the boot.

Who knows, perhaps St Barabara will be back in the ASX 200 one day. But it won’t be until 2023 at the earliest.

The post Guess which gold share is being booted out of the ASX 200 appeared first on The Motley Fool Australia.

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• With almost no savings at 30, I’d use the Warren Buffett method to try to get rich!
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• Bought $1,000 of BHP shares 10 years ago? Here’s how much dividend income you’ve received
• The ASX 200 share to buy that just took a 24% dive: expert

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 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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When we’re talking about ex-dividend dates here at the Fool, we’re usually talking about ASX shares. But exchange-traded funds (ETFs) can pay out dividends (called distributions) too. Thus, these investments have ex-dividend dates as well. Or more accurately, ex-distribution dates.

An ex-dividend date is the date that any new investors are cut off from receiving an upcoming dividend payment. It’s simple — if you own share shares before the ex-dividend date, the dividend is yours. If you buy after the date, no dividend.

That’s why we usually see a share that trades ex-dividend fall in value on the day in question.

So let’s now talk about two ASX ETFs trading ex-distribution tomorrow.

These two cash-based ASX ETFs are going ex-distribution

The first is the iShares Core Cash ETF (ASX: BILL). Yes, ETFs can invest in cash too. This ETF from BlackRock puts investors’ money to work in “high quality short-term money market instruments”. The iShares Core Cash ETF pays out a distribution every month. Its latest payment is due on 16 December, and will be worth 24.02 cents per unit.

But investors will need to own units of this ETF tomorrow if they wish to receive this distribution. That will equate to a yield of around 0.24% on the current unit price of $100.56 (at the time of writing). Over the past 12 months, the iShares Core Cash ETF has a trialling yield of approximately 0.74%.

Our next ETF is also a cash-focused fund from BlackRock’s iShares. The iShares Enhanced Cash ETF (ASX: ISEC) is a similar fund to the Core Cash ETF. However, it invests in “a diversified portfolio of higher-yielding high quality short-term money market instruments, including floating rate notes”.

This ETF also pays out monthly distributions. Its next distribution is also due on 16 December, with the ex-dividend date set for tomorrow, 6 December. The iShares Enhanced Cash ETF will dole out 24.75 cents per unit, which would give investors a yield of 0.25% or so on today’s unit pricing.

Over the past 12 months, this fund now has a trailing yield of 0.81%.

So tomorrow is a big day for these two cash-based ETFs on the ASX.

The post 2 ASX ETFs trading ex-dividend tomorrow appeared first on The Motley Fool Australia.

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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 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 Warrego Energy Ltd (ASX: WGO) share price has started the week with a bang.

In morning trade, the energy explorer’s shares are up just short of 12% to 31.5 cents.

This means the Warrego Energy share price is now up 100% since this time last month.

Why is the Warrego Energy share price zooming higher again?

Investors have been scrambling to buy shares again after a bidding war broke out between Beach Energy Ltd (ASX: BPT) and Gina Rinehart’s Hancock Energy.

According to the release, Hancock Energy has increased its takeover bid from $0.23 per Warrego share to $0.28 per Warrego share. All other terms of its offer remain unchanged.

The release also reveals that the Warrego board has assessed the revised Hancock takeover offer and has determined that it is a superior proposal compared to the revised scheme proposal from Beach Energy.

Beach Energy’s revised offer was for an upfront cash consideration of $0.25 per share, plus the potential for additional scheme consideration if Warrego’s Spanish assets are sold within 12 months of implementation of the scheme.

What’s next?

Warrego Energy has now issued a notice to Beach Energy under the matching rights regime in the Beach Scheme Implementation Deed. This gives Beach five business days to match the revised Hancock Energy takeover offer.

Until Beach Energy has had an opportunity to match the revised Hancock offer, the Warrego Energy directors maintain their existing recommendation in favour of the Beach scheme proposal.

However, that will very likely change if Beach Energy doesn’t improve its offer, given how the company now regards the Hancock Energy as “superior”.

And let’s not forget that Strike Energy Ltd (ASX: STX) is a dark horse in this race. It tabled a merger proposal last month for 0.775 new Strike shares for each Warrego share held. Based on the current Strike Energy share price, this represents an offer price of 25.575 per share.

Why is Warrego Energy in demand?

All three companies appear to have their eyes on the company’s onshore assets in Western Australia’s prolific Perth Basin.

The company holds a 50% interest in EP469, including the West Erregulla gas project, and 100% of STP-EPA-0127, covering a massive 8,700 km2 (or 2.2 million acres).

The post Warrego Energy share price leaps 12% as takeover battle continues 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 Arafura Rare Earths Ltd (ASX: ARU) share price has broken its trading halt this morning on news of a $121 million placement headed by mining magnate Gina Rinehart.

Rinehart’s Hancock Prospecting put forward $60 million for the capital raise. It’s expected to walk away with an approximate 10% stake in the ASX rare earths developer.

Right now, the Arafura share price is 38.7 cents, 12.05% lower than its previous close.

This morning marks the stock’s return to trade after it was frozen on Friday ahead of the announcement.

Let’s take a closer look at what’s going on with the ASX rare earths share on Monday.

Arafura share price plummets on placement

The Arafura share price is tumbling after the company announced a capital raise to help accelerate its Nolans Project’s development schedule.

It has received firm commitments for $121 million under the placement. The raise is offering new shares for 37 cents apiece.

Another $12 million is expected to be raised through a share purchase plan. That will allow existing shareholders to snap up new stocks for the placement price.

The 37-cent per share price tag represents a 15.9% discount to Arafura’s previous closing price.

Arafura managing director Gavin Lockyer commented in today’s release, saying:

We are extremely pleased with the number of new and significant Australian and offshore institutional investors joining our register including Hancock Prospecting, a company well experienced in large project developments.

The Nolans Project is well positioned to become a ground-breaking strategic development for Australia with its single site ore to oxide business model.

Construction at Nolans is set to kick off in the new year. Funds raised through the placement will go towards the early contractor involvement phase, orders for certain items, the start of notable constructions, design and financing activities, as well as general working capital.

Today’s tumble included, the Arafura share price is 83% higher than it was at the start of 2022. It has also more than doubled over the last 12 months.

Comparatively, the All Ordinaries Index (ASX: XAO) has fallen more than 3% year to date. The benchmark index is trading flat over the last 12 months.  

The post Arafura share price sinks 12% as Gina buys up big appeared first on The Motley Fool Australia.

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More reading

• Why is the Hawsons Iron share price rocketing 18% on Monday?
• Why is the Arafura Rare Earths share price on hold today?
• These were the 3 best-performing ASX All Ords shares in November
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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