A UBS broker has given Mineral Resources Limited (ASX: MIN) a huge upside of 86% if its demerger plans go ahead, as originally reported by the Australian Financial Review yesterday afternoon.

The broker assumed that its enterprise value trades six times its earnings bere interest, taxes, depreciation, and amortisation (EBITDA). Furthermore, a price target of $83 was provided along with a rating of buy.

Other trading desks have different takes on their valuations of the company, with some stating that its lithium operating segment is worth as much as the company itself. The Australian Financial Review reported that the business is likely trading at three times forward EBITDA.

Using comparables analysis of similar companies in its peer universe, AFR said it could potentially be rated as worth $10 billion.

Rumours have circulated about a potential spin-off of Mineral Resources. If that comes to fruition, Mineral Resources’ lithium operating segment will be spun-off to become an independent entity.

As my Fool colleague Mitch noted last Friday, the benefit of this spin-off is that the entity would have a concentrated focus on unlocking value purely from lithium extraction, which may lead to gains in internal efficiency and, ultimately, a better share price performance.

Mineral Resources share price snapshot

The Mineral Resources share price made a new all-time high yesterday, with shares closing at $73.08 each for the day. They have since reached a newer all-time high of $75.65 this morning.

Shares of the mining services company are trading for $74.99 at the time of writing, a rise of 2.61%.

The company share price is up 33.91% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 5.94% over the same period.

The company’s market capitalisation is $13.84 billion.

The post Lithium spin-off? UBS tips 80% upside for Mineral Resources share price appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ordinaries shares hitting all-time highs on Monday
• Mineral Resources share price lifts on positive lithium project update
• Possible lithium spinoff makes Mineral Resources share price undervalued: Credit Suisse
• Here are the top 10 ASX 200 shares today
• Brokers name 3 ASX shares to buy today

Motley Fool contributor Matthew Farley 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 Link Administration Holdings Ltd (ASX: LNK) share price is having a day to forget on Tuesday.

In morning trade, the administration services company’s shares have returned from their trading halt and are down a massive 20% to $3.55.

Why is the Link share price crashing?

The weakness in the Link share price on Tuesday has been driven by the release of an update on the proposed takeover of the company.

As you might have guessed from the share price reaction, things are not looking good for the transaction.

This is due to Link’s Link Fund Solutions Limited (LFSL) business and its dealings with the UK Financial Conduct Authority (FCA) regarding LFSL’s role as authorised corporate director to the LF Woodford Equity Income Fund. LFSL managed the now-collapsed Woodford Equity Income Fund.

According to the release, the FCA has approved Dye & Durham’s proposed acquisition of LFSL. However, this is subject to a requirement that Dye & Durham commits to make funds available to meet any shortfall within LFSL in the amount available to cover the redress payments LFSL may be required to make.

The FCA’s current view is that the redress payment in relation to the Woodford matters may be for an amount up to 306 million pounds (approximately A$519 million).

If Dye & Durham does not accept the requirement, then a condition under the scheme implementation deed may not be satisfied and the transaction could collapse.

As things stand, Dye & Durham has not yet indicated its position in relation to the FCA’s requirement and Link will update the market as appropriate.

It is also worth noting that the FCA has revealed that this is not a final decision. Furthermore, LFSL does not agree with the FCA’s view and intends to explore all options, including challenging any warning notice that may be issued.

The post Why is the Link share price crashing 20%? appeared first on The Motley Fool Australia.

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More reading

• Why is the Link share price frozen today?
• Link share price surges 9% on ACCC takeover nod
• Here are the top 10 ASX 200 shares today
• Link share price marching higher on revenue boost
• Why are ASX 200 tech shares having such a cracker of a day?

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 Link Administration Holdings Ltd. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The stock market has been a fickle place in 2022, with investor sentiment constantly changing by the day, week, and month. Inflation, which has been hovering near a 40-year high, has become the center of attention, as the market tries to figure out how high inflation might go and when it may peak.

The elevated inflation indicators over the past year or so are the main reason the Federal Reserve has had to raise interest rates so intensely this year, which has roiled markets and led to the worst first half of a year for stocks in about five decades.

On Tuesday, the US Bureau of Labor Statistics will release more inflation data — in this case, the change in prices for the month of August — which could have a big effect on the stock market. Let me explain.

More evidence to help guide actions

A major way that investors, economists, and policymakers measure inflation is through the Consumer Price Index (CPI), which tracks the prices on a basket of daily consumer goods and services. This figure indicates how much change occurs in the price year over year. The CPI has really shot up this year.

US Consumer Price Index YoY data by YCharts

In June (released in mid-July), the CPI clocked in 9.1% higher than one year prior, spooking investors and making them wonder just how aggressive the Fed might have to be with rate hikes to bring down inflation. But in July (released in mid-August), the market got some reprieve when the CPI came in about 8.5% higher on a year-over-year basis and remained unchanged from June on a monthly basis. The decline was led by a big drop-off in energy and gasoline prices, which have been surging all year long.

Stocks rallied after the July report on the belief that inflation might have peaked, but since that report, there have been a number of comments from the Fed and conflicting data points that have created a topsy-turvy market. The Fed is still currently on track to raise its benchmark overnight lending rate by 0.75 percentage points at its meeting later this month, in what would be its third such accelerated move in a row.

Now, the big question is: could August CPI data released on Tuesday provide further evidence that inflation has peaked and is now headed downward, or will it throw a wrinkle in the market and shoot higher?

Most economists seem to think that the data will be favorable. In a recent research note, economists at Morgan Stanley said they think the headline inflation number will drop and come in at 7.9% higher in August on a year-over-year basis, which would be a strong improvement. That drop is expected to once again be led by a decline in energy prices.

But less favorably, Morgan Stanley also predicted that rent prices would remain “strongly elevated for some time”. Rent is typically a big part of a consumer’s monthly expenses and therefore can cause inflation to linger. 

There are also other encouraging signs that consumer prices are dropping. Consider, for instance, that wholesale used car prices fell in August, as did airline tickets and global food prices.

How the report could move the market

I’m expecting a lower CPI reading in August to move stocks higher, generally, as it would offer investors more proof that inflation is indeed declining and that the Fed may be able to pivot from its aggressive rate-hiking policies sooner than anticipated. But what happens if the headline CPI number jumps and comes in more than 8.5% higher? Well, then I would duck and find cover because it likely means that inflation is more persistent than the market could have imagined.

However, with CPI estimates already around 7.9%, that may curb expectations and any potential market move. Below that number might be perceived as positive, while above it may be perceived as a negative for the market.

Ultimately, I would never advise investors to try to play a near-term event like this, because it can be difficult to know how exactly the market will interpret certain data. For instance, if the CPI reading comes in woefully short of estimates, while it may seem like it would be a good thing, that could spook the market into worrying about a sudden drop-off in consumer demand and savings, which could hint that a more severe recession is lurking.

My advice would be to simply be aware that there could be significant movement on Tuesday, up or down. Don’t panic, and continue to invest in stocks with good long-term prospects and strong fundamentals.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tuesday could be a huge day for the US stock market appeared first on The Motley Fool Australia.

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More reading

• Why is the Grange Resources share price falling in a hole on Tuesday?
• Vulcan Energy share price up 5% on lithium project update
• Why this fundie reckons the Zip share price is a falling knife
• Supermarket shakeup: Do Coles shares offer better dividends than Woolworths?
• What’s going on with the AGL share price today?

Bram Berkowitz 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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You may be wondering why the Grange Resources Limited (ASX: GRR) share price is falling 4.12% to 81.5 cents today.

The S&P/ASX 200 Index (ASX: XJO) is up 0.65% in early morning trade following upbeat sentiment on Wall Street.

For context, the Dow Jones rose 0.71% overnight, and is up 3% in the past week.

Let’s take a look at why the iron ore pellet miner’s shares are losing ground on Tuesday.

Why are Grange Resources shares in the dirt today?

Investors are offloading the Grange Resources share price as it trades ex-dividend today.

This means if you purchased the company’s shares yesterday or before, you will be eligible for the latest dividend.

When a company’s shares trade ex-dividend, the share price tends to fall in proportion to the dividend paid out. This can also vary on how the market is tracking for the day as well as investor sentiment.

Grange Resources is set to pay a fully-franked interim dividend of 2 cents per share on 30 September.

This marks a significant drop from the 10 cents per share declared by the board in the prior corresponding year.

The company reported double-digit losses across key financial metrics in its half-year results.

Management blamed the weak performance on soaring energy costs and volatility in iron ore prices.

While there was no mention of the final dividend, this will largely depend on Grange Resources keeping costs under control.

However, Goldman Sachs believes iron ore prices have further to fall, which could put pressure on the next dividend.

Grange Resources share price summary

After hitting a multi-year high of $1.79 on 8 June, the Grange Resources share price has tumbled more than 50%.

Nonetheless, the share is still up 8% year to date.

In comparison, the S&P/ASX 300 Metals and Mining Index (ASX: XMM) is down 2% over the same timeframe.

Grange Resources commands a market capitalisation of approximately $983.7 million and has a trailing dividend yield of 14.2%.

The post Why is the Grange Resources share price falling in a hole on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• Hoping to dig into the latest Grange Resources dividend? Here’s how
• These 6 ASX mining shares are now in the ASX 300
• Grange Resources share price lifts on ASX 300 inclusion
• Why Bravura, Bubs, Grange, and Sandfire shares are sinking
• Why has the Grange Resources share price plunged 30% so far this week?

Motley Fool contributor Aaron Teboneras 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. 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 Vulcan Energy Resources Ltd (ASX: VUL) share price is having a good day on Tuesday.

In morning trade, the lithium developer’s shares are up almost 5% to $8.33.

Why is the Vulcan Energy share price rising?

Investors have been bidding the Vulcan Energy share price higher this morning in response to the release of an update on the company’s Zero Carbon Lithium Project.

According to the release, Vulcan has started onsite construction of its Sorption-Demo Plant in Landau, Germany. This follows off site fabrication which has been ongoing since March.

Vulcan Energy advised that the plant is being built on the premises of Energie Südwest AG (ESW), the local energy utility for Landau, following the completion of FEED studies, mobilisation, and delivery of key components.

Management highlights that this is a key element of its strategy to de-risk its Zero Carbon Lithium Project. That’s because technical and operations personnel will train in the demo-plant to develop a comprehensive understanding of the process and its operation prior to the construction of the first commercial plant.

The plant is scheduled to start cold commissioning in late 2022 and start operation in early 2023.

The release explains that Vulcan Energy has chosen a sorption-type Direct Lithium Extraction (DLE) approach for its lithium extraction business due to its current successful commercial deployment globally. Furthermore, it highlights that sorption approaches have been shown to optimally produce lithium chemicals from hot brines with low operating cost and sustainable footprint.

Management commentary

Vulcan Energy’s managing director and CEO, Dr. Francis Wedin, commented:

We are excited to begin onsite construction of our Sorption-Demo Plant, which is the logical next step for us to continue upscaling towards commercial production of lithium hydroxide with a net zero carbon footprint. We are also encouraged with continuing receipt of environmental approvals from the authorities, and mobilisation of teams for commencement of “on the ground” seismic survey activities, toward our goal of developing a much larger geothermal renewable energy and Zero Carbon Lithium business.

One slight but not unexpected disappointment, is that the company is being impacted by supply chain disruption and rising costs. Wedin explained:

Vulcan, as with almost every developing project the world over, is being impacted by disruptions to supply chains due to COVID-19 and the war in Ukraine, together with the rising cost of raw materials due to global inflation. I would like to thank the entire Vulcan team who, faced with these universal challenges, are working hard to deliver the Zero Carbon Lithium Project at pace and scale. We believe the Zero Carbon Lithium project is crucial for Europe, both from an energy security perspective and due to the need to have a local, reliable supply of critical raw materials like lithium. With these macro-policy tailwinds in our favour, Vulcan looks forward to delivering Zero Carbon Lithium Project as soon as possible.

The post Vulcan Energy share price up 5% on lithium project update appeared first on The Motley Fool Australia.

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More reading

• Why Chorus, MA Financial, Tyro, and Vulcan Energy shares are dropping
• Vulcan Energy share price is one of the worst ASX lithium performers so far this year. Why?
• The Vulcan share price has cratered 21% since its August high. What’s going on?
• Could this give some ASX lithium shares the edge?
• ‘Green premium’: What could it mean for the Vulcan Energy share price?

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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S&P/ASX 200 Index (ASX: XJO) supermarket shares Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) both upped their dividends in financial year 2022.

But could the smaller of the two actually offer better value to shareholders? Readers might be surprised by the answer.

Let’s take a closer look at how the pair’s payouts stack up.

Do Coles shares offer better dividends than Woolies?

Those looking to invest in ASX 200 supermarket shares likely end up choosing between Coles and Woolworths.

While the pair are similar in many ways, they differ in many more. And their dividends represent one measure in which they are markedly different.

Coles declared a 30-cent final dividend for financial year 2022, bringing its full-year payout to 63 cents per share – a 3.3% year-on-year increase.

Meanwhile, Woolies upped its final offering to 52 cents per share, bolstering its full-year dividends to 92 cents.

But bigger dividends don’t necessarily mean better value.

Considering the current Coles share price – $17.24 – the $23 billion supermarket is trading with a 3.65% dividend yield.

At the same time, shares in $43.5 billion supermarket goliath Woolworths, currently swapping hands for $35.89 apiece, boast a yield of just 2.56%.

That means Coles shares offer a better dividend-to-share price ratio for investors.

It’s also worth noting that both companies offer fully franked dividends. Therefore, their payouts might bring additional benefits to some shareholders at tax time.

Additionally, both offer a dividend reinvestment plan (DRP), allowing shareholders to receive their dividends in the form of stock rather than cash.

The Coles share price has also been outperforming that of Woolworths lately.  

The smaller supermarket giant’s stock has slipped 3.7% year to date and 0.2% over the last 12 months. Meanwhile, Woolworths has dumped 6.7% in 2022 so far and 9.5% since this time last year.

For context, the ASX 200 has fallen 7.7% year to date and 9.7% over the last 12 months.

The post Supermarket shakeup: Do Coles shares offer better dividends than Woolworths? appeared first on The Motley Fool Australia.

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• Down 6% in a month, is September a good time to buy Woolworths shares?
• Top ASX dividend shares to buy in September 2022
• Why is top broker Citi tipping 17% upside for the Coles share price?
• Why this top broker is tipping 23% upside for the Woolworths share price
• How do Endeavour’s dividends stack up against its old parent Woolworths?

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 COLESGROUP DEF SET. 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 Zip Co Ltd (ASX: ZIP) share price is up 2.79% in early trade after gaining 2.3% yesterday.

Traders in the ASX buy now, pay later (BNPL) share have certainly had the opportunity to capitalise on some big swings in the Zip share price.

Traders astute – and lucky – enough to have bought shares on 30 June and sold a month later on 28 July would have made an eye-popping 245% gain.

On the flip side, anyone who bought shares on 28 July and still holding them today will be nursing a painful loss of 41%.

That’s the kind of volatility you might normally expect investing in cryptos.

Anyhow, that’s the short-term picture.

For long-term investors ignoring the sharp peaks and troughs, the Zip share price has inexorably retreated from its February 2021 all-time highs.

Even with shares still up 103% from the recent 28 June lows, the current share price is still down 30% from its post-pandemic selloff low on 20 March 2020. And it’s down 87% since this time last year.

Which is why Christopher Watt of Bell Potter Securities reckons investing in the former BNPL darling is like trying to catch a falling knife.

Zip share price susceptible to competition and regulation

As reported by The Bull, Watt has a sell recommendation for Zip shares.

According to Watt:

This buy now, pay later company reported a net loss of $1.1 billion in fiscal year 2022. Reducing cash burn is part of the company’s strategy. The company has decided to close its operations in Singapore and the UK. The company is winding down non-core products. We view the BNPL sector as highly competitive and susceptible to further regulation.

Bad debts and rising rates

The $1.1 billion loss from ordinary activities after income tax Watt mentions was a 63% increase from the losses reported in fiscal year 2021. And that came despite the company reporting record revenue of $620 million, up 57% from FY21.

Atop these alarming figures, and the cautions Watt notes above, the Zip share price has come under increased pressure this year from fast-rising interest rates. That could see the company continue to struggle with getting their customers to pay back those handy interest-free, instalment loans.

In FY22, Zip already reported a 110% increase in bad debts and expected credit losses, which reached a staggering $276.1 million over the 12 months.

The post Why this fundie reckons the Zip share price is a falling knife appeared first on The Motley Fool Australia.

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• Why is the Zip share price bolting out the gate on Monday?
• Here are the 10 most shorted ASX shares
• 5 things to watch on the ASX 200 on Monday
• Here are the top 10 ASX 200 shares today
• Why is the Zip share price charging 7% higher on Thursday?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ZIPCOLTD FPO. 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 AGL Energy Limited (ASX: AGL) share price is edging higher on Tuesday morning despite some potential bad news.

At the time of writing, the energy company’s shares are up slightly to $7.14.

What’s going with the AGL share price?

Investors have been buying AGL’s shares despite the release of an announcement after the market close on Monday.

This announcement relates to Unit 2 at AGL’s Loy Yang A Power Station in Victoria, which was taken out of service in April due to an electrical fault with the generator.

According to the latest update, the company’s Loy Yang A Unit 2 will not be returning to service as planned this month.

AGL advised that during testing in the final assembly of the generator rotor, a defect in a part was identified. This will require the original equipment manufacturer GE to manufacture a new part in Switzerland.

As a result, the outage is now expected to extend until the second half of October. AGL will make further changes to the outage profile of other units to accommodate this change.

What impact will this have on its earnings?

While the overall outage is expected to have a material impact on AGL’s earnings, this latest day will be less so. That’s because the impact of the latest extension is expected to be offset by a strong performance from its portfolio during August and September as other units returned to service.

Though, investors won’t have long to find out what the impact is. AGL is planning to provide FY 2023 earnings guidance at the end of September, which will reflect the extension of the Loy Yang A Unit 2 outage and the initial outcomes from the review of AGL’s strategic direction.

The post What’s going on with the AGL share price today? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• The AGL share price has tumbled 16% in a month. What’s next?
• Are AGL shares offering a bigger final dividend than Origin this year?
• Broker tips 22% upside for the AGL share price
• ‘We would like to see faster progress’: ASX 200 energy shares on notice

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 Ramsay Health Care Limited (ASX: RHC) share price is in the freezer on Tuesday amid rumours its suitor has scrapped its takeover approach.  

The company granted a consortium led by KKR due diligence following an $88 per share takeover bid in April.

However, KKR ran into difficulties when it tried to open the books of Ramsay Health’s European subsidiary Ramsay Generale De Santé SA (EPA: GDS). As a result, the consortium withdrew its offer, replacing it with one the company dubbed “meaningfully inferior”.

The Ramsay Health share price is halted at $70.21 this morning as the company prepares to release an announcement.

The update is expected to outline the withdrawal of KKR’s offer, according to various media reports.

Let’s take a closer look at what’s going on with the S&P/ASX 200 Index (ASX: XJO) healthcare giant on Tuesday.

Is this why the Ramsay share price is frozen?

The Ramsay Health share price isn’t going anywhere just yet as the company gears up to release an announcement to the ASX.

The stock has been put into a trading halt amid reports the company and its suitor have reached an impasse. In response, KKR has binned its bid entirely, the Australian Financial Review reports.

The consortium withdrew its $88 per share cash offer last month. Instead, it offered $88 per share in cash for the first 5,000 Ramsay Health shares held by an investor and $78.20 and 0.22 Ramsay Santé shares for each share thereafter. The part-scrip offer represents a valuation of $85.93 per share.

The company had previously indicated that around 18% of its shares would likely receive the cash offer while approximately 82% of shares would be eligible for the part-scrip consideration.

The Ramsay Health board refused the new offer but left the door open for the consortium to post another bid.

However, according to the masthead, KKR and its partners believe the business has deteriorated since it posted its initial bid.

Additionally, the consortium was disappointed by the company’s latest results, The Australian reports.

The Ramsay Health share price has fallen 2.3% year to date and 12.3% since the initial takeover bid was announced. Though, it’s trading 2.3% higher than it was this time last year.

For comparison, the ASX 200 has fallen 8% year to date and 6% over the last 12 months.

The post No deal? Here’s why the Ramsay share price is on ice appeared first on The Motley Fool Australia.

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More reading

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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 recommended Ramsay Health Care Limited. 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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ASX lithium shares are surging to new heights amid the world’s transition to electric vehicles. Some companies, such as Latin Resources Ltd (ASX: LRS), are up as much as 300% year to date.

One downside of the share price increases for lithium shares is that latecomers to the investing party could view them as suspiciously overvalued. After all, no company’s shares can keep going parabolic forever.

There is a different battery metal that goes hand in hand with lithium. Let’s investigate the material, the companies that produce it, and how it stacks up with lithium moving forward.

Graphite challenges ASX lithium shares for the spotlight

According to analysts from Credit Suisse, graphite is another battery material with excellent prospects, as reported by The Age in April.

The analysts said:

It looks a lot more like lithium three to five years ago.

In five years’ time, suddenly graphite pricing will have gone up in my view quite significantly, and it will bring a huge incentive to bring all these projects on board.

The Age published additional analysis on graphite last Saturday, this time with Ausbil portfolio manager James Stewart stating that:

EVs underpin long-term growth for nickel and copper, but here and now, we see very tight markets in graphite and lithium, as mine development has not kept pace with surging demand with this one-time fundamental switch from fossil fuels to renewables.

Stewart continued:

Lithium and graphite pricing is expected to remain elevated for some time, and we believe we will benefit from owing [sic] the lithium and graphite producers and developers.

So, according to analysts, graphite arguably has the same outlook as lithium. Both also benefit from a surge of interest on the demand front, while on the supply end, producers can’t ship the material fast enough to keep up with expected orders.

Aside from this, graphite is also a critical component in creating lithium batteries. One lithium battery in an electric vehicle comprises around 20% graphite.

Companies involved in graphite production

The following companies are in the graphite production space, for investors looking for an alternative to ASX lithium shares.

Sayona Mining Ltd (ASX: SYA) is a mineral explorer with an interest in discovering lithium and graphite. In Australia’s northern region, graphite mineralisation was reported in the East Kimberley site. Shares are up 157.14% year to date.

Syrah Resources Ltd (ASX: SYR) was named “the biggest graphite producer on the ASX” by a broker in September. Shares are down 2.59% year to date.

Argosy Minerals Limited (ASX: AGY) has a graphite project located in Namibia. The company has “not made any final decision on its strategy for the project, pending further review and considering funding opportunities”. Shares are up 48.48% year to date.

Magnis Energy Technologies Ltd (ASX: MNS) owns the Nachu graphite project in Ruangwa, Tanzania. Shares are down 14.04% year to date.

The post Investors are obsessed with ASX lithium shares, but what about this other critical battery metal? appeared first on The Motley Fool Australia.

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More reading

• Why is the Sayona Mining share price soaring 8% on Monday?
• Vulcan Energy share price is one of the worst ASX lithium performers so far this year. Why?
• 4 ASX lithium shares that have rocketed more than 100% in 2022
• Do Sayona Mining shares pay dividends?
• Latin Resources share price follows ASX sell-off amid ‘excellent high‐grade lithium’ news

Motley Fool contributor Matthew Farley 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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