The Core Lithium Ltd (ASX: CXO) share price is sliding today as negotiations with Tesla continue on a lithium deal.

Core Lithium shares are currently trading at $1.345, a 3.24% fall. For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) is down 2.23% today. Pilbara Minerals Ltd (ASX: PLS) shares are falling 2.25%, while the Allkem Ltd (ASX: AKE) share price is down 1.58%.

Let’s take a look at what is going on with Core Lithium.

Offtake agreement termination date extended

Core Lithium announced today it has agreed with Tesla to extend the termination date on an offtake agreement to 26 October.

In March, Core Lithium announced it had entered a binding offtake term sheet for the supply of lithium to electric vehicle manufacturing giant, Tesla.

The deal involves Core Lithium supplying Tesla with up to 110,000 tonnes of spodumene concentrate over four years from the Finniss Lithium Project.

The plan is subject to the two companies entering a definitive product purchase agreement.

Previously, the final date for completion of negotiations was 27 August. However, with today’s announcement, this has now been extended to October.

Commenting on today’s news, Core Lithium said:

The extension allows Core and Tesla to complete negotiations for the definitive full form binding offtake agreement.

Core Lithium share price snapshot

The Core Lithium share price has exploded 320% in the past year, while it has gained 128% year to date.

However, in the past week, Core Lithium shares have lost nearly 4%.

Core Lithium has a market capitalisation of about $2.3 billion based on the current share price.

The post Core Lithium share price dips despite Tesla extension appeared first on The Motley Fool Australia.

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• Why are Core Lithium shares seeing so much action in August?
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• Here are the 3 most heavily traded ASX 200 shares on Monday
• Down 16% in a week, what’s next for the Core Lithium share price?
• Could ASX battery minerals shares be in for a boost next month?

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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Bust out a bottle from A2 Milk Company Ltd (ASX: A2M). The share price is giving shareholders something worth celebrating today.

While the S&P/ASX 200 Index (ASX: XJO) is underwater by 2.14%, the infant formula company’s shares look rosy. The catalyst behind such differing performances today is A2 Milk’s full-year results for FY22 — which have been well-received by the market.

In early afternoon trade, the A2 Milk share price is enjoying an 8.35% boost to $5.32. The move positions the company’s shares at their highest level since 30 March this year.

Getting back on track

Investors who have been around the block would recall the days when A2 Milk was considered a gemstone of the ASX. However, the COVID-19 pandemic poured cold water on the fiery performance of the New Zealand-based company.

Between June 2020 and December 2021, A2 Milk’s trailing 12-month profits sunk from NZ$388.2 million to a meagre NZ$20.2 million. As you might expect, the A2 Milk share price collapsed in lockstep with the dwindling earnings.

Fortunately, today’s full-year FY22 figures hint that those difficult days may be behind the company. As The Motley Fool Australia reported earlier, the strained milk business bounced back in the latest financial period. Both revenue and profits returned to growth, leaping 19.8% and 42.3% respectively.

Pleasingly, net profit after tax (NPAT) for the period came in at NZ$114.7 million — more than five times greater than the paltry profits at the end of December 2021. This would suggest the bulk of the uptick in growth occurred in the second half of the financial year.

Boosting the A2 Milk share price

Shares in A2 Milk are likely getting a positive nudge from its share buyback news today as well. With a closing balance of $816.5 million in net cash at the end of the reporting period and more profits on the horizon, management made the call to announce a buyback program.

Shareholders will benefit from a return of capital of up to $150 million. For reference, this represents 3.7% of the company’s market capitalisation at the current A2 Milk share price.

The post A2 Milk share price soars 8% as company regains money-making mojo appeared first on The Motley Fool Australia.

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• A2 Milk share price lags ASX 200 ahead of Monday’s earnings result
• How did the A2 Milk share price respond last time the company reported?

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. 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 Northern Star Resources Ltd (ASX: NST) share price is heading south on Monday.

This comes after the company released its FY2022 full-year results.

At market open, the gold miner’s shares dumped nearly 3%, but have since recovered some of those losses. However, the downturn is in line with a broader slump across the ASX today.

Currently, Northern Star shares are down 1.45% to $7.47.

Northern Star share price retraces despite ‘strong performance’

• Annualised gold sold of 1,561koz at AISC of $1,633/oz, in line with guidance
• Total revenue up 35% to $3,735 million
• Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) up 31% to $1,517 million
• Underlying net profit after tax (NPAT) down 27% to $273 million
• Final dividend down 43% to 11.5 cents per share, fully-franked
• Strong balance sheet with cash and bullion of $628 million as at 30 June

What happened in FY2022?

For the 12 months ended 30 June, Northern Star achieved gold production of 1,561koz at an all-in sustaining cost (AISC) of $1,633/oz.

Despite a challenging environment, this was in line with its guidance of 1,550koz to 1,650koz at an AISC of $1,600/oz to 1,640/oz.

The performance of the Western Australian production centres of Kalgoorlie and Yandal delivered FY2022 production and cost guidance. Production performance at the Pogo Operation substantially improved, with a milestone run rate of 250koz per annum achieved in the second half.

As a result of the strong production and gold price realised, the company generated record underlying EBITDA of $1.5 billion. This was underpinned by a 29% increase in gold sold and a 7% increase in the average realised gold price.

Similarly, operating cash flow was up 49% from the prior year to a record $1.6 billion. This compared to $1.1 billion in FY2021.

At 30 June, cash and bullion totalled $628 million. The company had drawn corporate bank debt totalling $100 million and has no scheduled repayments in the next 12 months.

The board declared a fully-franked final dividend of 11.5 cents per share, corresponding to 23% of cash earnings. This brings the full-year dividend to 21.5 cents per share, representing a 13% improvement over the prior comparable year.

In addition, Northern Star elected to return funds to shareholders via an on-market share buyback of up to $300 million.

What did management say?

Commenting on the results, Northern Star managing director Stuart Tonkin said:

These results, which include for the first time Saracen and 100% of the Super Pit, clearly demonstrate Northern Star’s cash earnings potential. Our strong performance in FY22 generated $1 billion in cash earnings, which underscores the sustainability of the cash flow from our high-quality assets located in tier-1 jurisdictions.

The fully franked final dividend of 11.5cps, within our dividend policy target and payable next month, will mean we have returned $1 billion cash to shareholders since FY12.

The announcement today of the first buy-back in Northern Star’s history presents compelling value and confirms the Board’s confidence in our strong balance sheet and cash generation outlook and aligns with our fiscal discipline and returns focus.

What’s the outlook?

Looking ahead, Northern Star provided the following guidance for FY2023:

• Gold sales between 1,560 and 1,680 ounces, weighted towards the second half due to the scheduled ramp-up of the Thunderbox mill expansion and Pogo stoping schedule
• AISC in the range of $1,630 to $1,690 per ounce (based on assumed average exchange rate of AUD: USD 0.70)
• Growth capital expenditure similar to FY2022 levels with $650 million forecasted (including $13 million corporate investment)
• Exploration expenditure of $125 million

Tonkin touched on Northern Star’s outlook:

We have made a solid start to FY23 and continue to progress the KCGM cutback with our new cost-efficient mining equipment. The SKO processing plant is now on care and maintenance, at Thunderbox we commence commissioning the expanded mill in Q1, while at Pogo we have removed surplus equipment, reflecting increased development rates across the fleet.

The Northern Star share price is 20% in 2022 after recording heavy falls from April onwards.

The post Northern Star share price backtracks despite revenue lifting 35% to $3.7b appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has positions in Northern Star Resources Limited. 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 Michael Hill International Ltd (ASX: MHJ) share price is firmly in the emerald green today, up 6.83% amid the company announcing its full-year results for FY22.

Shares of the iconic jeweller currently trade for $1.095 each. Earlier, they hit a high of $1.12 apiece shortly after market open.

Let’s go over the highlights of the report.

What did Michael Hill Report?

• Group operating revenue up 7% year over year (yoy) to $595.2 million
• Comparable earnings before interest and tax (EBIT) up 11.1% yoy to $62.9 million
• Statutory net profit after tax (NPAT) up 13.9% yoy to $46.7 million
• Unfranked final dividend of 4 cents per share

Michael Hill reported delivering “record sales, gross margin, and profit” during FY22. This was despite its retail stores losing an aggregate total of 10,000 trading days due to COVID-19 lockdowns and other restrictions during the period.

One highlight of the year was that Michael Hill reported its profit grew faster than sales. The company attributed this to “margin expansion driven by strategic initiatives across product, stores, digital and loyalty”.

A share buyback program will begin on 19 September and is expected to conclude on 28 August next year. A total of 19,414,267 ordinary fully paid shares, or 4.9% of this securities class, will be repurchased for a total value of around $22.7 million at the time of writing.

The unfranked final dividend of 4 cents per share has a record date of 9 September and a payment date of 23 September.

What else happened in FY22?

Michael Hill’s digital sales delivered record numbers with sales of $42 million, partly because customers were forced to shop from home during lockdowns. Online sales comprised 7.1% of the company’s total revenues. This channel is also becoming more important as part of its omnichannel marketing structure, the company said.

FY22 was also a year Michael Hill strengthened its balance sheet considerably, with the company noting the period ended with it holding $95.8 million in cash and no debt on its books. It was boosted by an influx of cash from the company selling its Canadian credit book for $14.2 million.

Michael Hill has 280 retail stores, noting that it closed six underperforming stores and opened one new one in Australia during the reporting period.

What did management say?

Michael Hill International managing director and CEO Daniel Bracken said:

Pleasingly, FY23 has started with both strong sales and gross margin performance. Our current bridal campaign has been extremely well received by customers and clearly demonstrates our commitment to brand elevation, our heritage, quality and craftmanship. With the significant impacts from Covid behind us, we are still mindful of potential economic disruptions. That being said, over the last few years, we have demonstrated the resilience of our business, strength of our brand and determination of our team.

What’s next?

Michael Hill strongly emphasises sales and margin growth, which it pursues through several avenues. One aspect is increasing membership of its Brilliance by Michael Hill loyalty programme, which provides a source of regular and profitable customers.

Another aspect is the ongoing evolution of its products, with the company noting the popularity of synthetic diamonds will likely increase moving forward. Further improvements to its artisanal factories in Australia are scheduled, which will help make its supply chain more robust.

Michael Hill is also expanding into new territories and offering a new range of services. One market, in particular, is Quebec, Canada where the company said it’s expanding its web presence. Some new services in the works also include bespoke design, financial services, and sustainability.

Michael Hill share price snapshot

The Michael Hill share price is down 21.4% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 7% over the same period.

The company’s market capitalisation is roughly $421 million including today’s price action.

The post Michael Hill share price surges 7% on record profit appeared first on The Motley Fool Australia.

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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 Aussie bourse is having a Monday to forget, with the S&P/ASX 200 Index (ASX: XJO) tumbling 2.2% at the time of writing. But the week has kicked off in a worse fashion for the Betashares Nasdaq 100 ETF (ASX: NDQ).

The exchange-traded fund (ETF) has plummeted 3.67% at the time of writing to trade at $28.07. That marks its lowest point of the month so far.

So, what could be driving the ETF’s tumble?

To explain that, one must first explain what it is. ETFs represent a collection of stocks and the like, which can be traded just like listed shares.

And the Betashares Nasdaq 100 ETF provides exposure to the stocks that make up the NASDAQ-100 Index (NASDAQ: NDX).

So, why is the ASX favourite suffering more than the ASX 200 today? Keep reading to find out.

Why is the Betashares Nasdaq 100 ETF (NDQ) struggling?

The Betashares Nasdaq 100 ETF is most likely falling on – perhaps unsurprisingly – suffering endured by the NASDAQ 100 Index.

The index, made up of many of Wall Street’s most renowned companies, tumbled 4.1% on Friday amid seemingly bad news about interest rates.

US Federal Reserve chair Jerome Powell suggested rates would remain elevated for longer in a continued bid to battle inflation late last week, Reuters reports. That’s despite the likelihood that such rate hikes would weigh on the nation’s economy and result in job losses.

Many of the NASDAQ-100’s largest constituents were among its biggest weights on Friday.

Stock in NVIDIA Corporation (NASDAQ: NVDA) – which boasts a US$406.5 billion market capitalisation – tumbled 9% on Friday.

Meanwhile, the share price of tech giants Apple Inc (NASDAQ: AAPL) and Microsoft Corporation (NASDAQ: MSFT) – each with market caps of more than two trillion – both fell around 4%.

Sadly, it’s just the latest pain facing those invested in the Betashares Nasdaq 100 ETF. Its share price has plunged 23% since the start of 2022 and 17% since this time last year.

The post Why is the Betashares Nasdaq 100 ETF (NDQ) tumbling 4% on Monday? appeared first on The Motley Fool Australia.

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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 positions in and has recommended Apple, BETANASDAQ ETF UNITS, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Apple and Nvidia. 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 McMillan Shakespeare Limited (ASX: MMS) share price is leaving the S&P/ASX 200 Index (ASX: XJO) in the dust today.

After opening 3% higher, the McMillan share price is soaring 9% at the time of writing to $13.95.

Investors are reacting positively to the fleet management and salary packaging company’s FY22 results.

McMillan share price takes flight as dividend delights 

Here are some of the key points from McMillan Shakespeare’s full-year results:

• Normalised revenue came in at $594.3 million – up 9.2% compared to the prior corresponding period (pcp) of FY21
• Statutory net profit after tax (NPAT) grew by 15.2% on the pcp to $70.3 million
• The company declared a fully franked final dividend of 74 cents
• McMillan will undertake an off-market share buyback for up to 10% of its shares

McMillan’s final dividend was a standout, representing a whopping 154% increase on the pcp as the company revised its dividend payout policy.

Going forward, it will now return between 70% and 100% of underlying profit to shareholders in the form of dividends.

Today’s final dividend of 74 cents represents a dividend payout ratio of 100% of underlying profit, up from 66% in the pcp.

Combined with its interim dividend earlier in the year, McMillan shares are currently trading on a trailing dividend yield of 7.7%.

What else happened in FY22?

During the year, McMillan’s long-standing CEO Mike Salisbury retired after 14 years with the company. 

The year also saw McMillan restructure the company and divest its Davantage Warranty and UK CLM Fleet Management businesses. 

In an effort to further simplify the business, it will consider exit options for its UK businesses in FY23.

At the same time, it’s considering potential acquisition opportunities in its plan and support services (PPS) division.

What did management say?

Commenting on the results, McMillan Shakespeare CEO Robert De Luca said:

While we have continued to operate in an environment impacted by new vehicle supply constraints, our ongoing customer focus has helped underpin business momentum benefiting FY22 and future periods.

Through FY23 we will continue to simplify our business, invest in digital and data analytics to enhance the customer experience, supporting business growth and future productivity benefits.

What’s next?

Looking ahead, McMillan has begun FY23 with around $26 million in novated lease carryover.

While management didn’t provide specific guidance, it did comment on the outlook.

The company expects that many of the market conditions experienced in FY22 will continue into FY23. In particular, global motor vehicle supply constraints.

McMillan also anticipates that novated lease yields and end-of-lease income yields will remain at current levels.

McMillan Shakespeare share price snapshot

Boosted by today’s rise, the McMillan share price has comfortably outperformed the ASX 200 this year.

McMillan shares have jumped 15% since the beginning of 2022 and are up 11% over the last 12 months.

The post McMillan Shakespeare share price revs 9% higher on bumper final dividend appeared first on The Motley Fool Australia.

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Motley Fool contributor Cathryn Goh 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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It’s been an awful start to the trading week for the Evolution Mining Ltd (ASX: EVN) share price this Monday. At the time of writing, Evolution shares are down a nasty 4.4% at $2.39 each.

That’s a far worse performance than that of the S&P/ASX 200 Index (ASX: XJO), which has lost a less severe but still depressing 2.07% at present.

This drop for gold miner Evolution Mining comes despite some positive conditions for gold, which my Fool colleague went through this morning.

Earlier this month, we covered Evolution’s full-year earnings for FY2022.

As we went through at the time, these earnings saw Evolution post total revenues of $2.06 billion, up 11% year on year.

But a 6% slide in statutory net profit after tax (NPAT) to $323.3 million and a 2% drop in earnings before interest, taxes, depreciation, and amortisation (EBITDA) to $898.814 million didn’t exactly inspire investors.

Evolution shares dropped 1.56% on the day the earnings were posted, and the company is now down around 7% since.

Everything you need to know about Evolution’s dividend

But let’s talk about Evolution’s upcoming dividend. So the gold miner declared a final and fully franked dividend of 3 cents per share for FY22.

That was consistent with the company’s last interim dividend. But a 40% drop from FY21’s final dividend of 5 cents per share.

Evolution shares will trade ex-dividend for this payment on 30 August (tomorrow). This means that any investor wishing to receive this dividend must own Evolution shares by the end of this trading day.

When the shares trade ex-div tomorrow, it will lock any new investors out of this dividend. As such, we can expect the typical ex-dividend share price drop during tomorrow’s trading session.

Investors will then have to wait until 30 September to receive the dividend in their bank accounts. Evolution shares are not currently operating a dividend reinvestment plan (DRP), so Evolution shareholders have no choice but to receive this payment in cash.

The Evolution Mining share price today has a fully franked dividend yield of 2.51%, which includes this upcoming payment.

The post Hoping to bag the next Evolution Mining dividend? Here’s what to do 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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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.

Dividends are payouts to shareholders from a company’s profits. Growth stocks and younger companies typically don’t pay out dividends because they need to reinvest profits to continue growing at a high rate. However, once a company reaches a certain size, its room for high growth typically decreases, so companies will pay out dividends to incentivise investors to continue investing in them.

Dividend stocks aren’t as flashy or get the attention that growth stocks tend to but there’s no denying they’re just as, if not more, lucrative for investors.

It pays to hold onto dividend stocks

A large part of the appeal of dividends is that they’re close to guaranteed income, and investors don’t have to worry as much about a stock’s price movements because they’ll be getting paid their dividend regardless. Is the stock price up 10%? Expect your dividend. Is the stock price down 10%? Expect your dividend. The stock price flat? Expect your dividend.

There are situations where a company may cancel its dividend — like Delta (NYSE: DAL) during the start of the COVID-19 pandemic — but if you’re investing in Dividend Aristocrats, you don’t have to worry too much about that problem. Dividend Aristocrats are S&P 500 companies that have managed to increase their yearly dividend payout for at least 25 consecutive years. The title of Dividend Aristocrat gives investors confidence that a company has the financial resources to weather broader economic problems and still produce good returns.

Dividends add to the effects of compound earnings

Looking to build wealth in the stock market? Learn to appreciate the power of compound earnings. Compound earnings occur when the money you earn on your investments begins to earn money on itself. Compound earnings by themselves are powerful, but the effects increase when you reinvest your dividends into the stock that paid them. And it doesn’t take much effort; you can enrol in your broker’s dividend reinvestment program to have it automatically done for you.

Let’s take the Vanguard High Dividend Yield ETF (NYSEMKT: VYM) as an example. Since its inception in 2006, the ETF has returned just over 8% annually. Imagine if you invested $500 monthly into the fund, receiving those same returns for 20 years. At the end of that span, your investment would be worth over $274,500. If we assume its current 3% NYS stayed constant during that span and you reinvested the dividends, your investment would increase to over $385,200 after 20 years.

It’s usually better to delay your dividend payouts in cash until retirement so you can give it time to compound and increase your stake in the stock that’s paying it. A 3% dividend yield may not be much today ($300 per $10,000 in value), but once you’ve accumulated a sizable stake throughout a career, it can be great supplemental income in retirement.

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

The post Ignoring dividend stocks in your investment portfolio? You’ll regret that appeared first on The Motley Fool Australia.

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Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard High Dividend Yield ETF. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.

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

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The Ramelius Resources Limited (ASX: RMS) share price is sliding into the red today following the release of its FY22 earnings results.

At the time of writing, the Ramelius share price is 4% down at 86.5 cents apiece.

Ramelius slides as profits get a haircut

Key takeaways from the company’s results include:

• Gold production of 258,625 ounces down 5% year on year
• All-in sustaining cost (AISC) of A$1,523 per ounce, up 16% from FY21
• Revenue from ordinary activities of $603.9 million down 5% year on year
• EBITDA of $208.1 million for the year, down 39% from last year’s result
• Statutory net profit after tax (NPAT) of $12.4 million down 90% year on year
• Underlying NPAT of A$73.0 million, down 40% from FY21
• Fully franked dividend of 1.0 cent per share

What else happened last period for Ramelius?

The company recognised a step backwards on the growth front. Gold production was lower at Mt Magnet due to lower grade and higher input costs.

Although, higher gold prices mitigated some of these negative factors, backed by higher production at Edna May following the introduction of ore from Tampia.

Ramelius has also introduced a Dividend Reinvestment Plan (DRP). Shareholders can now choose to reinvest their dividends into buying additional RMS shares.

“The reinvestment price is based on a 2.5% discount to the 10-day volume weighted average price after the date of election,” the company said.

Management commentary

Speaking on the results, Ramelius Managing Director, Mark Zeptner said:

Despite the challenges faced across the industry last financial year, Ramelius has posted a solid set of underlying results for the period and remains in a secure, debt free, financial position.

While FY23 continues to present some uncertainty in terms of local and global inflationary pressures, we expect both our production centres to generate positive operating cashflows which will fund the exciting prospects we see at Penny, Rebecca and at Mt Magnet where the development pipeline continues to grow.

What’s next for Ramelius?

For the 2023 financial year, Ramelius is forecasting gold production of 240,000–280,000 ounces. It hopes to achieve this at an ASIC of A$1,750–$1,950 per ounce.

In the past 12 months the Ramelius share price has slipped more than 43% into the red.

The post Ramelius share price slips following 90% profit plunge appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow 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 Block Inc (ASX: SQ2) share price is tumbling hard today, down 8.21% in morning trade.

Block closed on Friday trading for $105.80 per share and is currently trading for $97.11 per share.

It’s not just the Block share price sliding today either.

Fellow ASX BNPL share Zip Co Ltd (ASX: ZIP) is down 7.22%, while Sezzle Inc (ASX: SZL) shares have fallen 6.11% since the opening bell.

The tech sector is facing a sharper selloff than the broader market, with the S&P/ASX 200 Index (ASX: XJO) down 2.09% compared to a 3.76% decline in the S&P/ASX All Technology Index (ASX: XTX).

Still, the Block share price, alongside its BNPL rivals, is leading the charge lower. What’s going on?

Jerome Powell’s hawkish words

As you’re likely aware, Block shares are listed on both the NYSE and ASX. Block began trading on the ASX on 20 January after completing its acquisition of Afterpay.

And in Friday’s trade in the US, the Block share price closed down 7.7% on the NYSE, with futures currently down another 1%.

The fall was part of a sweeping selloff that saw the tech-heavy NASDAQ finish Friday down 3.9%.

Investors were hitting the sell button after US Federal Reserve chair Jerome Powell delivered his much-awaited speech at the Jackson Hole central banking summit in the US state of Wyoming.

And investors hoping for some dovish signals were left wanting.

Powell reiterated the central bank’s full intentions to bring inflation back into its target range, acknowledging this will bring some pain to the economy.

According to Powell:

Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labour market conditions. While higher interest rates, slower growth, and softer labour market conditions will bring down inflation, they will also bring some pain to households and businesses…

Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy.

US Treasury yields increased following Powell’s speech.

Commenting on the market’s reaction, which included the sharp selloff in the Block share price, Joe Gilbert, portfolio manager at Integrity Asset Management said (courtesy of Bloomberg):

Powell wants financial conditions to tighten further and wanted the market to know that the Fed is not ready to declare victory over inflation yet. He also renounced any prospects of interest rate cuts soon. The market is repricing this prospect.

Tech shares are particularly vulnerable to rising rates, as they’re often priced with future earnings growth in mind. With higher rates, the present cost of those future earnings rises.

The Block share price likely took a bigger hit than many, because BNPL shares are especially vulnerable to the monetary tightening environment.

With rates looking to rise into 2023 across most of the developed world, a growing cohort of analysts is sounding warnings on the rise of bad debts amongst the BNPL players, already an Achilles heel for the sector.

Block share price snapshot

With today’s intraday loss factored in, the Block share price is down a painful 45% since listing on 20 January. Over that same period, the ASX 200 had dropped 5%.

The post Why is the Block share price plunging 8% today? appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• Why is the Block share price tumbling 6% today?
• These are the 10 most shorted ASX shares
• How does Zip’s ‘Operation Blue Sky’ stack up against Block’s battening down of the hatches?
• Could Block’s ‘superpower’ be an Achilles’ heel for Zip shares?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. 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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