The biggest ASX lithium shares are all edging higher in late morning trade.

But one small-cap lithium stock is leaving them far behind.

Shares in European Lithium Ltd (ASX: EUR), with a market cap of some $143 million, are soaring 18% at the time of writing, having earlier posted gains of more than 34%.

This comes after the ASX lithium share emerges from yesterday’s trading halt, which it requested “pending an announcement regarding offtake arrangements.”

That announcement was released this morning when European Lithium reported on a deal with Bayerische Motoren Werke (ETR: BMW).

And ASX investors have taken note.

ASX lithium share rockets on agreement with BMW

European Lithium reported it has signed a non-binding memorandum of understanding (MOU) with BMW, securing its first offtake of battery grade lithium hydroxide (LiOH).

The MOU will see European Lithium and BMW cooperate in negotiations for “suitable commercial terms” for BMW to purchase LiOH from the ASX lithium share. BMW will have the first right to purchase 100% of the LiOH produced from the identified resources.

Commenting on the MOU, Tony Sage, European Lithium chair, said, “Securing our first offtake with BMW AG is another key milestone for the company. Partnering with BMW AG is an ideal fit for EUR”.

European Lithium said no assurance is given that the non-binding MOU will progress to a binding contract.

Should the parties agree to a binding contract, BMW will pay US$15 million upfront. European Lithium will repay that through equal set offs against the LiOH it delivers to BMW.

The ASX lithium share said it will use the proceeds from the prepayment to develop its Wolfsberg Project. That includes supporting the commencement of the construction phase.

European Lithium stated:

Securing its first offtake is a key milestone allowing the company to focus on the final steps of development and implementation of the Wolfsberg Project while it looks to the future and builds a portfolio of prospective battery metals projects located in Europe.

How has European Lithium been performing?

Though European Lithium has struggled this year, down 31% in 2022, the ASX lithium share remains up 60% over the past 12 months.

For some context, the All Ordinaries Index (ASX: XAO) is down 7% since this time last year.

The post Guess which ASX lithium share is rocketing 18% on a new deal with BMW appeared first on The Motley Fool Australia.

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• Road to retribution: Can the Telstra share price continue its upwards trajectory under a new CEO?
• Block share price tumbles 6% as quarterly earnings sink
• Worried about how ASX 200 tech shares might perform this earnings season? Here’s what to watch
• Why Goldman is tipping 80% upside for the Elders share price
• ‘The world is changing’: CEO reveals what will help drive Rio Tinto shares in 2023 and beyond 

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 recommended BMW. The Motley Fool Australia has recommended BMW. 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 Telstra Corporation Ltd (ASX: TLS) share price has risen by around 50% since 30 October 2021.

The telco has been going through a significant strategic shift in a bid to improve things for a while now, with its T22 strategy and the recently-announced T25 strategy.

At the end of March 2022, current CEO Andrew Penn announced that he was going to retire after serving more than seven years in the role.

Telstra’s current chief financial officer (CFO) Vicki Brady will officially take over as CEO on 1 September 2022.

In an interview with The Australian, Penn said:

The fact I’ve been able to create my successor and the chief financial officer successor from within the team, it’s a great team that is very cohesive. Strategies come and go but those things are durable and will mean whatever our strategy is in the future we will be able to respond to.

Review of how Penn performed

Telstra Chair John Mullen has commented on the positive impact Penn has had on the business:

Andy has led Telstra during a period of significant change and will be known for his courage in setting a bold ambition through the T22 strategy to deliver a transformed experience for customers, shareholders and employees.

There is no doubt the strategy has delivered beyond expectations and has laid the foundation for Telstra’s recently announced T25 strategy and a renewed focus on growth and innovation.

Delivery of the T22 strategy has seen Telstra return to underlying growth, achieve significant customer experience improvements, reduce costs by over $2.5 billion and reach high performing employee engagement levels with over 17,000 people now working in agile teams across Telstra.

Those were some of the key objectives of the T22 strategy. Telstra also worked on monetising assets. It managed to sell 49% of its towers business for $2.8 billion.

Telstra acquired Digicel Pacific in partnership with the Australian government for US$1.6 billion. It’s a leading telco provider across PNG, Fiji, Nauru, Samoa, Tonga, and Vanuatu. It has around 2.5 million subscribers, generating US$431 million of service revenue, the majority of which is generated in PNG.

It also bought GP clinical and practice management software company MedicalDirector for an enterprise value of $350 million.

The asset sale and acquisitions came within the last 18 months, so it has been a busy period for the business.

What’s the next thing that could impact the Telstra share price?

Aside from the impending result during reporting season, the telco is now working on its T25 strategy.

This involves expanding its 5G network coverage, improving its customer experience, and growing its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) as well as its underlying earnings per share (EPS) It also aims to further reduce costs and look to grow its dividend over time. Indeed, profit growth could be key for helping the Telstra share price rise.

While this strategy was devised under Penn’s leadership, it will be the new CEO that is tasked with seeing it through.

Certainly, 5G could unlock new technologies and services that are yet to be invented.

Telstra share price snapshot

Over the last month, the Telstra share price has risen by almost 4% and over the past five years, it has dropped 3%. However, there have been many ups and downs during that time.

The post Road to retribution: Can the Telstra share price continue its upwards trajectory under a new CEO? appeared first on The Motley Fool Australia.

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• Why this ASX 200 giant ‘looks attractive’ right now: expert

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation 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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The Elders Ltd (ASX: ELD) share price has had a rough month on the markets, but the stock’s future appears far brighter.   

That is according to one top broker. Goldman Sachs remains bullish on the Elders share price, holding its ‘conviction buy’ rating steady and tipping an 80% upside on its current levels, as my Fool colleague James reports.

The S&P/ASX 200 Index (ASX: XJO) agribusiness company’s stock is currently swapping hands for $11.71 a piece. That’s 9.7% lower than it was this time last month.

Let’s take a look at what’s got Goldman Sachs bullish on the 183-year-old Australian business.

Goldman Sachs tips Elders share price to reach $21

The Elders share price could soon reach a whopping $21, according to the broker. Goldman Sachs believes the ASX has been too harsh on the stock.

It commented on the recent selloff of Elders’ shares, saying:

We believe the market is applying a higher weight to the potential of a cyclical downturn in seasonal conditions over the long-term structural growth opportunities still in front of the company.

Elders revealed a combination of market and seasonal factors, acquisition, and organic growth saw its activity increase over the first half of financial year 2022.

Indeed, it posted a 38% jump in revenue and an 80% lift in earnings before interest and tax (EBIT) over the six months ended 31 March.

That led the company to upgrade its guidance. It’s forecasting its full-year EBIT to be 30% to 40% above that of financial year 2021.

And it’s not just the company’s potential growth that’s exciting the team at Goldman Sachs.

The broker tipped Elders to up its dividends to 50 cents for financial year 2022 and 53 cents in financial year 2023, as The Motley Fool Australia reported last month.

For comparison, the company paid out 42 cents in dividends in financial year 2021.

The post Why Goldman is tipping 80% upside for the Elders share price 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 Goldman Sachs. The Motley Fool Australia has recommended Elders 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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Rio Tinto Limited (ASX: RIO) shares are off to a positive start in early trade, up 1.3%.

Shares in the S&P/ASX 200 Index (ASX: XJO) mining giant closed yesterday at $96.58 and are currently trading for $95.99.

That’s this morning’s price action for you.

Now here’s what CEO Jakob Stausholm says will help drive Rio Tinto shares in the future.

A new kind of partnership

On 21 July Rio Tinto announced it had signed a memorandum of understanding (MOU) with Ford Motor Company (NYSE: F) to supply the automaker with battery and low carbon materials in support of a net-zero future.

Among those materials, Rio will be the primary supplier of aluminium raw materials for Ford’s F-150, the world’s first all-aluminium body pick-up truck. Or ute, if you prefer.

Responding to a question regarding Rio’s MOU with Ford and how things might evolve with agreements with automakers during the mining giant’s earnings call, Stausholm said (lightly edited for readability):

What you see is that EVs is happening now and it’s an irreversible process. In the beginning, people were afraid of investing in the new platform of EV. But now all of the automakers have done it, and they really have to scale that up. And suddenly, they’re all realising that some of the bottlenecks are actually in the materials.

That’s one dimension.

The other thing is they’re making commitments that their products will have less CO2 in them. For both reasons, we [Rio Tinto] become very, very relevant.

Stausholm also noted the low emissions levels related to miners’ aluminium production, which should offer future tailwinds for Rio Tinto shares.

“We also are very relevant [because] we are producing some of the lowest CO2 aluminium in the world,” he said.

“So, it’s a different kind of partnership with customers that we can start forming compared to a history of very much commodity trade from our side. The world is changing in the commercial landscape, and I find it very exciting.”

How have Rio Tinto shares been performing longer-term?

So far in 2022 the mining giant is down 4%, compared to an 8% year to date loss posted by the ASX 200.

Over the past five years Rio Tinto shares have gained 52%.

The post ‘The world is changing’: CEO reveals what will help drive Rio Tinto shares in 2023 and beyond  appeared first on The Motley Fool Australia.

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• ‘We are in for the long haul’: Rio Tinto CEO defends future spending in the face of recession fears
• Which ASX 200 shares will prove to be dividend heavyweights this earnings season?
• ‘Unlocks hidden value’: Rio Tinto share price slides despite $525 million payday
• Is the iron ore price entering a bear market?
• Why is the Fortescue share price sliding on Tuesday?

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 Brainchip Holdings Ltd (ASX: BRN) share price has been on a rollercoaster ride of late.

Shares in the ASX computer chip processor have gained 40% in the last month, but have lost 12% in just the past week.

According to the Australian Financial Review (AFR), a relatively unknown US-based investment firm has played an influential role. 

The investment house LDA Capital reportedly has a financing arrangement with Brainchip. And it seems the company is not the only ASX micro cap it’s supporting.

But more on that later. Let’s focus on Brainchip first up. 

Brainchip and LDA Capital

According to the AFR, Branchip’s financing arrangement with LDA Capital allows it to access between $20 million to $45 million across a one-year period. This arrangement reportedly started in August 2020. 

In return, LDA Capital is paid fees and provided 100 million options, leading it to bank tens of millions of dollars, the AFR reported.

LDA Capital decided to exercise 75 million options in January 2021. Half were exercised at an issue price of 15 cents a share and the other half at 20 cents per share. 

The AFR also noted Brainchip had requested an extension to draw the minimum amount under the facility, enabling it to access a further $35 million.

LDA Capital’s latest ASX coup is Hawson Iron Ltd (ASX: HIO) which, in December 2021, said it had secured $200 million in funding. 

What is Hawson Iron? 

The business holds a 100% interest in the Hawsons Iron Project outside Broken Hill in New South Wales, as well as other magnetite interests in the emerging Braemar Iron Province. 

The project is striving to produce the world’s highest grade iron product to steelmakers who understand the benefits of producing ‘green steel’. That’s according to the company’s latest quarterly report. 

Similar to Brainchip, Hawson Iron is yet to generate a profit and both companies remain highly speculative investments. But this appears to be the type of business that LDA Capital caters for globally.

GetSwift Ltd was another company within LDA Capital’s portfolio.

The former ASX-listed logistics software company, founded by former media executive Bane Hunter and retired AFL player Joel Macdonald, recently filed for bankruptcy, according to media reports.

Tread with caution

Unprofitable companies with unproven business models are often risky. When you add in significant leverage, it often creates a recipe for disaster. 

Whilst GetSwift presents the worst-case scenario, I believe it’s imperative for investors to tread carefully in such murky waters. 

The post This US investment house has made tens of millions from Brainchip. Guess which other ASX share it’s backing. appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
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• Why BrainChip, Fortescue, PointsBet, and Zip shares are dropping
• Why is the BrainChip share price sinking 11% on Friday?

Motley Fool contributor Raymond Jang 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.

What happened

July was a good month for the stock market in general, with the S&P 500 index jumping over 9%. But some electric vehicle (EV) stocks significantly outpaced that gain. Shares of sector leader Tesla (NASDAQ: TSLA) jumped 32.4% during the month, while the stocks of start-ups Lordstown Motors (NASDAQ: RIDE) and Canoo (NASDAQ: GOEV) soared 41.8% and 87%, respectively, according to data provided by S&P Global Market Intelligence.

So what

Tesla shares have now increased more than 45% since late May. The jump in the month of July came as Tesla reported second-quarter earnings that showed the company was resilient even in the face of several headwinds. Its second-quarter revenue increased 42% year over year, but was lower than the two previous quarterly sales results. Considering supply chain issues that most global automakers are also facing, as well as COVID-19-related production delays and sales impacts from lockdowns in China, the results were received positively. 

Now what

These challenges also come as Tesla works to ramp up production at its two new factories in Texas and Germany. CEO Elon Musk had recently said those plants were burning cash, but Tesla still generated free cash flow of $621 million in the second quarter. That helped put some concerns to rest, and it was also taken as positive news for Tesla competitors. 

Lordstown and Canoo stocks outperformed Tesla in July on more than just sector tailwinds. Both businesses had been in danger of failing, but managed some key moves to continue with plans to operate and grow. 

Lordstown shifted its strategy and formed a strategic partnership with electronics manufacturer Foxconn. Foxconn purchased Lordstown’s manufacturing facility and will build the electric Endurance pickup truck for the EV company. The asset sale provided Lordstown needed capital, and the two companies intend to expand their joint venture for future product collaboration.

Canoo reported a net loss of $125 million in the first quarter, and it was down to just $104.9 million in cash and cash equivalents as of March 31, 2022. But in July it announced two new deals that may have saved the company. On July 12, it announced an agreement with Walmart. The retail giant agreed to purchase 4,500 of Canoo’s electric lifestyle delivery vehicles (LDVs), with an option for a total of 10,000 units to support its e-commerce business. Just two days later, Canoo said the U.S. Army agreed to take a vehicle “for analysis and demonstration.” Investors hope this could presumably result in a business relationship in the future. 

While both Lordstown and Canoo seemed to get good news last month, it should be noted that the outsize stock moves came after the stocks had hit all-time lows heading into July. Both companies’ market capitalizations had fallen below $500 million at that time. The bounce reflected hope that the companies will survive, but investors shouldn’t forget they remain very speculative investments. 

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

The post Why Tesla and other EV stocks rocketed higher in July appeared first on The Motley Fool Australia.

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Howard Smith 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 Tesla. 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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A top broker believes the Qantas Airways Limited (ASX: QAN) share price could be dinted as disappointing service, reduced capacity, and higher costs take their toll.

Citi asked, “How much will it cost [for Qantas] to improve performance?” The broker refers to large numbers of delays and cancellations experienced by the airline in June.

The Qantas share price closed Thursday’s session trading at $4.56 and is currently swapping hands for $4.62 in early trade. But Citi doesn’t believe that will hold.

Let’s take a closer look at why the broker is bearish on the S&P/ASX 200 Index (ASX: XJO) travel staple.

Broker tips Qantas share price to tumble 6%

Citi has slapped Qantas’ shares with a ‘sell’ rating and a lower price target on concerns the company will be forced to fork out extra cash and drop capacity in a bid to improve its performance.

“Overall, we expect improved on-time performance and cancellation rates from Australia’s premium airline,” the broker said before continuing:

However, we estimate this will likely come at a cost of higher staffing levels and lower capacity.

Subsequently, we forecast lower capacity growth and higher [cost of available seat kilometres] than the market is expecting.

The broker said Qantas upped staff numbers by around 3% and cut capacity by around 10% over the last few months amid higher costs, reports The Australian. It quoted Citi’s Samuel Seow as saying:

We expect this trend to continue and as a result we see higher costs and lower capacity. 

The broker also holds a “cautious” view of Qantas’ upcoming full-year earnings, set to be released on 25 August. It expects the airline’s guidance to be muted after a slow start to the financial year 2023.

Indeed, the company admitted the spread of COVID-19 and flu saw 15% of domestic flights cancelled or delayed for more than an hour during July’s busy school holiday period.

Citi’s new price target for Qantas shares is reportedly $4.28. That represents a potential 6.1% downside for the stock.

Citi also downgraded its financial year 2023 earnings expectations for the company.

It now expects Qantas to post a $514 million underlying profit, a 30% drop on its previous prediction, according to The Australian.

The post ‘Higher costs and lower capacity’: Why this broker tips the Qantas share price to nosedive appeared first on The Motley Fool Australia.

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• Are Qantas shares worth buying ahead of this month’s earnings result?
• Why is Rex smashing the Qantas share price on Tuesday?
• Qantas share price lifts despite airport mayhem
• When will Qantas shares pay a dividend again?
• What’s happening to the Qantas share price today?

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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 one of the great headlines: “Beer, cigs up”.

And, as any smoker or drinker knows, it’s one that could be applied regularly, as government taxes increase in line with inflation.

Which, as you might know, is kinda high right now, leading to headlines suggesting that we might soon have to pay $15 for a pint.

Now, I’m not sure, but I think if anything is unAustralian, it’s four beers costing more than a Pineapple.

Yes, yes, I hear the harm minimisation angle, but apparently we pay double the grog tax the Kiwis pay, around 6 times as much as the Poms, and a staggering 15 times the amount they pay in Germany – the home of beer.

Am I talking out of my ‘kick’?

Maybe.

I don’t mind a quiet beer from time to time.

But there are legitimate questions to ask about whether beer tax (and fuel tax, for that matter) are the right ways to fund government spending in this day and age.

Once upon a time, trade excises were the best, most reliable way to raise revenue – when hiding income was easier and computerisation was a pipe dream.

That was the 1800s.

These days? Well, let’s just say we’ve moved on (and in the case of petrol excise, there won’t be much to tax in 10 or 15 years!).

But the beer tax palava also asks questions about rising prices in general.

Beer tax isn’t a consideration for the RBA when discussing interest rates, but the same forces are at play in both cases.

The Reserve Bank put rates up on Tuesday. The Big Four banks finally followed, yesterday.

And there’s almost-certainly more to come.

Meanwhile?

Meanwhile, we’re in the opening salvos of earnings season, where companies will give us a look under the bonnet – and one of the key things to keep an eye on is how well – or otherwise – they’re dealing with inflation.

I’m regularly asked ‘How are you investing in this time of…’.

At the moment it’s ‘…inflation and rates.’

In the past it was high valuations.

Before that, it was COVID.

And so it goes.

My answer is boring – and probably doesn’t help me get invited back on those programs!

I haven’t changed my investing strategy in years.

Oh, I’ve learned some things. And modified my approach accordingly.

But I’ve never taken a ‘…this time of…’ strategy.

For example, I’ve always liked businesses with strong brands and pricing power.

Sometimes that’s not what the cool kids are investing in, and sometimes those companies can be out of favour.

But ask yourself how the ‘hot stocks’ have performed recently.

You know, the ones that people loved because they were ‘cool’, no matter how good or bad their financials looked.

Remember when everyone wanted to buy buy-now-pay-later stocks?

Or lithium miners?

Or whatever.

No, I’m not saying they can’t or won’t come good.

Some probably will.

Some, well… won’t.

I’m a bit old school. I like profitable companies.

Not exclusively – I’ve recommended loss-making companies where I think there’s a clear path to profitability – but mostly.

That doesn’t get me invited to the ‘hot stock’ forums or panels.

Meanwhile?

Meanwhile, shares in a company I own, Berkshire Hathaway, are up 62% over the last 5 years.

Another, Washington H. Soul Pattinson, is up 52%.

Amazon (ditto) is up 171%.

Oh, they’re not all winners – I’ve lost some money, too.

Have other companies gained more over the last 5 years? Absolutely.

Would I have liked to own them? Sure, if I’d have known, in advance, what might happen.

But that would have required luck. And, in some cases, blatant speculation.

Hey, someone wins lotto every week, too, right?

I looked silly for a while, eschewing buy-now-pay-later.

Afterpay shareholders got a Godfather offer from a US payments company and – if they’d sold, rather than taking shares in the deal – got very, very lucky.

Others, who bought shares in competitors are down 84% over the last year (Zip), 86% (Sezzle), or 76% (Openpay).

There were others.

No, I’m not raining on their parade.

I’m not rubbing it in.

But I am making the point that, at certain times, a ‘boring’ investment strategy can look hopelessly out of touch.

One business magazine, in 1999, famously asked ‘What’s Wrong, Warren?”.

They were, of course, talking about Warren Buffett, whose company, Berkshire Hathaway that I mentioned earlier, had not only avoided investing in tech, but had suffered serious share price falls as investors abandoned it.

They were investing, instead, in dot.com high-flyers.

We know how that ended.

Unfortunately, investment memories are short.

Maybe it’s the seduction of seemingly quick, easy wins.

The challenge of watching other people get rich and not being able to resist joining the party.

Of ‘this time it’s different’.

Sometimes, it is different.

Amazon made it through the dot.com carnage and went on to bigger and better things.

There will be winners from the current tech slump that will look cheap, today, in hindsight.

Hopefully, including a couple I own.

But I own some boring businesses. Ones that tick away, compounding in the background.

They’re not going to be ‘hot stocks’ any time soon.

But they’re slowly, surely, growing.

Some have been ‘’hot stocks’, but have fallen to Earth.

And I’m okay with that, too.

Because I didn’t buy them because they were ‘hot’.

I bought them because I think they’ll be bigger, better and more profitable in 5, 10 and 15 years.

I plan to own the vast majority of my current holdings well beyond 2037, if they continue to perform.

And if they do?

Not only will the compound returns be great, but I’ll have avoided brokerage, capital gains tax and the challenge of finding better companies to replace them.

I’ll keep adding money to my portfolio regularly, too – sometimes buying more of what I already own, sometimes buying shares in companies I haven’t owned before.

Some years will be great.

Some will be ordinary.

But over the long term?

I reckon it’ll be pretty boringly wonderful.

Which beats ‘exciting, but mediocre’, don’t you reckon?

Fool on!

The post The New Normal? Kinda like the Old Normal… appeared first on The Motley Fool Australia.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Scott Phillips has positions in Amazon, Berkshire Hathaway (B shares), and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Berkshire Hathaway (B shares), Washington H. Soul Pattinson and Company Limited, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Amazon and Berkshire Hathaway (B shares). 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 Lynas Rare Earths Ltd (ASX: LYC) share price has outperformed its benchmarks in the new financial year.

In the last three weeks of trade, investors have bid the share 22% higher.

In broad market moves, the S&P/ASX 300 Metals and Mining Index (ASX: XMM) has risen less than 1% over the past month of trade.

What’s up with the Lynas share price?

Lynas shares caught a bid on 13 July and have surged ever since.

It’s curious because as commodity markets such as oil and gas cool off, rare earths have followed suit. Their price on global markets is down 13% on the month.

Despite this, investors have piled into Lynas shares since mid-July, with trading volumes shooting higher again yesterday following a company announcement.

The miner advised of a $500 million project to expand capacity at its Western Australia Mt Weld mine and concentration plant.

As The Motley Fool reported, global demand for NdFeB [neodymium] magnets is expected to grow from 130,000 tonnes in 2020 to 265,000 tonnes by 2030.

Lynas’ new project is fully funded from cash flow. The company’s initial expansion plans have already been scoped, with Lynas looking to produce 12,000 tonnes per annum equivalent of neodymium and praseodymium in 2024.

Prior to this, the company’s Q2 FY22 earnings report was a positive catalyst that saw shares head back to longer-term price ranges.

In the report, Lynas grew cash receipts to a record $351 million, also 34% up on the same time last year. This was recognised with sales revenue of roughly $295 million.

In the last 12 months, the Lynas share price has clipped a 23% gain.

The post Why has the Lynas share price surged 22% in the last 3 weeks? appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
• Why BWP, Lynas, Pilbara Minerals, and Pinnacle shares are charging higher
• ‘Essential foundation for success’: Lynas share price leaps on $500 million expansion
• Here are the top 10 ASX 200 shares today
• Rare earths are now in the red for 2022. What does this mean for the Lynas share price?

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 Transurban Group (ASX: TCL) share price was rangebound yesterday and finished the day at $14.72 apiece. This extends the month’s gains to more than 1.3% and a 52-week high.

Zooming out, the share now trades at its highest level in more than 2 years. It nudged this level briefly in 2021, before quickly receding below the neckline.

As such, Transurban has nudged to another multi-year high and the question now becomes if it can keep up the pace.

Returns for the share versus the benchmark S&P/ASX 200 Index (ASX: XJO) for the past 5 years are plotted on the chart below.

Can Transurban push higher?

Analysts at Bell Potter reckon it can and recently affirmed their buy rating in a recent note to clients. In the release, Bell Potter reckons there are large opportunities on the horizon for the toll road giant.

The company’s “current pipeline of growth projects is $3.9 billion,” the broker said.

“[F]urther huge development opportunities are expected over the next few decades supported by population and economic growth” are also expected to be key drivers of the share price.

Meanwhile, more than 42% of brokers reckon Transurban is a buy right now, according to Refinitiv Eikon data.

However, 50% also say it’s a hold with the remainder urging clients to sell.

From this list, the consensus price target is $14.21, suggesting that the Transurban share price might have difficulty climbing higher if the group is correct.

One fund manager is positioned in TCL to capture a return from the current trends in inflation.

As TMF reported in July, “Atlas Funds Management chief investment officer Hugh Dive has named Transurban as one of three companies that could do quite well in a high interest rate environment.”

According to the Australian Bureau of Statistics (ABS), the consumer price index – Australia’s primary measure of inflation – increased 6.1% over the 12 months to 30 June.

Hence, if the relationship between the Transurban share price and upturns in inflation turns out to be true, that’s certainly something to think about.

In the last 12 months, the Transurban share price has clipped a 4% gain as well as 6% this year to date.

The post This $45 billion ASX 200 share just hit a new multi-year high. Can it keep going? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 shares smashing new 52-week highs on Thursday
• Broker names 3 ASX 200 shares to buy and hold
• When inflation = profit: Why this fundie is tipping the Transurban share price to outperform
• Expert prediction: 3 ASX 200 shares that can ‘do well’ in volatile times
• 3 ASX shares for ‘predictability’ through tough times: expert

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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