No investor is immune to making a mistake. I’ve certainly had my fair share over the years. However, no other mistake is likely as expensive as my decision on DroneShield Ltd (ASX: DRO) shares — a miscalculation that cost my portfolio $29,612.

The counter-drone technology company is among the top gainers within the S&P/ASX All Ordinaries Index (ASX: XAO) for the past year’s return.

While the benchmark is up 11%, Australia’s only publicly listed drone defence pure-play is a mind-boggling 467% higher.

My $29,612 mistake on DroneShield shares

I nabbed 17,522 DroneShield shares in April 2020 for 11 cents apiece — an investment worth about $1,930 at the time. At the end of yesterday’s session, the DroneShield share price stood at $1.83, nearly 17 times higher than my purchase price.

Shouldn’t I be jumping for joy after buying DroneShield shares at 11 cents if they’re now $1.83?

Yes, if I still owned them…

The problem is that I sold the lot — not for $1.00 per share, not even 50 cents. No, I sold out completely when the share price hit 14 cents, taking home a profit of $525.66 before tax. Don’t spend it all at once, right…

I left $29,612 on the table by selling my DroneShield shares too soon.

Why did I sell? In short, the temptation of a quick gain. I knew DroneShield was a speculative investment at the time. So when the share price raced ahead 27% only a couple of months after initially investing, I thought a $525 profit in the hand sounded pretty good.

Unfortunately, this type of short-term thinking is precisely what prevents compounding. As Warren Buffett said, “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”

Greed can hurt in both directions

What’s the lesson from my DroneShield shares mishap?

It shows that greed doesn’t need a declining share price for it to be costly. Imagine the accumulative forgone gains among investors who sold Apple Inc. (NASDAQ: AAPL) before 2019 merely because the profits were too alluring to pass up.

Investing decisions should be rooted in rational assessments of a company’s value. If you’ve done the legwork to conclude the business is worth $100 per share and it’s valued at $20, an increase to $30 shouldn’t prompt a sale.

Selecting good companies is half the battle as an investor. The other half is being rational and avoiding psychological traps.

So before cashing in any shares, ask yourself: Am I selling because it makes sense or because of greed?

You might just dodge a do-over of my $29,612 DroneShield shares mistake.

The post DroneShield shares taught me a $29,612 lesson. Stick to your guns appeared first on The Motley Fool Australia.

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

The S&P/ASX 200 Index (ASX: XJO) is having a subdued session on Thursday. At the time of writing, the benchmark index is down 0.2% to 8,039.7 points.

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

Accent Group Ltd (ASX: AX1)

The Accent Group share price is up almost 10% to $2.15. Investors have been buying this footwear retailer’s shares following the release of a trading update. Accent revealed that it expects to report EBIT (before one-offs) in the range of $123.2 million to $125.2 million for FY 2024. This would mean a 9.8% to 11.2% decline year on year. Analysts at Bell Potter were forecasting Accent to deliver EBIT of $124.6 million for the year, so the company could yet outperform expectations despite the tough economic environment. Accent achieved like for like sales growth of 4.2% during the second half.

Dusk Group Ltd (ASX: DSK)

The Dusk Group share price is up 30% to 76.5 cents. This has also been driven by the release of a trading update this morning. The specialty retailer of home fragrance products revealed that its performance improved markedly during the second half. This culminated in positive sales growth of 0.4% for the last five weeks of the financial year. Management advised that its improved sales performance in the second half reflects the implementation of various strategic initiatives.

Evolution Mining Ltd (ASX: EVN)

The Evolution Mining share price is up over 3% to $4.11. Investors have been buying this gold miner’s shares following the release of its quarterly update. During the fourth quarter, Evolution Mining reported record quarterly group cash flow $230 million, which was up 171% on the previous quarter. Evolution also reported a 14% increase in gold production to 212,070 ounces and a 13% reduction in its all-in sustaining cost to $1,275 per ounce.

Zip Co Ltd (ASX: ZIP)

The Zip share price is up 9% to $1.75. This follows the completion of the buy now pay later provider’s capital raising and the release of its quarterly update. In respect to the former, Zip was able to raise $217 million (before costs) via an equity placement at just $1.56 per new share. This represents a discount of just 2.8% to its last close price. These funds will be used for the early repayment of Zip’s existing corporate debt facility and associated exit fee. Zip didn’t have any problems raising the funds after impressing investors with strong growth in the fourth quarter. It is likely this performance that is really driving its shares higher today.

The post Why Accent, Dusk, Evolution Mining, and Zip shares are pushing higher today appeared first on The Motley Fool Australia.

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

S&P/ASX 200 Index (ASX: XJO) gold stock Evolution Mining Ltd (ASX: EVN) is racing ahead of the benchmark today.

Evolution Mining shares closed yesterday trading for $3.98. In late morning trade on Thursday, shares are changing hands for $4.14 apiece, up 4.0%.

For some context, the ASX 200 is down 0.1% at this same time.

As you can see on the chart below, this now sees the Evolution Mining share price up a stellar 33.0% over the past six months.

Here’s what’s boosting the ASX 200 gold stock again today.

ASX 200 gold stock lifts on record cash flow

Investors are snapping up Evolution Mining shares following the release of the miner’s quarterly update covering the three months ending 30 June.

Highlights included a 14% increase in quarterly gold production to 212,070 ounces. Copper production was broadly in line with the prior corresponding quarter at 20,318 tonnes.

And the ASX 200 gold stock is likely catching some tailwinds after reporting a 13% decline in All-in Sustaining Cost (AISC), which dropped to $1,275 per ounce (US$842/oz).

This helped Evolution achieve record quarterly cash flow of $230 million, up 171% from the $85 million reported in the March quarter. Net mine cash flow also notched a new quarterly record, leaping 74% to $242 million, equivalent to $1,170 per ounce.

As for the balance sheet, the company had cash holdings of $403 million as at 30 June, after paying out $40 million to cover the interim dividend. That’s up 87% from the $215 million cash reported on 31 March.

And gearing improved to 25%, down from 33% on 30 June 2023.

Evolution also reported that full-year cash flow came in at $367 million. Gold production was 716,700 ounces, with copper production of 67,862 tonnes, at an AISC of $1,477 per ounce (US$975/oz).

Evolution will release its FY 2024 full-year financial results and guidance for FY 2025 on 14 August.

What did management say?

Commenting on the results sending the ASX 200 gold stock charging higher today, Evolution Mining CEO Lawrie Conway said, “We had an outstanding June quarter with sector leading cash generation and low costs which showcase the quality of our portfolio.”

Conway added:

We achieved multiple records at an operational level, and I am particularly pleased that June was the strongest month of the quarter which builds momentum moving into FY25. This result is a credit to our team.

Evolution vice president discovery, Glen Masterman separately addressed the exploration drilling results at Ernest Henry, noting these returned exceptional results for the ASX 200 gold stock from extensional drilling to the Bert orebody.

According to Masterman:

Drilling results from Bert continue to reinforce the significant growth options at Ernest Henry. Located adjacent to the north wall of the pit, Bert represents a potential production target that could be mined independently of the underground materials handling system.

We are excited about the opportunity to extend the mineralisation footprint at Bert with further drilling to be completed during FY25.

The post Why is this ASX 200 gold stock smashing the benchmark again today? appeared first on The Motley Fool Australia.

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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.

The artificial intelligence (AI) stock surge that started in 2023 has created some fortunes.

Over in the United States, companies like Nvidia Corp (NASDAQ: NVDA) and Microsoft Corporation (NASDAQ: MSFT) have been major beneficiaries since entering the AI foray. Both stocks are up 144% and 19% this year to date, respectively.

Life360 Inc (ASX: 360) is another AI stock riding the wave, but right here on the ASX in Australia.

Life60 shares are trading more than 120% higher this year to date, offering investors comparable gains to Nvidia. They are currently swapping hands at $16.70 apiece at the time of writing.

As AI continues to revolutionise various industries and with many shares still rallying, it begs the question of whether it is still worth buying Life360 to capitalise on the AI stock surge. Here’s what the experts think.

Why consider this ASX AI stock?

Life360 shares were a major ASX performer in FY24, rallying more than 115% in that period. With the backdrop of AI driving positive sentiment, many brokers are still bullish on the AI stock.

According to CommSec, the consensus of analyst estimates is that it is a strong buy. Here are the main reasons brokers say to buy Life360 shares.

1. Adoption of its technology

The company is leveraging AI to enhance safety and connectivity for families worldwide through its mobile app of the same name.

The app provides real-time location updates, safety alerts while driving, and rapid emergency responses. It doesn’t take great imagination to see the benefits of this feature.

And this hard-to-replicate business advantage is pulling through to Life360’s financials. Revenues increased by 15% year over year in Q1, reaching US$78.2 million. This growth was driven by a jump in premium subscriptions and reduced churn rates The company put this down to the expansion of its safety features.

Bell Potter analysts are optimistic about Life360 due to the potential expansion of the technology. It recently retained its buy rating on the AI stock with a price target of $17.75. It believes the company has the potential to leverage its large and growing user base to enter and disrupt new markets.

2. Data collection possibilities

The app helps track children, elderly individuals, and those with special medical needs. This broad user base provides valuable data that can be used to fuel AI-driven innovations.

Morgan Stanley analysts see vast data collection capabilities as a competitive advantage for Life360. The company’s subscriber base is around 66 million users, which is a tonne of a lot of insights.

The thinking is that Life360 can glean unique and actionable insights from these data points. Data is like digital gold in the modern age, so it’s not surprising to see Morgan Stanley’s posture so upright on this with the AI stock.

Solaris Investment Management’s chief investment officer, Michael Bell, also praised Life360’s growth, highlighting that the app has more than 2 million paying circles, ahead of expectations.

3. Future outlook

It’s worth noting that Life360 is exploring monetisation opportunities through advertising.

Following its acquisition in 2021, the integration of Tile within the core Life360 subscription model could drive higher conversion rates and lower churn over time. This could also support subscription revenue growth.

Goldman Sachs analysts project the same outlook and estimate that Life360 is exposed to a total global addressable market (TAM) of US$12 billion. In a May note, it saw significant opportunities for the AI stock to expand its product suite and grow average revenue per paying circle (ARPPC).

The broker notes that Life360’s subscription business trades at a discount to global peers despite its superior growth outlook.

It rates Life360 a buy:

The company is now scaling margins and earnings rapidly off a low base, with attractive unit economics and potential structural profitability tailwinds on the horizon from a reduction in effective app store fees.

Life360’s Subscription business currently trades at a discount to global subscription app peers when adjusting for its superior growth outlook.

We see scope for re-rating as Life360 demonstrates operating leverage, ongoing subscription growth and user monetisation via ads. We are Buy rated on Life360.

Is this AI stock a buy?

Life360’s innovative use of AI, robust financial performance, and significant growth potential could make it an attractive option for investors looking to profit from the AI stock surge. Brokers are bullish, and the stock continues its ascent in FY25.

However, as with any investment, it’s essential to consider your risk tolerance and investment goals. While Life360 appears poised for continued growth, there’s no certainty it will get there. Investors should always weigh the potential rewards against the risks and seek professional advice when necessary.

The post Should I buy Life360 shares to profit from the AI stock surge? 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 positions in and has recommended Goldman Sachs Group, Life360, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Microsoft and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is running out of steam today and edging into the red. At the time of writing, the benchmark index is down 0.2% to 8,041 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Alumina Ltd (ASX: AWC)

The Alumina share price is down 5% to $1.53. This morning, the alumina producer revealed that major shareholder, CITIC Group, has advised that it is supportive of its takeover by Alcoa Corp (NYSE: AA) and intends to vote in favour of the deal. CITIC Group has a 18.9% stake in the company. While this is positive news, it is having no effect on its share price today. That’s because Alumina’s takeover is an all-scrip deal. This means that it tends to move in line with the Alcoa share price at present. So, with Alcoa’s shares taking a tumble on Wall Street overnight, Alumina’s shares have fallen to reflect this.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The Domino’s Pizza share price is down 9% to $32.89. This follows news that the pizza chain operator plans to close approximately 800 underperforming stores in the Japan market. However, management advised that the majority of customers that ordered from these stores will be covered in the delivery network of remaining stores. Also, in France, Domino’s is targeting a net 10-20 store reduction in FY 2025. Once again, it believes the majority of delivery orders from these stores will be serviced by neighbouring stores, resulting in earnings improvements.

DroneShield Ltd (ASX: DRO)

The DroneShield share price is down 2.5% to $1.78. This counter drone company’s shares have come under pressure this week after its incredible rally ran out of steam. The company’s market capitalisation rose to approximately $2 billion before its shares started to crater. This may have been driven profit taking from some investors, which then led to panic selling from other investors. DroneShield’s shares remain up almost 500% since this time last year despite this week’s selloff.

WiseTech Global Ltd (ASX: WTC)

The WiseTech Global share price is down 5.5% to $94.28. Investors have been selling WiseTech Global and other ASX tech stocks on Thursday following a selloff on the Nasdaq index on Wall Street overnight. Investors in the United States were locking in gains and rotating out of high-flying tech stocks and into other areas of the market. This has led to the S&P/ASX All Technology Index falling by a sizeable 2.2% today.

The post Why Alumina, Domino’s, DroneShield, and WiseTech shares are sinking today appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises, DroneShield, and WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Zip Co Ltd (ASX: ZIP) share price is lifting off today.

Shares in the All Ordinaries Index (ASX: XAO) buy now, pay later (BNPL) stock were in a trading halt yesterday after closing up 1.9% on Tuesday at $1.605 a share.

In morning trade on Thursday, Zip shares are back in action. They are currently swapping hands for $1.738 apiece, up 8.3%.

For some context, the All Ords is down 0.1% at this same time.

Here’s what’s happening.

ASX BNPL stock lifts as debt slate to be wiped clean

The Zip share price was frozen yesterday after the company released its quarterly results and announced its intention to raise $217 million via a fully underwritten equity placement. Zip is also offering eligible shareholders the opportunity to take part in a non-underwritten share purchase plan, aiming to raise another $50 million.

The company plans to use the $267 million in new funds to improve its balance sheet and pay off hundreds of millions of dollars in debt. Management said this would enable greater flexibility to pursue growth ambitions, with one eye on expanding operations in the lucrative US markets.

Today, the Zip share price is charging higher after the company said it had successfully completed the $217 million (before costs) equity placement. The funds are earmarked for the early repayment of Zip’s existing corporate debt facility and associated exit fee. That’s expected to happen as soon as Monday, 22 July.

All told, the BNPL company issued some 139.1 million new shares under the placement. The final issue price, determined via a bookbuild process, came out to $1.56 a share. That’s 2.8% below Tuesday’s closing price. But notably it’s 2.6% more than the underwritten floor price of $1.52 per new share.

Commenting on the successful capital raising boosting the Zip share price today, CEO Cynthia Scott said, “We are delighted with the extremely strong support we have received from high-quality existing and new shareholders for the placement.”

Scott added:

This is a strong endorsement of our strategy, and we thank our existing shareholders for their ongoing support and welcome our new shareholders to Zip.

The placement will enable Zip to repay its existing corporate debt, optimise our capital structure and provide Zip with greater flexibility for future growth.

What’s ahead for the Zip share price?

With today’s intraday gains factored in, the Zip share price is up 304% in just 12 months.

But RBC still sees significant upside potential from here. According to data from The Australian, the broker raised the ASX BNPL stock to an ‘outperform’ rating with a $1.90 price target. That represents a potential 9% upside from current levels.

The post Zip share price rockets 8% on ‘extremely strong support’ for $217 million capital raise appeared first on The Motley Fool Australia.

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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 Zip Co. 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.

The ASX tech share industry is suffering today, with some of the most well-known names in the red. It is the worst-performing sector on the ASX in early trading, with the S&P/ASX 200 Information Technology (ASX: XIJ) down 2.1%.

Looking at some of the ASX technology stocks with the biggest market capitalisations:

• The WiseTech Global Ltd (ASX: WTC) share price is down 3.75%
• The REA Group Ltd (ASX: REA) share price is down 2.2%
• The Xero Ltd (ASX: XRO) share price is down 2.2%
• The CAR Group Limited (ASX: CAR) share price is down 1.4%  
• The Nextdc Ltd (ASX: NXT) share price is down 3%

What’s causing this indiscriminate selling of ASX tech shares?

The ASX share market’s daily performance is usually heavily influenced by what happens in the global share market, particularly in the US share market.

The US technology sector suffered a sizeable sell-down overnight. Let’s examine what’s going on.

What happened to US technology shares?

In Wednesday trading, the Nvidia share price dropped 6.6%, the Microsoft share price fell 1.3%, the Apple share price dropped 2.5%, the Amazon share price dropped 2.6%, the Tesla share price declined 3.1%, the Meta Platforms share price dropped 5.7%, the Alphabet share price fell 1.6%, and semiconductor business ASML suffered a 10.9% sell-off.

Overall, the NASDAQ-100 Index (NASDAQ: NDX) fell 2.9% overnight.

It has been reported by Bloomberg that the United States is considering implementing significant trade restrictions on tech companies to stop them sending advanced semiconductor technology to China.

With China being one of the biggest economies in the world, restrictions could send shockwaves through the technology sector and supply chain. Additionally, this week, Republican candidate Donald Trump floated the possibility of slapping tariffs on goods from China of between 60% to 100%.

With both Democrats and Republicans seeking to increase pressure on China, it creates more uncertainty for the tech sector and the broader stock market. Time will tell how investors react to ASX tech shares.

Could tech share prices fall further?

The Australian quoted Pepperstone’s head of research, Chris Weston, who was pessimistic about the near term for technology companies:

The world has been debating what could cause big tech and the AI-rated equity names to reverse lower on a sustained basis, and for some time, it’s been hard to make a clear judgment call on when that might be.

Some had talked up valuation as a key concern for the US and global tech plays, with calls that these names had hit peak gross margins, but with such broad-based confidence behind the sustainability of the rally, investors piled in, and positioning had become incredibly rich.       

Well, it appears as though we may have our answer, and it comes from both the Trump and Biden camps, with both presidential candidates beefing up their rhetoric towards the scene and notably towards Taiwan, and companies, most notably ASML, who are providing advanced semiconductors technology to Taiwan.

In my thinking, the rhetoric on protectionist measures offers such limited visibility to efficiently price risk and with limited confidence to price the near-term future it feels like this rich positioning has further to unwind.

Despite one day of negative trading, ASX tech shares and the NASDAQ-100 are still up significantly. To date in 2024, the NASDAQ-100 is up around 20%.

The post Why are ASX tech shares being hit so hard today? appeared first on The Motley Fool Australia.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ASML, Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, REA Group, Tesla, WiseTech Global, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has recommended ASML, Alphabet, Amazon, Apple, Car Group, Meta Platforms, Microsoft, Nvidia, and REA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The market may be falling today but that hasn’t stopped one beaten down ASX small cap stock from rocketing.

Prior to today, Dusk Group Ltd (ASX: DSK) shares were down over 40% since the start of the year.

But much to the relief of the retailer’s long-suffering shareholders, the company’s shares are up 32% to 78 cents today.

Why is this ASX small cap stock rocketing?

The catalyst for this has been the release of a trading update from the specialty retailer of home fragrance products.

According to the release, the company’s sales run rate continued to improve on a monthly basis in the second half.

This culminated in positive sales growth of 0.4% for the last five weeks of the financial year compared to the prior corresponding period.

This led to its second half sales falling 5.8% on the prior corresponding period, which is a nice improvement on the 9.7% sales decline recorded in the first half of FY 2024.

For FY 2024, total sales are expected to be down 8.2% to $126.3 million and underlying EBIT is expected to be $6.2 million to $6.4 million (from $16.5 million in FY 2023).

What drove the improvement?

Management notes that the improved sales performance in the second half reflects the implementation of various strategic initiatives.

These strategic initiatives focused on product rejuvenation, tactical and disciplined promotional activity, and enhanced execution of its online channel following the website relaunch in June 2024.

It also notes that its position as a gifting destination was highlighted during the Mother’s Day week, with total sales up 10.4% on the same period last year. It believes this is an indication that its refreshed product range is resonating well with customers.

Also likely to be going down well with investors is commentary relating to the ASX small cap stock’s gross margin. Management advised that it was diligent in maintaining its gross margin in the second half through focused promotional activity and supply chain management.

As a result, its gross margin rate for FY 2024 is expected to be broadly in line with the prior year (FY 2023: 64.1%) despite headwinds from freight and distribution costs.

The company’s CEO and Managing Director, Vlad Yakubson, was pleased with the improvements. He said:

FY24 has been a time of transformation at dusk as we laid the foundations for the rejuvenation of the business, with significant changes made to the leadership team over the past 12 months. The executive team brings new ideas and fresh perspectives to trading the business and developing products that appeal to our customers. In 2H FY24, we have progressively arrested the sales decline and more recently moved into positive growth.

Looking ahead to FY25, we are in a strong financial position and our inventory is clean and well balanced. We continue to focus on delivering product innovation and the latest trends to our customers on a regular basis.

The post Down 40% in 2024, why is this ASX small-cap stock rocketing 32% today? appeared first on The Motley Fool Australia.

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

The Santos Ltd (ASX: STO) share price is marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock closed yesterday trading for $8.01. In morning trade on Thursday, shares are changing hands for $8.06 apiece, up 0.6%.

For some context, the ASX 200 is down 0.2% at this same time.

This comes following the release of Santos’ quarterly update for the three months ending 30 June.

Read on for the highlights.

Santos share price higher on production lift

Investors are bidding up the Santos share price today after the company reported quarterly sales revenue of US$1.3 billion. That’s roughly equivalent to revenue in the prior corresponding quarter.

Production hit 22.2 million barrels of oil equivalent (mmboe), up 2% quarter on quarter.

Gearing was reported at 19.9%, excluding operating leases. Including those leases, gearing stands at 23.5%.

And free cash flow from operations came in at US$380 million. Santos said it expects its half-year free cash flow to reach roughly US$1.06 billion.

Commenting on the key metric helping lift the Santos share price today, CEO Kevin Gallagher said, “First half cash flow of almost US$1.1 billion positions us well to fund shareholder returns, backfill and sustain our existing business, and grow our Santos Energy Solutions business.”

The quarter also saw Santos execute a binding long-term LNG supply and purchase agreement with Hokkaido Gas to provide portfolio LNG of some 400,000 tonnes per year for 10 years, commencing in 2027.

On the major project front, the Barossa Gas Project is 775 complete; the Pikka Project is 56.2% complete; and the Moomba phase one Carbon Capture and Storage (CCS) Project is 92% complete.

“Our major projects continue to deliver to plan,” Gallagher said.

He added:

I am very pleased that both the Barossa pipelaying activities and the installation of the modules onto the FPSO in Singapore are now complete and other activities are on track for offshore commissioning to commence in the first quarter of 2025. The Pikka project has had a strong first winter season with the team delivering significant progress on the North Slope, with some pleasing well results…

We can now see line of sight to our major projects progressively coming online, putting us in a strong position to deliver sustainable, competitive shareholder returns over the long term.

What’s next?

Looking at what could impact the Santos share price in the months ahead, the company is forecasting 2024 production of 84 mmboe to 80 mmboe with sales volumes of 87 mmboe to 93 mmboe.

Total capital expenditure guidance (including major project and decommissioning) is around $2.85 billion for the year. Unit production costs are expected to be in the range of $7.45 to $7.95 per barrel of oil equivalent (boe).

“Our focus for 2024 is on continuing to drive the disciplined low-cost operating model across the business and the execution of the Moomba phase one CCS project, Barossa Gas Project, and Pikka Project, whilst maintaining a strong balance sheet,” Gallagher said.

Santos will report its full half-year results on 21 August.

With today’s intraday moves factored in, the Santos share price is up 7% over 12 months. The ASX 200 energy stock trades on a 3.5% unfranked dividend yield.

The post Santos share price marching higher on US$1.1 billion first half cash flow appeared first on The Motley Fool Australia.

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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.