In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week with a disappointing decline. At the time of writing, the benchmark index is down 2.2% to 6,447.6 points.

Four ASX shares that have avoided the selloff today are listed below. Here’s why they are rising:

A2 Milk Company Ltd (ASX: A2M)

The A2 Milk share price is up almost 4% to $4.16. This gain appears to have been driven by optimism that the company could still have a chance of benefiting from shortages in the United States market. This follows news that a major infant formula manufacturing facility has been shut down just two weeks after reopening. This has been driven by flooding on this occasion.

Bubs Australia Ltd (ASX: BUB)

The Bubs share price is up 6% to 64 cents. This morning this infant formula company upgraded its FY 2022 guidance to reflect its deal with the US government. Bubs was previously expecting “modest” half on half growth from the $38.5 million gross revenue it recorded during the first half. Whereas it now expects gross revenue to be over $100 million for FY 2022, subject to scheduled operations occurring without disruption. Possibly holding its shares back a touch was a lack of operating leverage.

Evolution Mining Ltd (ASX: EVN)

The Evolution share price is up 5% to $3.67. This has been driven by a rebound in the gold price and a broker upgrade by UBS. The latter saw Evolution upgraded to a buy rating with a $4.05 price target. The former has led to the S&P/ASX All Ords Gold index storming 2.6% higher today.

Zip Co Ltd (ASX: ZIP)

The Zip share price is up 3.5% to 52.3 cents. This is despite there being no news out of the buy now pay later (BNPL) provider. However, it is worth noting that a number of BNPL shares are storming higher on Friday. Investors may believe that this area of the market has been oversold in recent weeks.

The post Why A2 Milk, Bubs, Evolution, and Zip shares are rising despite the selloff appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ordinaries shares defying today’s rout to surge higher
• The Zip share price is actually climbing today. What’s going on?
• ASX 200 midday update: GUD crashes, tech shares tumble
• Here’s why the A2 Milk share price is defying the market selloff on Friday
• ‘The bar has been set low’: Why this top broker just upgraded the Evolution Mining share price

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ZIPCOLTD FPO. The Motley Fool Australia has recommended A2 Milk and BUBS AUST FPO. 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 Santos Ltd (ASX: STO) share price has surged higher in 2022, clipping a 22% gain in that time.

Despite recent volatility, one portfolio manager is still constructive on the share, noting the long-term upside potential.

Santos has slipped 4% into the red to $7.72 today on no news, as the S&P/ASX 200 Index (ASX: XJO) slides 2%.

Compelling opportunity

According to Vince Pezzullo of Perpetual Asset Management, Santos is well-positioned to capitalise on market trends for the future.

The portfolio manager laid out the investment case for Santos.

[O]ur investment thesis is the leverage that Santos has to domestic gas and export liquefied natural gas markets as we believe these forms of energy are key to facilitating Australia and the world to transition to a lower carbon future.

A key driver of Santo’s share price is global energy markets, he says, “and we have seen these tighten of late and oil and gas prices rallying,” the portfolio manager wrote on Livewire.

“One of the ways it is looking to do this is through increasing LNG imports and Santos is a key global producer through its stake in the PNG LNG, Gladstone LNG, and Darwin LNG assets,” he added.

Adding to the compelling opportunity are Santos’ recent asset sell downs that have strengthened its balance sheet.

“Successful execution of all these sell-downs would see the company significantly exceed its target of US$2 – 3 billion in asset sales in 2022,” Pezzulo opined.

This could blow out to 2023 however, due to various routine setbacks. Nevertheless, the portfolio manager is constructive toward Santos on a number of levels.

Brent crude oil still buoyant at US$118 per barrel alongside surging gas markets are also key components, Pezzullo said.

“We would welcome these sales as it would significantly cut Santos’ capital expenditure, improve its cash flow and potentially lead to a re-rating of the stock,” he concluded.

In the last 12 months, the Santos share price has held onto a 1.5% gain.

The post Santos share price ‘a compelling opportunity’: fundie appeared first on The Motley Fool Australia.

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• 2 energy ASX shares to buy while inflation is killing everything else: expert
• 5 things to watch on the ASX 200 on Thursday
• The Santos share price is up 27% this year. Is it too late to buy?
• ‘Resilient growth profile’: Why this broker is tipping Santos shares to outperform
• This fund manager is optimistic on these 2 leading ASX 200 energy shares

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 Rio Tinto Limited (ASX: RIO) share price is set to finish lower today.

Despite the company not releasing any price-sensitive announcements to the ASX, the mining giant’s shares are currently down 4.94% to $106.19.

This brings its losses this week to more than 8% following a broader market sell-off.

In contrast, the S&P/ASX 200 Index (ASX: XJO) is currently shedding 2.25%.

What’s dragging Rio Tinto lower?

There are a couple of reasons as to why the Rio Tinto share price might be heading south today.

The current decline in iron ore prices is providing a resistance across the mining sector, with the majors down.

Shares in BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) are down 3.91% and 4.69%, respectively.

This is leading the S&P/ASX 200 Resources Index (ASX: XJR) to completely erase yesterday’s 0.56% short-lived gain.

As such, the benchmark index for Australian resource companies is falling 3.34% to 5,475.2 points.

With the price of the steel-making ingredient fetching a three-week low of US$131.50 per tonne, investors have turned elsewhere.

The only performing index among a sea of red is the S&P/ASX All Ordinaries Gold (ASX: XGD) sub-industry.

The index is up 2.48% to 6,119.6 points.

Also putting pressure on the Rio Tinto share price is news surrounding China’s plans to set up a centralised iron ore buyer.

According to the Financial Times, the Xi administration is hoping to reduce reliance on Australia’s biggest export.

The move involves Beijing securing lower iron ore prices through larger bulk purchases from its state-owned mining and steel companies.

Notably, this will promote domestic iron ore production and boost investments in bringing mines online inside and outside the country.

Regarded as a key commodity in Rio Tinto’s portfolio, the latest news is particularly significant.

In the financial year ending 31 December 2021, iron ore accounted for 62% of the total group sales revenue.

Rio Tinto share price review

Over the last 12 months, the Rio Tinto share price has dropped 14%.

However, when looking at 2022, the mining outfit’s shares are up around 6%.

Based on today’s price, Rio Tinto commands a market capitalisation of roughly $41.19 billion.

The post Why is the Rio Tinto share price diving 5% on Friday? appeared first on The Motley Fool Australia.

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More reading

• ‘Force them to give us a discount’: ASX 200 mining shares lift despite China’s latest move to curb iron ore prices
• ASX 200 midday update: ResMed’s US$1bn acquisition, tech shares continue to sink
• Rio Tinto share price lower despite Gudai-Darri update
• Why is the Rio Tinto share price tumbling 6% today?
• 2 ASX dividend shares to buy this month: experts

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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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Rumour has it that Pointsbet Holdings Ltd (ASX: PBH) shares were in the sights of a potential takeover two weeks ago. Yet, here were are, with no word of a deal being considered by the board.

At the time of writing, shares in the sports betting company are holding up well during a difficult day for the market. Currently, the S&P/ASX 200 Index (ASX: XJO) is down a significant 2.26%. Meanwhile, Pointsbet shares are 1.96% in the green.

Perhaps the market is only now responding to the prospects of Pointsbet being a takeover target. But rather than speculate, let’s take a look at what has been reported.

Betting on itself

The Pointsbet share price has seen better days, that’s for sure. Unfortunately for shareholders, a growing concern about rising interest rates has pulled valuations of many unprofitable names back down to Earth.

Pointsbet shares have not been immune to the drawdown. Reporting a $247.9 million loss for the 12 months ending 31 December 2021, investors have lost their confidence in the company under the current economic conditions.

However, the 87% retracement in the company’s shares has now put it on the takeover menu. Unbelievably, Pointsbet could almost be considered a Warren Buffett-style investment based on its price-to-book value.

At the end of last year, the company counted $569 million worth of cash and equivalents on its balance sheet. Comparatively, Pointsbet’s current market capitalisation is approximately $535 million.

Now, realistically, the business has likely chewed through a chunk of that capital in the first six months of this year unless it has drastically clamped down on expenses. Though, reports of an approach from Rupert Murdoch’s News Corporation (ASX: NWS) indicate there still might be value in Pointsbet shares.

According to reports, a consortium including former Sportsbet chair Matthew Tripp lobbed a deal worth over $200 million at Pointsbet for its Australian division. It is believed the deal was an attempt to give News Corp scale for its own offering in the works.

Reportedly, the Pointsbet board rejected the offer without presenting it to shareholders. This is at a time when the company expects the Australian division to soon be EBITDA positive.

Are Pointsbet shares an opportunity?

While the Pointsbet share price is down 71% since the start of the year, some brokers are still bullish on the company.

As my Fool colleague James covered recently, Bell Potter is one such broker with a buy on Pointsbet shares. The large market opportunity in the United States fed into the analysts placing a $6 price target on the company.

For context, shares are currently swapping hands at $2.08, indicating a potential 188% upside.

The post Own Pointsbet shares? Here’s why the company rebuffed a Murdoch takeover approach appeared first on The Motley Fool Australia.

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• Why BHP, Block, Harvey Norman, and PointsBet shares are sinking
• These were the worst performing ASX 200 shares last week
• 10 ASX All Ords shares that could be stung by tax-loss selling
• Why these top brokers say the beaten-up PointsBet share price has 100% upside
• Investors are betting on the Pointsbet share price today, it’s up 5%

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 positions in and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. 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 month so far has been tough for the Commonwealth Bank of Australia (ASX: CBA) share price.

The bank’s stock has been dinted by a broader market stumble amid a 50 basis point rate hike announced by the Reserve Bank of Australia.

At the time of writing, the CBA share price is $88.13, 2.59% lower than its previous close. That’s also more than 15% lower than it was at the end of May.

For context, the S&P/ASX 200 Index (ASX: XJO) has slumped 10.5% in that time.

But could the CBA share price’s tumble have brought about a buying opportunity? Let’s take a look.

Is the CBA share price worth looking at?

The CBA share price has languished this month. And while that’s likely upset those invested in the bank’s shares, it could mean now is a good time to jump on board the ASX 200 giant.

Clime Investment Management Limited (ASX: CIW) chief investment officer Will Riggall reportedly said the fund is snapping up certain ASX bank stocks amid the downturn.

Rate increases give banks an opportunity to up their loan margins. But they also increase both the cost of living and the risk of a housing market downturn.

Such happenings could lower the quality of a bank’s loan book and result in more defaults.

However, Riggall reportedly believes Australians’ weighty savings accounts mean defaults won’t increase so much as to offset the benefits of rising rates. The chief investment officer was quoted by the Australian Financial Review as saying:

[W]e will be selectively increasing our position in bank shares through this period of volatility as we see the high and sustainable dividend outlook as a key attraction in what is likely to be a lower-return environment.

It’s a similar sentiment as that reportedly expressed by Citi earlier this week. The broker is said to believe banks have already factored higher interest rates into mortgages, creating a financial buffer.

This month’s tumble included, the CBA share price is 14% lower than it was at the start of 2022. It has also slumped nearly 17% since this time last year.

The post The CBA share price has lost 15% so far in June. Is it worth banking on? appeared first on The Motley Fool Australia.

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• ASX 200 bank shares languish on Thursday despite market lift
• Why are ASX 200 bank shares having another day to forget?
• What’s going on with the CBA share price on Wednesday?
• ASX 200 bank shares tumble: Citi says time to buy
• The CBA share price is down 5%. Should investors jump on this?

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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The benchmark All Ordinaries Index (ASX: XAO) is tracing lower today, down 2.2% to 6,633 at the time of writing.

That brings the index’s losses for the week to more than 8%.

However, the downside hasn’t stopped these 3 ASX All Ordinaries shares pushing ahead of the pack today.

5E Advanced Materials Inc (ASX: 5EA)

Shares of 5E are climbing in afternoon trade on Friday, currently up by 2.8% to $2.91 despite no news from company, which produces boron and lithium.

It follows a rise of 11.4% yesterday after a period of wide-reaching volatility for this ASX All Ordinaries share, which saw it sink 14.4% on Tuesday and 10.9% on Wednesday.

Earlier in the week, the company announced it will soon be included in the Russell 2000 Index, Russell 3000 Index, and Russell Microcap Index.

Inclusion into the index will see it added to some portfolios and exchange-traded funds (ETFs) that track these particular instruments.

Since listing on the ASX on March 1, the 5E share price is down 2.4%.

APM Human Services International Ltd (ASX: APM)

Shares of APM have also bounced from three-month lows this week. The ASX All Ordinaries share is currently trading 4.5% higher at $2.81.

Investors have bid the APM share price up amid the release of a company announcement on Thursday.

While not price sensitive in any way, the company advised that it had released more than one million shares from a holding lock restriction under its “employee gift offer”.

The offer was part of APM’s initial public offering (IPO) in November. It notes that it’s retained “over 90% of our eligible employees” since that time.

The APM share price has slumped 16% since the company’s listing on the ASX in November, and has fallen from a high of $3.45 on 24 May.

Evolution Mining Ltd (ASX: EVN)

The Evolution Mining share price is skipping 4.6% higher at the time of writing, trading at $3.66.

Evolution’s shares are surging alongside the price of gold. The yellow metal has ticked up to US$1,846 in the last few days.

The ASX All Ordinaries share also copped an upgrade from analysts at UBS, with the broker setting its recommendation to a buy.

UBS is bullish on the gold sector and sees “more value in the ASX gold sector” as macroeconomic pressures begin to mount.

In the last 12 months, Evolution Mining has slipped 22% into the red.

The post 3 ASX All Ordinaries shares defying today’s rout to surge higher appeared first on The Motley Fool Australia.

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• ASX 200 midday update: GUD crashes, tech shares tumble
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• Investing in ASX 200 gold shares? Here’s the latest on the gold price forecast
• 3 ASX All Ordinaries shares that leapt more than 10% on Thursday
• 5 things to watch on the ASX 200 on Thursday

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 Zip Co Ltd (ASX: ZIP) share price has surprisingly avoided the market selloff on Friday.

In afternoon trade, the buy now pay later (BNPL) provider’s shares are up 6% to 53.5 cents.

As a comparison, the ASX 200 index is down 2.2% at the time of writing.

What’s going on with the Zip share price?

Today’s gain by the Zip share price is a bit of a mystery. However, it is worth noting that this outperformance isn’t exclusive to Zip’s shares.

For example, the Openpay Group Ltd (ASX: OPY) share price is up a whopping 20% today and the Sezzle Inc (ASX: SZL) share price is up 2%.

This is despite there being no real industry news to speak of, other than Latitude Group Holdings Ltd (ASX: LFS) bailing on its plan to buy the BNPL business of Humm Group Ltd (ASX: HUM).

What could be driving its shares higher?

Investors may believe that BNPL shares have been oversold in recent weeks and have decided that now is the time to pounce.

After all, despite their gains today, year to date, the Zip share price is down 88%, the Openpay share price is down 70%, and the Sezzle share price is down 90%.

Time will tell if they hold onto today’s gains.

The post The Zip share price is actually climbing today. What’s going on? appeared first on The Motley Fool Australia.

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• Is the ‘path to profit impossible’ for Zip shares?
• ASX 200 midday update: Block and Zip crash amid market selloff
• Own Zip shares? CEO warned co-founder 8 months ago, ‘There are some clouds gathering on the horizon’ after Morgan Stanley meeting
• Zip share price crashes 21% to new multi-year low
• Wall Street tumbles into bear market. What does that mean for ASX 200 shares?

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 ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Bitcoin (CRYPTO: BTC) price is down 7% over the past 24 hours.

The world’s top token by market cap is currently trading for US$20,889 (AU$29,544).

Most all cryptos are deep in the red today.

This follows on from a heavy day of selling in US share markets yesterday (overnight Aussie time), with the tech-heavy Nasdaq closing down 4.1%. Cryptos have been trading in line with risk assets throughout the year, and have come under pressure amid fast rising interest rates.

Bitcoin is now down 56% since 1 January, and down 70% from its 10 November all-time highs.

With the latest selling, the Bitcoin price is coming uncomfortably close to the key level of US$19,500.

Or US$19,511, to be precise.

Why is US$19,511 a line in the sand for the Bitcoin price?

You likely recall that 2017 was a banner year for the Bitcoin price.

The token kicked off that year trading for US$1,020, and by mid-December it reached new records of US$19,511, a gain of more than 1,800%.

Prices retraced from there and it took until December 2020 before Bitcoin surpassed its previous record. And despite some wild volatility, it’s stayed above that price ever since.

Vetle Lunde and Jaran Mellerud at Arcane Research point out that the Bitcoin price has never fallen below any of its prior cycle peaks during its entire 12 years of trading. Which is why they’re keeping a sharp eye on the US$19,511 level.

“A potential visit below this level could lead to a lot of hodlers capitulating and a wind-down of leverage, making this a very important support level to pay attention to onwards,” they said (courtesy of Bloomberg).

That’s no typo, by the way. Hodlers, if you’re unfamiliar, refers to long-term, devoted crypto holders.

They added that most of the open interest in Bitcoin options is based on a $20,000 strike price, “which can contribute to selling pressure in the spot market should the price fall below”.

Where to next for the Bitcoin price?

With the entire crypto market under pressure, we’re hearing more bearish forecasts for the medium-term Bitcoin price.

Bobby Lee, CEO of crypto storage provider Ballet Global Inc said:

I think we will test $20,000 and go to $19,000-$18,000. There are lot of funds, large borrowers of Bitcoin who have liquidation positions in $20,000 range.

Given that there is blood in the water and there are sharks swimming around there is going to be lot of incentive for people to trade it down to pass that point for the long holders who are on leverage to capitulate.

Adrian Przelozny, CEO of crypto exchange Independent Reserve, remains optimistic about the longer-term outlook for the Bitcoin price. But shorter-term, he sees some more pain ahead.

Przelozny said (quoted by Bloomberg), “There’s a lot of Bitcoin pledged as collateral that might have to be sold if its price drops into the $15,000 to $20,000 range. But this is short-term pain. I am still very bullish longer term.”

Silver linings ahead?

Josh Gilbert, Australia market analyst at multi asset trading platform eToro, noted that these kinds of big declines in the Bitcoin price are nothing new, though that won’t make it any easier for investors.

According to Gilbert:

Since Bitcoin’s inception, we have seen well over ten 50% corrections in the last decade. Although this is par for the course when investing in the asset, it does not make it any less painful. For many new investors, this will be the first significant crypto decline they have ever seen.

Looking ahead, Gilbert believes the current sell-off will leave cryptos better off in the long run.

“Despite major drawdowns across the crypto space, it is important to note that the development of crypto, its use cases, and the regulation of the industry is continuing regardless of the sell-off,” he said.

“This essentially helps set the asset class up to be in a much stronger position for when crypto markets rebound.”

The post Why US$19,500 is a line in the sand for the Bitcoin price appeared first on The Motley Fool Australia.

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• Why tech billionaire Bill Gates is ‘not involved’ in crypto or NFTs
• Why Bitcoin, Ethereum, and Dogecoin dropped and popped in the last 24 hours
• What is the realised Bitcoin price and why does it matter?
• 3 reasons Bitcoin, Ethereum and Solana just hit their lowest levels this year
• Why is the Bitcoin price crashing 16% today?

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 Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. 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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Unfortunately, it’s looking like it’s going to be a depressing end to a depressing week for ASX shares so far this Friday. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) has lost another painful 2.18% and is now back below 6,500 points.

With such a move, most ASX 200 shares have been sold off today. But what of the Coles Group Ltd (ASX: COL) share price?

Coles shares have indeed taken a hit today. But the supermarket share is currently down by 1.13% at $16.610 a share. That’s not a pleasant move by any means. But it is also a marked underperformance of the broader market.

Other ASX 200 blue chip shares like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and Woodside Energy Group Ltd (ASX: WDS) have fallen far harder today. In BHP’s case, the miner is down by a nasty 3.7% so far today.

So how is the Coles share price getting off so lightly?

Well, it’s not entirely clear. Coles hasn’t released any news or announcements itself today.

But we can speculate.

Why is the Coles share price defying the worst of the ASX 200’s woes today?

So the big falls we have seen over this dreadful trading week have arguably largely stemmed from fears over inflation and interest rates. This week saw the US Federal Reserve hike American interest rates up by an unusually large 75 basis points.

Earlier this week, my Fool colleague Tony covered how experts are describing inflation across the US, United Kingdom and Germany as “the highest rate for 40 years”. Sobering stuff.

So it’s fair to say that investors are worried about high inflation and interest rates right now.

Why is this relevant for Coles shares? Well, Coles is seen by many investors as an inflation-proof investment.

As my Fool colleague Tristan covered last month, Coles is a well-placed business to take advantage of rising prices. That’s because of its nature as a provider of consumer staple goods like food, drinks and household essentials.

No one likes seeing food go up in price. But it’s not like any of us have a choice whether to buy it or not. Thus, if Coles can maintain its profit margins by passing on rising prices to its customers, rising inflation actually has the potential to boost the company’s profits.

What does the expert say?

At least one ASX broker agrees. As we covered just yesterday, ASX broker Citi is currently bullish on Coles shares.

Noting that “there were no observable signs of trading down or lower volumes in response to higher food inflation” in Coles’ recent trading update, Citi put a buy rating on Coles shares. That was complete with a 12-month share price target of $19.30. If that were to come to pass, it would result in an upside of more than 16% on current pricing.

So it could be this reputation as an inflation hedge that could be keeping the Coles share price from the worst of the ASX 200’s falls this Friday.

At the current Coles share price, this ASX 200 share has a market capitalisation of $22.19 billion, with a dividend yield of 3.67%.

The post Why is the Coles share price getting off lightly today? 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 positions in and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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One of the worst performers on the ASX today is the Dacian Gold Ltd (ASX: DCN) share price.

The gold miner’s shares have lost 40% during midday trade to a new 52-week low of 10.2 cents apiece.

For context, the All Ordinaries Index (ASX: XAO) is down 2.32% to 6,626.5 points following heavy losses on Wall Street overnight.

What’s happened to Dacian shares?

Investors are fleeing the Dacian share price after the company delivered an update regarding its Mt Morgans operations.

In its release, Dacian advised the operating environment has rapidly changed over the last 6 months. This comes after significant inflationary cost pressures have impacted the business leading to an uptick in Dacian’s cost base.

As such, the management has been forced to conduct a review of its operating strategy with the following decisions made:

• Open pit mining operations at Jupiter to be suspended by the end of this month
• Underground operations to continue until the previously developed stopes have been mined in Q1 FY23
• Open pit mining at Hub at Redcliffe to commence later in FY23 following receipt of mining approvals
• Processing of existing stockpiles totalling roughly 5 million tonnes will begin in Q1 FY23
• Drill testing to focus on high-priority exploration targets at Jupiter throughout FY23

Overseeing the change, Dacian general manager for geology and exploration, Dale Richards, has been appointed as CEO.

This follows outgoing managing director, Leigh Junk’s resignation after spending 3 years with the company.

Dacian non-executive chair, Mick Wilkes commented:

In light of the current high inflationary environment, the Board has taken the decision to reset the company strategy by discontinuing the current open pit mining operations at Mt Morgans.

In doing so we are pivoting to exploration and a focus on the significant potential we see beneath and alongside the Jupiter open pits. This along with the strategic value of our processing facilities and infrastructure in the Laverton Leanora gold belt underpins the company.

Dacian is forecasting cash and gold-on-hand of approximately $17 million at 30 June after a $12.75 million bank debt repayment. 

Dacian share price snapshot

It has been a rollercoaster ride for the Dacian share price, with large volatile swings over the past 12 months.

Adding to today’s losses, the company’s shares are down 60% since this time last year. This is a big difference to when its shares touched a 52-week high of 32 cents in mid-April.

On valuation grounds, Dacian presides a market capitalisation of roughly $184.46 million.

The post Why did this ASX gold share just crater 40%? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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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