Shares of diversified miner IGO Ltd (ASX: IGO) have lifted 1.9% in afternoon trade on Wednesday and now fetch $12.05 apiece.

Despite trading down in recent weeks, IGO found buyers at the $10.54 mark and again at $11.16 as sellers were pushed out of the market.

The IGO share price has rallied 14% from 13 May to the time of writing, having whipsawed in 2022, as seen below.

IGO settles Western Areas transaction

Helping drive equity returns for IGO is confirmation the company’s acquisition of Western Areas Ltd (ASX: WSA) is now legally effective.

Following a Supreme Court of Western Australia’s orders to approve the scheme yesterday, IGO will now acquire all of the shares in Western Areas through its subsidiary, IGO Nickel Holdings Pty Ltd.

“[W]e are looking forward to welcoming the Western Areas team into the IGO business once the transaction has been completed on 20 June 2022,” the company wrote.

CEO Peter Bradford said the acquisition represented “a logical consolidation of key nickel assets in Western Australia”.

It enhanced IGO’s position “as a leading, independent producer of metals critical for a clean energy future”, he added.

We are looking forward to unlocking unique synergies across the combined nickel portfolio comprised of Nova, Forrestania and Cosmos, as well as the immediate commencement of the downstream nickel sulphate feasibility studies – bringing IGO closer to key customers in the clean energy and electric vehicle industries.

The Western Areas acquisition is a key milestone in the company’s growth narrative, having stirred controversy on its announcement on questions the company may be overpaying for the asset.

What do the brokers say?

Further clamping returns in recent weeks was a shift in sentiment from Goldman Sachs about the prospects of battery metals and electric vehicles.

Nevertheless, various research notes from other brokers have contrary evidence to Goldman’s assessment.

The Macquarie team pushed back on several of the downside risks covered by Goldman and note there were still legs for both sectors to run in the coming years.

Analysts at JP Morgan were also constructive on the sector earlier this year.

Meanwhile, analysts remain bullish on the stock on average, with more than 64% of coverage saying its a buy right now, according to Bloomberg data.

The average price target from this list is $13.20, around 9.5% above the current market price.

In the last 12 months, the IGO share price has gained 61%.

The post Here’s why the IGO share price is making headlines on Wednesday appeared first on The Motley Fool Australia.

More reading

• Why Macquarie still sees ‘material upside’ for ASX lithium shares
• Is the ASX about to wave goodbye to this billion-dollar nickel miner?
• Why is the Galileo share price soaring 9% on Tuesday?
• One broker’s outlook for lithium supply and demand and what it could mean for ASX lithium shares
• Why Bubs, IGO, Strike Energy, and Woodside shares are pushing higher

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 Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is tumbling on Wednesday.

In afternoon trade, the banking giant’s shares are down 2.5% to a 52-week low of $23.85.

Why is the ANZ share price tumbling?

Investors have been selling down the ANZ share price today amid broad weakness in the banking sector.

This has seen all the big four and challenger banks drop into the red today despite the market rebounding from yesterday’s selloff.

The weakness in the banking sector has been caused by concerns over the Reserve Bank’s greater than expected rate hike on Tuesday and its future plans.

But aren’t rate hikes good news?

While increasing rates are seen as a positive for the banks and their net interest margins, it is the pace of the hikes that has investors concerned.

The market was previously expecting a gradual and measured tightening cycle from the central bank. However, it now looks likely to undertake an aggressive stance, which could create challenges for the banking sector.

Morgans believes the Reserve Bank could take the cash rate as higher as 2.6% by the end of the year if it follows the US Federal Reserve’s lead. A sharp contrast to where it started 2022.

It commented:

[T]he RBA will likely move in 50bps increments consistent with upcoming Fed decisions. This will see the RBA increase the cash rate to 135 basis points in July, and on current market pricing take the cash rate to 260 basis points by year-end.

As for the impact on the big four banks, Morgans summarised:

Although a rising official cash rate will benefit bank Net Interest Margins (NIM). Higher interest rates will likely place downward pressure on asset prices and credit growth. Higher interest rates will increase the risk of asset quality deterioration. Rising risk-free rates will place upward pressure on the cost of equity. From a dividend yield perspective, we expect downward pressure on valuations as we expect dividend yields to become less attractive relative to rising risk-free rates.

The post Rate pain? ANZ share price dips to 52-week low on Wednesday appeared first on The Motley Fool Australia.

More reading

• Why are ASX 200 bank shares plunging on Wednesday?
• Forget Terra. ANZ moves ahead with Aussie dollar pegged stablecoin
• What’s the outlook for the ANZ share price in June?
• Experts name the ASX 200 dividend shares to buy with big fully franked yields
• What’s dragging on ASX 200 bank shares like NAB on Thursday?

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

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Shares in Novonix Ltd (ASX: NVX) are in the red today, currently trading 1.18% lower at $3.34.

Today’s downside extends losses for Novonix to more than 63% this year to date, or 27% in the last month alone.

The company is set to present at the Stifel Cross Sector Insight conference during US market hours on Wednesday, and has released the slide deck of its presentation beforehand.

What is Novonix set to present?

A recent release to the ASX advised that the company was set to present its investment case to prospective analysts, portfolio managers and industry experts at the conference.

Specifically, it noted that Novonix CEO Dr Chris Burns would “present and participate in a moderated Q&A session” and would also participate in the panel discussion, Electric Vehicle Supply Chain Review – What the Industry has Learned from Disruption.

In the slide present, the company outlines numerous takeouts and milestones in its journey to date, particularly around its battery technology.

“Novonix’s Complete Battery Cell Technology is Leading the way for Next Generation EV Batteries,” it writes in one heading.

“Novonix offers improved Coulombic Efficiency (CE) compared to industry leading materials (including a Tesla Model S cell used as a reference benchmark),” it adds. The higher the CE, the longer the battery life, apparently.

The company also outlined its future goals, hoping to scale capacity of anode materials to “meet the growing demands of customers” and “develop Novonix cathode materials into an industry leader in cathode technology”.

Also on the list of company objectives is being highly profitable “with strong cash flow generation, enabling continued pursuit of profitable, high-growth opportunities”.

The conference runs from 7–9 June during US market hours, and is being presented live in Boston. Investors can tune into the live webcast by registering here.

In the last 12 months, the Novonix share price has held a 47% gain despite trading in a downtrend since November 2021.

The post Novonix share price dips ahead of US investor conference presentation appeared first on The Motley Fool Australia.

More reading

• Do Novonix shares pay dividends?
• Why are ASX 200 tech shares having such a cracking Friday?
• Why did the Novonix share price tumble 22% in May?
• These were the worst performing ASX 200 shares in May
• Here are the top 10 ASX shares today

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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S&P/ASX 200 Index (ASX: XJO) bank shares are all deep in the red in late morning trade, following on yesterday’s 0.50% cash rate increase by the RBA.

The higher than expected hike takes the official cash rate to 0.85%. And governor Philip Lowe indicated Australians should expect more increases from the central bank in the months ahead.

While the ASX 200 is up 0.8% at the time of writing, the S&P/ASX 200 Financials Index (ASX: XFJ) is down 12%. And the ASX 200 banks are underperforming the Financials Index.

At the time of writing the Commonwealth Bank of Australia (ASX: CBA) share price is down 3.5%.

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is down 2.4%.

Westpac Banking Corp (ASX: WBC) shares are down 5.3% after the bank became the first to pass on the full RBA rate hike to mortgage holders this morning.

And the National Australia Bank Ltd. (ASX: NAB) share price is down 3.3%.

Financial stocks, as you’ve likely heard, can benefit from a higher rate environment.

So, why are the ASX 200 bank shares under pressure today?

Tailwinds from rising interest rates

On the plus side of the central bank’s tightening cycle, ASX 200 bank shares have the potential to increase their profit margins amid higher interest rates.

CBA CEO Matt Comyn reported that every 0.25% increase in the benchmark cash rate increases the bank’s net interest margins by 0.04%. “That’s purely just on the deposit side, and then of course there’s offsetting factors from funding,” he said.

According to Credit Suisse bank analyst Jarrod Martin (quoted by The Australian):

Net interest margins will get close to 2% from their current level of less than 1.9%. So the balance at the moment favours the upside, but the latter stages (of the cycle) are not as good for bank share prices because of asset-quality considerations, such as the impact on house prices.

So,  ASX 200 bank shares are looking at potentially significantly higher profit margins on the loans they make.

But both Comyn and Martin also alluded to some headwinds.

Headwinds for the ASX 200 bank shares from fast rising rates

As Comyn pointed out, one of the factors that will drag on ASX 200 bank shares’ profitability as rates go higher is that their own funding costs increase as well.

And as Martin said, the looming impact on housing prices is also something investors will be keeping a close eye on.

Morgan Stanley’s head of Australian research, Richard Wiles, said that ASX 200 bank shares were likely to perform worse if the RBA moves to increase the cash rate rapidly.

According to Wiles (quoted by The Australian Financial Review):

Much of the benefit of higher rates is factored into the outlook. Housing loan growth is likely to slow, inflation is putting more pressure on costs, and a quick and aggressive tightening cycle increases tail risks.

We believe the near-term earnings outlook remains sound, but the risk of a trading multiple de-rating has risen.

Andrew Triggs, executive director at J. P. Morgan also pointed to the mixed impacts of higher rates on ASX 200 bank shares (courtesy of The Australian).

“Cash rate hikes off record lows should lead to modest net interest margin expansion, but faster rate hikes raise concerns about credit growth slowdown and asset quality deterioration,” he said. “Banks report significant home loan buffers, but there is a large cohort of borrowers that has never seen rate hikes before.”

ASX 200 bank shares tend to underperform when house prices are falling.

The post Why are ASX 200 bank shares plunging on Wednesday? appeared first on The Motley Fool Australia.

More reading

• Westpac share price tumbles 5% on Wednesday
• ASX 200 midday update: Boral rockets, big four banks tumble
• Which ASX 200 bank is the first to pass on the full RBA rate hike?
• How does the Westpac dividend yield compare to the other ASX banks?
• Forget Terra. ANZ moves ahead with Aussie dollar pegged stablecoin

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. 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 climbing today after the company announced a low-carbon deal last night.

At the time of writing, shares in the world’s second-largest miner are up 2.75% to $119.76.

However, its share price gains are being eclipsed by peer BHP Group Ltd (ASX: BHP). BHP is trading 3.11% higher at $47.74.

In contrast, the broader S&P/ASX 200 Resources (ASX: XJR) sector is also rebounding in lunchtime trade, up 2.5% to 6,158.9 points.

Rio Tinto collaborates on green steelmaking process

Investors are bidding up the Rio Tinto share price after digesting the company’s news regarding “ways to accelerate green steelmaking”.

According to its release, Rio Tinto signed a memorandum of understanding (MoU) with major German steel producer Salzgitter.

Under the framework, both companies will work together to study Rio Tinto’s iron ore products for use in Salzgitter’s SALCOS green steel project.

In addition, the partners will explore the potential for greenhouse gas emission certification across the steel value chain.

Rio Tinto produces iron ore pellets and concentrate from its Canadian operations, and iron ore lump and fines in Western Australia.

The SALCOS project — Salzgitter Low CO2 Steelmaking — is targeting virtually carbon-free steel production. This is expected to start step by step in 2025 using hydrogen direct reduction.

Commenting on the partnership, Rio Tinto chief commercial officer Alf Barrios said:

We welcome the chance to work with Salzgitter on ways to accelerate green steelmaking, in keeping with our commitment to reduce emissions across the steel value chain.

Salzgitter has one of the world’s most advanced green steelmaking projects. Rio Tinto is excited at the opportunity of supplying our product and combining our technical expertise with that of Salzgitter to help advance the SALCOS project.

Rio Tinto is aiming for a 15% reduction in emissions by 2025, and a 50% reduction by 2030.

By 2050, the mining giant hopes to reach net-zero emissions across its operations.

Rio Tinto share price snapshot

A boom in commodity prices has led the Rio Tinto share price to accelerate 20% in 2022.

In particular, iron ore prices have shot up 21% since the beginning of the year.

Based on today’s price, Rio Tinto commands a market capitalisation of roughly $43.26 billion.

The post Rio Tinto share price gains lag BHP despite green steel deal appeared first on The Motley Fool Australia.

More reading

• Why is the BHP share price having such a stellar day?
• Own Rio Tinto shares? Here’s why the miner is being sued by this Russian aluminium producer
• Own BHP shares? Here’s how the miner plans to offset lower iron ore prices
• What are brokers predicting for the Rio Tinto share price in June?
• What happened to the Rio Tinto share price in May?

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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ASX uranium shares are surging today following in the footsteps of US markets overnight.

Shares soaring include Paladin Energy Ltd (ASX: PDN), Bannerman Energy Ltd (ASX: BMN) and Peninsula Energy Ltd (ASX: PEN). Boss Energy Ltd (ASX: BOE) and Bannerman Energy Ltd (ASX: BMN) are also ahead.

So let’s take a look at why ASX uranium shares are storming ahead?

ASX uranium shares soar

Peninsula shares are rocketing 20%, Paladin shares are soaring nearly 13%, while Bannerman Energy shares are jumping 13%. Meanwhile, Boss Energy shares are 11% ahead and Bannerman Energy shares are leaping 13%.

Uranium shares are following a similar trend to global markets overnight. The Global X Uranium Exchange Traded Fund jumped 5.98% in US markets. US uranium producer Energy Fuels Inc (NYSE: UUUU) leapt 12.94% while Canadian headquartered Uranium giant Cameco Corp (NYSE: CCJ) leapt 8%.

Investors appear to be buying up uranium shares following some positive news out of the United States.

The Biden administration is seeking Congress support for a $4.3 billion plan to buy enriched uranium from domestic producers, Bloomberg reported. A source told the publication the aim is to halt reliance on Russian imports of the nuclear fuel.

ASX listed Peninsula owns the Lance Uranium Project in the state of Wyoming, in the United States. Paladin Energy is working on the Michelin project, nearby in Canada.

In news closer to home, Opposition leader Peter Dutton has reignited the nuclear energy debate, saying he is “not afraid to have a discussion on nuclear”. Uranium is used as the fuel in nuclear power plants. In an interview with ABC Radio National, Dutton added:

If we want to have legitimate emission reductions, if we want to lower electricity prices, then that’s exactly the path that President Macron has embarked on in France, it’s what Prime Minister Johnson is talking about in the United Kingdom…

However, Queensland Energy Minister Mick de Brenni has pushed back on the plan today. He reportedly claimed nuclear energy is “dangerous”, the Canberra Times reported.

The post Why are ASX uranium shares having such a cracker run on Wednesday? appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Boral rockets, big four banks tumble
• Why is the Paladin Energy share price jumping 13% today?
• What’s going wrong for ASX uranium shares on Wednesday?
• Paladin Energy share price down 9%
• Boss Energy share price slides 5% despite project milestone

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

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It’s been a green day so far for ASX mining shares, with the BHP Group Ltd (ASX: BHP) share price leading the iron ore majors, up 3.2% at the time of writing.

Shares in ASX miner Rio Tinto Limited (ASX: RIO) are currently trading 2.75% higher and the Fortescue Metals Group Limited (ASX: FMG) share price is up 1.77%. In comparison, the S&P/ASX 200 Index (ASX: XJO) is up 0.5%.

What’s news for BHP today?

In positive news for BHP, leading US broker Jefferies believes shares in US-listed BHP Group Ltd (NYSE: BHP) could lift by around 18% from here. The ASX-listed company often follows the movement of the international-listed BHP shares so this could be a positive for the company’s Australian share price today.

As reported in The Australian, Jefferies has slapped a price target of US$82 on the energy giant, which is currently priced at US$69.21 on the New York Stock Exchange. The price target of US$82 therefore implies a possible rise of around 18% over the next year.

What’s been happening to the BHP share price recently?

Since 26 May 2022, BHP shares on the ASX have lifted close to 10%. However, the share price has been roughly flat over the last month.

At the start of June 2022, BHP announced that the merger of its oil and gas portfolio with Woodside Energy Group Ltd (ASX: WDS) via an all-stock merger had completed.

BHP shareholders received new Woodside shares. As part of completion, BHP has made a net cash payment of approximately US$0.7 billion to Woodside.

Approximately US$0.3 billion in cash will be left in the BHP Petroleum bank accounts to fund the ongoing operations. This reflects the net cash flows generated by BHP Petroleum, less cash dividends paid by Woodside to BHP, between the merger effective date of 1 July 2021 and completion.

BHP CEO Mike Henry said at the time:

The merger of our petroleum assets with Woodside creates a global energy company with the scale and opportunity to help supply the energy needed for global growth and development in a rapidly decarbonising world.

Our shareholders will now have exposure to assets in two organisations, BHP and Woodside, each with a very clear focus, strategy and value proposition. BHP’s world class portfolio is weighted towards commodities which support economic growth and have decarbonisation upside and combined with our operational excellence will underpin attractive returns and long-term value growth.

What do other brokers think of the mining giant?

Some of the other most recent broker ratings on the ASX mining share aren’t as optimistic as Jefferies.

For example, Morgan Stanley currently has a rating of ‘equal-weight’, which is essentially ‘hold’, on the BHP share price with a price target of $46.20. That implies no movement of BHP shares over the next year. The broker thinks that Rio Tinto Limited (ASX: RIO) is a better mining pick.

Ord Minnett also recently rated BHP a hold, with a price target of $45. That implies a slight decline of the BHP share price over the next year. The broker thinks that BHP may not generate as much profit in the medium-term, particularly if the iron ore price falls.

However, Macquarie is still optimistic about the business, with a price target of $57. That implies upside of more than 20%. It likes the decarbonisation-focused portfolio of commodities like nickel, potash and copper.

The post Why is the BHP share price having such a stellar day? appeared first on The Motley Fool Australia.

More reading

• What’s coming up for the Woodside share price in June?
• Own BHP shares? Here’s how the miner plans to offset lower iron ore prices
• ‘Woodside will distribute US$20bn in dividends over the coming decade’: Morgan Stanley
• Why GrainCorp, New Hope, Tabcorp, and Woodside shares are pushing higher
• Woodside shares or Whitehaven? What’s the best ASX 200 value play?

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 recommended Macquarie Group 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 Westpac Banking Corp (ASX: WBC) share price is suffering, sliding 5.25% lower at midday.

It comes as the bank is the first of the big four to pass the Reserve Bank of Australia’s interest rate hike onto home loan customers. And while higher interest rates are generally good for banks’ margins, their long-term impact might not be pretty.

At the time of writing, the Westpac share price is trading at a three-month low of $22.18, 5.25% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is recording a 0.76% gain.

Let’s look at what might be going on with the Westpac share price today.

Westpac share price tumbles on Wednesday

The Westpac share price is suffering alongside the S&P/ASX 200 Financials Index (ASX: XFJ) today.

The sector is currently down 2%, with Westpac coming in as its biggest weight. The other big four banks are also struggling, each slipping between 2.3% and 3.7%.

Of course, rising rates allow banks to reprice their loan offerings, bolstering net interest margins (NIMs). However, Morgan Stanley is wary of long-term detriment. It believes the move will slow housing loan growth while inflation pressures costs.  

“We believe the near-term earnings outlook remains sound, but the risk of a trading multiple de-rating has risen,” Morgan Stanley head of Australian research Richard Wiles said, as quoted by the Australian Financial Review.

Westpac might also be front of mind on Wednesday after it was the first to pass on the full rate hike to its home loan customers. It hasn’t moved on its savings accounts yet, however, from tomorrow Westpac will offer a 12-month term deposit with a 2.25% interest rate – 2% higher than its current 12-month term deposit rate.

“We expect the other big banks to follow Westpac’s lead and also pass on the RBA rate hike in full to their mortgage customers,” RateCity.com.au research director Sally Tindall said. She continued:

Many banks remain unwilling to substantially hike their savings rates until Australians start burning through some of the record amount of cash they’ve got stashed away.

However, Federal Treasurer Jim Chalmers told 3AW this morning he believes the banks should pass the hike onto savings deposits. The Treasurer said the Australian public will be “watching them like hawks” in wait.

The Westpac share price is currently 3.9% higher than it was at the start of 2022. Though, it’s 17% lower than it was this time last year.

The post Westpac share price tumbles 5% on Wednesday appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Boral rockets, big four banks tumble
• Which ASX 200 bank is the first to pass on the full RBA rate hike?
• How does the Westpac dividend yield compare to the other ASX banks?
• 2 excellent ASX dividend shares that experts rate as buys
• Top brokers name 3 ASX shares to buy next week

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

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

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

The Shiba Inu (CRYPTO: SHIB) cryptocurrency had investors dreaming of instant riches last year. The digital coin rose tenfold in October, mostly thanks to a series of bullish tweets from Tesla CEO Elon Musk. At the peak of that hype cycle, the sky seemed to be the limit.

But the blaze of publicity has been fading since November. Shiba Inu’s price has fallen 88% below October’s zenith. Some investors may be thinking about this token as a turnaround story in the making, hoping that coins bought at these ultra-low prices will rise from the ashes to even greater heights, phoenix-like.

Unfortunately, that’s not likely to happen. Shiba Inu has had its moment in the spotlight and it’s time to look for the next massive multibagger instead. This time, let’s pick a name that can grow your investment many times over and looks capable of holding on to those gains in the long run. I would suggest a closer look at freelance services specialist Fiverr International (NYSE: FVRR).

A wide-open buying window

Like Shiba Inu, Fiverr has taken a drastic haircut recently. The stock had zoomed into the public eye at the start of the pandemic, where freelance gigs performed over the internet seemed like a great use for lockdown-based spare time. And a few extra dollars in your pocket didn’t hurt during this period, which was plagued by a wave of layoffs and furloughs.

When coronavirus vaccines became widely available, market makers suddenly decided that Fiverr’s golden age was about to hit the wall. That’s where the price drop started. In all fairness, Fiverr’s stock traded at an unsustainable valuation of 47 times sales in January 2021. A correction was in order at the time, but now it has gone way too far down instead.

Great business results

You see, the gig economy is here to stay, and Fiverr is a leading force in that category.

Work-from-home policies turned out to be quite popular with information workers. This revelation is good for Fiverr in a couple of ways. First, freelancers can easily plug their services into the remote-enabled workflows of this new era. Second, the time you used to spend commuting to the office can now be spent on catching a couple of quick freelance gigs on the side instead.

So Fiverr’s growth never hit that seemingly inevitable brick wall, and it’s only a matter of time before the stock starts to reflect this reality again. Let’s compare and contrast Fiverr’s plunging stock chart with its booming top-line sales:

FVRR Revenue (TTM) data by YCharts

Furthermore, Fiverr isn’t some unprofitable gadfly. The company generates cash profits on a regular basis and trades at roughly 40 times free cash flows nowadays. That untenable triple-digit price-to-sales ratio is back down to less than 6. These are highly reasonable valuation ratios for a high-octane growth stock like Fiverr.

And don’t forget that we’re looking at a minnow swimming in a massive pond here. Fiverr’s trailing sales add up to just $316 million right now, but the global market for freelance service arrangements is already estimated at $115 billion in these early days of the emerging gig economy.

Where do I sign up?

Fiverr’s stock is much too cheap to ignore right now. In fact, I doubled down on my own real-money Fiverr stake last week. This is one of the most inviting investment opportunities on the market. That includes flash-in-the-pan cryptocurrencies like Shiba Inu. Fiverr’s stock has suffered a price reduction similar to the dog-themed crypto ticker’s, but only one of the two investment names is likely to spring back to life again. 

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

The post Thinking about buying Shiba Inu? Read this first appeared first on The Motley Fool Australia.

More reading

• Why Bitcoin, Dogecoin, and Shiba Inu are falling today
• Why Shiba Inu is down today
• 2 cryptocurrencies that could dwarf Shiba Inu
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• Why Dogecoin and Shiba Inu are tumbling today

Anders Bylund has positions in Fiverr International and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Fiverr international, Twitter and 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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At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) is on course to rebound from yesterday’s selloff. The benchmark index is currently up 0.6% to 7,138.1 points.

Here’s what is happening on the ASX 200 today:

Boral rockets on new CEO appointment

The Boral Limited (ASX: BLD) share price is rocketing higher on Wednesday. This follows news that the building products company has appointed Vik Bansal as its new CEO. Mr Bansal stepped down from the role of CEO of Cleanaway Waste Management Ltd (ASX: CWY) last year amid a scandal which saw him accused of creating a culture of workplace bullying. This overshadowed an otherwise highly successful six years at Cleanaway.

Big four banks tumble

Australia’s big four banks are tumbling today. The worst performer in the group has been the Westpac Banking Corp (ASX: WBC) share price with a 4% decline. This appears to have been driven by concerns that an aggressive tightening cycle by the Reserve Bank could create challenges for the banking sector. The market was previously expecting a more gradual and measured tightening cycle.

Uranium shares take off

The Paladin Energy Ltd (ASX: PDN) share price is taking off on Wednesday along with other uranium shares. This follows news that the United States is seeking to wean itself off Russian uranium for its nuclear reactors. The Biden Administration is seeking support for a US$4.3 billion plan to help with the transition.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Wednesday has been the Atlas Arteria Group (ASX: ALX) share price with a 16% gain. This follows news that IFM Global Infrastructure Fund has acquired a 15% stake in the toll road operator at a significant premium to its last close price. Going the other way, the worst performer has been the Westpac share price with a 4% decline amid weakness in the banking sector.

The post ASX 200 midday update: Boral rockets, big four banks tumble appeared first on The Motley Fool Australia.

More reading

• Which ASX 200 bank is the first to pass on the full RBA rate hike?
• Why is the Paladin Energy share price jumping 13% today?
• Atlas Arteria share price leaps 16% amid takeover speculation
• Boral share price charges higher amid controversial CEO appointment
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. 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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