The Evolution Mining Ltd (ASX: EVN) share price is enjoying another strong day today.

Evolution shares closed on Friday at $4.20 and are currently trading for $4.42. That sees the Evolution share price up 5.1% in intraday trading even as the S&P/ASX 200 Index (ASX: XJO) is down 0.7%.

So, what’s driving today’s gains for the ASX 200 gold share?

Why is the ASX 200 gold share up today?

To be fair, it’s not just the Evolution share price bucking the wider selling trend gripping the market today.

Most of the major ASX gold shares are well into the green, as witnessed by the 4.7% intraday gain posted by the S&P/ASX All Ordinaries Gold Index (ASX: XGD), in stark contrast to the 3.3% fall posted by the S&P/ASX All Technology Index (ASX: XTX) at this same time.

And you need look no further than the fast-rising price of gold to understand why.

Fuelled by the soaring global geopolitical tensions unleashed by Russia’s invasion of neighbouring Ukraine, bullion prices gained another 1% overnight. That brings the price of gold to US$1,990 per troy ounce, according to data from Bloomberg.

Gold, as you’re likely aware, is viewed by many investors as a haven asset in times of uncertainty. And its this haven status that’s seen bullion rocket from US$1,820 per ounce just one month ago.

And that 9.3% gain the price of gold has helped deliver a 22% boost for Evolution shareholders since this time last month.

Evolution share price snapshot

The Evolution share price has gained 8.1% so far in 2022.

By comparison, the ASX 200 is down 6.8% year-to-date.

Evolution Mining pays a 1.9% trailing dividend yield, fully franked.

The post Up 22% in 1-month, why the Evolution (ASX:EVN) share price is surging again today appeared first on The Motley Fool Australia.

More reading

• ASX 200 dives to 4-day low following Ukraine nuclear power plant crisis
• 5 things to watch on the ASX 200 on Thursday
• Here’s why ASX gold shares are having another stellar day
• 5 things to watch on the ASX 200 on Wednesday
• Why Dubber, Evolution, Sandfire, and Zip shares are dropping

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3gjsiUI

At lunch on Monday, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a heavy decline. The benchmark index is currently down 0.7% to 7,059.6 points.

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

AGL rejects second takeover offer

The AGL Energy Limited (ASX: AGL) share price is trading lower today. This follows news that the energy giant has rejected an improved takeover approach from the Brookfield Consortium. According to the release, the consortium has increased its offer by 10% from $7.50 per share to $8.25 per share. However, the AGL Board continues to believe that this undervalues the company and has rejected the approach.

Appen makes strategic investment

The Appen Ltd (ASX: APX) share price is falling again on Monday despite the AI data services company announcing a strategic investment. Appen revealed that it has made a ~$3.6 million investment in Mindtech Global. Mindtech is the creator of Chameleon, which specialises in developing training data for AI computer vision models. The two parties have formed a commercial partnership agreement following the investment.

Zip co-founder buy shares

The co-founders of Zip Co Ltd (ASX: Z1P) appear to believe the sharp pullback by its shares this year could be a buying opportunity. According to a release, the company’s co-founders Larry Diamond and Peter Gray have purchased approximately $1.5 million of Zip shares. A number of non-executive Directors, including chair Diane Smith-Gander, also purchased Zip shares at the end of last week.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Monday has been the Woodside Petroleum Limited (ASX: WPL) share price with an 8% gain. This follows another strong rise in oil prices. The worst performer has been the Unibail-Rodamco-Westfield (ASX: URW) share price with a 7% decline. The shopping centre operator’s shares have come under pressure amid news that they will be dumped from the ASX 200 later this month.

The post ASX 200 (ASX:XJO) midday update: AGL rejects new takeover offer, Appen makes strategic investment appeared first on The Motley Fool Australia.

More reading

• Here’s why ASX shares are set for a shakeup this month
• Why Woodside (ASX:WPL) shares are ‘best placed’ to benefit from the energy crisis: expert
• Payday? Here’s why the CSL share price is sliding this morning…
• These are the 10 most shorted ASX shares
• Appen (ASX:APX) share price fails to lift off on strategic investment

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. owns and has recommended Appen Ltd and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Appen Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/Ytu8TfA

The benchmark S&P/ASX 200 Index (ASX: XJO) continues its downward run on Monday after starting the session poorly. It is now tracking 76 basis points lower at 7,057 points, down almost 5% for the year.

Amid the downward pressure, one ASX share is shining above the rest today and is now trading 60% higher in the morning session.

Shares in Structural Monitoring Systems PLC (ASX: SMN) have exploded out of the gates today after being in a trading halt since 21 January. They’re now fetching $1.09 apiece.

Investors are responding positively to a company announcement this morning regarding usage approval for its CVM [comparative vacuum monitoring] Sensor technology.

Why’s this ASX share charging so hard today?

Market pundits are piling into the company today after it advised the US Federal Aviation Administration (FAA) granted authority to issue Supplemental Type Certificate (STC) approval for its CVM Sensor technology.

Structural Monitoring says the technology is now approved on the B737-800 Intelsat (Gogo) Wi-Fi antenna support structure inspection.

According to the company, the approval marks an incredible milestone in the world of aviation and is poised to make flying potentially safer for us all. This approval marks an extraordinary milestone in aviation history, the first-ever world regulatory agency approved sensor technology validated and certified for detecting critical structural cracks on aircraft.

“The certification of CVM sensors to detect cracks on aircraft is expected to meaningfully impact the
industry maintenance inspection methods,” the announcement said.

“Inspections can be performed more routinely, plus the sensor eliminates the need to remove ceiling panels and pneumatic ducting to gain access for various safety checks.”

In fact, Structural Monitoring says that inspections using the technology can be performed “at the gate during a turn-around in approximately 30 minutes, as opposed to taking the aircraft to the hangar to perform the inspections”.

The company says it will now be putting its efforts into getting the technology ready and able for as many airline fleets as possible.

“Now that SMS has an FAA certified product available on the market, our team will be assessing all factors related to the current airline operating environment,” it said.

“This includes current aircraft fleet compositions, aircraft utilisation information and other factors which airlines rely upon to assess their cost benefit analysis for use of CVM technology.”

As a result, investors are seeing green today, sending shares north of 60% higher on a volume of more than 1,000% higher than the company’s 4-week trading average.

Management commentary

Speaking on the announcement, the company’s head of business development and marketing executive vice president Rich Poutier said:

This industry-first approval of SMS’s structural health monitoring technology granted by the FAA is validation of the tremendous efforts put forth by the entire team. We are excited to pave the way and expand the commercial market with our highly innovative CVM sensor technology.

How has this ASX share performed?

In the last 12 months, the Structural Management Systems share price has soared more than 166% and it is also up 79% this year to date.

As a result of the gain seen on the back of today’s announcement today, the company is now trading at its 52-week high as well.

During the past month of trading alone, shares have surged more than 86% and, it’s safe to say, SMS is now comfortably outperforming the benchmark index so far in 2022.

The post Little-known ASX share explodes 60% on ‘breakthrough’ US certification appeared first on The Motley Fool Australia.

More reading

• Here’s why the Graincorp (ASX: GNC) share price has rocketed 24% in a month
• Why Crypto Fantom is crashing lower
• Goldrush! Why are Newcrest Mining (ASX:NCM) shares up 4% today?
• Here’s why this ASX coal share is rocketing 52% today
• Why the De Grey Mining (ASX:DEG) share price is shooting 12% higher 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/N5jv2g9

A message from our CIO, Scott Phillips:

“G’day Fools. If you’re like us, you’re dismayed by the events taking place in Ukraine. It is an unnecessary humanitarian tragedy. Times like these remind us that money is important, but other things are far more valuable. And yet the financial markets remain open, shares are trading, and our readers and members are looking to us for guidance. So we’ll do our best to continue to serve you, while also hoping for a swift and peaceful end to war in Ukraine.”

---

It’s been a bumper month for the Graincorp Ltd (ASX: GNC) share price, despite only a single price-sensitive announcement having been released by the company.

Since this time last month, Graincorp has gained 24.34%, growing from $7.21 to $8.97.

For context, the S&P/ASX 200 Index (ASX: XJO) has fallen 0.8% in that time.

Let’s take a look at what’s been helping to boost the integrated grain and edible oils business’ stock lately.

What’s been driving the Graincorp share price lately?

This time last month, the Graincorp share price was surging on the back of a guidance upgrade.

The company announced it had managed to dodge most supply chain issues as Australia experienced yet another bumper crop.

On top of that, supply shortages and drought conditions in the northern hemisphere sent demand for Australian grain and oil seeds soaring.

As a result, Graincorp expects to report between $480 million and $540 million of underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) for financial year 2022.

For comparison, it reported $331 million of underlying EBITDA last financial year.

Additionally, the company’s underlying net profit after tax (NPAT) is predicted to be in the range of $235 million to $280 million – up from $139 million.

The Graincorp share price gained 12.34% the day the company upgraded its guidance. And the market might be expecting even more from the company into the future.

As The Motley Fool Australia’s Mitchell Lawler recently reported, Russia’s invasion of Ukraine could send wheat prices soaring.

Russia and Ukraine are responsible for a significant portion of the world’s wheat exports. However, Russia’s invasion of Ukraine and resulting sanctions could hamper both production and supply of the commodity.

Thus, one expert predicted that supply and demand could see the price of wheat grow by more than 50% if the conflict continues into July. It could also see demand for Australian wheat take off.

If the commodity’s price were to increase, it could help boost Graincorp’s bottom line and, in turn, its shares.

The post Here’s why the Graincorp (ASX: GNC) share price has rocketed 24% in a month appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to sell today
• 5 things to watch on the ASX 200 on Thursday
• 3 ASX shares that could get a slice of a record $81bn farm output this year
• Here’s why the Graincorp (ASX:GNC) share price jumped 5% today
• Why Core Lithium, Dicker Data, GrainCorp, and InvoCare shares are rising

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/8P4xUSc

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

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

What happened

Cryptocurrency Fantom (CRYPTO: FTM) is down 16% as of 1:25 p.m. ET Sunday following a tweet from Anton Nell that he and Andre Cronje are leaving the decentralized finance (crypto) industry. Cronje is a prolific coder who has done extensive work on Fantom, and Nell is — or was — the senior solutions architect for the Fantom Foundation. Several of the apps the pair of developers helped operate will also be shutting down. 

So what

There’s no ill-will or internal conflict driving the decision, for the record. Nell’s tweet explains “this is not a knee jerk reaction to the hate received from releasing a project, but a decision that has been coming for a while now.” Nevertheless, the crypto’s response to the news underscores just how critical an individual can be to a cryptocurrency’s value. That’s especially true for a less liquid and less utilized crypto such as Fantom.

The Fantom Foundation itself is confident its platform will be able to continue on without Nell’s and Cronje’s involvement. In its own response tweet, the foundation points out “Fantom isn’t and never was a one man team. There are 40+ people working at Fantom.” The Fantom Foundation’s Twitter account goes on to add, “Therefore, the development of Fantom won’t be impacted by Andre’s decision.”

The cryptocurrency market, however, isn’t so sure Fantom has a bright future without Cronje and Nell in it. 

Now what

The Fantom Foundation is right, by the way. While Nell and Cronje may have been instrumental in getting Fantom and the foundation up and running, that groundwork has already been fully laid. Their presence is no longer necessary. Their greatest value to the organization going forward was as spokespeople and advocates.

Still, a sharp sell-off stemming from the exit of two developers after the development work has been done indicates the sort of vulnerability that most investors would be wise to avoid… if at all possible. This unpredictable volatility may eventually pass, but in a crypto arena that’s getting crowded, Fantom may not be worth that wait. Would-be buyers would be better served by looking for other opportunities available right now. 

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

The post Why Crypto Fantom is crashing lower appeared first on The Motley Fool Australia.

More reading

• Here’s why the Graincorp (ASX: GNC) share price has rocketed 24% in a month
• Goldrush! Why are Newcrest Mining (ASX:NCM) shares up 4% today?
• Here’s why this ASX coal share is rocketing 52% today
• Why the De Grey Mining (ASX:DEG) share price is shooting 12% higher today
• Here’s why ASX shares are set for a shakeup this month

James Brumley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Twitter. 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 Bruce Jackson.

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

from The Motley Fool Australia https://ift.tt/WAk45Jg

The S&P/ASX 200 Index (ASX: XJO) is having a fairly disappointing start to the trading week so far this Monday. At the time of writing, the ASX 200 is down by 0.76% at under 7,100 points. But bucking that trend so far this morning is the Newcrest Mining Ltd (ASX: NCM) share price.

Newcrest shares are currently up by a pleasing 3.6%  at $26.96 a share, after rising more than 4% at one point. That’s after this ASX 200 gold miner closed at $26.02 last week and opened at $26.82 a share this morning. It puts Newcrest’s 2022 year to date gains at 10.1%, and its gains over the past month at an impressive 19.9%. 

So why are Newcrest shares defying the broader market and shooting higher today? 

Why are Newcrest Mining shares glittering today? 

Well, it appears that the price of gold itself might be playing a large role here. As a gold miner, there are few things that affect the valuation of Newcrest more than the gold price itself. And the precious metal has indeed been making some big moves of late. Gold is currently being priced at close to US$1,990 an ounce. That is its highest level in almost 2 years. It also represents a sharp appreciation, considering gold was under US$1,800 an ounce just over a month ago. 

Gold is a traditional safe-haven asset. It seems to have a particular appeal during times of economic or geopolitical stress. So it’s perhaps no surprise then that gold has shot up in value in light of the current war in Ukraine.

That’s perhaps why we are also seeing other ASX gold mining shares see similar moves today. Although it is worth noting that Newcrest is among the more tamer moves that we see. For example, the Northern Star Resources Ltd (ASX: NST) share price is currently up a far more dramatic 6.5% at the time of writing. Perseus Mining Limited (ASX: PRU) shares are up 5%, while Gold Road Resources Ltd (ASX: GOR) shares have gained more than 5.5% so far today. 

At the current Newcrest Mining share price, this ASX 200 gold miner has a market capitalisation of $21.28 billion, with a dividend yield of 2.52%. 

The post Goldrush! Why are Newcrest Mining (ASX:NCM) shares up 4% today? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Here are the top 10 ASX shares today
• ASX 200 dives to 4-day low following Ukraine nuclear power plant crisis
• Why Infomedia, Newcrest, Piedmont Lithium, and Woolworths shares are rising today
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Sebastian Bowen owns Newcrest Mining Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/27DTxsQ

The benchmark S&P/ASX 200 Index (ASX: XJO) has started the week poorly. On Monday morning the ASX 200 is now tracking 54 basis points lower at 7,056 points.

One ASX share is flaming ahead of the pack today and is now trading 52.84% higher at the time of writing. Shares in Stanmore Resources Ltd (ASX: SMR) are well in the green after surging out of the opening gate and now fetch $1.75.

Prior to today’s announcement, shares in the ASX coal miner had been on halt since 2 March. Before this, they traded in a two-month range of roughly $1.20 per share.

Why are Stanmore Resources shares flaming higher today?

Investors are responding positively to a company announcement out of Stanmore’s camp today. The company says it has successfully completed an institutional entitlement offer raising a gross of approximately $656 million.

The deal was a 7-for-3 underwritten entitlement offer, giving the investors retail rights to trade new fully-paid ordinary shares in Stanmore at an offer price of $1.10 per share.

Stanmore says this tranche of capital signifies the first stage of its $694 million entire capital raising announced on 3 March.

Eligible shareholders can elect to take up all of their entitlements by the closing date or let them lapse by discretion, per the release.

Stanmore also notes that these entitlements can be traded on ASX “in whole or in part.” Trading will commence on 7 March 2022 under the ASX ticker “SMRR”.

Trading of the instruments will conclude after the closing bell on 14 March 2022.

“Eligible Shareholders in the Retail Entitlement Offer will be sent a retail offer booklet, which will contain further information in respect of the Retail Entitlement Offer and a personalised entitlement and acceptance form, on 10 March 2022 and lodged with ASX on that date,” the company says.

Management commentary

Stanmore managing director Marcelo Matos spoke on the announcement today:

The overwhelming support for the offer from both existing shareholders and new investors is a real endorsement of the value of the proposition offered by the BMC acquisition and the enlarged Stanmore business. Stanmore is excited to welcome some significant new Australian and international investors to its register.

Stanmore Resources share price summary

In the last 12 months this ASX share has soared over 173%. It has gained another 69% this year to date.

Prior to the announcement it was trading in a tight range of roughly $1.20 per share for the last two months, and wasn’t showing anything exciting. Until today, that is.

Now, as a result of today’s news, shares have surged 49% in the last month alone. That puts Stanmore’s performance ahead of the majority of its ASX peers so far this year.

The post Here’s why this ASX coal share is rocketing 52% today appeared first on The Motley Fool Australia.

More reading

• Goldrush! Why are Newcrest Mining (ASX:NCM) shares up 4% today?
• Why the De Grey Mining (ASX:DEG) share price is shooting 12% higher today
• Here’s why ASX shares are set for a shakeup this month
• Why Woodside (ASX:WPL) shares are ‘best placed’ to benefit from the energy crisis: expert
• Payday? Here’s why the CSL share price is sliding this morning…

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/vM23Y5D

The De Grey Mining Limited (ASX: DEG) share price has been a very strong performer on Monday.

In morning trade, the gold explorer’s shares are up 12% to $1.30.

This latest gain means the De Grey share price is now up almost 50% over the last 12 months.

Why is the De Grey share price surging higher?

There have been a couple of catalysts for the rise in the De Grey share price on Monday.

The first is a solid rise in the gold price on Friday night and then again on Monday morning amid increasing demand for safe haven assets.

According to CNBC, during Asian trade this morning, the spot gold price has risen a further 1.3% to US$1,992.4 an ounce. This means the gold price is now up approximately 11% since the start of the year.

What else is boosting its shares?

Also giving the De Grey share price a boost today is news that the gold explorer will be added to the illustrious S&P/ASX 200 Index (ASX: XJO) later this month. It is one of four shares that will be added to the index on 22 March following the quarterly rebalance.

This can be a positive for a share price for a couple of reasons. One is that index funds that track the ASX 200 will need to buy these shares in order to reflect the changes.

In addition, most fund managers have strict mandates on the shares that they’re allowed to invest their clients’ money into. A popular one is that they only buy shares from certain indices like the ASX 200.

This means that De Grey’s addition to the index could have allowed some fund managers that have been wanting to invest in the company’s shares to do so today.

The post Why the De Grey Mining (ASX:DEG) share price is shooting 12% higher today appeared first on The Motley Fool Australia.

More reading

• Why these 2 ASX mining shares are in the spotlight today
• These ASX 200 shares are being dumped out of the index and replaced with…

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/XPebrSt

It’s that time again when investors find out whether their ASX shares have made it into various indices, such as the S&P/ASX 200 Index (ASX: XJO), or if they have been booted out.

The event holds significance as it can often have implications for the share prices of companies. Usually, the addition to an index indicates a company has been performing. Meanwhile, removal often follows a period of disappointment.

What is index rebalancing?

There are various indices in the Australian share market that are based on either market capitalisation or sector. For many investors, the ASX 200 is the most popular cross-section of ASX shares, which is comprised of the 200 largest companies on the ASX.

The major indices, such as the ASX 200, 100, 50, and 20, are rebalanced quarterly. On the third Friday of March, June, September, and December, any changes in the indices are enacted.

This month we will see some notable changes in how the market looks. For example, we will witness the removal of Brambles Limited (ASX: BXB) and Block Inc (ASX: SQ2) from the ASX 20.

In their place will be James Hardie Industries PLC (ASX: JHX) and Santos Ltd (ASX: STO).

Why do ASX shares undergo rebalancing?

In short, indices are regularly rebalanced in an attempt to accurately reflect an accurate representation of the broader equity market.

Throughout the quarter, some companies grow and others shrink. In turn, the constructors of the index need to make modifications to mirror these changes.

As an example, Mesoblast Limited (ASX: MSB) has fallen 37% in the last three months, while AVZ Minerals Ltd (ASX: AVZ) has rallied 63%. These major alterations in market capitalisation call for Mesoblast to be removed and AVZ to be added.

When is the next one?

The decision for which ASX shares to be added and removed for March has already been made. Investors can expect to see the adjustments officially made on 22 March.

However, for those keen shareholders looking forward, the next rebalance will take place on 17 June. The question is: which ASX shares will be shuffled around next quarter?

The post Here’s why ASX shares are set for a shakeup this month appeared first on The Motley Fool Australia.

More reading

• Payday? Here’s why the CSL share price is sliding this morning…
• 5 things to watch on the ASX 200 on Monday
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• Here are the top 10 ASX shares today

Motley Fool contributor Mitchell Lawler owns Block, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Block, Inc. The Motley Fool Australia owns and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/esGWtUP

The Woodside Petroleum Limited (ASX: WPL) share price is up 6.8% in early trade today, currently at $33.54 per share.

Woodside shares have been thrust into the spotlight as the global energy crisis ratches up another level.

Energy prices for everything from crude oil, to gas, to coal (and more) began trending sharply higher in early December. That’s when the global reopening from the pandemic began to pick up pace only to find that energy demand growth was outstripping new supply growth.

The next big shock to energy prices was, of course, Russia’s brazen invasion of neighbouring Ukraine. That’s sent the price of Brent crude oil rocketing above US$118 per barrel. In case you’re wondering, on 1 December that same barrel was trading for US$69.

With that in mind, we turn to Hamish Tadgell, portfolio manager of SG Hiscock’s High Conviction Fund, and his take on why Woodside shares look best placed to benefit from these soaring prices.

The strategic value of its underlying assets

Addressing the Australian Financial Review, Tadgell compared the ASX energy sector to the yesteryear’s telecom sector:

In some respects, we see the energy sector like the telecommunications sector a few years ago when it was plagued with concerns by investors around competition and regulation before COVID-19 found a renewed appreciation for the strategic value of the underlying assets.

Narrowing it down to why Woodside shares appear best placed to benefit, Tadgell said:

We see Woodside Petroleum as the best placed domestic beneficiary of any tightness in regional energy. Woodside’s exposure to spot cargoes of LNG is around 20 per cent, but its valuation starting point is cheaper owing to the complex merger of equals with BHP Group Ltd (ASX: BHP) expected to be finalised mid-year.

The deal – if approved – will position Woodside with twice the levels of production and a balance sheet with low levels of gearing and sufficient flexibility to fund various growth options, including Scarborough in Western Australia.

How have Woodside shares been tracking?

Woodside shares have charged higher in the new year, up a stellar 48.7%. And that’s despite going ex-dividend on 24 February.

By comparison, the S&P/ASX 200 Index (ASX: XJO) is down 6.6% year-to-date.

At the current price, Woodside shares pay a trailing dividend yield of 5.6%.

The post Why Woodside (ASX:WPL) shares are ‘best placed’ to benefit from the energy crisis: expert appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• These were the best performing ASX 200 shares last week
• 3 ASX shares to cash in from the energy crisis: expert
• 5 things to watch on the ASX 200 on Friday
• The Woodside (ASX:WPL) share price has smashed at least 8 52-week highs in the last month. What’s next?

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/wIVfz1U