Key points:

• Materials and labour shortages are impacting ASX shares across various industries
• Dermot Ryan of AMP Capital highlights how investors’ portfolios could benefit from the conditions
• Inflation gives points for and against some of the big healthcare names

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Shortages have plagued Australian companies across numerous sectors in the past year or so. Unfortunately, the recent and sudden surge in COVID-19 cases has put pressure back on supermarkets to stay stocked. Despite this, there could be an opportunity for investors to benefit from this situation with certain ASX shares.

Whether it be materials or labour shortages, many companies are struggling to keep their footing in the current climate. A prime example of this that many people have witnessed is the bare shelves at supermarkets such as Woolworths Group Ltd (ASX: WOW).

However, one expert has named a few options up investors’ sleeves outside of the COVID-19 battered ASX shares.

ASX shares to fend off the sting in Omicron disruptions

One expert investor recently offered insights into how a portfolio could be positioned to benefit from the current environment. According to AMP Capital portfolio manager Dermot Ryan, there are ways to potentially combat the shortage blues.

In an article by Ryan, the portfolio manager names local well-stocked retailers and key commodities as shortage hedges. Providing an example in the commodity space, the investor lists battery minerals as one segment to keep tabs on. Minerals such as spodumene/lithium have been piggybacking the decarbonisation trend and skyrocketed in the process.

Some high-profile ASX shares operating in the lithium space include Pilbara Minerals Ltd (ASX: PLS), Allkem Ltd (ASX: AKE), and Sayona Mining Ltd (ASX: SYA). All of which have doubled or more in value over the past year.

In addition, the AMP Capital portfolio manager noted other battery minerals such as nickel, cobalt, and graphite as recent winners. One company that has proven to be a remarkable performer in this space has been Novonix Ltd (ASX: NVX). Over the last 12 months, this battery materials play has enriched the pockets of shareholders by a staggering 547%.

What to watch for as wages inflate?

Inflation is another important factor playing into how ASX shares are performing. Woolworths has already had a rough start to 2022, with its share price tumbling 9% since the new year kicked off. This follows the supermarket giant revealing higher costs for doing business in December.

AMP’s Dermot Ryan warned of other companies that will likely suffer a similar fate due to inflated wages and business costs. The ASX shares making this list included Estia Health Ltd (ASX: EHE), Regis Healthcare Ltd (ASX: REG), and Ramsay Health Care Limited (ASX: RHC).

Although, on a positive note — the inflationary pressures could result in an increased value for the healthcare infrastructure owned by these companies.

The post Which ASX shares could you buy when the supermarket shelves are bare? appeared first on The Motley Fool Australia.

More reading

• JB Hi-Fi (ASX:JBH) share price pushes higher after broker upgrade
• Zip (ASX:Z1P) will become the largest pureplay BNPL on the ASX this week. What might this mean for shareholders?
• Crypto is crashing: Should you invest now?
• Anson Resources (ASX:ASN) share price surges 9% on major lithium exploration
• These are the 10 most shorted ASX shares

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• JB Hi-Fi shares push higher following broker upgrade.
• Morgans believes the retailer’s shares are a buy after recent weakness
• Its analysts predict significant upside and generous yields in 2022

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The JB Hi-Fi Limited (ASX: JBH) share price has started the week in fine form.

At the time of writing, the retail giant’s shares are up 2.5% to $46.22.

Why is the JB Hi-Fi share price pushing higher?

The catalyst for the rise in the JB Hi-Fi share price on Monday appears to have been the release of a bullish broker note out of Morgans this morning.

According to the note, the broker has upgraded the retailer’s shares to an add rating and held firm with its price target of $54.00.

Based on the current JB Hi-Fi share price, this implies potential upside of 17% over the next 12 months. And that’s before dividends. If you include the $2.17 per share fully franked dividend the broker is forecasting in FY 2022, this stretches the potential return to over 21%.

What did the broker say?

Morgans made the move largely on valuation grounds following a sharp pullback in the JB Hi-Fi share price in recent months. It feels this has brought its shares down to an attractive level which is below historic multiples.

Based on Morgans’ estimate for earnings per share of $3.33 in FY 2022, the company’s shares are changing hands for under 14x forward earnings. The broker also notes the generous forecast yield (4.7%) on offer at current levels.

And while its analysts aren’t expecting JB Hi-Fi’s half year results next month to be as strong as the prior corresponding period, they do see upside risk to forecasts.

All in all, the broker believes the sum of the above makes JB Hi-Fi’s shares a great option for investors in the retail sector right now.

The post JB Hi-Fi (ASX:JBH) share price pushes higher after broker upgrade appeared first on The Motley Fool Australia.

More reading

• ASX 200 retail shares slump despite higher-than-expected sales
• 2 beaten-up blue chip ASX shares rated as buys
• Are these 2 strong ASX 200 shares buys?
• Forget Christmas! Could these ASX retail shares be set for a Boxing Day bonanza?
• Fed up with term deposits? How to get 10% income from ASX 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 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.

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Key points

• Afterpay shares are set to leave the ASX in just a few days
• That will leave Zip as the ASX’s largest pureplay BNPL share
• What does this mean for Zip shareholders in 2022?

It’s rather strange to picture, but in a matter of a few days, the Afterpay Ltd (ASX: APT) share price will leave the ASX boards. Yes, Afterpay’s last day of trading on the ASX will be this Wednesday, 19 January.

Last week, Afterpay received the green light from the Bank of Spain for its upcoming merger with the giant US payments company Block Inc (NYSE: SQ), formerly known as Square. This was the final hurdle for both companies to overcome before the merger could take place, so it’s now full-steam ahead. And that will leave Zip Co Ltd (ASX: Z1P) as the largest pureplay ASX buy now, pay later company on the Australian share market.

If you remember, the Afterpay-Block merger was first announced back in August last year. It will result in Afterpay investors receiving an all-scrip deal that will exchange every share of Afterpay still held for a fixed ratio of 0.375 Block shares. To facilitate an easy transition for ASX shareholders, a CHESS depository interest (CDI) share class will begin trading on the ASX from 2 February (under the ticker code SQ2). Investors can either elect to have their Afterpay shares exchanged for the NYSE-listed SQ stock, or these new ASX-listed SQ2 CDIs. 

So after this, BNPL investors looking for a stake in the largest 2 BNPL companies in Australia will either have to settle for Block shares or an investment in Zip Co.

So what does this mean for shareholders? Will some of Afterpay’s shareholder base migrate over to the Zip share price?

Is the Zip share price a buy in 2022?

Well, we can’t say for sure on the latter. It is, of course, possible. But it is also possible that many shareholders will just take the Block shares on offer. Or else just cash out after what has been an incredibly bumpy, and lucrative, few years for Afterpay on the ASX. Remember, although the Afterpay share price has had a rollercoaster ride over the past year, it’s still up an extraordinary 2,210% or so over the past 5 years.

But on the former, Zip could be in the driver’s seat, according to one ASX broker. As my Fool colleague James covered last week, broker Morgans is ‘add’ rated on Zip Co at the moment, with a 12-month share price target of $7.54.

That implies a rather lucrative potential upside of more than 100% over the next year. The broker noted that “the [BNPL] sector is suddenly unloved by investors, so solid 1H22 results are required to change sentiment”. But it expects this to be the case, with a prediction of “strong revenue growth for APT and Z1P (~100%) on pcp)”.

However, it is still expecting both shares to still report losses for the first half of FY2022 when it comes to net profits after tax.

That could bode well for Zip shareholders if Morgans’ estimates turn out to be true. But we shall have to wait and see what the BNPL landscape looks like once the dust settles from the blockbuster Afterpay-Block wedding.

At the current Zip Co share price, this BNPL share has a market capitalisation of $2.17 billion.

The post Zip (ASX:Z1P) will become the largest pureplay BNPL on the ASX this week. What might this mean for shareholders? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• 5 things to watch on the ASX 200 on Monday
• Why Afterpay, BWX, Pendal, and Temple & Webster shares are sinking
• Is the slide in BNPL shares like Zip (ASX:Z1P) just getting started?
• ASX 200 (ASX:XJO) midday update: Qantas cuts capacity, Afterpay hits 52-week low

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

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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.

Cryptocurrency has been having a rough year so far. Major cryptocurrencies have watched their prices plummet over the past two months, and the crypto market as a whole has shed nearly $1 trillion since its peak in mid-November.

While falling prices can be concerning, it’s also a fantastic opportunity to “buy the dip.” Expensive cryptocurrencies like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) are essentially on sale right now.

Bitcoin is currently priced at $43,000 per token, down from nearly $70,000 in November. Similarly, Ethereum costs around $3,300 per token, a steep fall from its peak of close to $4,900 per token a couple of months ago.

If you’ve been considering buying crypto, right now is one of the most affordable times to invest. But does that mean it’s a smart investment? Here’s what you need to know.

Is crypto a good investment right now?

In general, it can be smart to load up on stocks during market downturns. Stocks tend to be more affordable when the market is down, but there’s a good chance prices will rebound once the market recovers.

Cryptocurrency is a little different, however, because it’s still highly speculative.

Stocks have a long history of growth over time. As long as you do your research and choose the right investments, it’s likely your stocks will recover from downturns and earn positive average returns over time.

With crypto, though, there’s no guarantee it will succeed over the long run. Although major cryptocurrencies are developing more utility, most of their growth is still based on their potential real-world uses. In other words, while there’s a chance crypto could explode and change society as we know it, there’s also a chance it could fail. And right now, nobody knows what will happen.

Should you invest in cryptocurrency?

Crypto isn’t necessarily a bad investment. It is risky, though, so be sure you know what you’re getting into before you buy.

To decide whether crypto is right for you, consider your tolerance for risk. The price of Bitcoin has fallen by nearly 37% since mid-November, and it’s lost more than 80% of its value in the past. If you know that level of volatility will cause you to lose sleep at night, crypto may not be the right investment for you.

It’s also important to think about your overall financial situation before you invest. As with any investment, it’s best to keep a long-term outlook. Be prepared to keep your money invested for at least a few years, if not decades. Also, don’t invest any money you can’t afford to lose, and double-check that the rest of your portfolio is well-diversified.

Finally, try your best to keep realistic expectations when investing in crypto. There’s no shortage of stories about people who have made millions investing in cryptocurrency, but those instances are the exception rather than the rule.

While you likely won’t become a millionaire overnight, it is possible to make money with crypto. It is a risky investment, though, so don’t rush to buy simply because it’s more affordable right now. If you have a higher tolerance for volatility and can afford to invest, now might be the right opportunity to buy. Otherwise, you may be better off waiting. 

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

The post Crypto is crashing: Should you invest now? appeared first on The Motley Fool Australia.

More reading

• Bitcoin could hit ‘death cross’ soon! Expert explains why this is great
• Is Bitcoin making share prices more volatile?
• Bitcoin, Ethereum, and Dogecoin surge higher as crypto markets recover
• Why Bitcoin, Ethereum, and Dogecoin plunged today
• Forget Bitcoin! These were the 5 crypto assets you wish you’d held in 2021

Katie Brockman owns Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Bitcoin and Ethereum. The Motley Fool Australia Katie Brockman owns Bitcoin and Ethereum. 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.

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Key points

• The Anson Resources share price soared 9% to trade at 18 cents earlier today
• It took off after the company announced it’s started a major exploration program at its flagship Paradox Lithium Project
• The program could see the company upgrading the resource estimate in the current half

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The Anson Resources Ltd (ASX: ASN) share price is soaring today after the company announced it’s started a major program to increase the Paradox Lithium Project‘s resource estimate.

The company expects the resource expansion sampling program will lead it to upgrade the project’s estimates in the first half of 2022.

At the time of writing, the Anson Resources share price has slipped from its intraday high to trade at 17.5 cents. That’s a 6.06% gain on its previous closing price.

Let’s take a closer look at today’s news from the explorer and developer of resources for the energy transition.

What’s driving the Anson share price on Monday?

The Anson Resources share price is surging after the company announced it’s started work on increasing the Paradox Project’s JORC estimates and adding new claims nearby the project.

Paradox is a lithium brine project located in Utah. It covers a total area of 95 square kilometres.

The first target of the company’s new exploration program is the Long Canyon No 2 well. It plans to re-enter the Long Canyon No 2 well to test lithium, bromine, boron, and iodine grades.

The project’s highest lithium value to date – 253 parts per million – was recorded in this well.

Additionally, the company has confirmed a new exploration target for the Mississippian units – said to contain a super-saturated brine – surrounding the well.

The units are between 100 metres and 250 metres thick. They are said to be made up of between 445 megatons and 1,000 megatons of brine with a grading of 70 to 100 parts per million of lithium and 2,000 to 3,000 parts per million of bromine.

The new target makes up part of the project-wide exploration target of 1,300 megatons to 1,800 megatons grading between 80 and 140 parts per million of lithium and 2,000 to 3,000 parts per million of bromine.

However, the new target is still conceptual and might not result in a mineral resource. It’s based on data from previous oil and gas drilling programs.

Right now, the Anson Resources share price is 29% higher than it was at the end of 2021. It has also gained 65% in the last month.

The post Anson Resources (ASX:ASN) share price surges 9% on major lithium exploration appeared first on The Motley Fool Australia.

More reading

• These were the 5 best performing ASX uranium shares of 2021

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.

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Once a week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) continues to be the most shorted ASX share despite a slight easing to 14.5%. Short sellers appear to believe the Omicron variant will weigh heavily on the travel market for some time to come.
• Kogan.com Ltd (ASX: KGN) has seen its short interest rise to 10.9%. A very disappointing performance over the last 12 months and expectations that it will continue in FY 2022 have been weighing on its shares. A underwhelming update from rival Catch today won’t have helped matters.
• Zip Co Ltd (ASX: Z1P) has seen its short interest jump to 10.1%. A range of factors including increased competition, rising interest rates, and regulatory scrutiny are weighing on BNPL shares.
• Redbubble Ltd (ASX: RBL) has short interest of 9.7%, which is up week on week. Short sellers don’t appear confident that this ecommerce company’s performance will improve in 2022.
• Mesoblast limited (ASX: MSB) has short interest of 9.4%, which is up week on week. Short sellers have been increasing their holdings since Novartis terminated an agreement that could have been worth US$1.25 billion.
• BHP Group Ltd (ASX: BHP) has short interest of 8.9%, which is up week on week once again. This is being driven by traders looking to profit from the unwinding of its dual listing, which will be voted on this week. They have shorted BHP’s ASX shares and bought the cheaper UK shares that will eventually be repatriated if all goes to plan.
• Webjet Limited (ASX: WEB) has short interest of 8.7%, which is up week on week. Concerns over the Omicron variant are spooking investors and putting pressure on its shares.
• Polynovo Ltd (ASX: PNV) has seen its short interest rise to 7.9%. Short sellers may regret not closing out of this one sooner. This medical device company’s shares rocketed higher last week following a trading update.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest rise to 7.4%. Given the prospect of interest rates rising quicker than expected, investors may have concerns over the lofty multiples this betting technology company’s shares trade on.
• Appen Ltd (ASX: APX) has seen its short interest remain flat at 7.2%. This high level of short interest may be due to concerns about structural changes in the artificial intelligence data services market. This includes big tech companies taking things in-house.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

More reading

• Is the iron ore price set to slide?
• Does the BHP London share price perform the same as the company’s ASX:BHP listing?
• 5 things to watch on the ASX 200 on Monday
• These were the best performing ASX 200 shares last week
• The BHP (ASX:BHP) unification vote is next week and not everyone is happy

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, Betmakers Technology Group Ltd, Kogan.com ltd, POLYNOVO FPO, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Appen Ltd and Kogan.com ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd, Flight Centre Travel Group Limited, and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• The American Pacific Borates share price is in the green this morning
• The new board of the renamed 5E Advanced Materials announced
• The company’s NASDAQ listing is still on track for February

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The American Pacific Borates Ltd (ASX: ABR) share price is in the green today on news of the company’s NASDAQ listing and board changes.

Shares in the boron producer are currently trading at $2.79, up 1.45%.

Let’s take a look at what this ASX resource explorer announced today.

What did the company announce?

American Pacific announced it expects to list on the NASDAQ Index by February 2022. The company has received an update from the United States Securities and Exchange Commission requesting further information. American Pacific will review the comments and submit an amendment in the next few days.

Shareholder support has been secured for the US listing, however, court approval is also still required. Should the NASDAQ listing go ahead, American Pacific Borates will be renamed 5E Advanced Materials.

In a statement approved by chief executive officer Henri Tausch, the company affirmed it is on track for a NASDAQ listing in February.

Subject to the timing of further SEC comments and court approval, the company continues to target the previously released date of 15 February 2022 as the expected commencement of trading on the Nasdaq.

In further news, the company also updated shareholders on its expected composition of the 5E Advanced Materials Board.

Palvi Mehta takes on the role of non-executive director and will chair the audit committee. She has more than 25 years of global finance experience and currently holds the role of operating partner and chief financial officer at Pioneer Square Labs.

Stephen Hunt will stay on as a non-executive director and chair the compensation committee.

Current company secretary Aaron Bertolatti will not be a director of 5E. However, he will support the transition of the main listing from Australia to the USA. Meanwhile, Chantel Jordan will be the corporate secretary of 5E.

Anthony Hall will move on from executive director of American Pacific to the 5E advisory council where he will join John Mitchell, Govind Arora and Tim Johnston.

Share price snapshot

The American Pacific Borates share price is soaring 54% in the past year and almost 18% in the last month.

In comparison, the S&P/ASX 200 Index (ASX: XJO) has returned 10% to investors in the past year.

The company commands a market capitalisation of roughly $1.2 billion based on the current share price

The post American Pacific Borates (ASX:ABR) climbs on NASDAQ listing appeared first on The Motley Fool Australia.

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• Amazon challenges SpaceX in space
• South32 (ASX:S32) share price lower despite ‘next generation mine’ update
• Wesfarmers (ASX:WES) share price higher despite guiding to first half profit decline
• Does the BHP London share price perform the same as the company’s ASX:BHP listing?

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.

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The iron ore price has seen a recovery to above US$120 per tonne. But some experts now think that the commodity may have seen the best of the recovery and that it’s likely to fall back again.

In-fact, prices have risen by approximately 50% from a couple of months ago.

What has been causing the iron ore price to rise?

There may be a few different factors that have been combining to help iron recover.

Some of the gain may have been due to increasing steel production in China as well the possible expectation of more Chinse stimulus to help growth which could help recharge the economy, according to reporting by the Australian Financial Review.

But the rise of the iron price may have been boosted by the fact there has been very heavy rain in Brazil. Why does that matter? It made Vale, one of the world’s biggest iron ore producers, and others stop their production. This is impacting short-term supply.

However, the heavy rains weren’t going to last forever. The weather is reportedly easing in Brazil.

The AFR quoted Westpac Banking Corp (ASX: WBC) senior economist Robert Rennie who said:

You can see why the market is moving near-term spot prices higher because there are a lot of risks, but as we move through the first quarter and get a better understanding of stimulus in China post-Olympics, that’s when we see prices easing.

I expect to see prices peak in the coming weeks and begin to soften, assuming no other major weather events.

The Westpac economist doesn’t think that the Chinese steel production is going to return quickly according to the AFR.

The upcoming Winter Olympics is believed to be a key reason why China has implemented emission curbs and forcing some steel mills to drop production. Mr Rennie thinks that the steel production reductions will stay until the Olympics.

Mr Rennie also said:

I’m also not as optimistic as the market that we will see a sudden recovery in Chinese construction and steel demand. I think the low levels are a story in place for this year and beyond.

Where is the iron ore price headed?

Every analyst has their own thoughts on where the iron ore price is going to go. According to the AFR, Westpac is projecting an iron ore price of US$88 per tonne by the middle of 2022 and could go to US$75 per tonne by the end of this year.

The change in the iron ore price can have a big impact on the profits of Australia’s biggest miners including BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG).

But there are others that think that iron ore could continue to do well.

For example, Morgan Stanley reckons that a return to production in March 2022 could help prices climb a bit further.

The AFR quoted Morgan Stanley commodity strategist Marius van Straaten who said that even if China doesn’t allow full-year steel production to grow, the broker has positive a positive view for the next few months:

Even under such a no-growth constraint, we can see a potential 25 per cent increase in steel run-rates by the second quarter of 2022 versus October-November levels.

However, by the fourth quarter, Morgan Stanley recently forecast the iron ore price could drop to US$85 per tonne by the fourth quarter of the year.

The post Is the iron ore price set to slide? appeared first on The Motley Fool Australia.

More reading

• Does the BHP London share price perform the same as the company’s ASX:BHP listing?
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• Top brokers name 3 ASX shares to sell next week
• The BHP (ASX:BHP) unification vote is next week and not everyone is happy
• Own Rio Tinto (ASX:RIO) shares? Jefferies says they’ll outperform ‘in the near term’

Motley Fool contributor Tristan Harrison owns Fortescue Metals Group 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 recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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.

Amazon (NASDAQ: AMZN) announced in November that — at long last — it’s getting ready to roll out its Project Kuiper initiative to provide broadband internet service via satellite.  

And yes, I said Amazon — not SpaceX.

We’re No. 2! We’re No. 2!

Thanks to the popularity of Starlink, satellite-provided broadband internet has become an idea most closely associated with SpaceX, not Amazon. In the six years since SpaceX announced plans to put a constellation of 12,000 Starlink satellites in orbit, and in the year and a half since it began opening up Starlink for beta service, Starlink has put about 1,800 operational satellites in orbit and expanded its footprint to 25 countries — and 145,000 customers — receiving satellite internet service. Starlink has progressed toward its goals so far that SpaceX has already begun talking about IPOing its subsidiary.    

In contrast, Amazon currently has zero satellites in orbit and plans to launch just two this year. But just because it’s far behind SpaceX in this race doesn’t mean Amazon has abandoned its intention to compete.

In its most recent announcement, Amazon says it plans to deploy its first two internet satellites — KuiperSat-1 and KuiperSat-2 — in Q4 2022. Although equipped with “parabolic antennas, power and propulsion systems, and custom-designed modems,” these first two satellites will not offer any internet service. Rather, Amazon says it will use them just to “test the communications and networking technology that will be used in our final satellite design, and help us validate launch operations and mission management procedures.”

That accomplished, both satellites will be deorbited and allowed to burn up in Earth’s atmosphere.

A curious route to space

But how does Amazon even propose to get KuiperSat-1 and 2 into orbit in the first place?

Funny you should ask. In addition to the airplanes, trucks, and delivery vans it uses to move packages around the globe, Amazon also shares a founder — Jeff Bezos — with the space company Blue Origin, which has proposed building a large, orbital-class rocket called the New Glenn that would seem ideal for putting Amazon’s satellites into orbit. And yet Amazon made no mention of New Glenn in its recent announcement. Instead, Amazon says it will use RS1 rockets from start-up rocket-maker ABL Space Systems.

This is curious because ABL Space, like Blue Origin, has never flown a rocket to orbit. Indeed, like Blue Origin itself, ABL is scheduled to make its first orbital launch attempt later this year. (When you consider that Blue Origin has flown multiple suborbital flight tests, in fact, you could even argue that Blue Origin is closer to orbital spaceflight than ABL).

And yet Amazon is choosing not only to fly its satellites to space with ABL instead of Blue Origin but to establish “a long-term relationship together” with ABL. Very interesting.

Can Amazon ever catch up to SpaceX?

Call me a skeptic, but when I consider the lead SpaceX Starlink has over Project Kuiper and how little confidence Amazon seems to be placing in Blue Origin’s ability to put its KuiperSats in orbit, I have to wonder if Project Kuiper is really nothing but a pipe dream.

Amazon’s choice of ABL’s rocket over Blue Origin’s New Glenn is my first reason for skepticism. Blue Origin’s troubles getting its BE-4 rocket engine (the one that will power New Glenn) ready for operation are well known at this point. And now Amazon’s decision to use ABL’s rocket rather than wait for one from Blue Origin suggests that BE-4 may be even farther behind schedule than is commonly understood.

If Amazon cannot depend upon Blue Origin’s rockets to deploy Project Kuiper, that will create even more significant problems for Amazon. You see, in 2019, Amazon told the Federal Communications Commission that it will cost “more than $10 billion” to build Project Kuiper and orbit its planned 3,236 satellites. Similarly, SpaceX plans to spend “as much as $10 billion” to create Starlink — and yet, $10 billion will buy SpaceX nearly four times as many satellites — namely, 12,000.   

Why is that? Well, when SpaceX sends Starlink satellites to orbit, they ride atop SpaceX rockets. Thus, one half of SpaceX’s business subsidizes the other half. But because Blue Origin can’t get its rockets ready for prime time (pun intended), Amazon must hire somebody else to launch its satellites at a presumably higher cost than if it could use New Glenn rockets to launch Project Kuiper.

This all seems to add up to an insurmountable business advantage SpaceX has over its rival — one that will give Starlink’s profit margins an edge over Project Kuiper’s (if the latter ever gets operational) and one that may even make Project Kuiper so un-profitable as to doom the entire operation.

Sad to say, it looks like Amazon lost this space race before it even began. 

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

The post Amazon challenges SpaceX in space appeared first on The Motley Fool Australia.

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Rich Smith has no position in any of the stocks mentioned.  John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Amazon. The Motley Fool Australia has recommended Amazon. 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.

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Key points

• South32 has completed the pre-feasibility study of its Taylor Deposit
• Results show potential for Taylor to be a multi-decade operation through its zinc-lead-silver underground mine
• Operation will leverage automation and technology to be carbon neutral

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In morning trade, the South32 Ltd (ASX: S32) share price is edging lower on Monday.

At the time of writing, the mining giant’s shares are down 0.5% to $4.15.

Why is the South32 share price falling?

The South32 share price is falling on Monday after weakness in the materials sector offset an announcement relating to its Hermosa project in the United States.

According to the release, the company has completed its pre-feasibility study (PFS) for the Taylor Deposit at the 100% owned Hermosa project in Arizona.

Pleasingly, the PFS support Taylor’s potential to be the first development of a multi-decade operation aiming to establish Hermosa as a globally significant producer of metals critical to a low carbon future and delivering attractive returns over multiple stages.

The release notes that an initial development case demonstrates a sustainable, highly productive zinc-lead-silver underground mine and conventional process plant, in the first quartile of the industry cost curve.

As a result, the Taylor Deposit will now progress to a feasibility study, including work streams designed to unlock additional value. This will be by optimising operating and capital costs, extending the life of the resource, and the further assessment of options identified to target a carbon neutral operation. Completion of the feasibility study and a final investment decision to construct Taylor are expected in mid 2023.

“An important first development option”

South32’s Chief Executive Officer, Graham Kerr, said: “The Taylor Deposit provides an important first development option for our Hermosa project in Arizona, USA. The project has the potential to sustainably produce the metals critical for a low carbon future across multiple decades from different deposits.”

“Completing the pre-feasibility study for the Taylor Deposit is an important milestone that demonstrates its potential to be a globally-significant and sustainable producer of base and precious metals in the industry’s first cost quartile. Beyond Taylor, [the] Clark [depost] offers the potential to realise further value from our investment in Hermosa through the production of battery-grade manganese, a mineral designated as critical in the United States.”

Mr Kerr also revealed that the company intends for the Taylor Deposit operation to leverage automation and other technologies in order to be carbon neutral.

He explained: “We are designing the Taylor Deposit to be our first ‘next generation mine’, using automation and technology to minimise our impact on the environment and to target a carbon neutral operation in line with our goal of achieving net zero operational carbon emissions by 2050.”

The post South32 (ASX:S32) share price lower despite ‘next generation mine’ update appeared first on The Motley Fool Australia.

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

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