At lunch on Thursday, the S&P/ASX 200 Index (ASX: XJO) has followed the lead of US markets and is tumbling lower. The benchmark index is currently down 1.2% to 7,477.2 points.

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

Tech shares sold off

It has been a brutal day for the tech sector on Thursday with heavy declines being seen across the board. This follows a tech selloff on Wall Street which led to the Nasdaq index having its worst day in almost a year. Among the worst performers are Afterpay Ltd (ASX: APT) and Altium Limited (ASX: ALU) shares. The former was down as much as 11% at one stage.

Mining giants rise

It has been a much better day for mining giants BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO). Both miners are pushing notably higher today after the benchmark iron ore price continued its ascent. According to CommSec, the spot iron ore price rose by US$2.45 or 2% to US$125.35 a tonne.

South32 to restart Brazilian aluminium operation

The South32 Ltd (ASX: S32) share price is trading largely flat today despite announcing the restart of its 40%-owned Brazilian aluminium operations after a pause of over six years. The diversified miner also revealed that it will be powering its share of the operations by 100% cost efficient renewable power. This will place the smelter in the second quartile of the global aluminium site cost curve.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Thursday has been the Clinuvel Pharmaceuticals Limited (ASX: CUV) share price with a 2.5% gain on no news. However, the biopharmaceutical company’s shares have fallen by 33% over the last two months, so bargain hunters could be swooping in today. The worst performer has been the Afterpay share price with a decline of almost 10%. This follows another heavy decline by the Block share price overnight.

The post ASX 200 (ASX:XJO) midday update: Afterpay sinks again, BHP and Rio rise appeared first on The Motley Fool Australia.

More reading

• Afterpay (ASX:APT) share price tumbles 11% in massive one-day loss
• Why did the Rio Tinto share price (ASX:RIO) have such a lousy 2021?
• Is the party over for ASX BNPL shares?
• Why the South32 (ASX:S32) share price is pushing higher again today
• ASX 200 tech shares on watch after Nasdaq selloff

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 Afterpay Limited and Altium. 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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The S&P/ASX 200 Index (ASX: XJO) has opened this Thursday on a rather negative note. The ASX 200 is currently down a nasty 1.11% and is going at 7,482 points at the time of writing. But that’s nothing compared to the Afterpay Ltd (ASX: APT) share price. Afterpay shares have been savaged today. At the time of writing, the buy now, pay later (BNPL) pioneer has lost a demoralising 9.5% and is sitting at $72.86 a share. That comes after it fell as low as $71.65 a share just after market open (down 10.7%).

That’s the largest one-day drop for Afterpay since at least the gyrations we saw back in February last year. And possibly since the COVID-induced market crash back in early 2020. As it stands today, Afterpay has now lost more than 22% of its value over the past month alone, and more than 45% since early August.

So what’s behind this apparent collapse in investor sentiment today?

Why is the Afterpay share price getting hammered today?

Well, we can’t say for sure. But it appears a sharp drop in the US markets overnight may have had something to do with it. Last night saw many prominent US tech shares’ share prices massacred following some hawkish comments from the US Federal Reserve. As we covered in depth earlier this morning, the Fed’s latest minutes reveal that the Bank is considering bringing forward a ‘tightening’ of US monetary policy. That could mean higher interest rates sooner. As well as a ‘tapering’ of its quantitative easing programs.

Many tech shares’ valuations are particularly vulnerable to tighter monetary policy due to their debt burdens and (in many cases) pre-profit growth stages.

And one of the tech shares caught up in the US sell-off was none other than Block Inc (NYSE: SQ). Block is the US payments giant formerly known as Square that is lining up to acquire Afterpay in full. Since the Afterpay-Block deal announced back in August is an all-scrip one (0.375 shares of Block for every Afterpay share owned), the Afterpay share price now has a direct link to that of Block.

And last night, Block stock was hammered. It fell a nasty 8.2% and finished up very close to its new 52-week low at US$143.49 a share. That means the value of the Block shares that Afterpay shareholders will receive if this deal reaches the finish line also fell by 8.2%. So it’s perhaps no surprise that Afterpay shares are getting a drilling today.

At the current Afterpay share price, this BNPL share has a market capitalisation of $21.64 billion.

The post Afterpay (ASX:APT) share price tumbles 11% in massive one-day loss appeared first on The Motley Fool Australia.

More reading

• Is the party over for ASX BNPL shares?
• ASX 200 tech shares on watch after Nasdaq selloff
• 5 things to watch on the ASX 200 on Thursday
• Why Afterpay, Kogan, Premier Investments, and Pro Medicus shares are dropping
• Why are ASX 200 tech shares getting hammered today?

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 and Block, Inc. 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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The Rio Tinto Limited (ASX: RIO) share price came crashing down in 2021, despite a positive start to the year.

The mining company’s share price fell from $113.83 to $100.11 during the year, shedding 12%. In comparison, the S&P/ASX 200 Index (ASX: XJO) gained around 13%.

Let’s examine what may have impacted this ASX 200 share in 2021.

Iron ore prices

The Rio Tinto share price recorded gains in the first half of the year before collapsing from August to November. The company’s share price then picked up in late November to finish the year off in style.

In the first six months of the year, Rio Tinto shares gained nearly 12%. Shares in the mining giant climbed 15% between market close on 5 February and 25 February. Strong iron ore prices, a record dividend payout from the company, and positive financial results all weighed positively with investors.

The company reported a 3% increase in sales revenue to US$44,611 million and a 13.4% boost in iron revenue. Rio Tinto also rewarded shareholders by declaring a fully franked final dividend of US$4.02 (A$5.19) per share.

March to May also saw the company’s share price explode on the back of record iron ore prices and well-received first-quarter production results. In the first quarter of FY 2021, the company shipped 77.8 million tonnes of Pilbara iron ore, a 7% increase. Rio Tinto shares surged more than 24% between 22 March and 10 May.

However, from August to November the Rio Tinto share price came crashing down to earth. As Motley Fool Australia noted at the time, investors were selling down the mining company’s shares due to falling iron ore prices.

The company also downgraded its production targets for 2021. A third-quarter trading update in mid-October slightly pushed the share price down, with the Covid-19 virus impacting production results. Between market close on 4 August and 5 November, the Rio Tinto share price dropped 30%. Iron ore prices fell 48% in this same time frame.

Then came the bounce back. The Rio Tinto share price recovered nearly 12% between 18 November and 31 December. The iron ore price increased nearly 31% during this same time period, likely impacting investor sentiment.

The company also announced two major lithium projects. Rio Tinto will acquire the Rincon lithium project in Argentina for $1.15 billion and the Jadar project in Serbia for $3.3 billion.

Rio Tinto share price snapshot

In the past month, the company’s shares have gained around 7%, while they are up 2% this week. At the time of writing, they are trading at $102.23, up 1.74%.

Looking ahead, as my Foolish colleague James reported this week, opinion on the outlook for the company’s share price is divided.

Macquarie Group Ltd (ASX: MQG) has a $135 price target, while Morgans has a hold rating and a $104 price target.

The company has a mammoth market capitalisation of nearly $37 billion based on its current share price.

The post Why did the Rio Tinto share price (ASX:RIO) have such a lousy 2021? appeared first on The Motley Fool Australia.

More reading

• 2 ASX dividend shares with yields of more than 8%
• How the Pilbara Minerals (ASX:PLS) share price surged 268% higher in 2021
• Here’s what brokers are saying about the Rio Tinto (ASX:RIO) share price
• Here’s why ASX 200 mining shares could be in for a boost in 2022
• How the Macquarie (ASX: MQG) share price went in 2021

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 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.

Wall Street remained somewhat choppy on Wednesday morning, as investors remained divided in their views of the prospects of various industries within the stock market. As of 10 a.m. ET, the Dow Jones Industrial Average (DJINDICES: ^DJI) was up 18 points to 36,817, which would be a new record high if it holds onto those gains. However, the S&P 500 (SNPINDEX: ^GSPC) had fallen 3 points to 4,791, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) had lost 67 points to 15,555.

Evidence of a market rotation continues to pile up, and one of the clearest signs of the possible ascendancy of value investing came from Omaha, Nebraska. Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) shares were up another 2% on Wednesday morning, bringing its gains in the first two and a half trading days of the year to nearly 5% and representing a record stock price level for Warren Buffett’s company. Given the gains that other stocks have seen, some investors wonder if Berkshire could finally make its way into the $1 trillion market capitalization club sometime in 2022.

A tough few years

Some investors in Berkshire Hathaway have been disappointed with the stock’s performance in recent years. A persistent preference from investors for higher-growth companies has contributed to underperformance from Berkshire stock, with its 91% total return over the past five years trailing the S&P 500’s 130%.

Berkshire has also had its share of miscues. Buffett’s decision to sell out of airline stocks near their lows in March and April 2020 received widespread criticism, as it seemed to resemble a panic-driven sale and was soon followed by a massive rebound in the airline industry. Meanwhile, the stock didn’t seem to get much credit for Berkshire’s massive holding in shares of Apple, which have skyrocketed over the period.

Growth-oriented investors also question why Berkshire keeps so much cash on hand. Even with the company making increasingly substantial repurchases of its own stock, Berkshire had nearly $150 billion in cash on its balance sheet as of its most recent quarterly report. That cash on the sidelines earning next to nothing was arguably a big drag on potential investment performance.

Seeing value

More recently, though, investors have seemed to recognize the intrinsic value of Berkshire’s businesses. Wholly owned companies in areas like energy and transportation are starting to show signs of strength, and even with Buffett having dramatically cut exposure to the banking sector, Berkshire’s holdings there are benefiting from the prospects for rising long-term interest rates that could bolster net interest income.

Perhaps most importantly, many shareholders see Berkshire as a counter-trend play that offers portfolio diversification when combined with higher-growth stocks. Despite some recent purchases of positions in companies like data warehousing specialist Snowflake, Buffett’s conservative style is likely to remain in place at Berkshire even once he’s no longer able to lead the company.

Is $1 trillion within reach?

Berkshire’s market capitalization just topped the $700 billion mark, so it’d take a better-than-40% gain from here to reach $1 trillion. That’s a tall order for Berkshire in 2022 even after years of underperformance. However, some of the trends that have created big headwinds for the insurance conglomerate appear to be shifting, and that suggests that even if it doesn’t happen this year, Berkshire could put together the gains necessary to join the trillion-dollar club before too much longer. 

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

The post Is Berkshire Hathaway headed for $1 trillion? appeared first on The Motley Fool Australia.

More reading

• How the Vulcan (ASX:VUL) share price almost quadrupled in 2021
• Is the party over for ASX BNPL shares?
• Is the Fortescue (ASX:FMG) share price on track to reach $50?
• What’s happening with the IAG (ASX:IAG) share price today?
• Why the South32 (ASX:S32) share price is pushing higher again today

Dan Caplinger owns Apple, Berkshire Hathaway (B shares), and Snowflake Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple and Berkshire Hathaway (B shares). 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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The Vulcan Energy Resources Ltd (ASX: VUL) share price was one of the best performers on the Australian share market in 2021.

Over the 12 months, the lithium developer’s shares rose a massive 277%.

This was despite the Vulcan share price ending the year at $10.36, which is almost 38% lower than its 52-week high of $16.65.

Why did the Vulcan share price almost quadruple in 2021?

Investors were buying Vulcan and other lithium shares last year amid the increasingly positive outlook for the battery making ingredient. This is due to the insatiable demand for the white metal from electric vehicle battery and renewable energy markets which is expected to significantly outstrip supply in the coming years.

And while Vulcan is not yet producing lithium, it has signed away a large portion of its future production to automakers. This gives investors good visibility on its future earnings.

Among the companies that have signed offtake agreements for lithium from the Zero Carbon Lithium Project in Germany are Renault, Volkswagen, and Stellantis. The latter may not be a familiar name, but its car brands will be. Stellantis is the world’s fourth largest automaker and the name behind brands including Alfa Romeo, Chrysler, Citroen, Fiat, Jeep, Maserati, and Peugeot.

Where next for its shares?

Incredibly, despite the Vulcan share price rocketing 277% higher in 2021, one leading broker believes it can more than double in 2022.

A recent note out of Canaccord Genuity reveals that its analysts have retained their speculative buy rating and $21.00 price target on the company’s shares.

This could make it well worth keeping a close eye on Vulcan’s shares again in 2022.

The post How the Vulcan (ASX:VUL) share price almost quadrupled in 2021 appeared first on The Motley Fool Australia.

More reading

• The 5 best ASX lithium stocks of 2021
• Here’s why the Vulcan (ASX:VUL) share price is charging 6% higher today
• Broker tips Vulcan (ASX:VUL) share price to double in 2022
• The Vulcan Energy (ASX:VUL) share price is down 12% this week. What’s happening?
• Vulcan (ASX:VUL) share price storms higher after receiving short seller apology

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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Tumbling share prices and industry consolidation: this probably isn’t how most ASX buy now, pay later (BNPL) investors pictured it playing out. In 2021, ASX BNPL shares such as Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) severely underperformed the broader Aussie market — so is the party over?

The days when Australia’s BNPL companies were the market darlings of the ASX seem a distant memory now. Rather than gaining more excitement in the last year, the sector attracted heightened scepticism.

For investors, the last year marked a clear shift in sentiment towards the once idolised credit disruptors. Afterpay recorded its first negative share price return since being listed, falling nearly 30%. Similarly, the Zip share price dealt shareholders their first negative return since 2017, shaving off 18%.

What could be ahead for ASX BNPL shares?

Despite the pullback in share prices, there are a number of experts who still aren’t so keen on ASX BNPL shares. This would suggest these companies remain stuck in a more pessimistic light currently.

Morgans analyst Richard Coles is one of the numerous spectators that envisions tougher times ahead for BNPL companies. In a broker note, the analyst outlines several risk factors to Afterpay specifically. These include slowing sales momentum, margin compression from competition, overseas expansion risk, bad debts, increased funding costs, and regulatory pressure.

For these reasons, Morgans slashed its price target on Australia’s biggest BNPL company to $91.49 from $132. Likewise, the broker revised its Zip price target to $7.54 from $8.56 on lower earnings per share (EPS) expectations.

These concerns mirror those of payments industry expert Gran Halverson. As we covered back in December, the founder of payments consultancy company McLean Roche is mindful of a bumpy path ahead for ASX BNPL shares. In turn, Halverson suspects another challenging year for the payment companies in 2022.

On the flip side

According to a forecast published by Juniper Research, the long-term picture for ASX BNPL shares may not be so much doom and gloom. In its June 2021 Buy Now Pay Later: The Future of Ecommerce whitepaper, the research firm estimates that fixed instalment plans and flexible credit accounts will reach $995 billion globally in 2026. At present this figure sits around $266 billion.

Unlike Coles and Halverson, Juniper believes regulations won’t stifle the appeal or growth of BNPL platforms. In fact, the whitepaper highlights that an expected 24% of global eCommerce transactions for physical goods will be conducted via BNPL services by 2026.

At the time of writing, Afterpay shares are down 9.4% to $72.94. This follows an 8.2% fall in the Block Inc (NYSE: SQ) share price overnight.

The post Is the party over for ASX BNPL shares? appeared first on The Motley Fool Australia.

More reading

• ASX 200 tech shares on watch after Nasdaq selloff
• 5 things to watch on the ASX 200 on Thursday
• Why Afterpay, Kogan, Premier Investments, and Pro Medicus shares are dropping
• Why are ASX 200 tech shares getting hammered today?
• ASX 200 (ASX:XJO) midday update: Afterpay hits 52-week low, energy shares rise

Motley Fool contributor Mitchell Lawler owns Afterpay Limited. 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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One fund manager believes the Fortescue Metals Group Limited (ASX:  FMG) share price could have a 145% upside if the company is successful in its current endeavours.  

Its foray into green hydrogen, through its renewable energy leg Fortescue Future Industries (FFI), teamed with its position as one of Australia’s largest iron ore producers could see its stock continuing to boom into the future.

At the time of writing, the Fortescue share price is $20.28, 1.6% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is down 0.83% right now.

Let’s take a look at what the portfolio manager of Tribeca Investment Partners’ Global Natural Resources Fund, Ben Cleary, thinks might be in store for the iron ore giant.

Could the Fortescue share price have a 145% upside?

Cleary recently told the Australian Financial Review (AFR) that, right now, Fortescue shares are coming with a free side of hydrogen, one that might be particularly valuable in the future. The AFR quoted him as saying:

Fortescue is well ahead of peers in terms of hydrogen and ammonia production, and this could be worth $50 a share or more if they execute.

However, what’s truly got Cleary bullish on ASX 200 giant is its iron ore business.

The fundie is positive the price of iron ore will have another good year in 2022, and it might bring the Fortescue share price along with it. Cleary commented on his expectations for the coming 12 months:

I think iron continues to rally in the first quarter to $US150 a tonne or higher, well above current consensus expectations of $US100 a tonne.

China’s credit impulse is starting to expand after mostly contracting in 2021 and infrastructure demand for iron ore should be particularly strong.

According to data from CNBC, iron ore is currently going for US$124.14 a tonne. That’s despite it reaching record highs of more than US$200 mid-last year.

The commodity’s tumble might explain why the Fortescue share price fell 18% over the course of 2021. Still, it has gained 233% over the last 5 years, leaving long-term investors well and truly in the green.

The post Is the Fortescue (ASX:FMG) share price on track to reach $50? appeared first on The Motley Fool Australia.

More reading

• Would you like cheese with that? A look at some of Twiggy’s highest profile ASX investments of 2021
• These were the 5 worst performing ASX hydrogen shares of 2021
• Here’s why ASX 200 mining shares could be in for a boost in 2022
• Here’s why the Fortescue (ASX:FMG) share price has leapt 12% in December
• Top brokers name 3 ASX shares to sell

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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The Insurance Australia Group Ltd (ASX: IAG) share price is moving into the green in morning trade after opening down some 1%. At the time of writing, IAG shares are up 0.91% at $4.43.

The S&P/ASX 200 Index (ASX: XJO) remains down just under 1% at this same time.

Below we take a look at the Aussie insurance giant’s catastrophe reinsurance program update, released this morning.

What did IAG announce?

The IAG share price is edging higher after the company reported it has finalised its catastrophe reinsurance program for the 2022 calendar year. IAG’s gross reinsurance protection covers the company for losses of up to $10 billion, including one prepaid reinstatement, just as in 2021.

Also in line with the previous year, the insurance group will retain the first $250 million of each loss, with second and third event drop-down covers of $50 million. IAG said this will reduce the cost of these events to $200 million.

Commenting on the development, IAG chief financial officer Michelle McPherson said:

Our catastrophe reinsurance program remains an intrinsic part of IAG’s capital management strategy. The structure of the new program is similar to that of prior years, and we received strong support from our reinsurance partners with whom we have long-term relationships.

The credit quality of the reinsurance program increased from the previous year, with 90% of covering entities rated A+ or higher. Additionally, some 60% of the 2022 program is protected by multi-year coverage, which the company says provides it with the assurance of reinsurance coverage in the future.

IAG noted that, after allowance for the quota share arrangements, “the combination of all catastrophe covers at 1 January 2022 results in IAG having a maximum event retention of $95 million”.

IAG share price snapshot

The IAG share price has been on a bit of a rollercoaster over the past 12 months, one that’s left shares down 6% since this time last year. By comparison, the ASX 200 is up almost 14% over that same time.

Over the past month, IAG shares have gained 3%.

The post What’s happening with the IAG (ASX:IAG) share price today? appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to sell today
• Could the IAG (ASX:IAG) share price be on the road to recovery in 2022?
• Own IAG (ASX:IAG) shares? Here are the key dates to pencil in for 2022
• Brokers name 3 ASX shares to sell
• Why is the IAG (ASX:IAG) share price diving in December?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Insurance Australia Group 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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The South32 Ltd (ASX: S32) share price has been a positive performer on Thursday.

In morning trade, the mining giant’s shares are up almost 1% to $4.05.

This leaves the South32 share price trading within touching distance of its multi-year high of $4.13.

Why is the South32 share price rising?

The catalyst for the rise in the South32 share price on Thursday has been an announcement relating to its Brazilian aluminium operations.

According to the release, the company and its joint venture partner Alcoa have decided to restart the Alumar aluminium smelter (Brazil Aluminium). This follows over six years of being on care and maintenance mode.

The smelter is expected to be generating its first production in the June quarter, with full capacity of 447ktpa forecast to be achieved by the March 2023 quarter. Once at full capacity, South32’s group wide annualised equity share of aluminium production is expected to lift by 16% or 179kt to 1,269kt.

The company expects to invest ~US$70 million across FY 2022 and FY 2023 to support the smelter’s restart. This includes ~US$10 million in capital expenditure.

Renewable energy shift

South32 highlights that its 40% share of Brazil Aluminium will be powered by 100% cost efficient renewable power. This will place the smelter in the second quartile of the global aluminium site cost curve.

Furthermore, with its energy requirements secured under long term contracts, South32’s alumina supply will be sourced from the co-located Brazil Alumina refinery (36% South32 share), offering substantial efficiencies.

South32’s Chief Executive Officer, Graham Kerr, said: “We are excited to participate in the restart of the Alumar smelter using 100% renewable power. With the smelter benefitting from existing infrastructure, access to our own supply of alumina and long-term green energy sources, we expect our investment to deliver strong returns through the cycle.”

“We see strong long-term market fundamentals for aluminium. By investing along our existing alumina-aluminium value chain with the smelter’s restart and the expected increase to our shareholding in Mozal Aluminium, we are further integrating our business and meaningfully increasing our share of metal produced utilising green energy.”

Mr Kerr also notes that this agreement is further enhancing its portfolio overhaul.

He explained: “With this decision we continue to make substantial progress in reshaping our portfolio, increasing our exposure to the base metals required for the critical transition to a low carbon future.”

The post Why the South32 (ASX:S32) share price is pushing higher again today appeared first on The Motley Fool Australia.

More reading

• 2 ASX 200 mining shares to buy in January
• Brokers name 3 ASX shares to buy
• Why has the South32 (ASX:S32) share price surged another 14% in December?
• Top ASX shares to buy in 2022
• 2 quality ASX dividend shares to buy

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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The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price lagged the benchmarks and other majors in 2021 and finished the year down approximately 2% down at $9.10.

After a period of lumpy returns to fill the 1H 2021, shares in the bank then began consolidating and had nudged below 52-week lows by November.

Bendigo Bank then bottomed in December, before regaining support at the $8.49 level. Any movement to the upside from here will be working off a low base – especially for those investors who entered a position at these lows.

There were numerous inflection points littered throughout the year for the Bendigo Bank share price. These ranged from internal drivers like a uniform recycling program to external factors such as the bank’s “digital transformation roadmap” and various broker upgrades.

Aside from this, Bendigo rewarded shareholders with a 53 cents per share dividend across the period. That’s slightly down on prior years but a recovery from 2020. At its current share price, the bank is now trading on a 5.7% trailing yield.

Alas, shareholders with positions longer than 1 year realised a loss on their Bendigo Bank holdings in 2021, even when factoring in the total return from dividends.

And while several majors are currently outperforming, Bendigo is lagging the S&P/ASX 200 Financials Index (ASX: XFJ)‘s return of 2.5% so far this year. It lagged the index’s return of approximately 22% substantially last year as well.

What can investors expect for Bendigo Bank in 2022?

The team at Goldman Sachs is neutral on the Bendigo Bank share price and values the bank at $9.90 per share. Although this implies a slither of upside potential, Goldman cautions investors over Bendigo’s earnings volatility due to pressures on its regional banking segment.

While other majors have similar exposure here, Goldman notes Bendigo lacks the directives to hedge these pressures to profitability.

The firm notes that Bendigo’s loan book is skewed to bias 72% and 78% towards Australian mortgages, whereas it has underwritten almost half of its new mortgages of fixed rates in 2H 2021.

Bendigo Bank is also considered a price taker in the mortgage market, meaning it lacks the kind of pricing power of some of the larger banks.

Goldman notes the company will have to rely on the large banks to “drive further fixed-rate mortgage repricing” in order to level out these headwinds.

Meanwhile, JP Morgan also cautions investors on the bank as an investment in 2022. It remains neutral on the Bendigo Bank share price as well.

Back in November, Jefferies raised its rating on the company to a buy from a hold, citing company-specific tailwinds outlined in its digital transformation roadmap.

The broker noted Bendigo’s pathway to earning more than its cost of capital is murky and that it may lack the scale to fund its ambitions.

How’s the Bendigo Bank share price faring so far this year?

In the first week of trading in 2022, the bank’s share price has spiked.

Even though it has lagged the broad indices, the bank is now trading back near its 3-month rolling averages again. Volume has also been fairly consistent in the last 4 weeks.

Shares finished the session in the red yesterday, down less than 1% at $9.25. In early trading today, they are down 0.22% at $9.23. Many of Bendigo Bank’s peers have been choppy over the last month or so as well.

However, shares have shot up to start the year and time will tell if momentum from the wider sector will spill over to Bendigo’s share price.

The post How the Bendigo Bank (ASX:BEN) share price went in 2021 appeared first on The Motley Fool Australia.

More reading

• What’s the outlook for the Bendigo and Adelaide Bank (ASX:BEN) share price in 2022?
• Are Bank of Queensland (ASX:BOQ) shares a better buy for 2022 than Bendigo Bank?

The author has no positions 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 owns and has recommended Bendigo and Adelaide Bank 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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