The top-10 crypto assets by market cap are all in the green today.

The Bitcoin (CRYPTO: BTC) price edged higher over the past 24 hours, up 1% to US$37,272 (AU$51,766).

Moving further down the list, not every crypto is gaining.

Bitcoin Cash, the number 28 token by market valuation, is flat over the 24 hours, trading at US$277.

While every crypto investor will be well familiar with Bitcoin, not everyone is up to speed on Bitcoin Cash.

With that in mind, The Motley Fool reached out to Ray Brown, market analyst at Australian cryptocurrency exchange CoinSpot.

What brought about Bitcoin Cash? 

First, we wanted to know how Bitcoin Cash came into being.

Brown told us:

Whilst Bitcoin Cash holds a number of similarities to the original Bitcoin, it’s an entirely independent form of cryptocurrency which was ‘forked’ from Bitcoin.

It was created in 2017 by a segment of the Bitcoin community who had the intention of leveraging the successful elements of Bitcoin, whilst solving some of the drawbacks such as limited scalability.

Bitcoin Cash has seen some success and has become a formidable contender to other cryptos. However, it hasn’t come close to matching the popularity of Bitcoin.

Why the push for crypto scalability?

So why did the Bitcoin community want to increase the world’s first crypto’s scalability?

According to Brown:

Bitcoin was originally created with the intention of being a digital currency. However, as more and more people invested, the slower the processing of transactions became. This is due, in part, to the size of the blocks being limited to just 1MB which allows very little room for scalability. Because of this, Bitcoin has become somewhat of a store of value as opposed to a way for people to easily make daily transactions.

So, has Bitcoin Cash managed to overcome these shortcomings?

“Bitcoin Cash was created to amend these limitations and has somewhat achieved this by incorporating a maximum block size of 32MB,” Brown said.

He continued:

This allows for faster transactions and increases the amount of people that can use it at one time. So much so, the team behind Bitcoin Cash claim it’s capable of 200 transactions per second, while Bitcoin averages just seven. As a result of this, the cost per transaction of Bitcoin Cash has decreased and the ability to scale has increased.

Bitcoin Cash has underperformed Bitcoin in 2022

Despite the decreased cost per transaction and increased ability to scale, Bitcoin Cash has underperformed Bitcoin in 2022. While BTC is down 22%, BCH has tumbled 38% in the New Year.

Brown told The Motley Fool:

Most altcoins, including Bitcoin Cash, have been underperforming so far in 2022. However, many are starting to now stabilise since the major crypto selloff in January 2022. This selloff wiped out $1 trillion in market cap from the industry. Bitcoin and Ethereum also lost up to half of their value from the peak.

As most altcoins are impacted by the movements of Bitcoin, this means they felt more pain.

 What should crypto investors take into account?

Finally, we asked Brown what crypto investors should take into account before deciding which of the tokens to potentially invest in.

“Bitcoin Cash doesn’t currently have the level of consumer trust that Bitcoin does and therefore doesn’t have nearly as many investors, just yet,” he said. “This means that, at the time of writing, Bitcoin Cash in a ‘real-world’ scenario is lessened.”

Brown ended with this investor caveat, “Although the market is showing Bitcoin to be more popular than Bitcoin Cash right now, you should always do your own research to determine which crypto asset is right for you.”

The post Battle of the crypto assets: Bitcoin versus Bitcoin Cash appeared first on The Motley Fool Australia.

More reading

• Is Bitcoin a good way to diversify an ASX share portfolio?
• Cryptocurrency crash fails to put a dampener on cash-raising fiesta
• Is Bitcoin using lots of energy actually a good thing?
• Bitcoin price slides again. Here’s what crypto investors are watching
• Why these five cryptos could leave Bitcoin in the dust in 2022

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

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If you’re wanting to build a strong portfolio, then having a few blue chips in there could be a good starting point.

But which blue chips should you buy? Two highly rated blue chip shares are listed below. Here’s why they could be in the buy zone right now:

Goodman Group (ASX: GMG)

The first blue chip ASX 200 share to look at is Goodman Group. It is a leading integrated commercial and industrial property company with a portfolio of warehouses, large scale logistics facilities, and business and office parks.

It has been experiencing very strong demand for these properties in recent years, which is underpinning solid earnings and distribution growth.

Goodman’s CEO, Greg Goodman, recently commented: “The results of the deliberate positioning of our portfolio over the last decade to adapt to and leverage the changes in the digital economy, are now being realised. Customer demand for high-quality properties close to consumers has never been greater.”

But it gets better. Goodman has $12.7 billion of development work in progress, which is expected to underpin further growth over the coming years.

Citi is a fan of Goodman. It currently has a buy rating and $28.00 price target on the company’s shares. The broker believes that Goodman’s earnings per share guidance for FY 2022 is conservative.

ResMed Inc. (ASX: RMD)

Another blue chip ASX 200 share to look at is ResMed. It is a sleep treatment-focused medical device company with a portfolio of industry-leading products that are improving the lives of sufferers of conditions such as sleep apnoea.

The good news is that this is a huge market with just an estimated one fifth of sufferers currently diagnosed. This gives ResMed a long runway for growth in the future.

For example, ResMed’s CEO, Mick Farrell, recently reaffirmed his expectation for the company to improve a quarter of a billion lives by 2025.

He commented: “Despite constantly evolving market dynamics, we remain focused on our goal to improve 250 million lives in the year 2025; supporting patients with the sleep apnea therapy, respiratory care therapy, and digital health solutions they need as we deliver value for all of our customers.”

The team at Morgans is very positive on ResMed. It has an add rating and $40.46 price target on the company’s shares. The broker believes ResMed is “well-placed as it builds a unique, patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain.”

The post 2 highly rated blue chip ASX 200 shares to buy appeared first on The Motley Fool Australia.

More reading

• Morgans names 4 more of the best ASX shares to buy in February
• 3 fantastic ASX shares to buy this month
• Leading brokers name 3 ASX shares to buy today
• ASX 200 (ASX:XJO) midday update: Ansell crushed, ResMed upgraded
• Broker upgrade sends ResMed (ASX:RMD) share price charging higher

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 recommended ResMed Inc. 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 roll into the new year of 2022 has been one for the ages for global equities markets, with this January’s performance firmly on the podium as the 8th worst on record, and the worst since 2008.

The benchmark S&P/ASX 200 Index (ASX: XJO) has fallen 500 points off its previous highs in January and is down 4% for the month, whereas the S&P/ASX Small Ordinaries Index (ASX: XSO) is down 7%.

ASX shares have been hit hard so far in 2022 as shifting yields on long dated bonds and the inflation narrative play havoc on stocks throughout the globe.

That’s important seeing as there tends to be an inverse correlation in the benchmark index and the yields on long duration bonds, as seen in the chart below. The chart shows this relationship, by plotting the return on the benchmark ASX 200 index (left hand side) versus the yield on the Australian Commonwealth Government 10 year bond (right hand side) going back to 1985.

As can be seen, bar a few anomalies in the data (the global financial crisis in 2007-09′ and the COVID-19 crash in 2020), long-term correlations have been negative for these two asset classes. In fact, this tends to be one of the many reasons portfolio managers include bonds into their allocations, to help smooth portfolio returns.

Over the past few months, these correlations have manifested heavily in the small cap domain of the market. Yields on longer bonds are rising, hurting the valuations on speculative assets as investors flock to more quality corners of the market. This activity has erased much of the gains that smaller ASX shares have earned in 2022. The same effect is observed on the chart below, although with the US Treasury 10 year yield.

Hence, any stock that offers long-term upside potential with additional features such as an attractive dividend yield to cover the downside is a key standout in this current market.

According to Investors Mutual Limited (IML) portfolio manager Simon Conn, wholesale distribution and marketing company Metcash Limited (ASX: MTS) might just fit that bill. Let’s take a look.

Why’s this ASX share a standout?

Conn is bullish on Metcash given his firm’s concentration and focus on the Australian mid and small cap sector.

Speaking to an episode of “Buy Hold Sell” on Livewire Markets on Friday, Conn stated his posture on Metcash is that it is “an underappreciated franchise, and a business that’s no doubt benefited from COVID, but [one] that’s delivered enduring benefits to their food business”.

“But also their liquor business has been growing and is a very resilient business. But really its the hardware business, where they position themselves as the second player in the hardware, retail and wholesale markets that we think is underappreciated by investors”, he said.

“Their acquisition of Total Tools looks really well priced. They bought that prior to COVID, effectively on about three-and-a-half times EBITDA”.

Conn also reckons that Metcash has grown exceptionally well after navigating its way throughout the COVID-19 landscape.

As such, the portfolio manager believes that local vendors and franchisees will continue reinvesting into their own stores with profits generated, leading local consumers to spend more in their local communities. This cycle looks set to play on repeat as well, according to the expert.

Not only that, but Conn is impressed by Metcash’s current valuation, its balance sheet and the total return prospects it offers investors with its current dividend yield of over 5%.

These are imperative characteristics for chasing quality names within the current investing climate – especially with the pullback in small cap stocks, Conn argues.

“The thing about Metcash is it’s really attractively priced on 13 times [earnings], and a yield of over 5%, with a really strong balance sheet. For us, it looks like a standout in the market, where a lot of stocks look pretty fully priced”.

Metcash shares finished Friday less than 1% up at $4.16, marking an impressive gain on the week.

Metcash share price snapshot

In the last 12 months, the Metcash share price has gained 22% after a strong performance in 2021. This year to date it has pared gains and is now down 7%, just in behind the broad indices.

However, investors are showing support once more and shares have gained around 7% in the past week of trading.

The post Well priced with a dividend yield over 5%, this ASX share ‘is a standout’: expert appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares held up the best in the last market crash
• Are ASX consumer staples shares really ‘safe’ to hold in a market selloff?
• 2 underrated ASX dividend shares to think about: analysts
• 2 big-name ASX shares to buy right now
• Why Domino’s, Fortescue, Medibank, and Metcash shares are falling

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.

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Key points

• Buy now, pay later shares started February in the red
• Block’s ASX listing crashed amid a sell-off in the United States
• Interest rate rises in 2022 were flagged by the RBA this week
• Block and Zip recovered some of their losses today

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Buy now, pay later (BNPL) shares have had a shocking start to the month but some edged higher today.

Block Inc CDI (ASX: SQ2) share price has fallen nearly 15% since market open on 1 February. Zip Co Ltd (ASX: Z1P) has fallen nearly 13% in the same time period. However, in today’s trade Block climbed 0.88% while Zip Co jumped 3%.

Let’s take a look at what’s been happening to BNPL shares lately.

BNPL woes

Block and Zip are not the only BNPL shares to fall in February. The Openpay Group Ltd (ASX: OPY) share price has descended 13% since market open on 1 February, while Beforepay Group Ltd (ASX: B4P) has slipped 9%.

Sezzle Inc (ASX: SZL) has also shed 13% in the same time period. In today’s trade, Openpay held steady while Beforepay fell 4.64% and Sezzle finished 0.89% in the red.

Block’s ASX listing dived after the company’s US listing plummeted. Block Inc (NYSE: SQ) fell 20% between market close on 1 February in the US and 3 February.

Investors sold Block shares after rival Paypal’s quarterly results fell short of market expectations. Paypal Holdings Inc (NASDAQ: PYPL) fell a mammoth 29% between market close on 1 February and 3 February in the US.

However, in after-hours trade, Block’s US listing has gained more than 3% and Paypal has edged ahead 1.5%. This could be helping the company’s ASX listing and confidence in the BNPL sector overall.

Zip’s shares also fell heavily this week amid negative sentiment in the industry. My Foolish colleague Aaron noted any Reserve Bank of Australia rate hikes could impact consumer spending. And the Zip business model depends on this spending.

BNPL’s shares suffered amid an overall tech stock slide this week. The S&P/ASX All Technology Index (ASX: XTX) dived almost 4% between market open on 1 February and close today. The index finished today 0.39% ahead.

BNPL share price recap

BNPL shares have suffered major losses in the past 52 weeks.

In the past year, the Zip Co share price has dived 63%. Meanwhile, Openpay has crashed 82% and Sezzle has plunged 74%. Meanwhile, Beforepay has shed 55% since joining the ASX this year, while Block has slipped 17%.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has returned more than 5% in the past year.

The post Some BNPL shares finished a horror week on a high. Why? appeared first on The Motley Fool Australia.

More reading

• Tech stocks crash, while Nufarm soars. Scott Phillips on Nine’s Late News
• Why did ASX 200 tech shares get annihilated today?
• Why Cettire, Novonix, Serko, and Zip shares are sinking today
• Is Zip (ASX:Z1P) the Titanic of ASX tech shares? It just keeps sinking
• With Afterpay shares no longer listed, is WAAAX officially dead?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The SEEK Limited (ASX: SEK) share price was out of form on Friday.

The job listings giant’s shares ended the day 4% lower at $28.31.

This means the SEEK share price is now down almost 14% since the start of the year.

Why did the SEEK share price tumble today?

The catalyst for this weakness in the SEEK share price today appears to have been a broker note out of Goldman Sachs this morning.

According to the note, the broker has retained its sell rating and cut its price target on the company’s shares by 15% to $27.30.

Following today’s decline, this implies potential downside of 3.5% for its shares.

What did the broker say?

Goldman is expecting SEEK to deliver a strong result later this month, but not one that achieves the market consensus estimate.

It said: “We expect a strong result from SEK, with 1H22 Rev/EBITDA of $483mn/$223mn, driven by +56%/+58% growth in ANZ Rev/EBITDA. However despite this strong growth, our SEK Rev/EBITDA estimates sit -3% below VA Consensus.”

In addition, the broker has adjusted its price target to reflect changes to valuation multiples in line with other classifieds peers and a discount to the valuation of its Seek Growth Fund business.

It made the move on the latter following industry feedback which suggests valuation pressure on venture capital assets. Goldman highlighted a recent de-rating of Bailador Technology Investments Ltd (ASX: BTI) as proof of this.

The broker explained: “Consistent with global classifieds (and peer REA) we lower our EV/EBITDA valuation multiples 3X within our SOTP (except for Latam).”

“We also introduce a 20% discount to SEK growth fund carrying value, reflecting: (1) peer BTI.AX de-rating (c.25% decline since Oct levels when SEK last provided an ESV valuation); and (2) industry commentary suggesting valuation pressure on VC assets in Australia. Overall our SOTP-based TP decreases by c.15% to $27.30,” it concluded.

The post SEEK (ASX:SEK) share price tumbles on broker sell rating. Here’s why it is bearish appeared first on The Motley Fool Australia.

More reading

• Why Boral, Magellan, REA, and SEEK shares are falling today
• 3 blue chip ASX 200 shares to buy after the selloff
• Analysts name 3 ASX 200 shares that could generate strong returns

Motley Fool contributor James Mickleboro owns SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bailador Technology Investments Limited. The Motley Fool Australia has recommended Bailador Technology Investments Limited and SEEK 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

• The Qantas share price glided 4.85% higher today amid changes to its loyalty program
• Frequent flyers will require between 30% to 45% fewer points depending on the redemption
• Qantas is rolling the changes out to its 13 million members, anticipating a pickup in domestic leisure travel

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The Qantas Airways Ltd (ASX: QAN) share price took flight on Friday after announcing radical changes to its frequent flyer program.

At the final bell, shares in Australia’s iconic airline were up 4.85% to $5.19. As a result, the airline operator is now in the green on a year-to-date basis.

All in all, it seems investors are optimistic about the modifications made to frequent flyers. Although, the important questions are: what are the changes, and what does it mean for Qantas?

Qantas lowers the bar for its frequent flyers

On Friday, investors pushed the Qantas share price up on news it will cut the number of frequent flyer points needed when booking hotels or holiday packages.

The move will see the Aussie airline reduce the number of points required by 30% and 45% respectively. While the decision might seem counterintuitive for a company attempting to increase profits as it rides out of the COVID-19 storm, the airline sees it differently.

According to the release, the program’s 13 million participants will be able to enjoy this generosity permanently, with the changes intended to remain in place.

In addition, the company is instating a temporary reduction for flight redemptions. In turn, travelers will need 20% fewer points when using a combination of cash and points on flights. However, this will only be in place between April 2022 and April 2023.

Commenting on the changes, Qantas loyalty chief executive Olivia Wirth said:

If you look at domestic trends, people are looking for weekends away up the coast or something similar and that might not include a flight – this provides the chance for our customers to use points on those trips.

Travel trends are changing in the market and, from a timing perspective, we think there will be a leisure travel boom soon.

Furthermore, the announcement comes two weeks after the Qantas share price weakened on the delayed reopening of the Western Australia border.

Qantas share price snapshot

The ASX-listed Qantas share price has been flying through turbulent patches during the pandemic. Despite the challenges, the airline has managed to land itself a positive return for shareholders in the past 12-months. In fact, the Aussie airline has outperformed the broader market during this period.

For reference, the S&P/ASX 200 Index (ASX: XJO) has returned a total of 4.1% in the last year. Meanwhile, the Qantas share price is up 9.5%.

The post Frequent flyer: what changed for the Qantas (ASX:QAN) share price today? appeared first on The Motley Fool Australia.

More reading

• Why is the Qantas (ASX:QAN) share price taking off this week?
• Are ASX travel shares finally emerging from the COVID storm?
• ASX 200 shares offer 12% upside after sell-off: JP Morgan
• What is green shorting and which ASX 200 shares are being targeted?
• Why is the Qantas (ASX:QAN) share price gaining altitude today?

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 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:

• Nufarm’s share price surged over 20% this week following a positive quarterly update
• Several brokers have upgraded their price target on its shares despite rising costs
• This is because price increases and revenue growth are more than offsetting inflation risks

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The party may not be over for the Nufarm Ltd (ASX: NUF) share price even after its big surge this week.

Leading brokers are tipping further upside for the seed and agri products company after its shares jumped 26% since Monday to hit $5.52.

The catalyst for the Nufarm share price was its quarterly results, which were released yesterday.

Several brokers were impressed enough to upgrade their price targets on the shares even as management warned of rising costs.

Brighter outlook for the Nufarm share price

One broker that lifted its valuation on the Nufarm share price post the update was Macquarie Group Ltd (ASX: MQG).

“NUF is experiencing upward pressure on costs due to raw material costs and global logistics challenges but this is being offset by increased revenues (ie price),” said Macquarie.

“NUF is increasingly confident of achieving revenue and earnings growth for the year. Earnings to be significantly weighted to 1H (saw same last year).”

Pricing power important in this climate

The ability of Nufarm to pass on rising costs is a desirable characteristic in the current climate. Inflationary pressures are building and the ASX shares that can outperform in such an environment are those with pricing power.

Macquarie increased its 12-month price target on the Nufarm share price to $6.29 from $5.45 a share. The broker also reiterated its “outperform” recommendation on the shares.

Planting seeds for extra growth

Meanwhile, Citigroup was another to up its price target on Nufarm by $0.50 to $6.50 a share.

The broker confidence in Nufarm’s ability to grow earnings and sales over the next five years improved after the update.

But its valuation may prove to be conservative as Citigroup did not include the upside from Nufarm’s seed technology business.

“NUF is also aiming for ~$600 to $700 million in revenues for its Seed Technologies business by FY26e which, while not reflected in CitiE or current consensus forecasts, provides an insight into the potential sales quantum for high-growth, early-stage products,” said Citi.

The broker repeated its “buy” recommendation on the Nufarm share price.

How much higher can the Nufarm share price go?

Bell Potter also upgraded its target price on Nufarm following the quarterly update. It increased the target by 18.5% to $6.40 a share.

“There is no change to our Buy rating,” said Bell Potter.

“If NUF can execute on its FY26e targets then it has the scope to become a $565-$635m through the cycle EBITDA business, with a higher exposure to less seasonal elements of the value chain through participation in Omega 3 and Carinata returns post farmgate.”

The post Why top brokers see further upside to the Nufarm (ASX:NUF) share price appeared first on The Motley Fool Australia.

More reading

• Tech stocks crash, while Nufarm soars. Scott Phillips on Nine’s Late News
• Why Amcor, Boral, Nufarm, and Westpac shares are rising today
• Nufarm (ASX:NUF) share price leaps 15% as revenue soars
• ASX 200 (ASX:XJO) midday update: Westpac higher on Q1 update, tech shares sink
• Nufarm (ASX:NUF) share price climbs higher on BP low-carbon fuel deal

Motley Fool contributor Brendon Lau owns Nufarm 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.

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Key Points

• Amcor shares down 1.6% for the day, but up marginally for 2022
• The company reported a robust result for the first-half of FY22
• Elston analyst Bruce Williams provided his expert take on Amcor shares

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The Amcor PLC (ASX: AMC) share price has continued to gradually travel higher over the past 12 months.

After hitting a low of $14.18 in February 2021, its shares ticked up a notch to reach an all-time high of $17.90 in August.

Since then, Amcor shares have settled back down to $16.58, down 1.6% for the day.

When comparing against its sector, Amcor shares are up 14.66% versus the S&P/ASX 200 Materials (ASX: XMJ), which is up 8.84% in a year.

Notably, following the release of the company results for its FY22 first-half scorecard, Elston’s analyst Bruce Williams weighed in.

What’s driving Amcor share price higher?

Over the six months ending 31 December, Amcor reported a solid first-half performance as it navigated a challenging operating environment.

Across the business, net sales increased by 12% to US$6,927 million on the back of servicing demand in key segments.

At the same time, a broad range of actions were implemented to recover higher input costs and manage through general inflation.

This led to adjusted earnings before interest and tax (EBIT) of US$769 million, up 5% on the prior corresponding period.

In addition, adjusted earnings per share (EPS) rose by 9% to 35.8 US cents.

The board declared a quarterly dividend of 12 US cents to be paid on 15 March 2022.

While the result itself was exceptional given the current surroundings, Amcor reaffirmed its fiscal 2022 outlook.

Management noted that it remains focused on executing its strategy for long-term value creation established over the last several years.

The company is increasing investments in premium segments such as healthcare and protein, in emerging markets to drive growth and margin expansion.

When asked by Ally Selby from Livewire Markets about which ASX share can safely deliver returns in 2022, Mr Williams said:

“The one we’re bringing to the table today is Amcor…

“The basis of its business is consumer staples, so things like healthcare, food, those sorts of things. It’s a packaging business that is dominant in what it does, in each of the markets in which it participates.”

Mr Williams went on talk about the business’ fundamentals, adding:

It generates excellent cash flow. It’s building into its technology around sustainable and recyclable packaging. We think it’s just a terrific defensive position that, through a combination of capital growth, dividends and buybacks, will generate consistent returns for investors for the foreseeable future.

Year to date, the Amcor share price has nudged about 0.36% higher.

The post Amcor (ASX:AMC) shares are ‘a terrific defensive position’: expert appeared first on The Motley Fool Australia.

More reading

• Why Amcor, Boral, Nufarm, and Westpac shares are rising today
• Energy stocks surge and RBA hoses down the chances of a rate rise. Scott Phillips on Nine’s Late News
• Why Amcor, Ansell, Block, and Credit Corp shares are sinking today
• ASX 200 (ASX:XJO) midday update: Amcor slides, BHP and Fortescue storm higher
• Amcor (ASX:AMC) share price falls despite reaffirming earnings guidance and US$200m buyback expansion

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

• The Ioneer share price has dropped 19% in a month
• The lithium explorer (along with a joint ventur partner) has made advancements in the construction of its US-based site
• The US site aims to become “an integral part of the US electric vehicle supply chain”

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The Ioneer Ltd (ASX: INR) share price has seen a significant drop within the last month.

Between the market closes on January 4 and February 4, Ioneer shares fell 19.28%. However, they climbed 4.69% today to close at 67 cents.

So what’s been going on with the company, which describes itself as “an emerging American lithium-boron supplier”?

Let’s dive in…

How has ioneer been performing?

Last week, the explorer released its activities and cash flow report for the quarter ending 31 December.

Most notable was a strategic investment from US-based Sibanye-Stillwater to develop Ioneer’s flagship Rhyolite Ridge lithium-boron project in Nevada, described as the “most advanced lithium project in the US”.

The company reported cash and equivalents at $149 million, and activities as follows:

• Silbanye-Sillwater’s US$70 million strategic investment in Ioneer;
• “Major progress” on its goal of achieving secondary listing of Ioneer shares by CY 2022;
• Advancement in offtake discussions directed at the US supply chain, which are expected to conclude by CY 2022;
• “Engineering and procurement activities” for site construction at advanced stage; and
• Ioneer invited into due diligence by the US Department of Energy’s (DOE) Loan Programs Office.

Since 31 December, the Ioneer share price has decreased by 16%.

What’s going on with Ioneer?

Despite the drop in the Ioneer share price, the explorer is remaining positive on its flagship operations.

The financing from Sibayne-Stillwater (which has entered into a joint venture with the company), tied with the invite from the DOE, signifies a major step towards the lithium project becoming “an integral part of the US electric vehicle supply chain”.

However, the Ioneer share price saw a 14.5% drop between the DOE’s invitation on December 20 and its activities report on January 25.

Ioneer managing director Bernard Rowe said Sibayne-Stillwater “share our vision of becoming a major force in the battery materials supply chain” and that the “investment further aligns our two companies as we look to bring the Rhyolite Ridge project to production”.

It aims to be construction-ready by Q4 2022.

Further, Rowe said:

We continue to see increased demand globally for lithium products and are well positioned to capitalise on the US Government’s efforts to secure critical minerals supply chains for end uses like EVs and renewable energy infrastructure in the US.

The uptick in inbound enquiries from potential offtake parties has only strengthened this quarter, as lithium supply is short, and prices have been rising.

Ioneer share price snapshot

Over the past 12 months, the Ioneer share price has increased by 63%. It saw its lowest price of 28 cents in late June and its highest price of 85 cents in mid-December.

The company has a market capitalisation of $1.31 billion and 2.05 billion shares issued.

The post Why the Ioneer (ASX:INR) share price has dropped 19% in a month appeared first on The Motley Fool Australia.

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Motley Fool contributor Alice de Bruin 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

• Bitcoin and other cryptocurrencies have long divided opinions
• Some see the asset as digital gold, others consider it worthless
• Let’s take a look at what this investing expert reckons…

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Most investors would now acknowledge that Bitcoin (CRYPTO: BTC) and other cryptocurrencies are now very much part of the mainstream investing zeitgeist. But that doesn’t mean cryptocurrencies aren’t still enormously divisive and controversial assets.

There is still a large camp of investors convinced that Bitcoin and other cryptos are on course to change the world as we know it. But there is still another large camp that consider Bitcoin to be one of the biggest investing hoaxes of all time.

Hamish Douglass of Magellan Financial Group Ltd (ASX: MFG), for example, falls into the latter camp. Last year, we discussed his remarks describing cryptocurrencies as having “zero intrinsic value” and “one of the greatest irrationalities I’ve seen in a very, very long period of time”.

Hero or zero?

So even if one doesn’t fall into one of the two camps described above, how does one view Bitcoin? Is it an asset class that can provide some positive diversification to your average ASX investing portfolio?

Investors often use different asset classes to diversify their own portfolios. For example, many investors invest in both shares and property because these markets largely move independently from each other. The same goes for gold or government bonds.

Some investors do indeed think that Bitcoin can fulfil this role. Many describe Bitcoin as ‘digital gold’, an inflation hedge or an effective store of value. Those traits would indeed likely give it a useful role in portfolio diversification. But let’s see what an investing expert reckons. Mike Young, of Mason Stevens, recently shared his views on this matter on Livewire.

Does Bitcoin give a portfolio diversification?

Mr Young was asked about the role that Bitcoin could play in diversifying a portfolio. He makes some interesting observations. Young points out that Bitcoin is not as ‘uncorrelated’ to other asset classes as people think, especially over short periods of time:

Over the long run, [diversification using Bitcoin] makes sense – as cryptocurrencies purport to reshape global financial systems – and therefore will be beholden to different narratives.

However, it has become increasingly more obvious over the last two years that cryptocurrencies are still very much affected by the incumbent financial system – particularly over the last few months as cryptocurrencies have fallen lockstep with equity markets.

Bitcoin can serve as an effective point of diversification within investor profiles over longer-term time horizons, where the factors that shape long term valuations differ greatly from traditional markets.

It’s that distinction between ‘short-term correlation’ and long-term correlation’ that is interesting. In short, Young seems to be saying that Bitcoin won’t help protect your portfolio from market volatility. But it can still be useful as a long-term diversification instrument.

There is no easy answer here. Bitcoin’s future is arguably more uncertain than any other asset class due to its currency-like structure, and its relatively recent ascension. Perhaps that’s why Young cites billionaire hedge fund manager Ray Dalio’s recommendation of a portfolio allocation to Bitcoin at around 2%.

But only more time will tell as to what role Bitcoin will play in our financial system. And what role it should play in our investing portfolios.

 

The post Is Bitcoin (CRYPTO:BTC) a good way to diversify an ASX share portfolio? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen owns Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin. The Motley Fool Australia owns and has recommended Bitcoin. 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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