Shares in coal freight operator Aurizon Holdings Ltd (ASX: AZJ) are down in early trading on Wednesday, slipping 0.45% to $3.335.

It’s been a difficult time these past 3 months for Aurizon shareholders who have seen their holdings collapse amid a bottom-heavy coal market.

Consequently, shares are trading around 52-week lows and investors have started leaving the Aurizon party.

What’s going on with the Aurizon share price?

Aurizon’s share price collapsed in late October amid a large pullback in the price of coal that began at the same time.

After an extended rally that started in late 2020, the price of coal has reversed sharply and now trades 44% off its record high of US$269.50/tonne in October.

As Beijing continues to regulate its domestic power market in an attempt to curb emissions and the impacts of soaring coal prices, those with exposure to coal have felt the brunt of these moves.

Aurizon has been front and centre of the massacre in ASX coal shares and has seen its share price slide 15% amid the plummet in the price of the black rock.

Adding to the downward pressure, renewed investor concerns surrounding the new Omicron COVID-19 variant have also been a negative catalyst for coal players, according to Trading Economics.

Aside from this, Aurizon’s recent acquisition efforts in acquiring One Rail Australia hasn’t been well received across the board.

Both UBS and RBC Capital Markets tip Aurizon to underperform, with the latter valuing the company at $3.30 per share.

Meanwhile, the team at Macquarie reckons the One Rail acquisition could be a net positive to the company, particularly due to the diversification benefits into new markets.

In light of this, sentiment appears mixed on Aurizon, particularly as its share price is failing to catch bids these past few weeks.

Aurizon share price snapshot

It’s been a difficult one these past 12 months for the Aurizon share price, having lost almost 21% in that time.

This year to date, things aren’t any better. The company’s shares have given away more than 14% since January 1, and are down almost 2% in the last month.

The post Why has the Aurizon (ASX:AZJ) share price had such a lacklustre start to December? appeared first on The Motley Fool Australia.

More reading

• Why is the Aurizon (ASX:AZJ) share price hitting 9-year lows today?
• Why has the Aurizon (ASX:AZJ) share price struggled this month?
• Is the Aurizon (ASX:AZJ) share price undervalued in November?

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 Aurizon Holdings 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.

What happened

Cryptocurrency mining stocks were up big on Tuesday, thanks to a price rebound among cryptocurrencies including Bitcoin (CRYPTO: BTC) — and thanks to a hot stock market. As of 12:30 p.m. ET, the S&P 500 was up 2%, which is a big move for a single day. And Bitcoin is up 4% over the past 24 hours and up around 14% from its weekly low.

Cryptocurrency mining stocks up today include Canaan (NASDAQ: CAN), Marathon Digital Holdings (NASDAQ: MARA), and HIVE Blockchain Technologies (NASDAQ: HIVE), up 11%, 9%, and 9%, respectively.

So what

There were several factors negatively impacting the price of Bitcoin over the past week. For example, cryptocurrency exchange BitMart was hacked on Saturday and the bad guys got away with between $150 million and $196 million in digital assets, according to CNBC. Whenever an exchange is hacked like this, it can spook investors in cryptocurrencies.

Besides Bitcoin, investors were recently reminded that there’s a big need for discernment when it comes to cryptocurrencies. Trading platform Bitget is based in Singapore. But this week, the Monetary Authority of Singapore reportedly suspended Bitget’s license because it promoted an obscure cryptocurrency based on the popular music group BTS from South Korea.

These kinds of things can rattle confidence in the cryptocurrency market. But the stock market has been far more rattled of late, especially with stocks that are labelled as growth stocks. The ARK Innovation ETF, a popular exchange-traded fund (ETF) with a plethora of high-flying growth stocks, is down 35% from its 52-week high and down sharply over the past month as investors fret over surging coronavirus cases and institutional investors make year-end moves to lock in gains.

Whatever the exact reasons may be, both the stock market and the cryptocurrency market rebounded sharply on Tuesday, which was doubly helpful for stocks like Canaan, Marathon Digital, and HIVE Blockchain Technologies. To be clear, none of these companies had news today. Marathon Digital did have a filing with the Securities and Exchange Commission (SEC) yesterday. However, this was merely an official filing of previous press releases. So there wasn’t anything materially moving these stocks today other than general market conditions.

Year-to-date returns for these cryptocurrency stocks, Bitcoin, and the S&P 500. CAN data by YCharts

Now what

Canaan manufactures hardware for mining Bitcoin and this is a good business to be in right now. Historically high profit margins for Bitcoin miners have sparked a spending frenzy as companies try to increase their mining capabilities to take advantage of these favourable economics. Strong demand was reflected in Canaan’s third-quarter results, released on Nov. 16. Hashing power sold was up an impressive 128% year over year. However, Q3 revenue was up over 708% from the previous year, reflecting a higher price per mining unit. 

As long as these favourable economics are in place, it’s likely that Canaan’s products will be in high demand. However, the other side of this equation is that mining companies like Marathon Digital and HIVE Blockchain Technologies are getting more competitive, attempting to increase their market share. 

As of December 1, Marathon Digital had a hash rate of 3.2 exa-hashes per second (EH/s), which was around 2% of the total hash rate of the Bitcoin network. But the company is rapidly adding power and expects to have 13.3 EH/s roughly six months from now.

However, companies like HIVE Blockchain Technologies aren’t going to just sit there while Marathon Digital expands. For its part, HIVE Blockchain mines both Bitcoin and Ethereum (CRYPTO: ETH) and has 1.31 EH/s for mining the former. It expects to roughly double this by the summer of 2022. Of course, that won’t keep up with Marathon Digital quadrupling its capacity. 

As long as the price of Bitcoin continues to rise, the economics of mining cryptocurrencies should keep making sense, motivating companies to buy more mining hardware from providers like Canaan. That’s good for now. However, investors will need to be sure to develop a balanced long-term perspective on this space, recognizing that prolonged pullbacks have happened in the past and can create tough operating environments for all of these companies.

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

The post Why Cryptocurrency Mining Stocks Were Up Big Today appeared first on The Motley Fool Australia.

More reading

• Can Bitcoin and other cryptos be used as an inflation hedge?
• Betashares CRYPTO ETF (ASX:CRYP) drops 16% in the past week. What’s next?
• Why Ethereum, Dogecoin, and Solana Fell This Morning
• Crypto investors missing millions after 2 Aussie exchanges collapse
• Bitcoin (CRYPTO:BTC) price crash dashes crypto’s safe haven status

Jon Quast owns shares of Bitcoin and Ethereum. The Motley Fool owns shares of and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

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

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Bitcoin (CRYPTO: BTC) as an inflation hedge?

Or perhaps Ethereum (CRYPTO: ETH), or some of the other top cryptos?

With inflation ticking up fast in most developed nations, including Australia, it’s a question more investors are pondering as the outlook for the value of their dollars and euros begins to weaken.

Can Bitcoin serve as an inflation hedge?

The jury is still out on the long-term use of cryptos like Bitcoin to protect investors in times of fast rising prices.

Prices, of course, tend to be rated in fiat currencies. And the supplies of fiat currencies are theoretically unlimited.

Governments can, and do, print large quantities of their own currencies, generally through their central banks. If they run the presses too hot, inflation usually follows. Which is what much of the developed world is beginning to experience these past months.

Select cryptos like Bitcoin, on the other hand, have a fixed supply. There are only so many Bitcoin that can be mined. Then there’ll be no more. Granted, they can be broken down into much smaller units called satoshis (100 millionth of a Bitcoin). But unlike the US or Aussie dollar, you can’t create endlessly more with the press of a button.

Indeed, looking at the price history of Bitcoin, it’s far outrun inflation to date. Over the past 12 months, Bitcoin has gained 173% in Aussie dollar terms. And over the past 5 years it’s up 6,439%.

Take that inflation.

But that’s all hindsight now.

Whether Bitcoin can serve as a decent inflation hedge moving forward depends on who you ask.

What the experts are saying

On the pro-side for Bitcoin as inflation protection is Strahinja Savic, head of data and analytics at crypto derivatives provider FRNT Financial.

According to Savic (quoted by Bloomberg), “Not only is the dilution of Bitcoin much less aggressive than USD over the last six years, it’s also much more consistent, not susceptible to political whims and, of course, predictable. Bitcoin’s programmed predictability contrasts it from the uncertain policy decisions that impact the dollar.”

But head of Securitize Capital Wilfred Daye takes a more cautious approach. “We don’t have long enough history to assert Bitcoin is indeed an inflation hedge,” he said.

Josh Gilbert, crypto analyst at multi-asset investment platform eToro, agrees:

We’re currently in an environment where it’s more important to invest when we consider the inflation print experienced in the US. Bitcoin has been labelled an ‘inflation hedge’ by some. But the crypto asset is still in its infancy, and hasn’t been tested during a recession. Therefore, it can’t be considered as a hedge against inflation for now.

The post Can Bitcoin and other cryptos be used as an inflation hedge? appeared first on The Motley Fool Australia.

More reading

• Betashares CRYPTO ETF (ASX:CRYP) drops 16% in the past week. What’s next?
• Missed out on Ethereum? Here’s a possible alternative
• Why Ethereum, Dogecoin, and Solana Fell This Morning
• Crypto investors missing millions after 2 Aussie exchanges collapse
• Bitcoin (CRYPTO:BTC) price crash dashes crypto’s safe haven status

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. 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 Playside Studios Ltd (ASX: PLY) share price is jumping after entering into a fixed price work-for-hire development agreement with Shiba Inu Games.

Playside Studies is Australia’s largest publicly listed video games developer. PlaySide describes Shiba Inu Games as one of the many projects established by the cryptocurrency community to create great games.

Playside Studios agreement with Shiba Inu Games

Under this agreement, Playside will provide production, design, engineering, art, user interface and experience development services to Shiba Inu Games on a new game title during the 8-month term of the agreement.

The development of the game will draw from the art of the Shiba token’s ‘Shiboshi’ NFT (non fungible tokens) and will feature card collection, strategy and battle mechanics.

The multiplayer collectible card game is planned to be launched on multiple platforms with a proposed launch date in the first quarter of FY23.

Playside disclosed this is a fixed-price development agreement and does not include a revenue share. The ASX share will be paid in US dollars and will not trade or participate in cryptocurrency as part of this agreement.

What does Playside like about the deal?

The market seems to like this agreement, with the Playside share price up around 5% at the time of writing.

But in explaining the rationale for this deal, the company said it wants to “collaborate with strategic partners to develop games using the latest trends that are shaping the future of the gaming industry”.

Playside likes the deal because there are new opportunities in games, like this one, that take advantage of booming global trends such as the metaverse, cryptocurrencies, non-fungible tokens and blockchain gaming.

The continuing and rapid evolution of new businesses within the industry increases the demand for games and provides “significant opportunities” for the company. It will allow the business to showcase its capabilities in a new area of gaming.

Playside said this will show off its credentials as a global premier game developer.

CEO commentary

Gerry Sakkas, the CEO of Playside, said:

Playside continues to demonstrate its capability to partner with leaders across a range of fields within interactive entertainment including leading influencers and global gaming brands. To add a new games client that has emerged from the popular NFT, token and decentralised cryptocurrency industry is very exciting for us.

Emerging technologies continue to gather pace, and this is an ideal opportunity for Playside to collaborate in this field, expand our skill base and showcase our development abilities.

The scale of the agreement with Shiba Inu Games is also significant and highlights the depth of our capabilities as we continue to grow our business.

Playside share price snapshot

Whilst the shares are up 5% today at the time of writing, it has gone up by 115% since 6 October 2021, meaning it has outperformed most other ASX shares over the last couple of months.

The post Playside (ASX:PLY) share price surges on Shiba Inu Games deal appeared first on The Motley Fool Australia.

More reading

• What are Metaverse stocks and why is everyone talking about them?
• Why the PlaySide Studios (ASX:PLY) share price is winning today
• Here’s why the PlaySide Studios (ASX:PLY) share price clocked it this morning
• PlaySide (ASX:PLY) share price on watch after landmark agreement with video game giant

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

What happened

As of 2:30 p.m. ET, Crypto.com Coin (CRYPTO: CRO) was up 11.7% over the past 24 hours. A leader in crypto-based mobile payments, Crypto.com token has surged in interest among investors looking for ways to not only trade, but also generate yield from their crypto investments.

Today’s rise is substantially higher than the move of the overall crypto market, up approximately 4% over the past 24 hours.

In fact, this token is the fastest-rising top-15 cryptocurrency by market capitalization at the time of this writing. Investors seeking momentum have that in Crypto.com token today. Most cryptocurrencies, such as rival Shiba Inu, are up, but not to this degree.

So what

Holding today’s growth rate for Crypto.com Coin and Shiba Inu steady, CRO could theoretically pass Shiba Inu in value in three days. This is a fast-growing token that has generated a lot of attention of late. As far as momentum goes, Crypto.com Coin appears to have the upper hand over Shiba Inu and most large-cap tokens right now.

Since the beginning of September, Crypto.com Coin is a three-bagger. Shiba Inu’s performance has been less impressive, with this token losing nearly half its value over this time frame. 

Now, there are a number of catalysts investors point to when it comes to Crypto.com Coin’s outperformance. Crypto.com has been one of the leaders in marketing in the crypto space, securing a massive $700 million naming rights deal for what’s now known as the Crypto.com Arena (formerly the Staples Center). Other high-profile marketing deals in F1 and UFC have provided impressive name recognition for this token. Additionally, Matt Damon is doing television advertisements on behalf of Crypto.com, suggesting this is a cryptocurrency that’s not afraid to pull out all the stops to make as much noise as possible.

Investors like the mobile payments functionality (crypto-based debit cards and financial services), as well as the yield farming capabilities Crypto.com provides, courtesy of its CRO token. Some may come for the marketing and stay for the yield. In either case, Crypto.com Coin is a token that’s certainly outperforming right now.

Now what

It’s clear Crypto.com Coin is making a tremendous amount of buzz right now. In the crypto space, filled with flashy tokens and moonshot meme bets, this has turned out to be a good thing. Investors know the Crypto.com name, and are investing in this token. 

There’s some functionality to Crypto.com Coin, and a reason for investors to hold this token. Those in the yield farming space will note that Crypto.com is a renowned platform that’s gaining a lot of traction right now. Sure, there’s competition, and the landscape is always shifting. However, this token is also one with a lot of marketing behind the name.

As with any cryptocurrency investment, buying a given token based on the marketing or pizzazz underpinning a name isn’t a prudent idea. However, this token is garnering attention among those sophisticated investors as well. Accordingly, this may be a token worth looking at right now, relative to meme coins such as Shiba Inu. 

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

The post This crypto token could be 3 days away from passing Shiba Inu appeared first on The Motley Fool Australia.

More reading

• Why the Price of Shiba Inu is down today
• 3 cryptocurrencies that crushed Shiba Inu in November
• You could’ve made $1 million investing less than $1,500 in these 3 cryptocurrencies
• Shiba Inu soars and crashes, but it’s still holding up this week
• Here’s how these 4 top traded cryptos performed in November

Chris MacDonald 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.

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 has been an exceptionally strong performer in 2021.

Since the start of the year, the lithium explorer’s shares have risen a remarkable 250% to $9.72.

This is despite the company being targeted by a short seller in recent months.

Can the Vulcan Energy share price keep rising?

One leading broker isn’t worried by the short seller attack and continues to tip the Vulcan Energy share price to rise further.

According to a recent note out of Canaccord Genuity, its analysts have retained their buy (speculative) rating and $21.00 price target on the company’s shares.

Based on the current Vulcan Energy share price, this implies potential upside of 116% for investors over the next 12 months.

What did the broker say about this lithium share?

Canaccord Genuity notes that the company has just signed a binding offtake agreement with automotive giant Stellantis.

Stellantis is the name behind popular car brands including Peugeot, Citroen, Fiat, Chrysler, Jeep, Abarth, Alfa Romeo and Maserati.

The broker commented: “Vulcan has announced that it has signed a binding offtake agreement with Stellantis for 81-99kt of lithium hydroxide over five years from 2026. We believe this is the largest hydroxide offtake agreement by tonnage signed globally to date and represents a significant step in Vulcan securing its customer pipeline with tier 1 customers.”

What else?

Outside this latest development, Canaccord Genuity is positive on the Vulcan Energy share price due to the company’s potential to supply the European market with lithium.

The broker explained: “We reiterate our support for the [Zero Carbon Lithium] project given its potential to: supply lithium to the European market; fundamentally shift the lithium industry carbon cost curve; and produce high quality lithium products at low unit costs.”

The post Top broker tips Vulcan Energy (ASX:VUL) share price to more than double appeared first on The Motley Fool Australia.

More reading

• Why Domino’s, Healius, Kogan, and Vulcan shares are pushing higher
• Vulcan (ASX:VUL) share price falls 6% despite auto giant agreement
• Vulcan Energy (ASX:VUL) share price leaps 10% on new lithium deal
• Vulcan (ASX:VUL) share price on watch following Renault agreement
• Vulcan (ASX:VUL) share price falls despite acquisition update

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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Last month was a big one for Afterpay Ltd (ASX: APT), though, the excitement wasn’t enough to save its share price.

The soon-to-be acquired buy now, pay later (BNPL) provider’s stock tumbled 11.71% over the course of November.

As of the month’s end, its shares were swapping hands for $108.85. That’s despite finishing October trading at $123.29 apiece.

And, so far, December hasn’t proven to be any better. At the time of writing, the Afterpay share price is $95.73.

Let’s take a look at what drove the BNPL giant’s stock last month.

What moved the Afterpay share price in November?

The Afterpay share price was given a temporary boost in early November when the company announced that Square Inc (NYSE: SQ) shareholders had voted in favour of a major condition of the upcoming takeover.

The payment provider’s investors voted to issue new stock (and underlying CHESS depository interests) for the all-scrip transaction.

Afterpay’s stock gained 2.3% on the back of the news but fell 5.5% the following day.

The BNPL company also set the date on which its own shareholders were expected to vote on the merger.

Originally, investors were to go to the polls on 6 December. However, that’s been pushed back to 14 December due to a delay by the Bank of Spain.

The company also achieved several non-price sensitive milestones in November.

It launched its new app, Money by Afterpay, which operates like a bank. The offering allows users to access a debit card, digital wallet, and open up to 15 savings accounts.

The BNPL company also broke into the hospitality sector in November, partnering with Australian Venue Co to launch its service in 160 pubs, restaurants, and venues.

Finally, Afterpay’s suitor’s performance might have weighed on its own shares last month.

The share price of Square – soon to be dubbed Block – tumbled 18.14% over the course of November. It ended the month trading at US$208.33.

As the seemingly impending takeover deal is all-scrip, the Afterpay share price tends to be dictated by that of Square.

While November wasn’t a great month for the BNPL giant, it still landed among the top performing BNPL shares of the month.

The post Why did the Afterpay (ASX:APT) share price go backwards in November? appeared first on The Motley Fool Australia.

More reading

• Why did ASX BNPL shares get hammered today?
• Afterpay (ASX:APT) share price in focus as Square vote confirmed for next week
• These were the worst performing ASX 200 shares last week
• Why Afterpay, Liontown, Northern Star, and Xero shares are falling
• ASX 200 (ASX:XJO) midday update: Afterpay sinks, Woolworths bids for API

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. owns shares of and has recommended AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. 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 Woodside Petroleum Limited (ASX: WPL) share price had a disappointing run in the first few days of December.

Since the beginning of the month, the energy producer’s shares have been trading flat. Except for yesterday when, following the upbeat sentiment of the day, the Woodside share price rose 1.95% to $21.94.

In contrast, the S&P/ASX 200 Energy Index (ASX: XEJ) climbed 3.56% over the same timeframe.

Let’s take a closer look at what may have caused Woodside shares to struggle until now.

What’s happened to Woodside shares?

A number of events have led Woodside shares to falter in recent times.

First and foremost, the Omicron coronavirus variant caused widespread fear that the global economy would be halted again. Travel restrictions to southern Africa and reports that the virus had spread to Europe and Asia weighed on investor confidence.

However, as more news comes to light, it appears the Omicron virus is not as severe as previously thought. The symptoms are said to be mild as compared with the more deadly Delta virus. This could lead to countries reopening their borders and recommencing the global recovery.

In addition, the price of oil had slumped for six weeks in a row across both benchmarks. This relates to the West Texas Intermediate (WTI) and more expensive alternative, Brent Crude.

Although, renewed optimism from the Organisation of the Petroleum Exporting Countries (OPEC) has led it to increase oil supply. The intergovernmental organisation will expand monthly supply by 400,000 barrels per day from January.

Since 1 December, the WTI has surged from trading around US$65.57 per barrel to now US$72.32 per barrel. This represents an increase of about 10.2% over the past few days.

Lastly, Woodside has been busy fighting a legal challenge against the Conservation Council of Western Australia (CCWA).

The $16.5 billion Western Australian Pluto LNG project remains at stake given the carbon footprint it will produce when online. While it’s still up in the air, for now, investors have been paying close attention to the ongoing developments.

Woodside share price summary

The Woodside share price is down 5% over the last 12 months, and is 2.8% lower year to date. The company’s shares took a dive to $14.93 when COVID-19 put the global economy at a standstill. Since then, its shares have traded sideways arounds the low $20 mark.

Woodside commands a market capitalisation of roughly $21.27 billion, with 969.63 million shares on its registry.

The post Why has the Woodside (ASX:WPL) share price had such a slow start to December? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Why did the Woodside (ASX:WPL) share price go backward in November?
• 5 things to watch on the ASX 200 on Tuesday
• Own Woodside (ASX:WPL) shares? Why this expert is watching LNG demand in Asia
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Aaron Teboneras owns shares of Woodside Petroleum Ltd. 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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If you’re wanting some exposure to the resources sector, then the Rio Tinto Limited (ASX: RIO) share price could be one to consider.

That’s the view of the team at Goldman Sachs, which has just reiterated its buy rating.

What does the broker think about the Rio Tinto share price?

According to a note out of the investment bank this morning, its analysts have retained their buy rating and $121.00 price target on the mining giant’s shares.

Based on the current Rio Tinto share price of $94.65, this implies potential upside of 28% for investors over the next 12 months.

But it gets better! Goldman also expects an US$8.10 per share fully franked dividend to be paid to shareholders in FY 2022. This equates to a ~12% yield at current levels and exchange rates.

What did Goldman say?

Goldman recently attended a briefing with Rio Tinto’s Chief Executive of Aluminium, Ivan Vella.

The note reveals that the broker left the briefing feeling just as bullish on the company’s aluminium operations as before.

It commented: “RIO continues to see a favourable outlook for the Aluminium market. As outlined at its recent Capital Markets Day (CMD), Rio expects Al demand growth of 3.3%/yr from 2020-2030 (vs. GSe c. 3%), and on supply, Rio expects 5.5% growth in scrap and 2.3% growth in primary production, with growing differentiation in production costs between hydro and coal powered smelters, with coal-powered smelter cash costs doubling to 2030 under a US$100/t carbon price, with nuclear power for smelting viewed as expensive.”

Why does the broker like Rio Tinto?

Goldman’s buy rating on the Rio Tinto share price is predicated on four key factors.

These are its valuation (0.82x NAV), strong free cash flow and dividend yield, its return to production growth in FY 2022, and its compelling low emission aluminium exposure.

In respect to the latter, the broker said: “In addition to copper production growth, Rio has one of the highest margin, lowest carbon emission aluminium businesses in the world, with over 2.2Mt of Ali production powered by hydro, and we think ELYSIS inert anode technology could be worth billions of $. Aluminium will contribute 20% of RIO’s group EBITDA in 2022 on our estimates.”

The post Why the Rio Tinto (ASX:RIO) share price could be a bargain buy appeared first on The Motley Fool Australia.

More reading

• Rio Tinto (ASX:RIO) and Fortescue (ASX:FMG) share prices hit by broker downgrade
• Rio Tinto (ASX:RIO) share price sinks amid Serbian protests, Novak Djokovic weighs in
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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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The A2 Milk Company Ltd (ASX: A2M) share price is having a year to forget.

Since the start of 2021, the embattled infant formula company’s shares are down a disappointing 52%.

Is the A2 Milk share price weakness a buying opportunity?

According to a note out of Bell Potter, its analysts remain positive on the A2 Milk share price.

This morning the broker retained its buy rating and $7.70 price target on the company’s shares.

Based on the current A2 Milk share price of $5.61, this implies potential upside of 37% over the next 12 months.

What did the broker say?

Bell Potter has been looking at industry and export data and remains positive.

The broker highlights that Australia-China exports, which are a daigou proxy, were up 8% in October. And while it notes that Christchurch exports to China were down 33% year on year in October, they remain up 10% year to date over the same period last year.

Commenting on the latter, its analysts said: “Based on the four month lead time in shipments to revenues, early indicators of 2H22e would imply activity ~7% higher than 1H22 levels.”

Finally, Bell Potter notes that overall China infant formula imports continue to demonstrate double digit year on year declines, with volumes falling 21% year on year in September. However, it feels that volumes may have formed a bottom, and is encouraged by a noticeable spike in export to Hong Kong (CBEC). The broker feels this is “notable and coincides with a similar notable uptick in volumes moving into China from Hong Kong.”

Remaining buy-rated

In light of the above, Bell Potter is holding firm with its buy rating on the A2 Milk share price.

The broker concluded: “There is no change to our Buy rating. We see the scope for EPS to double by FY26e, if A2M can execute on the China offline expansion strategy, while recovering 50% of the lost sales (from FY20-21) in English label IMF. Exiting the loss making US assets or navigating a turnaround at the MVM asset would likely accelerate this turnaround. We do not see the current share price as reflecting this potential.”

The post This broker thinks the A2 Milk (ASX:A2M) share price is heading to $7.70 appeared first on The Motley Fool Australia.

More reading

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• Down 50% in 2021, is the A2 Milk share price a cheap buy?
• Top brokers name 3 ASX shares to buy next week
• Are A2 Milk (ASX:A2M) and this beaten down share bargain buys?
• A2 Milk (ASX:A2M) share price dips on news of a second class action

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 A2 Milk. 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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