From time to time, the investing greats offer up their perspectives on what is happening in the share market. Considering the vast wealth of knowledge amassed over the years, investors will often pay close attention to what is said.

The latest news sending a jolt of nervousness through the market is the arising Omicron virus. This new COVID-19 variant has prompted governments to consider life with a possibly more contagious virus. In addition, fears of Omicron potentially being more resistant to current vaccines made the share market shudder.

On the day Omicron was designated as a ‘variant of concern’ by the World Health Organisation (26 November 2021), the S&P/ASX 200 Index (ASX: XJO) dropped 1.73%. However, Pershing Square Capital CEO and billionaire investor, Bill Ackman, is taking a contrarian view.

It might be better for the share market

In a tweet by the American hedge fund manager on Monday, Bill Ackman shared his thoughts on early data for Omicron. It is worth noting, the World Health Organisation is still unsure on whether the new variant is more transmissible or more severe.

However, some reports have indicated that Omicron appears to be spreading more rapidly in South Africa. Because of this, there is speculation over whether the new emerging variant could overtake Delta in the dominance of COVID-19 cases.

Ackman touched on this in his tweet, setting up his thoughts on how Omicron might influence the share market. While investors have mostly reacted with selling pressure since the coverage of the new variant, Ackman is open to a different idea.

If Omicron is less severe but more transmissible, then the outcome might be positive for markets. Although, it is still early days for understanding the details of the new virus.

A thought. While it is too early to have definitive data, early reported data suggest that the Omicron virus causes ‘mild to moderate’ symptoms (less severity) and is more transmissible. If this turns out to be true, this is bullish not bearish for markets.

— Bill Ackman (@BillAckman) November 29, 2021

https://platform.twitter.com/widgets.js

For Australia, five Omicron cases have now been confirmed. Though, the government is taking a cautious approach rather than jumping the gun to go back into lockdowns. Currently, 87% of Australians over the age of 16 are now fully vaccinated.

Damage report

Over the last 5 days, some share market sectors have been battered and bruised worse than others. Fears of the unknown associated with Omicron has led to investors taking some risk off the table.

The worst impacted sectors include energy and financials, falling 7% and 4.2% respectively in the past 5 days. A possibility of reduced demand for oil and tighter budgets could be to blame. Meanwhile, materials and tech have managed to move higher during the uncertainty.

The post Why this billionaire investor thinks Omicron could be bullish for the share market appeared first on The Motley Fool Australia.

More reading

• GUD (ASX:GUD) share price plunges 6% following cap raise
• The Magellan (ASX:MFG) share price dropped in November 2021. Here’s what happened
• Own IAG (ASX: IAG) shares? Here’s why the company is facing a shareholder class action
• ASX 200 (ASX:XJO) midday update: ANZ hit with class action, GUD sinks
• Firefinch (ASX:FFX) share price leaps 5% on US$39 million payday

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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The Magellan Financial Group Ltd (ASX: MFG) share price saw a decline in November 2021.

Magellan shares fell around 4% as the business continues to drift lower.

Since the start of FY22 (being July 2021), the Magellan share price has actually fallen by around 40%.

What’s happening to the Magellan share price?

Funds management businesses share prices sometimes follow the movement of the broader share market.

For example, today Magellan shares are down around 2% amid more comments from the US Federal Reserve. The Federal Reserve Chair Jerome Powell is not going to describe the current elevated inflation situation as “transitory” any more. With that in mind, the US Fed is going to slow down its purchases of assets quicker. Asset buying can be supportive of asset markets, like shares.

Investors are also coming to terms with the thought that vaccines may not be quite as effective against the new Omicron COVID-19 variant.

But that’s what is happening right now. What about November and the last few months?

Funds under management (FUM) and performance difficulties

Investors, analysts and brokers pay close attention to Magellan’s FUM movements. Investment fund performance also dictates whether the manager can earn performance fees.

In its update regarding the quarter to 30 September 2021, Magellan said it experienced net outflows of $1.53 billion, which was approximately 1.3% of average FUM over the quarter. This comprised net retail outflows of $617 million and net institutional outflows of $910 million. FUM movements can have an impact on the Magellan share price.

In regards to the net institutional outflows, $1 billion of outflows were the result of three clients rebalancing their portfolios across global equities ($410 million), infrastructure equities ($410 million) and Australian equities ($180 million). But, all three clients were retained, each with mandates of more than $2 billion with Magellan.

No institutional mandates were lost during that quarter. The global sustainable strategy secured its first mandates during the quarter.

In the latest monthly FUM update for October 2021, FUM increased $1.5 billion to $114.8 billion.

Some of Magellan’s main funds has been underperforming its benchmark. For example, the Magellan Global Fund (Open Class) (ASX: MGOC) had underperformed the MSCI World Net Total Return Index (AUD) by 22.8% over the prior year at 31 October 2021.

Analyst thoughts on the Magellan share price

Brokers at Macquarie Group Ltd (ASX: MQG) currently rate Magellan as a buy, with a price target of $38.

The broker acknowledged that the fund manager now wasn’t as highly valued by investors with its recent underperformance and said net flows may not improve over the rest of this financial year.

However, Macquarie thinks that Magellan shares now look attractive and offer a nice prospective dividend yield.

The Magellan share price is priced at 12x FY23’s estimated earnings with an estimated partially franked dividend yield of 7.5% for that financial year.

The post The Magellan (ASX:MFG) share price dropped in November 2021. Here’s what happened appeared first on The Motley Fool Australia.

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• Top brokers name 3 ASX shares to sell today

Motley Fool contributor Tristan Harrison owns shares of Magellan Financial Group. 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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Owners of Insurance Australia Group Ltd (ASX: IAG) shares might be interested to learn the company could be about to face a shareholder class action.

The class action refers to the company’s recent involvement in, and handling of, business interruption claims.

At the time of writing, the IAG share price is trading at $4.42, 0.23% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is down 0.3%, while the All Ordinaries Index (ASX: XAO) has slipped 0.37% .

Let’s take a closer look at the trouble that might soon find IAG.

Will IAG be hit with a class action this month?

Quinn Emanuel, a law firm specialising in class action, has announced plans to file a suit against IAG in the Supreme Court of Victoria before the year’s end.

The matter for which the class action refers to dates back to 2020, when COVID-19 first hit Australia.

As a result of the pandemic, businesses sought to claim their interruption insurance benefits. However, they were told their policies didn’t cover quarantinable diseases.

Some policyholders soon found the company’s business interruption policies referred to a redundant Act of Parliament to avoid paying out pandemic-related interruptions.

The policies referred to the Quarantine Act, which was repealed in 2016 and replaced by the Biosecurity Act.

The battle between insurers and insured was eventually brought in front of the New South Wales Court of Appeals. It’s worth noting that IAG wasn’t the only insurance provider to be involved in the initial court case.

This is where Quinn Emanuel’s suit begins.

The firm’s claim states IAG failed to make the market and owners of its shares aware of the likelihood the New South Wales Court of Appeal would find in favour of policyholders and how such a ruling would affect the company.

It plans to argue the company breached its continuous disclosure obligations and engaged in misleading and deceptive conduct.

Quinn Emanuel also notes the company had 5 years to amend its policies to include new legislation but failed to do so.

When the New South Wales Court of Appeal ultimately found in favour of policyholders, IAG was forced to put aside $865 million to pay the now-viable business interruption claims. It underwent a $750 million capital raise to cover the costs.

The law firm is claiming the IAG share price “fell materially” following the judgement and subsequent capital raise.

An IAG spokesperson said the company was aware of the firm’s intent to file a class action against it and it hasn’t been served with any legal proceedings yet.

IAG share price snapshot

The IAG share price has had a rough trot lately.

Right now, the company’s stock is trading 18% lower than it was before it announced the finding’s impact.

It’s also 6% lower than it was at the start of 2021.

The post Own IAG (ASX: IAG) shares? Here’s why the company is facing a shareholder class action appeared first on The Motley Fool Australia.

More reading

• With the IAG (ASX:IAG) share price trading around decade-lows, is now the time to buy?
• November hasn’t been a great month so far for the IAG (ASX:IAG) share price
• Is the IAG (ASX:IAG) share price set to outperform? Here’s what Motley Fool Australia analyst Drew Flowers says
• Why is the IAG (ASX:IAG) share price rising for the first time in 7 days?
• Could the IAG (ASX:IAG) share price be heading even lower?

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 owns shares of 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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At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) is on course to start the month with a decline. The benchmark index is currently down 1% to 7,185 points.

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

GUD shares sink

The GUD Holdings Limited (ASX: GUD) share price has returned from its trading halt and is sinking. This morning the products company announced the completion of the institutional component of its equity raising. GUD raised $405 million at a 13% discount of $12.03. These funds will be used to acquire Autopacific Group for approximately $744.6 million.

ANZ hit with credit card class action

The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price is trading lower after acknowledging that class action proceedings have been filed against it by Phi Finney McDonald in the Federal Court of Australia. The bank understands that the class action covers certain credit card holders in the period from 1 July 2010 to 1 January 2019. Phi Finney McDonald is believed to be alleging that ANZ’s credit card contracts were unfair, and contravened the Australian Securities and Investments Commission Act.

Codan announces acquisition

The Codan Limited (ASX: CDA) share price is falling on Wednesday despite announcing a new acquisition. The technology company has acquired UK-based Broadcast Wireless Systems (BWS) for up to $8.5 million. This comprises an upfront payment of $3.7 million and an additional payment of up to $4.8 million if certain earn-out targets are achieved over three years. BWS’ technology portfolio consists primarily of wireless video camera links and a newly developed range of high-quality video broadcast products.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Wednesday has been the Graincorp Ltd (ASX: GNC) share price with a 2% gain. Although Bell Potter downgraded its shares today, a number of other brokers have chimed in with bullish views. The worst performer has been the Pro Medicus Limited (ASX: PME) share price with a 6% decline on no news.

The post ASX 200 (ASX:XJO) midday update: ANZ hit with class action, GUD sinks appeared first on The Motley Fool Australia.

More reading

• ANZ (ASX:ANZ) share price lower amid credit card class action
• What’s JP Morgan saying about ASX 200 bank shares?
• The Starpharma (ASX: SPL) share price surges on Vietnam launch
• Codan (ASX:CDA) share price falls on acquisition news
• These were the 5 worst performing ASX 200 shares in November

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

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Shares in gold and lithium exploration company Firefinch Ltd (ASX: FFX) are in the green on Wednesday and currently trading 4.26% higher at 73.5 cents.

Investors are responding positively to a note from Firefinch this morning, where the company gave an update on the Leo Lithium Limited and the Goulamina Lithium Project.

What did Firefinch announce?

For a quick backdrop, Firefinch and Jiangxi Ganfeng Lithium Co. Ltd. have formed an incorporated Joint Venture
(JV) to develop Goulamina.

Goulamina is one of the world’s largest undeveloped high quality spodumene deposits, Firefinch says. Together with Ganfeng, the company will bring the project into production.

In the 50/50 JV, Ganfeng is set to contribute US$194 million in development funding, comprising of US$130 million in equity funding and US$40-64 million in debt funding.

Although it has been formed, the JV is still subject to various conditions. On satisfaction of this criteria, Ganfeng will contribute the US$130 million in cash towards the JV.

Firefinch announced today that the first US$39 million tranche of equity has been deposited by Ganfeng into an escrow account, following receipt of Chinese regulatory approvals.

The company will then restructure its corporate structure in order to separate its lithium activities from its gold activities. Afterwards, the Project Exploitation Licence will be transferred to the JV company, and the cash will be released from escrow.

Investors can expect the transfer to be complete in early 2022, according to the announcement.

Firefinch previously announced it is currently completing a Definitive Feasibility Study (DFS) update on the site. This will consider a “Stage 2 expansion involving a 75% increase in production capacity from 2.3 million to 4 million tonnes per annum”.

This expansion would result in “spodumene concentrate production increasing from 450,000 tonnes per annum in line with the planned throughput upgrade, placing Goulamina among the largest producers globally”.

Once the updated DFS is complete, both parties will make a final investment decision on the Goulamina site. According to the company, this remains on track for completion in late 2021.

Firefinch share price snapshot

In the past 12 months, the Firefinch share price has soared over 407% after rallying a further 308% this year to date.

It has climbed almost 23% in the past month and is now up more than 7% over the past week of trading. Each of these results is well ahead of the S&P/ASX 200 Index (ASX: XJO)’s return of around 10% in that time.

The post Firefinch (ASX:FFX) share price leaps 5% on US$39 million payday appeared first on The Motley Fool Australia.

More reading

• Here’s why the Firefinch (ASX:FFX) share price is combusting today

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 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 Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price is trading lower on Wednesday.

At the time of writing, the banking giant’s shares are down 0.9% to $26.46.

This makes it the worst performer among the big four this morning.

What’s happening?

This morning ANZ acknowledged that class action proceedings have been filed by Phi Finney McDonald in the Federal Court of Australia against it.

According to the release, the bank understands that the class action covers certain credit card holders in the period from 1 July 2010 to 1 January 2019.

Furthermore, the class action is believed to allege that ANZ’s credit card contracts were unfair, and contravened the Australian Securities and Investments Commission Act.

ANZ has stated that it will review the claim and intends to provide any updates as and when required.

No details on the amount of damages being sought has been revealed.

Is the ANZ share price in the buy zone?

One leading broker that sees a lot of value in the ANZ share price at the current level is Goldman Sachs.

Its analysts currently have a buy rating and $31.82 price target on its shares. This implies potential upside of 20% for investors over the next 12 months.

Goldman commented: “We reiterate our Buy on ANZ given: ANZ appears to be on track to reach its FY23 cost target of A$8bn, which should alleviate some of its revenue pressures; management notes capacity to drive better housing volumes has been expanded, and volume growth is evident across other parts of the balance sheet; its Markets income has exhibited a positive divergence in trend versus peers, which ANZ attributes to a more diversified business that it expects can be sustained; n the stock is trading more than one standard deviation cheap versus the sector on PPOP multiples (27% discount vs. 11% 15-year average discount).”

The ANZ share price is up 15% in 2021.

The post ANZ (ASX:ANZ) share price lower amid credit card class action appeared first on The Motley Fool Australia.

More reading

• What’s JP Morgan saying about ASX 200 bank shares?
• Here’s why some ASX 200 bank shares are having a terrific Tuesday
• ANZ (ASX:ANZ) shares rated a buy amid $125 trillion decarbonisation opportunity
• 5 things to watch on the ASX 200 on Monday
• ANZ (ASX:ANZ) share price shrugs off ASIC lawsuit

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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ASX 200 bank shares have been a mixed bag these past few months, with shareholders having to stomach wide-ranging volatility in that time.

For instance, the S&P/ASX 200 Financials Index (XFJ) has slipped more than 8% in the past month, indicating weakness in the broad sector.

This activity has analysts at leading investment firms chattering and updating their modelling to clients after the FY21 reporting season.

Investment banking giant JP Morgan has weighed in. It gave its opinion on the outlook for ASX 200 bank shares in a recent note to clients. Let’s take a closer look.

What’s JP Morgan’s stance on Aussie banks?

The broker notes that the FY21 major bank reporting season was “very volatile”. It also notes a large divide on net interest margin (NIM) performance between banks with retail exposure vs business exposure.

It reckons the NIM pressures were driven by mortgage competition and then compounded by higher flows into fixed-rate products. JP Morgan expects these sector trends to persist in the near-term before easing in 2023.

The firm also identifies 10 key issues that may impact ASX 200 bank shares after the reporting season, with a focus on NIM performance, expense ratios, and the outlook in the short term.

Some of these factors include a “minus 7% pre-provision profit growth on softer markets result and higher expenses” and “expense targets requiring a large drop in investment spend,” for example.

Overall, JP Morgan says the sector needs the RBA to lift rates in order for NIMs to stabilise, and that “investors need to be selective on their sector exposures in [its] view.”

What about individual ASX 200 bank shares?

JP Morgan also ranks the major ASX 200 banks shares from 1 to 7 based on several criterion. The firm rates National Australia Bank Ltd (ASX: NAB) as its top pick, with an overweight rating and valuing the bank at $31.40 per share.

Following this comes Macquarie Group Ltd (ASX: MQG). The broker acknowledges its share price has had an extended run, but likes its earnings outlook and is also overweight on its shares.

Filling out the middle of JP Morgan’s ranking are Bank of Queensland Limited (ASX: BOQ), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and Westpac Banking Corp (ASX: WBC). The broker values ANZ and Westpac at $30 and $24.30 per share, respectively.

Where the firm cautions investors is in Bendigo and Adelaide Bank Ltd (ASX: BEN) and Commonwealth Bank of Australia (ASX: CBA). It is neutral and underweight on the shares respectively, noting upcoming risks to earnings for each bank and CBA’s “very expensive valuation”.

Curiously, out of its ASX 200 bank shares coverage, JP Morgan anticipates an upside potential of 26% for Bank of Queensland, assigning a $10 price target in doing so.

That represents the highest margin of safety among the group in the broker’s eyes. It retains an overweight rating on the shares and forecasts $507 million in cash earnings for FY22 for the bank.

Out of its coverage on Australian financials, the firm sees upside potential in all names except CBA, indicating its relatively bullish stance on the sector.

The post What’s JP Morgan saying about ASX 200 bank shares? appeared first on The Motley Fool Australia.

More reading

• ANZ (ASX:ANZ) share price lower amid credit card class action
• These were the 5 worst performing ASX 200 shares in November
• Here’s why some ASX 200 bank shares are having a terrific Tuesday
• Leading brokers name 3 ASX shares to sell today
• ASX 200 (ASX:XJO) midday update: AMP shares jump, Collins Foods impresses

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 shares of and has recommended Bendigo and Adelaide Bank Limited. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Starpharma Holdings Limited (ASX: SPL) share price is racing ahead this morning after confirming its antiviral nasal spray will be launched in Vietnam this week.

The biotech registered its VIRALEZE spray for sale in the Asian country. It recently signed initial distribution agreements to supply 100,000 units and said it is finalising a contract for ongoing supply of the product.

The Starpharma share price jumped 6.5% to $1.16 at the time of writing when the  S&P/ASX 200 Index (Index:^AXJO) dipped 0.3%.

Vietnam boost for the Starpharma share price

The spray is a broad-spectrum antiviral nasal spray that contains Starpharma’s SPL7013 innovation. Tests have shown that SPL7013 caused the inactivation of more than 99.9% of the Delta COVID-19 mutation.

The initial distribution agreements were signed with Healthco Australia  Pty  Ltd and Vietnam-based Truong Bao Land International Investment  Company  Limited  (TBL).  TBL will also distribute VIRALEZE via its local medical distribution networks.

Starpharma share price breathing easier

This development couldn’t have come at a better time for embattled shareholders. The Starpharma share price has slumped by more than 20% this calendar year. Even with today’s rally, it is still trading close to an 18-month low.

However, the emergence of the Omicron mutation could put COVID-linked ASX shares back into investors’ good books.

From Delta to Omicron

Starpharma trying to capitalise on this by hinting that VIRALEZE could lower the risk of mutations too.

It noted that the mechanism of action meant that mutations of the spike protein that make SARS-CoV-2 more infectious appear to make the virus more susceptible to trapping and blocking by SPL7013.

“We are excited to see the product launched in Vietnam this week,” said Jackie  Fairley,  Starpharma’s chief executive.

“This registration, the first in South East Asia, builds upon existing submissions as well as registrations already achieved in Europe, India and New Zealand, and we are expediting further regulatory submissions in multiple regions and countries.”

Other ASX shares of note

The Starpharma share price isn’t the only one in the sector that is making gains. The IDT Australia Limited (ASX: IDT) share price gained 0.8% to 61.5 cents and the CSL Limited (ASX: CSL) share price added 0.9% to $309.53.

IDT is the first in Australia to develop a manufacturing capability for mRNA vaccines.

The IDT share price jumped by nearly three-fold in 2021 while the CSL share price gained a little over 8%.

The post The Starpharma (ASX: SPL) share price surges on Vietnam launch appeared first on The Motley Fool Australia.

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• These were the 5 best performing ASX 200 shares in November
• 2 ASX dividend shares that could provide rock-solid income
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• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Brendon Lau owns shares of CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. and Starpharma Holdings Limited. The Motley Fool Australia has recommended Starpharma 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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The Codan Ltd (ASX: CDA) share price is down 2.46% in morning trade, currently at $9.50 per share.

The S&P/ASX 200 Index (ASX: XJO) is struggling as well, down 0.6%.

Below we take a look at the acquisition announcement from the ASX communications and tech share.

What acquisition was announced?

The Codan share price is sliding after the company reported that its subsidiary, Domo Tactical Communications (DTC), has acquired 100% of the shares in Broadcast Wireless Systems Limited (BWS) from its founders.

The United Kingdom-based BWS’ technology portfolio encompasses wireless video camera links and video broadcast products.

Commenting on the acquisition, Paul Sangster, president of Domo Tactical Communications, said:

The quest for improved production quality, cost efficiencies and the challenges caused by the pandemic are fuelling the transition of broadcasters to adopt remote production capabilities and the combined offering of DTC and BWS will enable this.

DTC’s customers will now be offered a low-latency, high performance solution which has been validated in critical and challenging operations such as the opening ceremony for the Olympic Games in Japan and some of the world’s most prestigious and demanding motor racing events.

Codan reported it will fund the acquisition via its consisting debt facility. It will pay $3.7 million upfront and potentially up to $4.8 million more “if certain earn-out targets” are reached over 3 years.

The company said that the total assets it’s acquiring are approximately equal to the purchase price, and it expects no change to Codan’s shareholder equity.

Codan also expects the acquisition to immediately be earnings-per-share accretive. For the financial year ending 30 June, BWS delivered earnings before interest and taxes (EBIT) of $600,000. And the company notes its financial performance during that year was hampered by the global pandemic.

Codan share price snapshot

The Codan share price is down 15% in 2021. That compares to a year-to-date gain of 10% posted by the ASX 200.

Over the past month Codan, shares have dropped 5%.

The post Codan (ASX:CDA) share price falls on acquisition news appeared first on The Motley Fool Australia.

More reading

• These 2 ASX shares have been named as buys by experts
• Codan (ASX:CDA) share price edges higher on CEO replacement

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.

There’s a new cast list of electric vehicle (EV) contenders gunning for a slice of the auto industry pie. Among them are Rivian Automotive (NASDAQ: RIVN), Lucid Group (NASDAQ: LCID), and Nio (NYSE: NIO).

Since its initial public offering (IPO) on Nov. 10, share prices of Rivian have zoomed as high as $179.47 and as low as $95.20. In that same time frame, shares of Lucid blasted past $57 and then fell below the $40 threshold. 

With the dust somewhat settled, industry watchers now find Rivian, Lucid, and Nio all worth over $65 billion. Let’s find out which electric car company has the best chance to become the next Tesla (NASDAQ: TSLA).

The technological edge

Lucid began deliveries of the long-range and performance versions of its Air Dream Edition luxury sedan in late October. But at a price tag of $169,000, it’s hardly a viable option for most people.

However, Lucid’s 17,000 reservations are scattered throughout the four trims of the Air, which is a good sign that there’s demand for both Lucid’s expensive and more “affordable” options. Lucid plans to use the $4.4 billion in cash it got from its merger with SPAC Churchill Capital IV in July to fund its 2022 operations — which mainly consist of producing and delivering vehicles, expanding production capacity to 50,000 units per year, rolling out all four versions of the Lucid Air, and preparing to debut the Lucid Gravity SUV. 

Aside from a management team stacked with past experience at Tesla, Apple, and other major tech and financial firms, what Lucid has going for it more than anything else is some incredible battery technology that’s built completely in-house. The Lucid Air was named the 2022 MotorTrend Car of the Year largely due to its over-500-mile range and over-1,100 horsepower. The efficiency of its battery pack should translate well to the lower-priced trims of the Air, as well as future models.

Carving out its own niche

Lucid may be crowned the king of range, but Rivian is doing everything it can to limit its competition and tap into what it thinks will be a ripe subsector of the EV market. Roughly a third of the company is owned by Amazon (20%) and Ford Motor Company (12%).

Like Lucid, Rivian’s specs are impressive. The R1T has an estimated range of 314 miles and a towing capacity of 11,000 pounds. For comparison, the Ford F-150 Lightning has an estimated range of 230 miles (300 miles for the extended range version) and a towing capacity of around 10,000 pounds. But Rivian is hoping to distance itself from the competition as much as possible by tapping into the outdoor community. Rivian’s brand image is like if REI and Jeep got together and made electric trucks and SUVs.

Flush with $12 billion in cash, Rivian has the makings of greatness. However, it is completely unproven as a public company. There’s still a long laundry list of unchecked boxes that it needs to fill — the first being sustaining mass customer deliveries. Until management proves it can efficiently allocate the capital it’s been given, there are simply too many question marks facing Rivian at this time.

The value of volume

Before Lucid and Rivian hit the scene, it was Chinese electric car maker Nio that was getting the bulk of “FOMO” (fear of missing out) attention from EV investors. Unlike Lucid and Rivian, which have yet to achieve sizable deliveries, Nio delivered 10,628 vehicles in September alone, and has now delivered over 142,000 vehicles in total. By comparison, Lucid plans on delivering just 20,000 vehicles in 2022, and Rivian has about 55,000 reservations for its R1T truck and R1S SUV and has an annual production capacity of 150,000 units at its plant in Illinois. 

Nio has hit some supply chain snags, but the company is facing a lot of optimism on the way to Nio Day 2021 in mid-December. With a three-year advantage over Lucid and Rivian, Nio is a good bet for investors that value experience over potential.

The winner

Tesla’s success stems from its technological edge. For that reason alone, the company that has the best chance to become the next Tesla could be Lucid.

What Lucid has done better than Nio or Rivian is stuck to its schedule. The company hit its production and delivery targets. Until it breaks that trend, there’s reason to believe it can hit its 2022 goals, and beyond that, scale production while sustaining an over-20% gross margin (similar to Tesla). 

That being said, Lucid, Rivian, and Nio are several years away from even being considered the next Tesla. The best approach for most investors is probably to buy a basket of multiple EV stocks. It’s a good way to protect yourself from steep losses in case one company fails, but also give yourself room for an investment to exponentially compound.

Another helpful practice is to follow the story as these EV newcomers mature. As with all young industries, new competition and developments could shift the dynamics on a dime. Staying up to date on industry happenings is the best way to ensure you’re following the companies that have the best chance of becoming the next Tesla and not caught holdings shares of a company that’s on a downward spiral. 

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

The post Could Rivian, Lucid, or Nio become the next Tesla? appeared first on The Motley Fool Australia.

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Daniel Foelber owns shares of Lucid Group, Inc. and has the following options: short December 2021 $20 calls on Lucid Group, Inc., short February 2022 $20 calls on Lucid Group, Inc., and short November 2021 $22 calls on Lucid Group, Inc. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Amazon and Apple. 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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