The Vulcan Energy Resources Ltd (ASX: VUL) share price was one of the best performers on the Australian share market in 2021.

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

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

Why did the Vulcan share price almost quadruple in 2021?

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

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

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

Where next for its shares?

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

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

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

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

More reading

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

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

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

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

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

What could be ahead for ASX BNPL shares?

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

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

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

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

On the flip side

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

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

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

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

More reading

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

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

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

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

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

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

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

Could the Fortescue share price have a 145% upside?

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

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

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

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

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

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

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

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

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

More reading

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

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

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

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

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

What did IAG announce?

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

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

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

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

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

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

IAG share price snapshot

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

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

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

More reading

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

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

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The South32 Ltd (ASX: S32) share price has been a positive performer on Thursday.

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

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

Why is the South32 share price rising?

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

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

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

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

Renewable energy shift

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

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

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

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

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

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

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

More reading

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

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

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

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

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

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

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

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

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

What can investors expect for Bendigo Bank in 2022?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

More reading

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

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

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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.

Ethereum (CRYPTO: ETH), the second-largest cryptocurrency, sports a $445 billion market cap after a five-bagger performance in 2021 that made even Bitcoin (CRYPTO: BTC) look sleepy.

^SPX data by YCharts

However, this blockchain network also faces a couple of technical challenges. Ethereum is known as a powerful decentralized computing platform, but its transactions are also seen as slow and costly. Therefore, several rival cryptocurrencies are challenging Ethereum’s market position by offering some combination of faster processing and lower transaction fees.

Solana (CRYPTO: SOL), Cardano (CRYPTO: ADA), and Avalanche (CRYPTO: AVAX) are three of Ethereum’s strongest challengers. Their massive gains in 2021 left Ethereum eating buckets and buckets of dust.

Ethereum Price data by YCharts

Don’t sell your ether tokens just yet, though. As impressive as these Ethereum rivals may be, they don’t stand a chance to kill the old king in 2022 — or in the foreseeable future.

The king of smart contracts

The Ethereum blockchain can process approximately 20 transactions per second (TPS). The average transaction currently costs roughly 170 gwei, where 1 gwei equals one-billionth of an ether token. At today’s prices, that gas fee works out to $0.16 per Ethereum transaction. It takes about 5 minutes to receive the 20 confirmations required to complete that transaction, on average.

To compare and contrast Ethereum’s figures with the market’s largest digital currency, the median Bitcoin transaction currently costs 23,000 satoshis (billionths of a bitcoin), or $10.66. This trade only requires four network confirmations, but Bitcoin’s slower system results in delays as long as 40 minutes — unless you pay a higher fee to earn a faster processing schedule. The system can only settle roughly five transactions per second these days.

However, Bitcoin was never designed to churn through large numbers of transactions per second — this currency is meant to act like digital gold or cash. Security and stability are more important here than lightning-quick trade settlement.

Ethereum, on the other hand, was intended to provide immutable blockchain ledgers to a variety of decentralized applications (dApps). In this case, low fees and fast transactions make a big difference.

You should also know that both Ethereum and Bitcoin still use the energy-munching proof-of-work blockchain architecture. Millions of computers and specialized mining systems around the world are solving complex cryptography problems in order to settle transactions and earn tokens for the miners.

Meet the Ethereum alternatives

Each of the alternative smart contract blockchains has a unique set of attributes, though they all use a different blockchain system known as proof-of-stake. In this case, transactions are settled by consensus between proven holders of the cryptocurrency in question, resulting in lower energy consumption and a more scalable system. Here’s how this looks for various platforms:

• Cardano separates its transaction settlement functions from its computational layer, allowing the network to process hundreds of TPS. Transaction fees are comparable to Ethereum’s at $0.22 per average transaction. Finalizing each transfer requires 15 third-party confirmations, which currently takes about 10 minutes. The Cardano project is managed as a highly decentralized open-source system.
• Avalanche is optimized for low transaction fees and fast processing, hoping to attract many dApp developers. With three distinct blockchain networks at its service, Avalanche can churn through 6,500 transactions per second and the 20 transaction confirmations are typically collected in less than 1 minute. Transactions fees vary depending on what type of transaction you are executing on one of the Avalanche blockchain networks. The final cost tends to be roughly one-tenth of Ethereum’s fees for a similar transaction.
• Solana relies on proof-of-stake processing, paired with a unique layer called proof-of-history. This network records and settles transactions based on ultra-precise timestamps rather than constantly communicating with other validators. Together, Solana’s solution can process a mind-boggling 50,000 transactions per second and each transaction is completed in real time. Fees will rise as developers, traders, investors, and end users scale up their transaction volumes but currently run at a forgettably small $0.00025 per transaction.

But wait — things are changing!

Ethereum’s developer team isn’t sitting still while upstarts and alternative solutions rush in to steal their lunch. Through a series of upgrades to the underlying blockchain systems, the digital currency is transforming into Ethereum 2.0 before our eyes.

The Ethereum Foundation has already set up a proof-of-stake chain known as the Beacon Chain, which will merge with the current blockchain network later this year. The resulting hybrid should be able to process thousands of transactions per second while bringing costly Ethereum mining operations to a permanent halt. In 2023, the merged networks will add shard chains, spreading the processing load across 64 new blockchains.

The flawed Ethereum system you see today will hardly bear any resemblance to the upgraded and retooled Ethereum 2.0, apart from the fact that smart contracts designed to run on the old network will continue to work just fine on the new platform.

At that point, Ethereum will have erased most of the issues that Solana, Avalanche, and Cardano wanted to solve in the first place. Then, a cosmic game of ping-pong will ensue as the market leader and the usurpers take turns to develop game-changing system improvements.

Everyone’s a winner

None of the alternative smart contract networks stand any realistic chance of actually killing Ethereum — at least not in the next few years. Instead, we’re going to see healthy competition among projects with similar goals but different approaches, giving users and developers the opportunity to work with the best blockchain network for each end-market situation.

I’m not saying that Ethereum (or any of its rivals) will be around forever, but this particular cryptocurrency has a huge leg up on the competition in the form of early adoption and a massive market share right out of the starting gate. A smart cryptocurrency investor should build a diverse portfolio of promising coins and tokens, expecting a couple of misses alongside a few big wins in the long run. I own three of the four smart contract cryptocurrencies discussed above, and I’ll probably add the missing link, Avalanche, soon enough.

That’s no different from building a healthy stock portfolio for the long term. Investing is investing. The more you know, the better you’ll perform — and it’s OK to take a few risks along the way, as long as the potential upside is big enough. 

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

The post Can these 3 ‘Ethereum Killers’ actually kill Ethereum in 2022? appeared first on The Motley Fool Australia.

More reading

• Here’s what happened with the Ethereum price in 2021
• 3 big reasons crypto sceptics are WRONG
• Is Coinbase moving the goalposts on your taked Ethereum?
• Is Cardano a smart cryptocurrency to buy now?
• Australia’s first physical crypto gift cards are now on sale for Christmas

Anders Bylund owns Bitcoin, Cardano, Ethereum, and Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends 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.

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

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The Aristocrat Leisure Limited (ASX: ALL) share price is under pressure on Thursday.

In morning trade, the gaming technology company’s shares are down 3.5% to $43.66.

Why is the Aristocrat Leisure share price falling?

The weakness in the Aristocrat Leisure share price today has been driven by a couple of reasons.

One of course is a selloff on the tech-focused Nasdaq index overnight which is weighing heavily on the local tech sector today. So much so, the S&P ASX All Technology index is down 3.2% in early trade.

Also putting pressure on the Aristocrat Leisure share price was the release of an update on its proposed acquisition of Playtech after the market close on Wednesday.

Late last year, Aristocrat Leisure announced a deal to acquire London-listed leading global online gambling software and content supplier, Playtech, for an enterprise value of $5 billion.

Playtech has two key business segments: Business-to-Business gambling (B2B) and Business-to-Consumer gambling (B2C). The company’s B2B gambling operations include the design, development, and distribution of software and services to the online and land-based gambling industry.

Whereas the B2C gambling operations predominantly consists of Snaitech (Italy). It is a vertically integrated retail and online business leveraging Playtech’s proprietary technology and capabilities. Other B2C brands include HPYBET and SunBingo. HPYBET is Playtech’s retail sports betting B2C business, operating sports betting shops in Austria and Germany.

What’s the latest?

Playtech shareholders were due to vote on the takeover proposal at a meeting next week. However, this has now been pushed back until 2 February to allow time for rival JKO Play to make a firm competing offer.

Management notes that Aristocrat’s proposal remains the only firm offer that has been made for Playtech. It also highlights that it provides attractive value in cash and enhanced regulatory and financial certainty for Playtech shareholders.

Furthermore, Aristocrat notes that any other potential bidders have already had a substantial amount of time to make an alternative proposal for Playtech. Therefore, the decision to further delay the shareholder meeting only extends the period of uncertainty for all Playtech stakeholders.

One positive, though, is that proxy advisers continue to recommend shareholders vote in favour of Aristocrat’s proposal. It also advised that regulatory approvals process remains well on track, and that it is committed to completing the acquisition as quickly as possible.

The post Why the Aristocrat Leisure (ASX:ALL) share price is tumbling lower today appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Analysts name 3 ASX growth shares to buy right now
• What could the Playtech deal mean for Aristocrat (ASX:ALL) shares?
• 3 ASX 200 shares with major upside potential in 2022
• What’s impacting the Aristocrat (ASX:ALL) share price today?

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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There are a few S&P/ASX 200 Index (ASX: XJO) shares that are making a lot of revenue and profit from the high level of COVID-19 testing.

A few key providers are providing millions of tests, such as Sonic Healthcare Ltd (ASX: SHL) and Healius Ltd (ASX: HLS). The smaller, non-ASX 200 business Australian Clinical Labs Ltd (ASX: ACL) is also involved in testing.

How is testing benefiting the ASX 200 healthcare shares?

According to reporting by The Australian there has been a total of more than 55 million PCR tests done. The testing providers are now receiving a $85 million Medicare rebate for every test, which has gone up from $28.65 per test at the start of pandemic.

On 18 November 2021, Sonic disclosed that it had conducted 36 million COVID-19 PCR tests in total to date, though Sonic operates in several northern hemisphere countries like the USA, Germany, the UK and Switzerland.

Sonic also performs vaccinations. It had provided more than 1 million vaccinations when it announced a trading update in mid-November.  

Whilst rapid antigen tests are quickly becoming a key part of the testing system, it’s still thought that PCR testing will continue for the next couple of years at least.

Healius noted at its recent annual general meeting (AGM) (in October, before the Omicron surge) that it was doing more than 40,000 COVID tests per working day with commercial COVID testing performing “well” in industries like sports and film production. The ASX 200 share’s underlying net profit after tax almost tripled from $53.1 million to $148.4 million.

Healius said that it expected COVID PCR testing to be part of the health landscape for years.

How are investors seeing the situation?

The Australian reported that Citi is expecting more COVID testing in FY22 and FY23, as well as a continuation of testing going into FY24.

Investors have sent the share prices of the three companies mentioned much higher in recent times.

The Sonic Healthcare share price has risen 24% over the last six months and 39% over the last year at the time of writing.

Over the last six months the Healius share price has risen by 13% and it has increased by 36% in the past year.

The Australian Clinical Labs share price has surged 37% in just the last month and over the past six months it has soared 75%.

Are those ASX 200 shares still opportunities?

The broker Morgans has rated both Healius and Sonic Healthcare as buys with price targets that are approximately 10% higher than where they are now. It noted that both businesses are also making bolt-on acquisitions to boost earnings over the longer-term.

The post 2 ASX 200 shares benefitting from the surge in COVID tests appeared first on The Motley Fool Australia.

More reading

• 2 ASX dividend shares tipped as buys this month
• Are these 2 impressive ASX shares buys in January 2022?
• In the green: Here are the 5 best ASX healthcare shares of 2021
• 3 fantastic ASX shares to buy this month
• Why 4DS, Healius, Helloworld, and Humm shares are dropping today

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 recommended Australian Clinical Labs Limited and Sonic Healthcare 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 Latitude Group Holdings Ltd (ASX: LFS) share price is trading slightly higher on Thursday morning despite the tech selloff.

At the time of writing, the lending company’s shares are up a touch to $1.97.

Why is the Latitude share price not being sold off?

The Latitude share price has managed to avoid the tech selloff today after announcing an agreement to acquire the consumer business of Humm Group Ltd (ASX: HUM).

According to the release, Latitude will pay a total consideration of $335 million for the consumer business, which comprises Humm’s buy now pay later (BNPL), instalments and cards operations.

The release explains that the  $335 million consideration will be a mixture of cash and shares. Humm will receive $35 million in cash and 150 million Latitude shares valued at $2.00 each for the business.

Why acquire this business?

Latitude notes that at the end of June, Humm’s consumer business had approximately $1.8 billion of net receivables and $152 million of net tangible assets. The combination of the businesses would lead to more than $8 billion of receivables, over five million customers, and 70,000-plus merchants.

In addition, management highlights that it expects annualised combined synergies and cash earnings from the acquisition of Humm’s consumer business to exceed $100 million pre-tax in full year 2023, with $70 million of synergies including $50 million from duplicate costs and technology rationalisation.

In light of this, the transaction is expected to be double digit earnings per share accretive for Latitude assuming full run rate synergies.

Latitude’s Managing Director and Group CEO, Ahmed Fahour, commented: “Humm’s consumer business is highly accretive to Latitude’s shareholders. The proposed Transaction would enable us to accelerate the deployment of BNPL and instalment solutions for our customers and merchant partners in Australia/New Zealand and accelerate our growth in our international markets. It would also realise highly deliverable synergies which will enhance our financial performance and create significant shareholder value.”

The parties expect to sign definitive transaction documents by the end of January. Completion of the transaction will then be subject to regulatory, shareholder and board approvals, with both parties aiming to close the transaction before the end of June.

The post Latitude (ASX:LFS) share price higher on $335m Humm BNPL acquisition appeared first on The Motley Fool Australia.

More reading

• Humm (ASX:HUM) share price shoots 8% higher after BNPL takeover approach
• These were the 5 top performing ASX BNPL shares of 2021
• Why 4DS, Healius, Helloworld, and Humm shares are dropping today
• Bank of Queensland (ASX:BOQ) hoses down Humm (ASX:HUM) takeover rumours
• Why Anteotech, Bega Cheese, Humm, and Syrah shares are racing 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 Humm 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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