If you’re looking for a few new additions to your portfolio in October, then look no further.

Analysts at Morgans have picked out a number of ASX shares that they class as their best ideas for the month.

The first two I looked at can be found here. Whereas below are two more that the broker rates highly in October:

QBE Insurance Group Ltd (ASX: QBE)

The team at Morgans are very positive on this insurance giant’s shares. This is due to the company’s improving performance and attractive valuation. In respect to the latter, the broker believes the QBE share price is trading on undemanding multiples.

It commented: “We see QBE as likely having positive underlying momentum into next year. QBE has been putting through top-line rate increases of around 9%, which should assist margin expansion into FY22. With QBE’s balance sheet recently reset, pricing tailwinds evident and the stock relatively inexpensive trading on ~12.9x FY22F PE.”

Morgans has an add rating and $13.70 price target on QBE’s shares.

Santos Ltd (ASX: STO)

Another ASX share that Morgans is bullish on is Santos. The energy producer is the broker’s top pick in the sector due to its diversified earnings and its planned merger with Oil Search Ltd (ASX: OSH).

Morgans explained: “We expect the resilience of STO’s growth profile and diversified earnings base see it best placed to outperform against a backdrop of a continuing broader sector recovery. STO remains our top preference amongst our large-cap energy universe. With early indications supportive of our view that material synergies and enhanced growth plans will result from the OSH merger. While in good shape, we expect STO to continue gaining investor support as it executes on the opportunistic OSH merger.”

The broker currently has an add rating and $8.55 price target on Santos’ shares.

The post 2 more of the best ASX share ideas according to this top broker appeared first on The Motley Fool Australia.

More reading

• QBE (ASX:QBE) share price slips following Federal Court judgement
• How did the Santos (ASX:STO) share price perform in the last quarter?
• ASX 200 energy shares rise amid market sell-off
• 5 things to watch on the ASX 200 on Monday
• 2 ASX 200 shares surging this week despite inflation worries

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.

from The Motley Fool Australia https://ift.tt/3mN3Uww

The Pilbara Minerals Ltd (ASX: PLS) share price has been the best performer on the S&P/ASX 200 Index (ASX: XJO) in 2021.

Since the start of the year, the lithium miner’s shares have rallied an incredible 125% higher to trade at $1.97 today.

This compares to a 9.2% gain by the ASX 200 over the same period.

Could the Pilbara Minerals share price reach $2.80 by the end of the year?

Incredibly, despite the strong gain by the Pilbara Minerals share price this year, one leading broker believes it can rise even further.

According to a recent note out of Macquarie Group Ltd (ASX: MQG), its analysts have retained their outperform rating and $2.80 price target on the company’s shares.

Based on the current Pilbara Minerals share price, this implies potential upside of 42% for investors.

In light of this, it appears as though the team at Macquarie believe there’s a chance the Pilbara Minerals share price could hit $2.80 by the end of the year.

What did the broker say?

Macquarie is positive on Pilbara Minerals due to its bullish outlook for lithium prices. It notes that prices are being driven higher by strong demand in China and present upside risk to earnings estimates.

In addition to this, the broker was pleased to see the commissioning of the Ngungaju plant at Pilgangoora commence.

Macquarie suspects that Ngungaju could be up and running and producing spodumene by the third quarter of FY 2022. After which, it expects the plant to ramp up to full production by the first quarter of FY 2023.

All in all, the broker appears to believe the stars are aligning for Pilbara Minerals right now. This could make it a top option for investors looking for exposure to the lithium sector.

The post Could the Pilbara Minerals (ASX:PLS) share price hit $2.80 by the end of 2021? appeared first on The Motley Fool Australia.

More reading

• Brokers name 3 ASX shares to buy today
• These 3 ASX 200 shares are the most popular by trading volume today
• Why do Pilbara Minerals (ASX:PLS) shares keep topping the volume charts?
• How did ASX lithium shares perform in the FY22 first quarter?
• Here are the top 10 ASX shares 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 owns shares of and 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.

from The Motley Fool Australia https://ift.tt/3DBlWZD

It’s been a rough 30 days for the Vulcan Energy Resources Ltd (ASX: VUL) share price.

Right now, the Vulcan share price is $11.61, having fallen 0.6% yesterday. That’s 26.98% lower than it was this time last month.

Let’s take a look at what the market’s heard from Vulcan over the month that’s been.

Why is the Vulcan share price struggling?

The Vulcan Energy share price has been struggling despite the company releasing a plethora of news over the last 30 days.

It’s been nearly a month since Vulcan froze the trading of its shares on the ASX while it prepared to release news of a capital raise.

Vulcan was raising $200 million through an institutional placement. The funds were earmarked to go towards the company’s growth and its Zero Carbon Lithium Project.

Under the placement, shares in Vulcan were offered for $13.50 apiece, a 15.1% discount on their previous close.

It also announced it was planning to undergo a share purchase plan to raise another $20 million. The company later outlined the details of its share purchase plan, which also sports a $13.50-per-share price tag and will close tomorrow.

When Vulcan returned to trade on 16 September, its share price fell 8%.

Vulcan then released 2 seemingly positive announcements to the market towards the end of September.

First, it announced it had successfully created battery-quality lithium hydroxide monohydrate from its pilot plant. The pilot plant is in the same area and uses the same set-up as the company’s planned Zero Carbon Lithium Project.

Days later, Vulcan announced it had locked in the site on which it will build its Zero Carbon Lithium Project’s central lithium plant. The central lithium plant will process lithium chloride into lithium hydroxide monohydrate.

Unfortunately, the good news failed to meaningfully boost the Vulcan share price. Additionally, the company’s stock has fallen another 10% since the start of October.

However, Vulcan’s shares are still trading for 319% more than they were at the start of 2021. They’ve also gained 828% since this time last year.

The post Why has the Vulcan Energy (ASX: VUL) share price plunged 27% in a month? appeared first on The Motley Fool Australia.

More reading

• How did ASX lithium shares perform in the FY22 first quarter?
• Which shares are the biggest winners and losers on the ASX 300 today?
• Vulcan (ASX:VUL) share price falls despite positive lithium plant update
• Why the Vulcan (ASX:VUL) share price is pushing 3% higher today
• Vulcan (ASX:VUL) share price edges lower on share purchase plan update

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.

from The Motley Fool Australia https://ift.tt/3uZwnDa

Are you interested in adding some ASX growth shares to your portfolio this month? If you are, you may want to look at the ones listed below that have recently been named as buys.

Here’s what you need to know about them:

Breville Group Ltd (ASX: BRG)

The first ASX growth share to look at is Breville. It is the leading appliance manufacturer behind the Sage, Kambrook, Baratza, and Breville brands. These brands have been resonating extremely well with consumers for many years, underpinning consistently solid sales and earnings growth. The good news is that this is expected to continue in the future thanks to favourable industry tailwinds, its continued investment in research and development, and its global expansion.

Morgans is a big fan of Breville and is confident on its growth outlook. The broker currently has an add rating and $34.00 price target on its shares.

Life360 Inc (ASX: 360)

Another ASX growth share to look at is Life360. This growing technology company is responsible for the eponymous Life360 mobile app. This market leading app is for families and offers useful features such as communications, driver safety, and location sharing. As of its last update, the company had grown its user base to 32 million. This is generating significant recurring revenue and opens the door to material cross selling and upselling opportunities.

Bell Potter is bullish the company’s future. It currently has a buy rating and $10.75 price target on its shares.

Temple & Webster Group Ltd (ASX: TPW)

A final ASX growth share to look at is this online furniture and homewares retailer. It was a strong performer again in FY 2021 and revealed an 85% increase in revenue to $326.3 million and a 141% jump in EBITDA to $20.5 million. The good news is that Temple & Webster still has a long runway for growth over the next decade. For example, the company estimates that in 2020 just 7% to 9% of category sales were made online. This compares to 25.3% in the US in 2020.

Morgan Stanley has an overweight rating and $16.00 price target on Temple & Webster’s shares.

The post 3 excellent ASX growth shares to buy now appeared first on The Motley Fool Australia.

More reading

• 2 excellent ASX growth shares named as buys
• 3 fantastic ASX growth shares to buy
• Analysts name 2 high quality ASX tech shares to buy in October
• 5 things to watch on the ASX 200 on Thursday
• 2 excellent ASX growth shares to buy and hold

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 Life360, Inc. and Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3mNmAMP

The Redbubble Ltd (ASX: RBL) share price could be a good one to consider for the long-term for a few different reasons.

For readers that haven’t heard of Redbubble before, it’s an e-commerce business. It sells an array of products that have unique designs on them, that have been designed by independent artists.

Morgan Stanley is one of the brokers that currently rates Redbubble as a buy.

Here are three of the reasons to consider the ASX tech share:

Operating model

Redbubble has a goal of creating the world’s largest marketplace for independent artists.

It’s looking to deliver value to artists to inspire them to create more unique content. Scaling its network will improve the customer experience and unit economics.

Aside from winning new artists and users, whilst improving the process for them, there are two other areas it’s focused on. One is focusing on a deeper understanding of customers and their behaviour to create more compelling experiences and increased customer loyalty. The company is also investing in additions and changes to the available product range from the third party fulfilment network to reinforce winning more customers.

As the business grows, it is expected to see benefits across the company. This could help the Redbubble share price.

Customer base

There are a number of aspects of the customer base (and its growth) that may make it attractive.

In FY21, it had 9.5 million unique customers, which was an increase of 40%. It also saw 67% growth in purchases from repeat customers, contributing 42% of marketplace revenue. Around 55% of sales came from mobile platforms, with 14% of Redbubble marketplace revenue coming from apps.

In FY19 it made $257 million from repeat purchases, in FY20 this increased to $139 million and then in FY21 it rose to $232 million.

The company is making a number of investments and moves to understand the customer better and improve the experience.

It’s expanding its reach into social channels and improving audience targeting to drive advertising efficiency.

There is the potential for conversion gains shown in free shopping, or reduced shipping costs, and delivery date experiments. Redbubble noted it saw up to 40% conversion gains with free shipping.

Redbubble has been trying to increase its average order value (AOV). Buy now, pay later functionality may be helping, with early signs of up to 50% of AOV uplift from BNPL users.

Redbubble thinks it’s operating in an addressable market that’s worth around US$300 billion and could grow to US$400 billion by 2024.

Profit margins

Increasing profitability of the business over time could help the Redbubble share price.

Redbubble is planning to invest heavily over the next couple of years to capture the e-commerce opportunity.

However, the business points to a favourable working capital cycle and potentially growing profit margins as reasons why it has, and can have, good economics.

In the next few years, its gross profit margin can edge higher as it grows the product portfolio while maintaining similar margin structures.

However, it’s expecting to reduce its operating expenditure, as a percentage of revenue, from 16.8% down to a range of between 12% to 15% from the 2024 calendar year onwards as it realises the scale efficiencies in its core systems and processes.

At the earnings before interest, tax, depreciation and amortisation (EBITDA) margin level, which was 9.5% in 2020, it’s expecting to increase this to between 13% to 18% as it benefits from scale and top line growth.

Morgan Stanley believes that Redbubble has highly profitable unit economics.

In FY21, before its increased level of investing, it grew earnings before interest and tax to $39 million (from a loss of $9 million in FY20) after 58% growth of marketplace revenue to $553 million.

What is the Redbubble share price valuation?

The company isn’t planning to make much profit over the next couple of financial years.

Using FY21’s numbers, it’s valued at 40x the net profit and 23x the operating cashflow.

However, Morgan Stanley has pencilled in an estimated profit for FY23. The broker thinks the Redbubble share price is valued at 75x FY23’s estimated earnings.

The post 3 reasons why the Redbubble (ASX:RBL) share price could be a top buy appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• 2 impressive ASX shares that could be buys in October 2021
• These are the 10 most shorted ASX shares
• Redbubble (ASX:RBL) share price surges 7% following broker upgrade
• Why De Grey Mining, Gold Road, Nick Scali, & Redbubble shares are racing higher

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.

from The Motley Fool Australia https://ift.tt/3AxVw9h

It hasn’t been a good year for the Newcrest Mining Ltd (ASX: NCM) share price.

Since the start of 2021, the gold miner’s shares have fallen 11.5% and now trade at $23.90.

This isn’t too far away from the Newcrest share price 52-week low of $21.85.

Is the Newcrest share price good value?

One leading broker that sees a lot of value in the Newcrest share price is Goldman Sachs.

According to a note out of the investment bank this morning, its analysts have retained their buy rating but trimmed their price target slightly to $30.50.

Based on the current Newcrest share price, this implies potential upside of almost 28% over the next 12 months.

Why is Goldman bullish?

There are three key reasons why the broker is positive on Newcrest.

One of those is the company’s growth pipeline, which it believes will add value in the future.

Goldman said: “Key growth projects Havieron and Red Chris block cave continue to make significant steps forward. […] Combined, NCM’s major project growth pipeline could deliver additional attributable production of ~550koz of gold and ~140kt of copper (~1,350koz Au eq.) per annum when completed, roughly half of NCM’s FY21 Au eq. production. We value the projects at US$5.9bn (A$10.3/sh), with an average IRR of ~25%. NCM has the strongest balance sheet in over a decade, enabling it to fund value-accretive growth projects over the next 5-10 years and reducing project risk.”

Another reason for the bullish view on the Newcrest share price is its belief that the company’s earnings will hold up despite production declines.

It said: “Our supportive copper price view and development of the high-returning Havieron project means that we forecast NCM delivering flat earnings over the next five years on average, despite the known challenge of declining grade at key asset Cadia. NCM’s copper contribution will lift from ~23% of revenues in FY21E to 28% by FY25E, and continue to grow as the copper-dominant Red Chris and Wafi Golpu block caves are constructed (39% by FY30E).”

Finally, the broker sees a lot of value in Newcrest shares at the current level. Particularly in comparison to its peers.

The broker explained: “NCM is trading at 0.71xNAV vs. North American gold majors at ~1.2xNAV (FactSet broker consensus).”

The post 3 reasons this broker thinks the Newcrest (ASX:NCM) share price is a buy appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Wednesday
• Newcrest (ASX:NCM) share price lifts following annual report release

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.

from The Motley Fool Australia https://ift.tt/3lxhKDX

The Commonwealth Bank of Australia (ASX: CBA) share price has rallied 24% year-to-date and held up relatively well amidst the seasonally volatile months of September and October.

CBA shares have mostly traded sideways since June this year, with the exception of a few sharp pullbacks taking place during mid-June and mid-August (ex-dividend).

As the CBA share price continues to consolidate around the $100 level, investors eagerly want to know whether it will break towards the upside or downside.

In an interview by Livewire, Head of Equities at Tyndall Asset Management Brad Potter, called out CBA as being far too expensive compared to its peers.

Why this broker isn’t excited about the CBA share price

More broadly speaking, Potter is overweight on the banking sector.

He notes that dividend yields have bounced back to the 5% level, which he believes is sustainable for the short-to-medium term.

He believes that the strong capital position of banks will enable them to deliver shareholder value through buybacks and dividends.

In the case of CBA, it just completed a $6 billion off-market buy-back last Monday.

Despite an overall bullish view on the banking sector, he flagged that banks may struggle to maintain growth amidst a low interest rate environment which could pressure net interest margins.

Potter also believes that the CBA share price is far too expensive relative to its peers.

As it stands, the CBA share price trades at a premium price-to-earnings relative to the other big four peers.

CBA shares currently trade at a price-to-earnings of around 21. By comparison, the other big four banks sit between 13 to 16.

Commenting on the premium, Potter said:

We assume a 15% premium for CBA versus the other banks in our process, but it’s actually trading at a premium of more than 30% to the other banks. We think this is excessive as we don’t see top-line growth being any better for CBA than the other banks.

The CBA share price closed 0.05% lower on Monday to $104.42.

The post Why this top broker thinks the CBA (ASX:CBA) share price is overvalued appeared first on The Motley Fool Australia.

More reading

• Xero (ASX: XRO) subsidiary inks new partnership with CBA
• CBA (ASX:CBA) share price edges higher amid legal proceedings
• CBA (ASX:CBA) share price slips as bank spruiks carbon credit opportunity
• How did ASX bank shares perform in the last quarter?
• Why do Pilbara Minerals (ASX:PLS) shares keep topping the volume charts?

Motley Fool contributor Kerry Sun 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.

from The Motley Fool Australia https://ift.tt/3mL4FGl

Are you interested in boosting your income portfolio with some new additions? Then below are two options to consider.

Here’s why these ASX dividend shares have been rated as buys:

Coles Group Ltd (ASX: COL)

This supermarket giant could be a dividend share to consider buying. This is due to its strong market position, focus on automation, and the normalisation of shopping trends.

It was thanks to these factors that Coles delivered a strong full year result in FY 2021. For the 12 months ended 30 June, Coles reported sales revenue growth of 3.1% to $38,562 million and net profit after tax growth of 7.5% to $1,005 million. The latter was a touch ahead of the market’s expectations.

Analysts at Morgans were pleased with the company’s performance and appear confident in its long term outlook. The broker currently has an add rating and $19.80 price target on Coles’ shares.

In addition, the broker is forecasting fully franked dividends of 61 cents per share in FY 2022 and then 62 cents per share in FY 2023. Based on the current Coles share price of $17.04, this represents yields of 3.5% and 3.6%, respectively, over the next two years.

Transurban Group (ASX: TCL)

Another ASX dividend share to look at is Transurban. It is a toll road operator with a portfolio of important roads throughout Australia and North America. This includes the CityLink in Melbourne, Cross City Tunnel in Sydney, and the AirportlinkM7 in Brisbane.

While traffic volumes have been impacted by the pandemic and recent lockdowns, it is expected to rebound once trading conditions return to normal. And with New South Wales reopening this week and Melbourne edging close to doing the same, its roads could soon be filled with cars again.

Ord Minnett is very positive on the company. It currently has a buy rating and $16.20 price target on its shares.

The broker is forecasting dividends of 43 cents per share in FY 2022 and then 64 cents per share in FY 2023. Based on the current Transurban share price of $13.79, this will mean yields of 3.1% and 4.6%, respectively.

The post 2 ASX dividend shares analysts love appeared first on The Motley Fool Australia.

More reading

• 2 high quality ASX 200 shares named as buys
• Why is the Transurban (ASX:TCL) share price struggling lately?
• Why this broker sees 17% upside for the Coles (ASX:COL) share price
• 2 highly rated ASX dividend shares to buy
• 2 quality ASX dividend shares analysts rate as buys

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

from The Motley Fool Australia https://ift.tt/3vfBFe1

Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Datt Capital principal Emanuel Datt reveals how he’s counting on his 2 largest holdings doubling in value in the coming year.

Investment style

The Motley Fool: How would you describe your fund to a potential client?

Emanuel Datt: Datt Capital seeks to identify high growth and special situation opportunities within Australian markets with no institutional constraint. We aim to exploit informational, analytical, behavioural and structural edges in a high prediction environment over time to really try and capture the right feel risks out there. Overall, we’re opportunistic and disciplined, with a strong emphasis on risk control. 

The fund basically blends longer duration holding, which we anticipate compounds over time, interspersed with shorter term catalyst-orientated opportunities. We recognise that time arbitrage can be a huge advantage if exploited appropriately in a disciplined manner, so accordingly the funds may have a longer duration holding profile than typical. 

The fund invests in a concentrated manner. It could be holding [fewer] than 20 positions and with the flexibility to invest across asset classes. Ultimately, we aim to hold at least 70% of the portfolio in our top 10 positions.

Biggest convictions

MF: What are your two biggest holdings?

ED: The first one would have to be Adriatic Metals PLC (ASX: ADT), which has found and advanced just a remarkable high-grade polymetallic mineral deposit in Bosnia. Polymetallic means multiple metals, basically. It also holds base metal assets in Serbia. 

In a nutshell, we consider this to be the best undeveloped mineral asset globally. It trades at a material discount at a transaction price of similar deposits that we consider to be quite inferior to this one. We believe a lot of this situation is largely due to the fact that Bosnia is not well known as a mining jurisdiction, [but] we consider it quite comparable to Serbia, which is right next door and has major companies like Rio Tinto Limited (ASX: RIO). 

When we first bought Adriatic, it was in the low $1s. It’s gone up about 3x. 

But notwithstanding, the project since that time has advanced to the point of a final investment decision and project financing, so we expect this to occur imminently. Also, basically, the project is now shovel ready. It’s just a matter of pulling the trigger for development. 

We still consider the company to be materially undervalued. We think that their value is about double the current price of about $3, and that’s really driven by the projected financial metrics, which are just absolutely incredible. On a post-tax basis, the net present value, NPV, using a discount rate of 8%, is over US$1 billion dollars. That gives it a post-tax IRR [internal rate of return] of 134%.

The project CAPEX [capital expenditure] has been paid back after only 8 months of operation, so this is just absolutely amazing, this deposit. [And] that’s only for the flagship deposit, so it really allows for the significant exploration upside because they hold all the surrounding area as well as the Serbian-based metal assets, which we think would be worth at least $100 million in the current price environment. 

That’s why we think that it’s probably only been trading at about half of the price it should. And that’s why I’d say it’s our biggest holding at this point in time.

MF: What’s your second biggest?

ED: Second biggest is a company called Metals X Limited (ASX: MLX). Metal X’s core asset is a 50% interest in the Renison Tin Mine and a tin development project known as Rentails. These assets are located in Tasmania. The company itself is only 1 of 2 listed tin producers globally. 

That’s because tin itself is a unique but very, very important niche market. Tin [is] an unsubstitutable ingredient in solder, which is used for stuff like circuit boards. The whole shift toward clean energy and a greater emphasis on technology really drives demand for circuit boards, and hence tin.

Basically, the forward projection for tin market supply is very highly constrained in terms of supply. The market itself has been in deficit for many, many years now, but there’s always been sort of a stockpile to draw down upon. But the strategic stockpile is now depleted. 

Basically, growing demand has been driven by the adoption of the new technologies, and stable, or trickling, supply has just caused the tin price to explode over the last 6 months or so. 

One important factor that we should point out is the price component. Tin, within a finished good — like a computer — is just very, very minimal. Maybe for an iPhone, it’s probably about 20 cents of an iPhone’s total cost. So when you consider that the price can really go up multiples without too much impact on the end price of the finished good…

One thing that’s really held back the company is that historically the company has tried to go into other commodities like copper and nickel. But basically, it started to shed all these non-tin assets that were accumulated by past management teams. 

It should be a pure tin player by the end of the year. 

A lot of change has really been driven by its major shareholder. They’re an Asian-based shareholder known as APAC Resources. The management team are Australian, but they come from APAC Resources. 

We think that Metals X is materially undervalued by a large factor given the strong outputs of tin, and generating a hell of a lot of cash at the moment. There’s quite a number of monetisable assets on its balance sheet, as well. I think at the moment it’s trading about 35 cents, so it really wouldn’t be a surprise to see it double over the next 6 months to a year.

The post 2 ASX shares set to double in the next year appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Monday
• Why did the Rio Tinto share price struggle in the September 2021 quarter?
• Here’s why the Rio Tinto (ASX:RIO), BHP and Fortescue share prices are surging today
• US warns Evergrande crisis could affect ‘entire world’

Motley Fool contributor Tony Yoo 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.

from The Motley Fool Australia https://ift.tt/3Bxdk5H

Is it possible that the Insurance Australia Group Ltd (ASX: IAG) share price could reach $6 by the end of 2021?

Insurance Australia Group (IAG) is one of Australia’s largest insurance businesses with a number of brands including NRMA Insurance, CGU, SGIO, SGIC, Swann Insurance, WFI and Poncho Insurance. In New Zealand it also has NZI, State, AMI and Lumley.

Some of Australia’s leading brokers have had their say on what their price targets are for the IAG share price.

A price target is where the broker thinks that the IAG share price will be in 12 months from now. So, it’s not necessarily where the broker thinks the business will be by the end of the calendar year, though it may give an indication which way the share is headed, if the broker is right.

What are the broker expectations?

Different brokers have different ideas about how the IAG share price is going to perform.

For example, Morgan Stanley has a price target on the business of $4.80. That suggests that IAG shares could drop by around 10% over the next 12 months, if the broker is right.

However, Morgan Stanley did note the win in court for insurers relating to business interruption from the pandemic. The broker doesn’t rate IAG as a buy at the moment. Instead, it thinks it is a hold.

Based on the current IAG share price, Morgan Stanley puts it at 21x FY22’s estimated earnings.

However, another broker is much more positive than Morgan Stanley.

Analysts at Macquarie Group Ltd (ASX: MQG) rate the insurance giant as a buy. The price target here is $5.70. If Macquarie is right, the shareholders could gain around 6% over the next 12 months.

Macquarie analysts believe that IAG shares are at good value and think it’s actually valued at 21x FY22’s estimated earnings.

What’s happening for the IAG share price recently?

Yesterday, IAG shares rose by 3% after the insurer noted the court win relating to business interruption.

In that announcement, it said that the Federal Court found in favour of insurers on a significant number of policy wording questions and for policyholders on other questions.

IAG said that the judgement is detailed, and a comprehensive analysis is required to assess the impact, noting it will vary by insurer.

The Federal Court has set aside time in November to hear any appeal. This is to enable any appeal of the judgement to be finalised before the end of the year, or early in the new year.

IAG is reviewing the judgement to determine whether to appeal any aspect of the judgement. It will also consider the provision it announced in November 2020 and any required update will be provided at the appropriate time.

The company wants to resolve this as quickly as it can for customers.

The post Could the IAG share price hit $6 by the end of 2021? appeared first on The Motley Fool Australia.

More reading

• Why Ampol, Fortescue, IAG, & Perenti shares are charging higher
• ASX 200 (ASX:XJO) midday update: Star shares crash, tech shares tumble
• IAG (ASX:IAG) share price lifts after Federal Court makes judgement
• 2 ASX 200 shares surging this week despite inflation worries
• What happened to the IAG (ASX:IAG) share price in the FY22 first quarter?

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 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.

from The Motley Fool Australia https://ift.tt/3AAHPpQ