In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) has given back its morning gains and is tumbling lower. At the time of writing, the benchmark index is down 0.5% to 7,210.7 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are storming higher:

Afterpay Ltd (ASX: APT)

The Afterpay share price is up 3.5% to $117.49. This follows a strong night on Wall Street which saw the Square share price rebound with a gain of 4.3%. As Square is acquiring Afterpay in an-scrip deal, the value of the takeover rises and falls with the Square share price.

Austal Limited (ASX: ASB)

The Austal share price is up over 4% to $1.95. This follows news that the shipbuilder has been awarded its first steel vessel construction contract by the United States Navy. According to the release, the US$145 million (~A$198.5 million) contract is to build two Towing, Salvage, and Rescue ships.

Baby Bunting Group Ltd (ASX: BBN)

The Baby Bunting share price is up 5% to $5.69. Investors have been bidding this baby products retailer’s shares higher today following a bullish broker note out of Morgans. According to the note, the broker has upgraded the company’s shares to an add rating with a $6.20 price target. This follows the release of the company’s trading update on Tuesday at its annual general meeting.

Nick Scali Limited (ASX: NCK)

The Nick Scali share price is up 5% to $12.92. This morning Citi retained its buy rating and lifted its price target on the furniture retailer’s shares to $16.80. It was pleased with the company’s acquisition of Plush for $103 million. The broker described Plush and Nick Scali as a compatible low risk match.

The post Why Afterpay, Austal, Baby Bunting, & Nick Scali shares are storming higher appeared first on The Motley Fool Australia.

More reading

• Why the Afterpay Ltd (ASX:APT) share price is bouncing back on Wednesday
• ASX 200 (ASX:XJO) midday update: A2 Milk class action, tech shares rebound
• Why this broker just upgraded the Baby Bunting (ASX:BBN) share price to buy
• Why is the Afterpay (ASX:APT) share price plunging 5% today?
• Why De Grey Mining, Gold Road, Nick Scali, & Redbubble 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. owns shares of and has recommended AFTERPAY T FPO and Austal Limited. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Baby Bunting. 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 has been struggling over the last 8 weeks

It has dipped despite the regional bank releasing only seemingly positive news to the market.

Eight weeks ago, the Bendigo Bank share price finished its day’s trade at $10.97.

At the time of writing, the bank’s stock is trading for $9.28, 0.96% lower than its previous close and 15.4% lower than it was 8 weeks ago.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has fallen 4.9% over the last 8 weeks.

Let’s take a look at what’s been driving Bendigo Bank’s shares lower lately.

Bendigo Bank’s stock struggles

The Bendigo Bank share price has been struggling on the ASX in recent weeks.

That’s despite the bank posting strong results for financial year 2021 and announcing news of a $116 million acquisition.

On 16 August, the bank released its annual earnings report, detailing a seemingly strong 12 months ended 30 June 2021.

The bank’s statutory net profit after tax increased by 172% on that of the prior financial year while its cash earnings after tax were up 51.5%. It also posted a 50 cent fully franked dividend.

At the same time, Bendigo Bank announced it was to acquire Ferocia, a Melbourne-based fintech, for $116 million.

Ferocia is one of the collaborative developers of Up, Australia’s highest-rated banking app.

Unfortunately for Bendigo Bank, the market reacted poorly to the news it released on 16 August. The Bendigo Bank share price fell 9.9% on the back of the announcements.

Since then, its drooped another 7% despite silence from the bank.

Bendigo Bank share price snapshot

The poor performance over the last few weeks has plunged Bendigo Bank’s stock back into the red on the ASX.

The bank’s share price is currently 0.54% lower than it was at the start of 2021. However, it is 47% higher than it was this time last year.

The post Why has the Bendigo Bank (ASX:BEN) share price fallen 15% in 8 weeks? appeared first on The Motley Fool Australia.

More reading

• The ASX 200 banks may be in danger as half of mortgage-stressed households have “borrowed to the hilt”
• 5 things to watch on the ASX 200 on Thursday
• Confirmed: APRA is planning action on home loans, ASX 200 banks drop
• Bendigo Bank (ASX:BEN) share price slips despite recycling partnership
• Climbing mortgage stress: Are the CBA, ANZ, NAB and Westpac share prices in danger?

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 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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The Magnis Energy Technologies Ltd (ASX: MNS) share price is climbing in afternoon trade today and is now changing hands at 31 cents each.

At one point today, Magnis’ shares surged 7% to an intraday high of 33 cents, before levelling back out to the current market price.

Magnis shares have been on the move since the company released a response letter to the ASX just before the opening of trade today.

Here’s what we know.

What did Magnis Energy release today?

It appears that on 22 September the ASX compliance department flagged a couple of takeouts from recent announcements Magnis has made and wrote a “please explain” letter.

Specifically, the ASX mentions updates made in May and September, that list Indian utilities company Sukh Energy as a key stakeholder.

Back in May, the company advised it had secured an estimated US$655 million of orders in binding offtakes, however did not disclose the names of any counter-parties in the orders.

Then speculation regarding Sukh Energy’s financial health and balance sheet began to place doubt on Magnis’ dealings with the Indian energy giant.

This came after a release in September that advised of a 5-year, US$160 million offtake agreement with electric mobility manufacturer Omega Seiki.

As such the ASX asked Magnis to front up and wave away the cloudiness surrounding these issues, to which it has done today.

The company explained that it is well aware of Sukh Energy’s business operations, its key customers, and its financial health.

Curiously, the ASX asked Magnis if it were aware that Sukh Energy “has no revenues and assets of $70,000, as lodged with the Indian corporate regulator?”.

Magnis stated in response that, “Yes, to the best of the company’s knowledge, the financial information referred to (in the question) is correct”.

That means that Magnis has signed deals worth $1.2 billion with a company that has no revenues and a small asset base, so it appears written from the ASX’s letter.

Of the US$655 million in offtake orders announced earlier this year, Magnis expects that around US$243 million will be attributable to Sukh Energy.

That’s 37% of all the sales exposed to the one customer and/or its subsidiaries. Magnis Energy doesn’t appear to be worried though and is confident all parties will maintain solvency just fine.

Bringing it all together in conclusion to the ASX’s cross-examination, Magnis said:

Based on the Company’s understanding (as set out above) and the matters referred to above, Magnis is confident that Sukh Energy has, or will have at the relevant time, the financial resources necessary to satisfy its obligations under the iM3NY off-take arrangements.

Time will tell to see if more unfolds from this story.

Magnis Energy share price snapshot

The Magnis Energy share price has climbed 55% this year to date, bringing its 12-month return also to 55%.

Its been on the downward slope this past month, having slumped 15% into the red, which has carried through to this past week.

Despite this, Magnis Energy shares are ahead of the S&P/ASX 200 index (ASX: XJO)’s return of about 25% in the last year.

The post Here’s why the Magnis Energy (ASX:MNS) share price is leaping 7% today appeared first on The Motley Fool Australia.

More reading

• Magnis Energy (ASX:MNS) share price lifts after FY21 annual report release

The author Zach Bristow 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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It certainly has been a difficult few months for the Fortescue Metals Group Limited (ASX: FMG) share price.

Since peaking at $26.58 in late July, the iron ore producer’s shares have fallen 47% to $14.14.

Where next for the Fortescue share price?

Unfortunately, one leading broker doesn’t believe the Fortescue share price has bottomed just yet.

According to a note out of Goldman Sachs this morning, its analysts have retained their sell rating and cut their price target down to $11.40.

Based on the current Fortescue share price, this implies potential downside of almost 20% over the next 12 months.

What did the broker say?

Goldman believes high grade iron ore miners such as Rio Tinto Limited (ASX: RIO) have been sold off and are now in the buy zone. It has a buy rating and $123.40 price target on Rio Tinto’s shares.

However, it isn’t anywhere near as positive on low grade iron ore miners. This is due to its belief that the low grade discount will widen as steel producers favour higher grade ore.

Goldman explained: “Widening of low grade 58% Fe product realisations: we see spot realisations for FMG’s 58% product currently at c. 68-70% of the 62% Index (vs. 84% in the June Q) with likely further headwinds with ongoing China steel production cuts in 4Q21.”

In addition, the broker doesn’t see enough value in the Fortescue share price at this level despite its pullback.

Goldman highlights that its shares are trading at ~1.5x net asset value (NAV) versus Rio Tinto’s shares at 0.84x NAV.

The broker summarised: “Our FY22/FY23 EPS estimates are down 51%/55% on our lower iron ore price forecasts and higher bulk freight forecasts and after lowering our 58% Fe price realisations (of the 62% Fe Index) for FY22 to 74% (from 77%). Our NAV is down 21% to A$9.66/sh (from A$12.25/sh) and our 12-month TP is down 37% to A$11.4/sh (from A$18.0/sh).”

All in all, there could be more red days ahead for the Fortescue share price if Goldman’s predictions are accurate.

The post Broker warns Fortescue (ASX:FMG) share price could sink a further 20% appeared first on The Motley Fool Australia.

More reading

• Fortescue (ASX:FMG) share price at 16 month lows. What’s next for iron ore?
• Fortescue (ASX:FMG) share price slides to fresh year-to-date low
• Why did the Fortescue (ASX:FMG) share price have such a lousy month in September?
• These were the 5 worst performing ASX shares in September
• Top brokers name 3 ASX shares to sell next week

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 Hyperion Metals Ltd (ASX: HYM) share price is soaring 11% in early afternoon trade.

We take a look at the latest critical minerals announcement from the ASX resource explorer that looks to be stoking investor interest today.

What critical minerals update was announced?

Hyperion Metals’ share price is rocketing after the company reported on its maiden Mineral Resource Estimate (MRE) at its Titan Project in the US state of Tennessee.

According to the announcement, the MRE indicates that Titan is the largest rare earth minerals, titanium and zircon project in the United States.

The MRE is based on 107 drill holes totalling 4,101 meters. Another 109 completed drill holes totalling 3,566 meters are still being analysed.

The results the company highlighted for the MRE from the existing results at the Titan Project include:

• Total Mineral Resource of 431Mt @ 2.2% Total Heavy Minerals (THM), containing 9.5Mt THM at a 0.4% cut-off with 241Mt (56%) classified in the Indicated resource category;
• Includes high grade core of 195Mt @ 3.7% THM, containing 7.1Mt THM at a 2.0% cut-off;
• High value THM assemblage of 12% zircon, 10% rutile, 40% ilmenite and 2% Rare Earth Elements (REE) concentrate with an excellent ratio of heavy and light rare earths

Hyperion said the high-grade results, along with access to existing infrastructure in a low-cost jurisdiction, show the potential to build a “world class”, low carbon critical mineral business in the US. Tennessee, it said, has been confirmed as an untapped critical mineral province.

Commenting on the results, Hyperion’s CEO Anastasios Arima said:

Hyperion’s mission is to sustainably re-shore the production of American critical minerals and metals and this maiden MRE is a crucial step towards this goal.

The maiden MRE has immediately established the Titan Project as a major, untapped potential source of critical minerals rich in titanium, zircon and heavy and light rare earths. The combination of scale and grade of these high value, critical minerals — in a low risk, low cost and low tax jurisdiction — has the potential to drive significant value creation.

Hyperion Metals share price snapshot

The Hyperion Metals share price has been on a tear this year, up 336% in 2021. By comparison the All Ordinaries Index (ASX: XAO) is up 8% year-to-date.

Over the past month, however, Hyperion’s shares are down 9%.

The post Here’s why the Hyperion Metals (ASX:HYM) share price is soaring 11% today appeared first on The Motley Fool Australia.

More reading

• Broker warns Fortescue (ASX:FMG) share price could sink a further 20%
• Here’s why the Aussie Broadband (ASX:ABB) share price is lifting today
• Why the Coda Minerals (ASX:COD) share price is surging 16% today
• Here’s why the Swoop (ASX:SWP) share price is up 11% on Wednesday
• Technology shares lead the battle to lift the ASX 200 on Wednesday

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 Aussie Broadband Ltd (ASX: ABB) share price is climbing during Wednesday mid-afternoon. This comes as the broadband company provided an update on its recent Share Purchase Plan (SPP).

At the time of writing, Aussie Broadband shares are up 2.24% to $5.02. It is worth noting that its shares reached an all-time high of $5.22 on Monday, before slightly edging lower.

What did Aussie Broadband announce?

In today’s statement, Aussie Broadband advised it has successfully completed its SPP.

The heavily subscribed SPP received strong support from retail investors, exceeding the original offer to raise $10 million.

Aussie Broadband stated that due to the high demand, it has decided to increase the SPP offer to $20 million. While eligible shareholders will receive a larger portion of shares, the company noted that a significant scale back is required.

As such, a pro rata basis has been applied to each parcel of shares. A minimum allocation of 125 shares will be distributed to shareholders who requested more than $2,500 worth of Aussie Broadband shares. The amount increases up to 1,350 shares for those who applied for more than $30,000 worth of shares in the SPP.

Aussie Broadband managing director Phillip Britt, touched on the closing SPP, commenting:

Despite doubling the size of the SPP raise, we know the level of scale back will be disappointing for many. We hope to repay the faith our shareholders have shown us by continuing to deliver value to them as we execute our strategy.

The newly created shares will be allotted on 8 October, and refunds are expected to be processed around 11 October.

Aussie Broadband share price review

A strong couple of months for the company has led Aussie Broadband shares to accelerate 150% in 2021. In particular, its shares surged at the beginning of August buoyed by a positive trading update.

Since then, Aussie Broadband shares haven’t looked back.

Based on today’s price, Aussie Broadband has a market capitalisation of roughly $1.1 billion, and approximately 218.8 million shares outstanding.

The post Here’s why the Aussie Broadband (ASX:ABB) share price is lifting today appeared first on The Motley Fool Australia.

More reading

• 4 ASX shares looking ripe for the picking now
• Aussie Broadband (ASX:ABB) share price hits new high, up 27% this month
• Aussie Broadband (ASX:ABB) share price lifts on share purchase plan
• ASX 200 falls, Macquarie jumps, Aussie Broadband climbs
• Aussie Broadband (ASX:ABB) share price edges higher on capital raise update

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Aussie Broadband Limited. The Motley Fool Australia has recommended Aussie Broadband 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 Coda Minerals Ltd (ASX: COD) share price has enjoyed a day in the green. Coda’s shares are up 16.11% at the time of writing, having earlier posted gains of more than 20%.

Below, we take a look at the ASX resource explorer’s latest drill results that appear to be driving investor interest.

What drill results were announced?

Coda Minerals’ share price is surging after the company reported promising results from its ongoing drilling program at Emmie Bluff Deeps, located in South Australia.

According to the release, new data from visual logging of core from the exploration campaign, conducted along with Coda’s joint venture partner Torrens Mining Ltd (ASX: TRN), has “significantly increased the interpreted scale of the copper-bearing mineralisation” at the project.

(The Torrens share price is up 10% at this same time.)

Coda said it has now intersected iron oxide copper gold ore (IOCG) style mineralisation over a significant area at Emmie Bluff Deeps. Its exploration model continues to evolve as new results come in.

One of the recent holes highlighted by the company encountered 67 metres of mineralisation over 2 vertically stacked lodes, including:

• 27 metres of bornite-chalcocite-covellite mineralisation from 803 metres down hole in the upper lode immediately adjacent to a significant fault zone
• 40 metres of blebby chalcopyrite dominated mineralisation (with trace disseminated bornite) from 913 metres down hole

Commenting on the drill results, Coda CEO Chris Stevens said:

These new results substantially increase the mineralised footprint of the system and show that there is a significant amount of copper present. We are also seeing increased thicknesses of potentially economic mineralisation and, importantly, the presence of a higher grade bornite core.

We are particularly encouraged by the intensity of alteration and abundance of sulphides which are being reported by our field team, as well as the fact that we are seeing far greater lateral extensions to the mineralisation than we have seen before.

There are 2 drill rigs on the site digging wedge holes to follow up on recent promising drill holes.

“Our task now is to continue to test the areas of open mineralisation as we seek to extend the copper-rich bornite zones and to further test areas for vertical extension and additional stacked lodes,” Stevens said.

Coda Minerals share price snapshot

The Coda Minerals share price is up a stellar 226% year to date, well outpacing the ~8% gain posted by the All Ordinaries Index (ASX: XAO) so far in 2021.

Over the past month, Coda’s shares are up 0.48%.

The post Why the Coda Minerals (ASX:COD) share price is surging 16% today appeared first on The Motley Fool Australia.

More reading

• Here’s why the Swoop (ASX:SWP) share price is up 11% on Wednesday
• Technology shares lead the battle to lift the ASX 200 on Wednesday
• Why has the Brickworks (ASX:BKW) share price slumped 5% in 9 days?
• Top broker names 2 of the best ASX shares to buy in October
• Aerometrex (ASX:AMX) share price soars 6% on news of metaverse deal

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 Swoop Holdings Ltd (ASX: SWP) share price is charging higher on Wednesday after the company acquired another telecommunications player to expand its regional network.

At the time of writing, Swoop shares are up 8.67% to $2.13.

Swoop share price rallies on its 4th acquisition in 2021

Internet provider Swoop announced it will acquire Newcastle-based connectivity provider, Countrytell.

Countrytell offers high-speed internet on its own network of over 30 towers and a recently completed CBD dark fibre network. The company also provides data centre services, owning one of Newcastle’s largest facilities.

Swoop will acquire the internet services company for $4.2 million which includes $2.1 million in cash and 2.1 million Swoop shares.

It is understood that the purchase price represents a 4.2 multiple of Countrytell’s expected FY22 earnings before interest, taxes, depreciation, and amortisation (EBITDA).

The acquisition will be funded from existing cash reserves and is expected to be complete by 31 October 2021.

According to the company’s FY21 results, Swoop carries no bank debt with $17.49 million in cash and cash equivalents.

Management commentary

Swoop CEO Alex West sees the acquisition as another win for the company’s network coverage and expansion into data centre operations.

Acquiring Countrytell’s network provides another opportunity for Swoop to further expand the coverage of our infrastructure footprint in regional Australia, as well as providing additional services via its data centre operations.

The company has invested significantly in upgrading its wireless, network infrastructure
and transmission capacity; and gives us a strong springboard for continued growth in this
market. We look forward to the opportunities this acquisition provides in establishing a
Newcastle presence for the Swoop brand.

The Swoop share price is a four-bagger since IPO

The Swoop share price has come a long way since its 50 cents initial public offering (IPO)in late May.

During this time, the company has successfully completed four acquisitions (including Countrytell) to drive its regional fixed wireless network.

Swoop shares are up 72% year-to-date but for investors that managed to participate in its IPO, they’d be up a nice 430%.

The post Here’s why the Swoop (ASX:SWP) share price is up 11% on Wednesday appeared first on The Motley Fool Australia.

More reading

• Experts reveal 3 high-conviction ASX shares

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.

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The S&P/ASX 200 Index (ASX: XJO) has dipped into the red in early afternoon trade after a promising start this morning. At the time of writing, the benchmark index is trading 0.54% lower at 7,209.6 points. However, earlier, the Aussie index reached an intraday high of 7,279 points.

While there are some laggards weighing on the Australian share market today, the information technology sector is pulling its weight. This follows a strong showing by some of the world’s biggest tech companies during trade on the US market last night.

Let’s take a closer look.

What’s driving the ASX 200 today?

Though the tech sector is by far the best performing on the ASX market today, we can’t neglect other contributors to the ASX 200. Namely, the strong push of energy shares as oil and coal prices continue to move higher on supply concerns.

Consequently, the share prices of Whitehaven Coal Ltd (ASX: WHC), Santos Ltd (ASX: STO), and Oil Search Ltd (ASX: OSH) are all enjoying gains in excess of 2% on Wednesday.

Back to the top of tech shares — the high-flying sector is up 2.35% thanks to a handful of heavy hitters on the ASX. Firstly, in the top spot is buy now, pay later (BNPL) company Afterpay Ltd (ASX: APT). Shares in the instalment payment provider are up 4.05% after its expected acquirer, Square Inc (NYSE: SQ), climbed 4.3% higher overnight.

Close behind is Xero Limited (ASX: XRO) and TechnologyOne Ltd (ASX: TNE), up 3.4% and 3% respectively, despite no announcements from either of these companies.

Furthermore, it is worth mentioning the only tech companies in the ASX 200 that are in the red today are Iress Ltd (ASX: IRE), WiseTech Global Limited (ASX: WTC), and Altium Limited (ASX: ALU).

At the other end

As with most days on the Australian market, there are some companies struggling to keep up. On Wednesday, these names are spread across numerous industries.

For instance, the worst performer in the ASX 200 Index heading into lunch is Washington H Soul Pattinson & Co Ltd (ASX: SOL). We can also see Flight Centre Travel Group Ltd (ASX: FLT), The a2 Milk Company Ltd (ASX: A2M) and Ausnet Services Ltd (ASX: AST) rounding out the top four biggest fallers in the index so far today.

The post Technology shares lead the battle to lift the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: A2 Milk class action, tech shares rebound
• The Pilbara Minerals (ASX:PLS) share price surges on resource upgrade
• Why this broker just upgraded the Baby Bunting (ASX:BBN) share price to buy
• ASX futures point to rebound today after US stock market lifts
• Here’s what happened to the Wesfarmers (ASX:WES) share price in September

Motley Fool contributor Mitchell Lawler owns shares of AFTERPAY T FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Altium, Square, WiseTech Global, and Xero. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Altium, Washington H. Soul Pattinson and Company Limited, WiseTech Global, and Xero. The Motley Fool Australia has recommended A2 Milk and Flight Centre Travel 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 S&P/ASX 200 Index (ASX: XJO) seems to be having yet another day in the red on the markets so far today. At the time of writing, the ASX 200 is down a disappointing 0.19% to 7,234 points. The Brickworks Limited (ASX: BKW) share price is doing a lot better though. Brickworks shares are presently up a very healthy 1% to $24.50 a share.

However, Brickworks performance over the past week or two hasn’t been so rosy. Even after today’s initial rise, the Brickworks share price is still down by 5.44% over the past 9 days. Over the same period, the ASX 200 has lost a far tamer 2%. So what’s going on here for Brickworks?

Brickworks share price slumps, could Soul Patts be the problem?

Well, it’s not immediately clear. Brickworks has made no major announcements in the past few weeks, and we haven’t gotten any other business updates or the like.

However, there may be another possible explanation to consider here. Brickworks is a major shareholder of Soul Patts, or Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), holding around 39.4% of the company’s shares. In turn, Soul Patts also owns a large chunk of Brickworks shares, representing roughly 43.9% of the total company.

This exposure to Soul Patts means the Brickworks share price can be influenced by this company’s performance. And Soul Patts has also had a rough couple of weeks. That’s despite what was initially a well-received earnings report that was delivered late last month. Soul Patts has also recently wound up the acquisition of the Listed Investment Company (LIC) Milton Corporation Ltd (ASX: MLT). This saw Soul Patts acquire Milton’s sizeable portfolio of ASX shares.

Over the past 9 days, this company is also down by a little more than 8%.

Since this means that Brickworks’ large stake in Soul Patts would also be down by 8% or so, perhaps investors are punishing Brickworks shares for this fall in value.

At the current Brickworks share price, the company has a market capitalisation of $3.72 billion. It also has a price-to-earnings (P/E) ratio of 15.47 and a dividend yield of 2.49%.

 

The post Why has the Brickworks (ASX:BKW) share price slumped 5% in 9 days? appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: A2 Milk class action, tech shares rebound
• Soul Patts (ASX:SOL) share price slips amid completed Milton merger
• 2 ASX shares that could keep growing the dividend every year
• 2 ASX dividend shares that could be buys in October 2021
• Why the Brickworks (ASX:BKW) share price reached a new 52-week high today

Motley Fool contributor Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company 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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