The Lynas Rare Earths Ltd (ASX: LYC) share price is slipping into the red as we commence trade this week.

The Lynas share price has been selling off since 15 September when it came off a high of $7.79 at tremendous speed.

Shares in the rare earths player are now changing hands at $6.61 each, which is a 12.33% drop from the market open on Monday.

There’s been no market-sensitive information for the company, so let’s investigate what’s up with Lynas’ shares today.

What in front of the Lynas share price lately?

Lynas’ core business area of rare earths’ mining and development is an elusive yet essential segment.

Funnily enough, rare earths metals aren’t actually that rare. But they are essential. They are used in a diverse range of applications, particularly in electrical components in everything from speakers to electric motors to medical instruments.

There are 17 of these metals and each is becoming more and more essential in the demand for electrical necessities.

What’s more, the Lynas share price can fluctuate from volatility in rare earths’ markets.

This is because Lynas, as an ASX-resource share that produces commodities, is considered a price taker. That means its share price can potentially benefit from surging demand in rare earths metals.

Looking at the price chart for Neodymium, a rare earth Lynas produces, over the last 6 months, we can see it has climbed around 34%. The Lynas share price has also climbed around 32% over the same period.

This surging demand in Neodymium is fuelled by a profile of technology advancements and more industries using these advancements. Additionally, the coronavirus is lifting our appetite for electronics in just about everything.

However, recent geopolitical tensions between the US and China appear to have spilled over to the broader ASX resources space, including the rare earths markets.

This is in addition to China placing restrictions on its domestic resource producers in 2021 to curb production rates.

This is important for Lynas. According to analysis from commodity experts Roskill, China controls around 55% of global rare earths’ production capacity and 85% of global refining output for rare earths elements.

The S&P/ASX 200 Resources Index (XJR) is down 4.91% today as well, extending its loss over the past 5 days to 8.7%. The same index is down almost 9% over the past month as well.

So it appears that broad weakness in the ASX resources sector, spurred on by geopolitical tensions and an unstable rare earths’ outlook, could be weighing on the Lynas share price today.

Lynas share price snapshot

The Lynas share price has gained 69% this year to date, extending its return to 167% over the past 12 months.

However, it has flatlined over the last month and is 2% in the red over the past week.

Despite this, Lynas shares have outpaced the S&P/ASX 200 Index (ASX: XJO)’s gain of around 25% over the past year.

The post Why the Lynas (ASX:LYC)share price is sliding 12% on Monday appeared first on The Motley Fool Australia.

More reading

• Why the Lynas (ASX:LYC) share price is up 86% in 2021
• Here are the top 10 ASX shares today
• ASX 200 energy and materials shares are leading the market on Monday
• Materials sector lagged the ASX 200 on Tuesday
• The Lynas Rare Earths (ASX:LYC) share price is soaring 4% on Tuesday

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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S&P/ASX 200 Index (ASX: XJO) travel shares took some of the hardest hits when COVID-19 swept across the globe in early 2020.

While they also enjoyed some of the bigger bounce backs in the latter months of 2020, following the announcement of successful vaccines at the end of October, they are all still trading well below their pre-pandemic levels.

The Flight Centre Travel Group Ltd (ASX: FLT) share price, for example, remains down 49% since 21 February 2020, while the ASX 200 has managed to gain 2%.

The Webjet Ltd (ASX: WEB) is still down 40% since 21 February 2020.

The Qantas Airways Ltd (ASX: QAN) share price has fared the best, but it also remains down 17% over that same period.

With the price of all 3 ASX 200 travel shares yet to recover from the pandemic lockdowns, we take a look at how they’ve been performing since reporting their full year 2021 financial results (FY21).

Along with a brief recap of those results…

How has the ASX 200 airline performed since reporting results?

Qantas reported its FY21 results before market open on 26 August.

Some of the core numbers the airline reported included a statutory loss before tax of $2.35 billion.

Reporting a $12 billion hit from the pandemic-related travel closures, full year revenue came in at $5.9 billion.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) were in line with management’s guidance, at $410 million.

Qantas did not pay a final or interim dividend in FY21.

Despite the hefty losses, the Qantas share price closed up 3.5% on Friday, perhaps driven by news on the day that the airline intended to resume international flights by the Christmas holidays.

Qantas shares are down 2% today, but remain up 11% since the company reported results. The ASX 200 has lost 4% over that same period.

How about Webjet?

Webjet reported its FY21 results back on 19 May.

The ASX 200 travel share saw its full year revenues shrink to $38.5 million, down from $266.1 million in FY20.

The company slashed costs during the year but still reported an underlying operating earnings loss of $56.3 million.

Webjet’s balance sheet remained solid, with $431 million pro forma cash on hand.

Management did not declare a final dividend.

Investors’ response to the results was fairly mild, indicating much of the bad news had already been priced in. On the day of reporting, the Webjet share price fell 0.6%. Since market open on 19 May shares are up 25%.

The ASX 200 has gained 3% over that same time.

How has Flight Centre performed since reporting?

Rounding off our ASX 200 travel shares, Flight Centre posted its FY21 results before market open on 26 August.

Among the key metrics, Flight Centre reported total revenue of $396 million, down 79% year-on-year.

The company was deep in the red, with an underlying loss before tax at $507 million, similar to losses suffered in FY20.

Despite this, Flight Centre’s balance sheet looked solid, with a cash balance as at 30 June of $1.36 billion.

As with the other 2 ASX 200 travel shares above, Flight Centre did not pay an interim or final dividend for the financial year.

Perhaps spurred on by management statement that the company can be profitable in FY22, the Flight Centre share price finished the day up 4.0%.

Since market open on 26 August, Flight Centre shares are up 10%. The ASX 200 is down 4% in that same time.

The post How have these 3 ASX 200 travel shares performed since reporting results? appeared first on The Motley Fool Australia.

More reading

• 2 ASX travel shares to consider buying
• Is it too late to buy Qantas (ASX:QAN) and other ASX travel shares?
• Qantas (ASX:QAN) share price lifts on oversubscribed bond refinance update
• To buy, hold or sell? Experts weigh in on the Webjet (ASX:WEB) share price
• Recovery gaining momentum: Flight Centre (ASX:FLT) boss

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 Webjet Ltd. The Motley Fool Australia has recommended 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 Telstra Corporation Ltd (ASX: TLS) share price may be trading lower today but it is faring much better than the market as a whole.

At the time of writing, the telco giant’s shares are down 0.5% to $3.90.

This compares to a 2.2% decline by the benchmark S&P/ASX 200 Index (ASX: XJO).

Why is the Telstra share price outperforming?

Something that could be supporting the Telstra share price a touch today was news that the company is now offering two-hour deliveries in certain areas of Australia.

According to the media release, the new service, which is offered in partnership with Zoom2u Technologies Ltd (ASX: Z2U), provides Telstra customers with a free two-hour delivery of Apple and Samsung handsets to homes in selected areas of Sydney, Melbourne, and Brisbane.

However, it is worth noting that the service is only being trialled at the moment and may not be a permanent fixture for customers.

Nevertheless, it is being trialled at a very opportune time. With Apple just announcing the iPhone 13 and Samsung launching its flip phone, demand for handsets is increasing.

And if you’re impatient when it comes to deliveries like I am, this offering could be what sways you to contract with Telstra ahead of rivals Optus or TPG Telecom Ltd (ASX: TPG).

To take advantage of the offer, customers will need to call a participating store and order their new Apple or Samsung phone. After which, Telstra advises that it will zoom the phone to the customer’s home within two hours in eligible metro areas.

Zoom2u shares fall

While the Telstra share price may be performing better than the share market today, the same cannot be said for the Zoom2u share price.

Despite being included in this offering, the company’s shares have tumbled 12% to 59 cents on Monday.

Though, this is still almost triple Zoom2u’s IPO listing price of 20 cents from earlier this month.

The post Why the Telstra (ASX:TLS) share price is outperforming the ASX 200 today appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• Brokers name 3 ASX shares to buy today
• These 3 ASX 200 shares are flying around the markets today
• Acquisitions for Wesfarmers and Domain, Telstra plans to grow and Myer back in profit. Scott Phillips on Nine’s Late News
• The Zoom2u (ASX:Z2U) share price has soared 267% in a 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 owns shares of and has recommended Telstra Corporation 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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Shares in Karoon Energy Ltd (ASX: KAR) are heading south today. This comes after the energy company released its full-year results for the FY21 financial year.

The Karoon share price is trading at $1.37 apiece, down 6.69% at the time of writing, after sinking to an intraday low of $1.30 this morning.

Karoon share price falls on record result

Some of last week’s gains in the Karoon share price have been erased today despite the company’s robust result for the 12 months ending 30 June 2021. Here are the key highlights:

• Oil production totalled 3.14 million barrels (MMbbl), since Karoon’s acquisition of the Baúna oil field in Brazil on 7 November 2020
• Sales revenue from the cargoes lifted came to US$170.8 million
• Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) jumped to $9.8 million, compared to a loss of $85.4 million in FY20
• Underlying net profit after tax (NPAT) surged to $33.4 million, against FY20’s $65.2 million loss
• No final dividend declared by the board.

What happened in FY21 for Karoon?

Karoon’s new phase as an oil producer delivered a strong performance against a backdrop of the unprecedented COVID-19 pandemic.

The company sold 6 oil cargoes totalling 2.9 MMbbl from Baúna under its oil marketing agreement with Shell. The weighted average realised price of the contract came to US$59/bbl, net of selling expenses.

Crude oil sales revenue from the cargoes lifted stood at US$170.8 million, resulting in a gross profit of US$59.4 million.

The company said operating activities generated cash inflows of US$29.8 million, compared to cash outflows of US$67.1 million in the previous financial year.

Management noted that the results were supported by the macro-oil environment. Oil prices increased from US$45/bbl to more than US$70/bbl during the year. With no hedging in place over the year, Karoon benefited from the oil price strength, ending the year in a robust financial position.

The company had cash and cash equivalents of US$133.2 million for the end of June.

What did management say?

Karoon CEO and managing director Dr Julian Fowles touched on the milestone achievement, saying:

The 2021 financial year has been transformational for Karoon.

Following the acquisition of the Baúna oil field in Brazil in November 2020, the company has now entered a new era as a material oil producer and operator.

A strong emphasis on safety and reliability, coupled with operating and financial discipline, has enabled Karoon to safely deliver a strong underlying profit from our first eight months as an oil producer.

What’s next for Karoon?

In FY22, Karoon expects Baúna production to be in the range of 4.2 MMbbl to 4.6 MMbbl. Unit production costs are forecasted at US$28 to US$32/bbl, with unit depreciation and amortisation of between US$12 and US$13/bbl.

With production costs largely fixed, the company expects unit production costs to increase, reflecting lower production rates in FY2022.

Unit depreciation and amortisation are expected to remain largely unchanged.

Dr Fowles discussed the outlook for FY22:

Our highest priority in FY2022 will be on continuing to deliver safe and reliable production from the Baúna concession while we focus on progressing the Baúna intervention and Patola projects, on time and on budget, and implementing the Strategic Refresh initiatives.

The company expects to fund investment expenditures from existing cash, cash flow and drawdowns from Karoon’s US$160 million debt facility.

The post Karoon Energy (ASX: KAR) share price sinks despite record profit appeared first on The Motley Fool Australia.

More reading

• Why is the Fenix Resources (ASX:FEX) share price crashing 27% today?
• Cettire (ASX:CTT) share price leaps another 7%, up 82% in a month
• Why the FAR (ASX:FAR) share price is crashing 50% on Monday
• 2 COVID-19 ASX shares that could be buys
• Novonix (ASX:NVX) share price leaps to another new all-time high

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. 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 Fenix Resources Ltd (ASX: FEX) share price opened to a rude awakening on Monday, down 27% to a 6-month low of 21.5 cents.

What’s driving the Fenix Resources share price?

Fenix Resources shares went ex-dividend this morning for a whopping fully-franked 5.25 cents per share.

Any investors that held Fenix Resources prior to the ex-dividend date will be eligible to receive the dividend payment on Tuesday, 5 October.

Based on last Friday’s prices of 29.5 cents, this represents a dividend yield of 17.8%.

Double-digit dividend yield? How?

Fenix Resources had a breakthrough FY21, dispatching its maiden shipment of iron ore in February 2021.

Before today’s fall, the Fenix Resources share price was up 25% year-to-date and 100% in the past 12-months.

According to its annual report, the company shipped a total of 0.501 million wet metric tonnes of iron ore which helped it generate a net profit after tax of $49.0 million.

Fenix Resources currently has a market capitalisation of just ~$140 million.

This means that based of FY21 net profit, it’s trading at a price-to-earnings of just 2.85.

Perhaps what’s more encouraging for the iron ore junior is the fact that it’s managed to hedge its iron ore sales at A$230.30/dry metric tonne for the next 12-month period.

From October 2021 to September 2022, the company entered into iron ore swap agreements for 50,000 tonnes per month.

Fenix managing director Rob Brierley commented on the hedge, saying:

The iron ore swap arrangements were foreshadowed in our … quarterly activities report for the June 2021 period. We are effectively locking in ~45% of our planned production during a 12-month period commencing October 2021, at a fixed price that is sufficient to cover the majority, if not the entirety, of our budgeted cost base.

This might explain why the Fenix Resources share price is down 5.4% year-to-date compared to Fortescue Metals Group Limited (ASX: FMG) which has plunged 42% this year.

The post Why is the Fenix Resources (ASX:FEX) share price crashing 27% today? appeared first on The Motley Fool Australia.

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• ASX 200 (ASX:XJO) midday update: Transurban acquisition, BHP & Fortescue sink
• Fortescue (ASX:FMG) share price slides 6% as iron ore woes continue
• Could the Fortescue (ASX:FMG) share price bounce back? This fund thinks so
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to sell next week

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 Cettire Ltd (ASX: CTT) share price is soaring again today despite no news having been released by the company.

The Cettire share price has gained another 6.61% today to trade at $3.87. That leaves it 81.69% higher than it was this time last month.

Let’s take a look at what’s driving the ASX newbie’s stock higher lately.

What is Cettire?

If you’re not familiar with Cettire, it’s an online luxury goods retailer.

As my Foolish colleague recently reported, the company is reportedly backed by some of Australia’s richest individuals.

Interestingly, Cettire doesn’t hold its own inventory. Instead, most goods sold on its platform are shipped directly from Cettire’s suppliers.

Cettire listed on the ASX in December 2020. Under its prospectus, shares in the company were offered for 50 cents apiece.

What’s driving the Cettire share price higher?

That, dear market watcher, is a good question.

Cettire hasn’t released any price-sensitive news to the ASX since its financial year 2021 earnings.

Over financial year 2021, Cettire’s gross revenue quadrupled to outperform its guidance by 40%.

However, Cettire’s net profit after tax dropped to a $251,000 loss for financial year 2021. The previous financial year, the company reported a $1.5 million after-tax profit.

The Cettire share price gained 2.7% on the back of its results and another 49% since.

Additionally, the company announced it had migrated its e-commerce storefront from a third-party platform to its own software last month.

According to Cettire, the change will increase the site’s performance, flexibility, and functionality.

Cettire’s Founder and CEO Dean Mintz commented the software will support its rapidly growing customer base, product offerings, and suppliers.

And, indeed, the company’s business is certainly growing in all the above metrics. Further, the Cettire share price might be getting a boost from the company’s impressive growth.

In financial year 2021, the number of active customers shopping on Cettire increased by 285% with 40% of the company’s revenue coming from repeat customers. In addition, Cettire added 78,000 new products to its site, bringing its total number of purchasable products to more than 190,000 from 1,700 brands.

The post Cettire (ASX:CTT) share price leaps another 7%, up 82% in a month appeared first on The Motley Fool Australia.

More reading

• Cettire (ASX:CTT) share price leaps another 14%, up 66% in a month. Here’s why
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• These three ASX retail shares delivered double (and triple!) digit returns in 2021
• Why the Cettire (ASX:CTT) share price is slumping 5% today

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Cettire Limited. The Motley Fool Australia has recommended Cettire 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 FAR Ltd (ASX: FAR) share price is one of the worst performers on the Australian share market on Monday.

In afternoon trade, the oil and gas explorer’s shares are down a massive 50% to 75 cents.

Why is the FAR share price crashing today?

The good news for shareholders is that the decline in the FAR share price has nothing to do with its performance or commodity prices.

Instead, this decline has been driven by the company’s shares trading ex-capital return this morning. This follows shareholders voting to approve a capital return last month at a general meeting.

What’s happening?

Last month the company’s shareholders gave the thumbs up to an $80 million return via a cash capital return of 80 cents per share.

This capital return was proposed following the completion of the sale of its interest in the RSSD Project to Woodside Petroleum Limited (ASX: WPL) for US$126 million.

Management advised that the $80 million return represents surplus capital and leaves the company with sufficient funding for its drilling offshore The Gambia and for ongoing purposes.

Eligible shareholders can now look forward to receiving this capital return next week on 28 September.

What now?

If you were to take this capital return out of the equation, the FAR share price would actually be trading 6 cents higher today.

For example, the FAR share price is down 74 cents or 50% to 75 cents. Whereas the capital return is for 80 cents.

This appears to be an indication that some investors are confident in the direction the company is taking with its drilling campaign off the coast of The Gambia. This includes the Bambo-1 well which is targeting a combined best estimate of 1.118 billion barrels of oil.

This could make FAR one to watch in the energy sector in FY 2022.

The post Why the FAR (ASX:FAR) share price is crashing 50% on Monday appeared first on The Motley Fool Australia.

More reading

• Cettire (ASX:CTT) share price leaps another 7%, up 82% in a month
• 2 COVID-19 ASX shares that could be buys
• Novonix (ASX:NVX) share price leaps to another new all-time high
• Origin (ASX:ORG) share price slides amid moves into green hydrogen
• The Immutep (ASX:IMM) share price is up 25% in a month and could go 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 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 some COVID-19 ASX shares that may be worth thinking about at the current prices with the growth they are creating.

It has been a difficult time over the last year and a half, however some companies have experienced elevated levels of growth.

Whilst certain industries are seeing a reversal of that strong sales growth, others are still seeing elevated levels of demand, like these two:

Sonic Healthcare Ltd (ASX: SHL)

Sonic is one of the world’s largest pathology businesses with a market capitalisation of just over $20 billion according to the ASX.

It says that it’s playing a crucial role in combating the COVID-19 pandemic in its markets, whilst continuing to provide its usual essential healthcare services. A total of around 138 million patients were served globally in FY21.

Approximately 30 million COVID-19 PCR tests have been performed to date in around 60 Sonic laboratories globally, and Sonic has become Australia’s largest non-government COVID vaccination provider. It has generated “significant” revenue and earnings in FY21 from COVID-19 testing.

The COVID-19 PCR test volumes were lower in the second half of FY21 compared to the first half, though volumes were increasing with the spread of the Delta variant.

In FY21, Sonic’s revenue increased by 28% to $8.8 billion and net profit rose 149% to $1.3 billion thanks to increased operating leverage and utilising existing assets and people. Excluding COVID testing, revenue was up 6% compared to FY20 and 4% compared to FY19.

The ASX COVID-19 share also grew its FY21 annual dividend by 7%.

Sonic is looking to spend some of its elevated profit on finding acquisitions and contracts that will help lock in growth compared to the pre-pandemic business.

At the current Sonic share price, it’s valued at 20x FY22’s estimated earnings.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price is down around 12.5% since the end of August 2021, which is when it released its statutory FY21 result.

The e-commerce retailer had already told investors near the end of July 2021 how it had performed in FY21.

But investors got an insight into the trading performance of the business in FY22 to 27 August 2021. It said that year on year revenue growth for the first few weeks of the current financial year was 49%.

Management pointed to a few different tailwinds that are helping the business. It noted the ongoing adoption of online shopping due to structural and demographic shifts, an acceleration of these trends due to COVID-19, an increase in discretionary income due to travel restrictions and strong housing market growth.

In FY21, despite strong investing for growth, Temple & Webster saw full revenue growth of 85% to $326.3 million and normalised net profit after tax (NPAT) jumped 165% to $14 million.

The COVID-19 ASX share is looking to invest in a number of areas to improve the customer experience as well as increase product ranges and become more efficient. The earnings before interest, tax, depreciation and amortisation (EBITDA) margin is expected to be low in the next few years as it pursues this heavy investment strategy.

The post 2 COVID-19 ASX shares that could be buys appeared first on The Motley Fool Australia.

More reading

• 2 ASX growth shares analysts rate as buys right now
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• 3 excellent ASX share ideas for investors this week
• How have ASX healthcare shares performed during the August 2021 earnings season?
• 2 fast-growing ASX shares named as buys

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The Novonix Ltd (ASX: NVX) share price is soaring to another new all-time high.

At time of writing, the ASX lithium-ion battery company is trading for $6.22 per share, up 3.67% in intraday trading, having earlier posted gains of more than 8%.

Below, we look at what been driving the Novonix share price to a series of new records.

What’s driving the extended run higher?

The Novonix share price has set a number of new record highs over the past month.

While there are company specific factors helping drive the company’s valuation higher, it also looks to be benefiting from rapid growth in the demand outlook for lithium-ion batteries. These are among the top options to power the expected explosion in electric vehicles (EVs) numbers over the coming years.

In the first 2 weeks of September alone, booming demand for lithium saw technical and battery grade lithium carbonate prices rocket by more than 20% in the Chinese domestic market, according to data from Bench Mark Minerals.

Battery grade lithium prices have now soared 215% in 2021.

As for the Novonix share price? It’s up 408% in 2021.

Another tailwind for Novonix shares is the reshuffle in the S&P/ASX Indices announced by S&P Dow Jones a few weeks ago. That reshuffle sees Novonix join the S&P/ASX 300 Index (ASX: XKO), effective as of market open this morning.

Its inclusion in the ASX 300 may not directly impact retail investors. However, it will open the door to some institutional funds which are limited to investing in the top 300 ASX shares.

Novonix share price snapshot

It’s been a banner year for Novonix investors, with shares up 408% year-to-date and 72% in the past month alone.

By comparison, the All Ordinaries Index (ASX: XAO) is up 9% in 2021.

The steady run higher has seen Novonix’s market capitalisation exceed $2.4 billion.

The post Novonix (ASX:NVX) share price leaps to another new all-time high appeared first on The Motley Fool Australia.

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• Which ASX shares are looking to finish the week as the top movers on the ASX 300 today?
• The Novonix (ASX:NVX) share price appears to have come off the boil. Is it a buy?
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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 Origin Energy Ltd (ASX: ORG) share price has stepped into the red from the opening of trade on Monday.

Origin shares are now exchanging hands at $4.365 apiece, a slight dip into the red from the market open.

Let’s take a closer look at what’s at play here.

What’s up with the Origin Energy share price today?

Origin Energy’s share price is on the move despite there being no market-sensitive news for the company today.

However, one factor that could be weighing in is the company’s continued push into renewables, specifically green hydrogen.

It’s a funny-sounding name – “green hydrogen” – but it simply refers to hydrogen fuel made from renewable energy instead of fossil fuels.

For those interested in the technical side, it is hydrogen fuel obtained from the electrolysis of water where electricity is generated through low carbon/renewable sources. Obtaining hydrogen this way supposedly only leaves oxygen as the by-product, versus other nasty wastes.

The end product, along with its derivatives, is then used for things like electricity and transportation fuel.

Origin’s play comes amid a wave of interest from ASX resources names in developing green commodities.

Zooming out, it’s clear the wider trend has seen ASX energy and resource companies divesting and/or pivoting away from fossil fuels, re-investing instead into renewable energy solutions.

This appears to be related to a combination of government mandated actions and in alignment with the Paris Agreement on Climate Change.

Strengths in the broader commodity markets in 2020–21 have lead to resource and energy companies generating high margins and equally as high cash flow over FY20–21. As such, they have free cash on the books ready to spend.

So, in a bit of a paradox, the recent trend of ASX energy and resource companies investing heavily into renewables is somewhat fuelled by strengths in underlying “fossil fuels” commodity markets.

What does all this mean for Origin Energy’s share price?

Origin commenced a $3.2 million feasibility study into building an “export scale green hydrogen and ammonia plant” in Tasmania back in November 2020.

Origin’s proposal indicates it will produce green hydrogen in Bell Bay, Tasmania, from “sustainable water using sustainable energy”.

This hydrogen will then be processed with nitrogen to create “green ammonia” which Origin intends to sell for export.

The “greater than 500-megawatt plant” has a capacity to produce 420,000 tonnes of green ammonia each year and could cost up to $1 billion.

The feasibility study is nearing completion in December 2021 and Origin is gearing up to pull the levers on its Bell Bay venture, pending the study results.

Speaking to The Australian, Origin head of future fuels and growth, Tracey Boyes, said the company’s first steps into green hydrogen were “definitely about learning and not making a loss”. That sounds about right in business acumen terms.

Boyes expects with the “first few projects, (it) won’t be making millions of dollars”, acknowledging that Origin “wouldn’t be expecting as high a return at any rate” on the green projects.

However, Origin is seeing past the numbers in its step into renewables, with Boyes’ stating the reason hydrogen is interesting for the industry is “because of (its) decarbonisation in many ways”.

Foolish takeaway

Origin Energy is gradually pivoting into renewable energy solutions, much like several of its ASX-listed energy and resource peers.

Origin’s push is into green hydrogen and ammonia. It has a feasibility study on a site in Tasmania that is nearing completion in December 2021. The outcomes of the study are yet to be heard.

This could have an impact on the Origin Energy share price, which has struggled this year to date and posted a loss of 8%.

The post Origin (ASX:ORG) share price slides amid moves into green hydrogen appeared first on The Motley Fool Australia.

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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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