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

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

Square (NYSE: SQ) recently agreed to buy Afterpay (OTC: AFTP.F), an Australian “buy now, pay later” (BNPL) service provider, for $29 billion in stock. The deal represents a premium of 21.9% over Afterpay’s ten-day weighted average share price, and values the company at 25 times this year’s sales.

Square’s stock rallied following the announcement, which accompanied a solid second-quarter report on Aug. 1 that beat analysts’ expectations. Meanwhile, shares of its rival PayPal (NASDAQ: PYPL), which had already been sliding following its mixed second-quarter report on July 28, fell even further after Square posted its earnings report and announced the Afterpay deal.

Square’s takeover of Afterpay counters PayPal’s “Pay in 4” BNPL service, which it launched last August. Both Afterpay and Pay in 4 let customers pay for goods in four interest-free payments, but Square plans to integrate Afterpay into both its Seller ecosystem and its rapidly growing Cash App, which already provides peer-to-peer payments, Bitcoin (CRYPTO: BTC) purchases, and stock trading services.

Should PayPal’s investors worry about Square’s latest move? Or is there enough room for both companies and their other rivals to thrive in the expanding BNPL market?

Why is Square paying a premium for Afterpay?

Square’s takeover of Afterpay, which will close in the first quarter of calendar 2022, initially seems pricey. It will pay nearly a quarter of its market cap — and significantly dilute its existing shares with an all-stock transaction — for a company that will likely only boost its 2022 revenue by about 5%.

Afterpay’s revenue rose 78% in fiscal 2021, which ended in June, but Square’s revenue surged 101% in 2020 and is expected to rise 102% this year. Therefore, Square seems to be paying a high premium and diluting its shares for a company that generates slower growth.

However, Square’s growth in 2020 and most of 2021 was largely driven by bitcoin trades during the pandemic. If we exclude those bitcoin sales, Square’s revenue only rose 17% in 2020, and analysts expect its total revenue to grow just 13% in 2022 as those cryptocurrency trades normalize.

However, they still expect Afterpay’s revenue to rise 66% in fiscal 2022 — so it could generate smoother growth than Square’s volatile core business. Afterpay would also expand Square’s overseas presence, since it only generates about half of its underlying sales in the United States.

Afterpay’s active customers grew 63% to 16.1 million in 2021, and it serves nearly 100,000 merchants worldwide. Square’s Cash App hit 40 million active customers in June, up from 36 million at the end of 2020. Merging those two high-growth platforms together — and adding Afterpay’s BNPL services to its platforms — could significantly expand Square’s ecosystem.

Should PayPal be concerned?

PayPal was already in a vulnerable position after its second-quarter revenue growth and third-quarter revenue forecast missed Wall Street’s expectations. It also warned that its loss of eBay to its Dutch rival Adyen — which concludes its three-year transition this year — will throttle its near-term revenue growth.

That slowdown raises doubts about PayPal’s ambitious plans to more than double its annual revenue by 2025, as well as concerns about its recent decision to hike its processing fees for U.S. merchants.

PayPal operates in over 200 markets worldwide, and its number of active accounts rose 16% year-over-year to 403 million in the second quarter. Its peer-to-peer payments app Venmo serves more than 50 million active users.

PayPal repeatedly cited its BNPL service as a growth engine during its latest conference call. Over seven million consumers have used its BNPL service for more than 20 million transactions so far. The service has processed more than $3.5 billion in TPV (total payment volume) since its launch, with $1.5 billion of that total processed in the second quarter alone.

That figure sounds impressive, but $1.5 billion only accounted for 0.5% of PayPal’s total TPV of $311 billion during the quarter. It also reveals its Pay in 4 platform is still much smaller than Afterpay — which generated $15.6 billion in underlying sales (comparable to PayPal’s TPV) in fiscal 2021.

PayPal previously offered “pay later” options with its revolving credit line and an Easy Payments feature, but “Pay in 4” marked its first step into the streamlined, interest-free BNPL market. But it arrived late to the party — Afterpay was founded in 2014, while its Australian rival Zip was founded in 2013.

The bottom line

On its own, Square’s takeover of Afterpay won’t derail PayPal’s long-term growth. Bank of America estimates the market for BNPL apps will expand 10-15 fold by 2025, so there could be plenty of room for Square and PayPal to expand without trampling each other.

However, Square’s massive acquisition of Afterpay, which instantly gives it a bigger share of the BNPL market than PayPal, highlights the key difference between the two fintech giants.

Square is consistently more daring — as seen with its early moves in bitcoin trades, stock trades, and the expansion of its seller services — while PayPal is more conservative. Therefore, investors should question why PayPal didn’t buy Afterpay first — and if it needs to get more aggressive to hit its lofty growth targets for 2025.

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

The post Should PayPal investors be worried about Square’s Afterpay takeover? appeared first on The Motley Fool Australia.

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Leo Sun owns shares of Square. Bank of America is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Bitcoin, PayPal Holdings, and Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended eBay and has recommended the following options: long January 2022 $75 calls on PayPal Holdings and short October 2021 $70 calls on eBay. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended PayPal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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The Resolute Mining Limited (ASX: RSG) share price is charging higher today.

In morning trade, the embattled gold miner’s shares are up 6% to 58.7 cents.

Despite this gain, the Resolute Mining share price is still down 30% since the start of the year.

Why is the Resolute Mining share price charging higher?

Investors have been bidding the Resolute Mining share price higher today following the release of a positive announcement.

According to the release, the company has signed an agreement to sell its interest in the troubled Bibiani Gold Mine to Asante Gold Corporation. The sale will be for a total cash consideration of US$90 million. This comprises a US$30 million deposit, US$30 million on or before six months from completion, and US$30 million on or before 12 months from completion.

Positively, this agreement has received Ministerial Consent, having been approved by the Ghanaian Honourable Minister of Lands and Natural Resources. Earlier this year the Minister had blocked the sale of the asset to China’s Chifeng Jilong for ~$105 million.

The completion of the transaction is expected within 10 days, pending no material adverse changes over this period.

Resolute Mining’s Managing Director and Chief Executive Officer, Stuart Gale, commented: “Resolute has made a commitment to deliver sustainable and enduring value to shareholders and to the communities in which we operate. Resolute is proud of its contribution to Ghana and particularly proud to have the opportunity to transfer ownership in Bibiani to a highly regarded team with strong ties to Ghana.”

“The transaction is consistent with our strategic focus on our core operating assets and strengthening the balance sheet, with the initial cash receipt of US$30 million to be applied to the voluntary repayment of debt. We do not expect there to be any material tax implications following the completion of this transaction,” he added.

The post Why the Resolute Mining (ASX:RSG) share price is racing 6% higher today appeared first on The Motley Fool Australia.

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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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In the last four days, the Vulcan Energy Resources Ltd (ASX: VUL) share price has already rallied almost 18% to a record high of $11.56.

Taking a step back, shares in the emerging lithium producer have surged 317% year-to-date. They have also gained an extraordinary 2,117% in the last 12 months.

At the time of writing, Vulcan shares are up 0.26% on the previous clsoing price to $11.56.

The company isn’t expected to begin producing lithium until mid-2024.

So why does the Vulcan share price continue to surge?

Why the Vulcan share price has an edge

Vulcan’s Zero Carbon Lithium project draws on naturally occurring, renewable geothermal energy to power its lithium extraction processes. This means that its operations use no fossil fuels, require very little water and a tiny land footprint.

Vulcan flags that there is a high environmental footprint for the production of lithium. It says there are approximately 1 billion CO2 emissions from producing and refining lithium from hard-rock mines.

Many household ASX 200 lithium miners including Galaxy Resources Limited (ASX: GXY), Pilbara Minerals Ltd (ASX: PLS) and Orocobre Limited (ASX: ORE) use both hard-rock and water intensive brine extraction methods.

Surprisingly, when you invest in Vulcan shares, you’re gaining exposure to both an energy and lithium business.

Alongside the company’s core lithium business, Vulcan also aims to develop an energy business which would sell its excess geothermal energy to the grid and sell energy, in the form of heat, to public and private customers.

Vulcan to offset CO2 penalties for automakers

There are currently penalties in place for vehicles’ emissions in the European Union. However, there are none which target the supply chain, according to Vulcan.

In the company’s Zero Carbon Lithium corporate presentation, the company said “this is likely to change shortly with new EU legislation and lead to heavy penalties if carmakers are not sourcing greener raw materials”.

The company believes its Zero Carbon Lithium is a solution which “offers a negative carbon footprint that will help automakers to reach their sustainability targets by offsetting CO2 generated by the rest of their supply chain”.

There was positive news for the Vulcan share price earlier this week. This came when the company revealed a 5-year strategic partnership with Renault Group.

The bigger picture

The surging Vulcan share price isn’t a one-man show in the lithium sector.

The Pilbara Minerals and Galaxy share price have lifted well over 100% year to date. Orocobre is trailing behind, up 87% this year.

Beyond ASX-listed lithium players, the Global X Lithium & Battery Tech Exchange Traded Fund (ETF) rallied 4.47% overnight to a new all-time high.

The Lithium ETF invests in the full lithium cycle, from mining and refining through to battery production.

The ETF is up 39% year-to-date, reflecting broader tailwinds for the industry.

The post Why the Vulcan (ASX:VUL) share price is running hot in August appeared first on The Motley Fool Australia.

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Motley Fool contributor Kerry Sun owns shares of Vulcan Energy Resources Limited. 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 PointsBet Holdings Ltd (ASX: PBH) share price is back on form and pushing higher on Thursday.

At the time of writing, the sports betting company’s shares are up over 2% to $9.83.

Why is the PointsBet share price rising?

The catalyst for the rise in the PointsBet share price on Thursday appears to have been a bullish broker note.

According to a note out of Goldman Sachs, its analysts have reiterated their buy rating but trimmed their price target on the company’s shares to $14.90.

Based on the current PointsBet share price, this revised price target still implies potential upside of 51% over the next 12 months.

What did the broker say?

Goldman has lowered its earnings forecasts slightly to reflect its $400 million capital raising (which came as a surprise to the broker) and expectations that PointsBet will spend more heavily to grow its market share in the United States.

Nevertheless, the broker remains very positive on the company’s outlook and continues to forecast very strong growth over the medium term. Especially given its US$50 billion total addressable market (TAM) in the US and its strong position.

The broker explained: “Reiterate our Buy rating on PBH, with our thesis underpinned by i) PBH’s leverage to the burgeoning US Sports Betting and Gaming market which we forecast to be a >US$50 bn TAM opportunity at maturity with Canadian potentially >C$3bn, ii) our view that PBH is well-placed to achieve 10% share in states it operates in, iii) upside risk to long-run sustainable margins in Aus and the US, iv) Scalability benefits ahead noting positive impacts from the NBCUniversal deal to come/iGaming launch leveling playing field vs. peers, and v) strong management team and execution track record.”

The PointsBet share price has been a very strong performer over the last 12 months. During this time, the company’s shares are up a massive 67%.

The post PointsBet (ASX:PBH) share price higher on bullish broker note appeared first on The Motley Fool Australia.

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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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Nick Scali Limited (ASX: NCK) share price is rising on Thursday morning following the release of its full year results.

At the time of writing, the furniture retailer’s shares are up 5% to a record high of $12.96.

Nick Scali share price higher after doubling profits in FY 2021

• Sales revenue increase 42.1% year on year to $373 million
• Same store sales growth of 34%
• Earnings before interest and tax (EBIT) margin increased 940bps to 32.7%
• EBIT jumped 100.5% to $121.9 million
• Underlying net profit after tax doubled to $84.2 million, beating guidance of $78 million to $80 million)
• Fully franked final dividend per share up 11.1% to 25 cents

What happened in FY21 for Nick Scali?

As you might have guessed from the rising Nick Scali share price, the retailer had a strong 12 months. It reported sales growth of 42% and underlying profit growth of 100% for the 12 months ended 30 June. This was driven by buoyant trading conditions thanks to a booming housing market and a favourable redirection in consumer spending due to travel restrictions.

In fact, demand was so strong that its total written sales orders for the year outstripped sales revenue and came in at $401.6 million. This resulted in an end of year order bank 35% higher than at 30 June 2020.

Positively, despite rising freight and supply chain costs during the year, the company’s gross, operating, and profit margins all improved year on year.

At the end of the period, the company had a total network of 61 showrooms across Australia and New Zealand. It continues to assess new opportunities in line with its long-term showroom network target of 85 showrooms.

What did management say?

Nick Scali’s Managing Director, Anthony Scali, was very pleased with the company’s performance during FY 2021.

He said: “The most pleasing aspect of our FY 21 result, was the ability of our distribution network across Australia and New Zealand to deliver the materially elevated sales revenue whilst maintaining the same level of costs as FY20.”

What’s next for Nick Scali?

Possibly holding back the Nick Scali share price a touch today was its mixed outlook commentary.

The release explains that the company’s performance during the first month of FY 2022 was impacted by government mandated lockdowns in Greater Sydney, Victoria and South Australia. This led to written sales orders falling 27% in July compared to the prior corresponding period. Though, it does note that Victoria and South Australia have traded exceptionally well since coming out of their lockdowns towards the end the month.

In addition, this was offset partly by strong online growth. Nick Scali revealed that online sales increased 88% for the month of July compared to the same period a year earlier.

However, due to the high levels of uncertainty caused by lockdowns, supply chain challenges, and global shipping costs, management isn’t in a position to provide guidance at this point.

It concluded: “Despite the buoyant trading conditions, there is a high degree of uncertainty in the current retail environment, due to current and potential future lockdowns, supply chain challenges caused by lockdowns in sourcing countries, as well as the continuing escalation of global shipping costs. Therefore, at the current time, it is not possible to provide profit guidance for the Company for the first half of FY22.”

The Nick Scali share price is now up 68% over the last 12 months.

The post Nick Scali (ASX:NCK) share price up 5% to record high on FY 2021 results appeared first on The Motley Fool Australia.

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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 AFL has the Father/Son rule, allowing a player to play for his old man’s footy team (assuming certain criteria are met).

In my house — and given my lack of sporting ability — the Father/Son rule applies more to barracking than playing.

My 8yo is, under that rule, a fourth-generation Sydney Roosters fan.

He lives 100km from Bondi.

I grew up 50km away, and the closest I got was working in Bondi Junction for a few years.

But such is the way of things in many households, including ours.

I mean, he was free to pick his own footy team, but I might have planted some seeds with a Roosters jersey before he could speak and a Roosters footy before he could walk.

But I digress.

We were watching the game the other night.

And, as these things go, he was unhappy with the referee’s interpretation of one particular event.

“He didn’t knock it on! It went backwards” was the strangled cry.

Now, I’m as big a Chooks fan as you’ll find.

But I was also a junior league referee in my younger (and fitter days).

As a result, while I desperately want my team to win, and I desperately dislike it when I feel the rules are being applied inconsistently or incorrectly, the former referee in me can’t bring myself to completely disregard reality.

“The ball did end up going backwards” I explained, “But it went forwards out of his hands first, then bounced backwards.”

“That’s not fair!” came the reply.

The conversation that followed traversed both the rules of footy and a reminder that ‘fair’ isn’t the same as ‘I think the rules should be different’.

If you’re a parent, that’s probably familiar.

It’s also a little glimpse into our basic human nature.

Once we pick a side, we do truly start to lose perspective.

We notice the referee’s mistakes that hurt our team far more than we notice the reverse.

And while we say we want fairness, few of us actually complain when a blatant foul is missed by an official when one of our guys (or girls) is the perpetrator.

“Oh well, he was wrong, but we’ll take it” is the closest most of us get.

“We was robbed” is heard quite a lot more than “They was robbed”.

Again, it’s not surprising.

And it’s only footy, right?

But what about when it seeps into the rest of our lives?

I do tend to think we’re worse off when it comes to politics, for example, when we barrack for our team, no matter what.

When we hate it when ‘their guy’ does it, but turn a blind eye — or wilfully support it — when ‘our guy’ does, our democracy is weakened just a little more.

When we don’t think critically about an idea, because ‘our team’ came up with it. Or don’t consider the merits of ‘their idea’ before rejecting it.

The problem, of course, is that these responses aren’t even necessarily conscious choices.

Our subconscious does most of the work for us.

We know, for example, that ‘the endowment effect’ — a psychological bias — leads us to value something we have more highly than the same object if someone else had it.

(Famously, half of a group was given a coffee mug, and the other half were given money to buy the mug from those that had one. Time and time again, the group with the money would value the mug at, say, $2, while the group with the mug thought it was worth, say, $5. No matter how many times you run the experiment, the ‘endowment effect’ shows up.)

In politics — like in sport — confirmation bias tends to cloud our thinking. And, well, straight up vanilla-flavoured bias. We’ve made our choice, we want to be right, and it skews how we see and interpret the world.

I do think it’s a cancer on our politics. But that’s not my point. At least, not today.

Because I think it also impacts our investing.

I have to say, I’m still not sure if Square Inc (NYSE: SQ) isn’t paying too much to acquire Afterpay Ltd (ASX: APT), in the $39 billion deal that was announced on Monday.

But I also have to admit that, given I didn’t buy shares at $10, $20, $50 or $75, on their way to $120-plus, I might also be subconsciously trying to justify my own decision.

I don’t think I’m doing it consciously, but I can’t rule out that subconscious possibility.

I also think Afterpay’s products are bad for consumers.

Did that jaundice my view of the company as an investment?

Consciously, no. I own other companies whose products and services I think are irrational consumer choices. (I wouldn’t use them but I think people will, and I think the company will be successful.)

But subconsciously? Did my hope that consumers would make better financial choices influence my thinking on the company’s shares? Maybe, yeah. I can’t say, for sure.

Equally, while Afterpay shareholders pat themselves on the back for being ‘right’, can we be sure Square is not hugely overpaying for an overpriced asset? Nope.

But few of us, when we sell something for a stupidly high price, want to admit we were lucky. We much prefer to believe the buyer has seen the same thing we have, and is testifying to our genius.

Here’s another one to watch out for: “If I owned it, I wouldn’t sell it, but I wouldn’t buy it at this price”.

Kinda seems logical at first. Until you think about it.

If you wouldn’t pay $100 for a new pair of jeans, you should happily take someone else’s $100 if they want to buy those same jeans from you.

“I wouldn’t buy those jeans for $100, but if I already owned them, I wouldn’t sell them at this price.”

Really?

If you’ve read the whole way down, you’ll know that’s the endowment effect at play.

Now, I’m not saying you should buy, sell, buy and sell a company as its share price moves around by a few percentage points either way.

That’d be crazy.

But if you wouldn’t buy, say, Woolworths Group Ltd (ASX: WOW) shares for $35, why wouldn’t you sell them?

You obviously think $35 is too much to pay. Presumably, because you think at that price the future returns aren’t going to justify your investment.

So why not sell them, and buy something with better return potential.

It literally makes no sense (excluding tax considerations), to say something is too expensive to buy, but not expensive enough to sell.

It’s why we try to keep our ‘Hold’ recommendations to a minimum at The Motley Fool.

We ask ourselves ‘Is it likely to be market-beating or not’. It’s a yes/no question, usually with a Buy/Sell answer.

We don’t always do that, of course. Sometimes we use Hold when a company or industry is volatile, and we’re just putting the company in a ‘wait and see’ category.

Sometimes, our view is so borderline that we don’t have sufficient conviction either way.

But we try to keep those to a minimum and for as little time as possible.

Lastly, while it’s great to own shares in companies you like, and whose products and services you use, it’s important not to lose perspective.

And this one is hard.

You need enough conviction to buy and hold the shares, but you need to retain enough perspective not to be taken for a ride by management, to ignore or not see declines, and to realise when a company’s shares simply get too expensive not to sell.

The same can be true of refusing to take a loss, figuring you’ll wait until the shares come back up. Or, to think ‘Well, they’ve fallen this far… they must be good value now’.

Sometimes, that’s true. Sometimes — maybe often, if you’ve chosen well — you should stick to your guns. But always try to be as unbiased as you can, bringing enough perspective to each question that you won’t be mugged by your own subconscious.

And, perhaps most important of all, use other psychological biases that work in your favour. My favourite one is a bias to quality, meaning that if I buy well, the subsequent confirmation and endowment biases will still be there, but I will at least have the quality of the company itself to count on.

Another is being diversified.

And then there’s time. Your mistakes will, unfortunately, be a smaller and smaller part of a portfolio, meaning they can no longer hurt you as much, while your successes go on to be larger and larger parts of your portfolio (as long as you can resist selling them), meaning compounding will work in your favour.

Fool on!

The post The Father/Son rule doesn’t stretch to investing appeared first on The Motley Fool Australia.

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Motley Fool contributor Scott Phillips 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 Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. 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 Imugene Limited (ASX: IMU) share price is pushing higher on Thursday morning.

At the time of writing, the clinical stage immuno-oncology company’s shares are up 3.5% to 30.5 cents.

Why is the Imugene share price rising?

Investors have been bidding the Imugene share price higher today following the release of an announcement.

According to the release, Imugene has signed an exclusive strategic partnership with Nasdaq-listed clinical-stage biotechnology company, Celularity. The two companies will work together to develop off-the-shelf placental-derived allogeneic therapies.

The release explains that, as part of the partnership, Imugene and Celularity will initially collaborate to develop the combination of Imugene’s CD19 oncolytic virus technology and Celularity’s CD19 targeting allogeneic chimeric antigen receptor (CAR) T cellular therapy, CyCART-19, for the treatment of solid tumours.

CyCART-19 is a placental-derived T-cell investigational therapy engineered with a CAR that is cryopreserved and will be available off-the-shelf.

“The potential to shift the cellular medicine paradigm”

Imugene’s Managing Director & Chief Executive Officer, Leslie Chong, said: “We believe the synergy between Celularity’s placental derived cells and our OnCARlytic platform has the potential to shift the cellular medicine paradigm.”

“In preclinical studies Celularity’s cellular therapies have shown the ability to overcome limitations that have hindered other approaches, including increased proliferation and persistence in vivo, resistance to T-cell exhaustion and low immunogenicity, which allows for repeated dosing. These unique characteristics perfectly align with our vision for a combination treatment strategy, and we look forward to closely working together to bring this treatment strategy to the clinic and patients in need,” she added.

This sentiment was echoed by Robert J. Hariri, M.D., Ph.D., the Chair and Chief Executive Officer of Celularity.

He said: “We are excited to initiate this research collaboration, which we believe will lay the foundation for a new approach to the treatment of solid tumors. Most solid tumors have variable targetable antigens, limiting CAR T-cell therapy efficacy. This treatment strategy with Imugene has the potential to apply to a new range of indications by enabling CD 19 targeted cellular medicine to expand from its current effective usage in CD19 positive lymphomas and leukemia and potentially become applicable to a variety of solid tumors through inducing uniform expression of CD19 in solid tumors.”

The Imugene share price is up over 200% in 2021.

The post Why the Imugene (ASX:IMU) share price is charging higher on Thursday appeared first on The Motley Fool Australia.

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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 Healius Ltd (ASX: HLS) share price has performed swimmingly in 2021. Since the start of the year, the health diagnostic company’s shares have gained an impressive 32% to $4.98.

A boost from COVID-19 testing has given Healius some extra sheen recently. Considering this, the Perennial Value Management team thinks there might be suitors knocking at the door.

Takeover target in the making

In its June update, the Perennial team shared its monthly takeaways with investors of the Perennial Value Australian Shares Trust. The trust fund aims to invest in a range of 20 to 70 ASX-listed shares which offer good value.

Furthermore, the fund has outperformed the S&P/ASX 200 Index (ASX: XJO) over the past year. At the end of June, the trust had returned 30.5% net of fees, compared to ~26.4% from the benchmark index.

In contrast to the index, Perennial’s trust is overweight Seven Group Holdings Ltd (ASX: SVW), Insurance Australia Group Ltd (ASX: IAG), Santos Ltd (ASX: STO), Tabcorp Holdings Limited (ASX: TAB), and Healius.

Speaking of Healius… the fund manager considers the company a potential takeover target. The increased dependence on pathology services has brought to light the importance of such services. Likewise, the pandemic has demonstrated the high level of government funding available to the industry.

Considering Healius is the second-largest pathology services provider in Australia, it has benefitted from the additional funding throughout the pandemic. This has come at a handy time as it leans out operations.

On this topic, the Perennial investment team stated:

In many ways, parts of the healthcare sector such as pathology can be thought of as regulated utility services, with stable earnings largely derived from government funding. As a result, infrastructure-style investors are increasingly looking to these sorts of businesses, raising the potential for corporate activity in the space

Healius snapshot for ASX investors

The Healius share price set a new 52-week high on the ASX back in June. Since then, shares have slipped slightly despite analysts being positive about the company’s outlook.

Recently, Goldman Sachs revealed it expects a strong FY21 result from Healius. This is based on the consensus view that Australian COVID testing volumes would steadily fall through FY21 was far too conservative.

Based on the current Healius share price, the company holds a market capitalisation of $3.1 billion, with a price-to-earnings (P/E) ratio of 38.8 times.

The post Healius (ASX:HLS) could be a potential takeover target – Expert appeared first on The Motley Fool Australia.

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

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The Fortescue Metals Group Limited (ASX: FMG) share price is down almost 7% since this time last week.

At Wednesday’s market close, however, the miner’s shares broke their negative trend to finish slightly higher at $24.09, up 0.38%.

Here are some possible catalysts that could be dragging down the Fortescue share price.

Spot price of iron ore plummets

After spending the last couple of months above the US$200 barrier, the iron ore spot price has dramatically fallen.

Courtesy of Markets Insider, the steel-making ingredient is trading at US$181.01 per metric tonne as of last night. This represents a fall of close to 16% over the course of the week. It’s worth pointing out that the price of iron ore surged to a record high of US$219.77 in July.

The sharp decrease will have an impact on Fortescue’s bottom line, however, profits are still expected to be churned out. The company reported C1 costs of US$15.23 per wet metric tonne for Q4 FY21. C1 costs refer to the ‘direct’ production costs incurred in mining and processing the iron ore.

China signals end of reliance

Another possible factor weighing on the price of iron ore, and arguably the Fortescue share price, may have been China’s latest rhetoric.

The Asian country has directed some steel producers to cut down on production, in an effort to drive domestic demand. According to CNBC, Chinese mills will need to limit 2021’s output to no more than the volume recorded in 2020.

This is a difficult task as production volumes lifted 12% in the first half compared to the same period in 2020. This means the second half is likely to be lower than H2 FY20 levels.

In the month of May, China produced a monthly record of 99.45 million tonnes of steel. In June, that number dropped 5.7% to 93.88 million tonnes.

There are also concerns that if steelmakers don’t comply with the government’s latest rules, they will face retribution. Officials have warned that failure to comply may result in punishments such as potentially large fines.

Fortescue share price review

While relatively flat year to date, Fortescue shares have gained more than 30% over the last 12 months.

Based on valuation grounds, the company presides a market capitalisation of approximately $74.1 billion.

Fortescue is scheduled to report its FY21 results on 30 August 2021.

The post Why the Fortescue (ASX:FMG) share price is struggling this week appeared first on The Motley Fool Australia.

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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 Wesfarmers Ltd (ASX: WES) share price bolted to record highs during Wednesday’s session.

Shares in the Aussie conglomerate hit a record high of $62.765 during intraday trading yesterday, before closing at $62.55.

It’s been a magnificent year thus far for the Wesfarmers share price. Shares in the company have soared more than 24% since the start of 2021, making them among the top performers on the S&P/ASX 200 Index (ASX: XJO). 

Let’s take a look at what’s been fueling the Wesfarmers share price.

Renewed strategy

Wesfarmers operates household banners such as Bunnings, K-Mart, Officeworks and Target.

With a spate of COVID-19-induced lockdowns over the past 12 to 18 months, many of these businesses have benefitted from a surge in consumer demand for home office and home improvement products.

In addition to enjoying the tailwind of soaring customer demand, the conglomerate has also embarked on an ambitious growth strategy.

Wesfarmers has focused on investing in new growth platforms and selling unwanted assets. One example of this new strategy was reflected by the company divesting its coal business and expanding into the burgeoning lithium sector.

In addition, Wesfarmers has also made its intentions clear about expanding into the beauty and pharmaceutical sector. This was illustrated by the company’s $687 million offer for Australian Pharmaceutical Industries Ltd (ASX: API).

Wesfarmers shares price dividend yield

Wesfarmers shares have been attractive to some investors for their dividend yield, which currently sits at just under 3%.

In FY20, Wesfarmers paid shareholders a final dividend of 77 cents per share, in addition to a special dividend of 18 cents.

The conglomerate’s interim dividend for FY21 was booked in at 88 cents per share.

As a result, Wesfarmers has paid a total of $1.83 per share over the past 12 months.

Outlook for the Wesfarmers share price

Many investors will be tuning in the August reporting season for greater insight into how Wesfarmers has been performing over the past financial year.

Recently, noted broker Goldman Sachs released a note on what investors could expect from Wesfarmers this reporting season.

According to analysts, the conglomerate is expected to produce full-year revenue of $34,132.1 million and earnings before interest and tax (EBIT) of $3,508 million.

In addition, the broker expects Wesfarmers to reveal a $1.84 per share dividend.

Wesfarmers is slated to report its earnings on Friday 27 August.

The post Why the Wesfarmers (ASX:WES) share price is trading at record highs appeared first on The Motley Fool Australia.

More reading

• Here’s why the Coles (ASX:COL) share price is up 7% this last month
• Should you buy Wesfarmers (ASX:WES) shares in August 2021 for the dividend yield?
• Is it a good time now to buy Wesfarmers (ASX:WES) shares?
• ASX 200 Weekly Wrap: ASX grinds to a halt following new all-time high
• API share price (ASX:API) falls after rejecting Wesfarmers takeover offer

Motley Fool contributor Nikhil Gangaram 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 Wesfarmers 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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