Bitcoin (CRYPTO: BTC) enthusiasts have largely shrugged off the recent price falls, which have been mirrored by most of the major cryptocurrencies.

One Bitcoin is currently worth US$35,384 (AU$47,179). That’s down about 0.3% since this time yesterday.

While the world’s largest digital token by market cap remains up 24% year-to-date, it’s now down 45% from the record high US$64,829 reached in mid-April.

The lesson?

Cryptocurrencies have the potential to deliver outsized gains in rapid order. And just as rapidly, they have the potential to see half or more of their value evaporate.

Are 4 million Aussies putting their wealth at risk?

The recent volatility in crypto markets is nothing new. And it hasn’t appeared to diminish interest in investing in Bitcoin and other digital tokens Down Under, particularly among younger Australian investors.

As CoinTelegraph reports, fully 40% of Australian millennials believe investing in crypto beats other investment means to save for a property.

That’s according to a survey conducted by cryptocurrency exchange Kraken along with its partner YouGov. The online survey queried 1,027 Australian adults from 3 May to 5 May. At the time Bitcoin had slipped from its record highs but was still trading above US$53,000.

Taking into account all age groups, the survey indicated that 22% of Australians – or some 4 million people – think crypto investments are a better way to save for a mortgage than traditional savings methods.

Commenting on the findings, Kraken Australia’s managing director Jonathon Miller said:

Australians still maintain some conservative attitudes toward investment. Property has been a cultural norm and high on the wish list for most investors, but as affordability continues to be an issue, we’re seeing more young people look for other options to grow wealth.

How the option of investing in Bitcoin and other cryptos to grow wealth works out in the longer-term remains to be seen.

A dire warning on Bitcoin and meme stocks

Michael Burry, the head of Scion Asset Management, has grave doubts about Bitcoin…to say the least.

You likely recognise Burry’s name from the Hollywood blockbuster, The Big Short. That movie portrayed his warnings of a pending subprime mortgage crisis prior to the onset of the GFC in 2008. Which, as we now know, was driven by subprime mortgage issues in the United States.

Last week Burry came out with a new set of warnings, sounding the alarm on both meme stocks and cryptocurrencies.

In a now-deleted tweet (sourced from Bloomberg) Burry wrote:

All hype/speculation is doing is drawing in retail before the mother of all crashes. When crypto falls from trillions, or meme stocks fall from tens of billions, #MainStreet losses will approach the size of countries. History ain’t changed.

The truth is no one really knows where the Bitcoin and the other cryptos will be in 12 months time.

Bitcoin may breach US$100,000 by then. Or it could fall below US$1,000.

For those 4 million Aussies planning to invest in crypto, proceed with care.

The post Are 4 million Aussies about to lose a fortune on Bitcoin? appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: ASX makes it 5 out of 5
• How Elon Musk’s tweets move the cryptocurrency market
• Is Facebook about to finally launch its cryptocurrency?
• World Bank won’t support El Salvador’s Bitcoin ambitions
• Bitcoin crashed nearly 50% last weekend — Should you worry?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin. 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 big news on the S&P/ASX 200 Index (ASX: XJO) today is… the ASX 200 itself. At the time of writing, the flagship index is down a substantial 1.62% to 7,249.8 points. That’s a pretty big readjustment, considering the ASX 200 was pretty much at a new record high last week – over 7,400 points. We haven’t seen a fall of this magnitude for a while now. So understandably, some investors might be a little nervous today. Especially considering the rampaging run ASX shares have been on over the past month or two.

So what’s going on?

Well, it’s first worth noting that ASX 200 blue-chip shares are falling across the board. The big miners like BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) are all down between 1-3% today. Telstra Corporation Ltd (ASX: TLS) has fallen 0.98%. Woolworths Group Ltd (ASX: WOW) has lost 0.14%.

But the biggest sector adding to the AX 200’s woes today is undoubtedly the ASX banks. The big four major banks make up 4 of the 6 largest ASX 200 shares by market capitalisation. This means they have a massive influence on what the ASX 200 does at any point in time. And the banks are being sold off heavily today.

Westpac Banking Corp (ASX: WBC) shares are currently down 2.63% to $26.17. Australia and New Zealand Banking GrpLtd (ASX: ANZ) shares are faring even worse, down a nasty 2.76% to $28.18. National Australia Bank Ltd. (ASX: NAB) shares are doing a little better, but still down a substantial 2.38% to $26.20 today. But it’s the Commonwealth Bank of Australia (ASX: CBA) that’s really dragging on the ASX 200 today.

CBA ruins the ASX 200 party?

The CBA share price has been walloped today. Commonwealth Bank is currently down a hefty 4.34% today to $99.19 a share, back under the $100 a share threshold it broke for the very first time only a few weeks ago. After reaching a new all-time high of $106.57 just last week, CBA is now around 7% off of that new high watermark.

CommBank is the ASX 200’s largest share, with a market capitalisation of $176.62 billion on current pricing. This means that CBA is also the ASX share with the most weighting in the ASX 200 index. According to iShares, CBA shares currently have a weighting of 9.1% in the ASX 200. In turn, this means that CBA has the distinction of being the share that has the single largest impact on the index itself.  As such, the hefty fall of ASX’s biggest bank today would be proving a major drag on the entire share market.

So what happened with CBA today? Well, as my Fool colleague Marc Sidarous covered earlier, the market seems to be reacting rather unenthusiastically to an announcement CBA made this morning. The bank will be selling off its general insurance division (CommInsure General Insurance) to Hollard Group for a yet-undisclosed amount. The bank did state that it would be paid $625 million in upfront considerations. But it only stated that the rest (undisclosed) will be received “upon achieving certain business milestones”.

Evidently, investors have not been impressed with at least some aspects of this deal. And we can largely thank this apathy for the dismal performance of the entire ASX 200 today.

The post Why is the ASX 200 falling today? Thank CBA shares appeared first on The Motley Fool Australia.

More reading

• Why Codan, CommBank, Rio Tinto, & Starpharma shares are sinking
• Selling some ASX shares before tax time? Here’s what you should know
• ASX 200 sinks 1.9%: BOQ’s ME Bank acquisition approved, CBA divests insurance business
• Integrated Research (ASX:IRI) share price jumps 5% on trading update
• CBA (ASX:CBA) share price on watch after insurance business sale

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited and Telstra Corporation 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 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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Strike Energy Ltd (ASX: STX) shares are edging lower on Monday. At the time of writing, the Strike share price is trading 1.39% lower at 35.5 cents.

Below we look at the latest update from the ASX energy company.

What did Strike report?

The Strike Energy share price is falling during Monday trade after the company updated the market on the gas resource at its West Erregulla 5 (WE5) well. The announcement was on behalf of its EP469 joint venture.

Strike owns and operates a 50% joint venture interest in EP469. Warrego Energy Ltd (ASX: WGO) holds the other 50% interest.

According to the release, Strike has finished drilling the well to 5,015 metres, with the final depth reached in 38 days. Through its use of logging-while-drilling tools, Strike has acquired wireline logs to “confirm the reservoir and resource characteristics” of the drill sites.

Strike said that its initial Kingia results confirmed the presence of a “large high quality gas resource” at West Erregulla, in line with expectations. The company reportedly struck the Kingia formation at a depth of 4,771 metres, significantly shallower than expected.

The company said:

Gas was observed throughout the Kingia which was measured with a high gas saturations and is interpreted to have a net pay of 32 metres, with an average porosity of 10% across this section and porosities up to 15%. Strike interprets the Kingia reservoir as an above average play across the numerous discoveries at Waitsia, West Erregulla, and Beharra.

Looking ahead, Strike said it plans to conduct further wireline logging to acquire fluid samples and pressures across the various formations it is drilling. Once the final production casing string is cemented in place, it intends to keep the well on inventory for “Phase 1 development as a future producer”.

Strike Energy share price snapshot

Over the past 12 months, Strike Energy shares have gained 69%. By comparison, the All Ordinaries Index (ASX: XAO) is up 23% over the same period.

Year to date, the Strike Energy share price has continued to outperform, up 24.6% so far in 2021.

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

More reading

• Why Kogan, MyState, Regional Express, & Strike shares are sinking

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 afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a disappointing decline. At the time of writing, the benchmark index is down 1.8% to 7,233.7 points.

Four ASX shares that have fallen more than most today are listed below. Here’s why they are sinking:

Codan Limited (ASX: CDA)

The Codan share price has fallen 11.5% to $17.09. This is despite there being no news out of the metal detector manufacturer. However, with the gold price plummeting, investors may believe that demand for metal detectors has now peaked. Some recent insider selling by its CEO may also be weighing on its shares.

Commonwealth Bank of Australia (ASX: CBA)

The Commonwealth Bank share price is down almost 5% to $98.84. This is despite the banking giant announcing the sale of its general insurance business this morning. However, all of the big four banks are tumbling lower today. This may be due to profit taking after some stellar gains in 2021.

Rio Tinto Limited (ASX: RIO)

The Rio Tinto share price is down 2.5% to $120.31. This morning analysts at UBS downgraded the mining giant’s shares to a sell rating with a $104.00 price target. The broker made the move largely on valuation grounds and concerns that iron prices may have peaked. It suspects prices could halve in value over the next 18 months.

Starpharma Holdings Limited (ASX: SPL)

The Starpharma share price has tumbled 9% to $1.55. Investors have been selling the dendrimer products developer’s shares following an update on its UK operations. According to the release, its UK retail partner, LloydsPharmacy, has received correspondence from the UK Medicines and Healthcare Products Regulatory Agency  regarding the promotional claims for the company’s Viraleze antiviral nasal spray. This relates to references to SARS-CoV-2 and COVID-19. Sales have been suspended in the country while the matter is resolved.

The post Why Codan, CommBank, Rio Tinto, & Starpharma shares are sinking appeared first on The Motley Fool Australia.

More reading

• Selling some ASX shares before tax time? Here’s what you should know
• ASX 200 sinks 1.9%: BOQ’s ME Bank acquisition approved, CBA divests insurance business
• Why the Starpharma (ASX:SPL) share price is down 10% today
• CBA (ASX:CBA) share price on watch after insurance business sale
• ASX 200 Weekly Wrap: ASX makes it 5 out of 5

James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Starpharma Holdings Limited. The Motley Fool Australia has recommended Starpharma Holdings 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 Lake Resources N.L. (ASX: LKE) share price is on fire today. At the time of writing, Lake Resources shares are up a hefty 13.77% today to 34 cents a share. That comes after the company closed at 30 cents a share last week, and opened at 32 cents this morning.

So what’s going on with this ASX lithium company’s share price today?

Lake share price shoots higher

It’s not exactly clear what’s lighting the rocket under Lake Resources shares today. There hasn’t actually been any major official news or announcements out of the company this morning. Or indeed since 4 June, when a financial update for its Kachi project was released.

It’s worth noting that Lake Resources’ fellow ASX lithium miners are not enjoying the same sentiment today either. Pilbara Minerals Ltd (ASX: PLS) shares are down 1.43% at the time of writing to $1.38 a share. Similarly, Galaxy Resources Limited (ASX: GXY) shares are also on the nose this morning, falling 2.22% to $3.30 a share.

There might be another factor at play here though.

Last week, Lake released a research report from Orior Capital on its business fundamentals. This Orior report found that the company looks incredibly cheap. It compares the current Lake Resources share price to that of US-based fellow lithium company Standard Lithium Ltd (OTCMKTS: STLHF).

It found that Standard Lithium is currently trading at 107% of its adjusted attributable post–tax net present value (NPV). Orior reckons that if Lake was valued with the same model, its shares are worth around $1.89 a share. That would imply a potential upside of 456% from the current share price, and 530% from the share price that Lake Resources closed at last week.

It’s possible that investors have taken some of the findings of this report to heart today.

About the Lake Resources share price

The Lake Resources share price has been a solid performer for investors over the past few months and years. The company’s shares have enjoyed gains of 21.4% over the past week alone, 26% over the past month, a whopping 375% year to date, and 750% over the past 12 months.

At the current share price, Lake Resources has a market capitalisation of $343.4 million.

The post Lake Resources (ASX:LKE) share price on fire today up 14% appeared first on The Motley Fool Australia.

More reading

• Andromeda (ASX:ADN) share price slides 8% despite positive updates
• Here’s why the Telix (ASX:TLX) share price is crashing 14% lower
• Selling some ASX shares before tax time? Here’s what you should know
• Why the Boral (ASX:BLD) share price just hit a 52-week record
• Why Coles (ASX:COL) might be a good ASX share for dividends

Motley Fool contributor Sebastian Bowen 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 Andromeda Metals Ltd (ASX: ADN) share price is losing ground today despite a series of updates for its Great White Kaolin project.

The Andromeda share price is down 8% trading at 20.5 cents at the time of writing.

What did Andromeda announce?

Offtake agreements

Earlier this month, the Andromeda share price surged as much as 27% to 27.5 cents following a significant binding offtake agreement for the supply of kaolin product.

The offtake agreement secured a much higher price to what was used in the company’s pre-feasibility study, of A$700/tonne for ceramic grade material.

Additionally, the offtake agreement introduces a second product stream of ultra-bright, high-purity kaolin product, known as “Great White PRM’. The company says this will provide the benefit of product diversification and assist in managing offtake market risk.

Today’s announcement advises that Conrad Partners, a commodity marketing agency, has engaged with high end ceramic users in China to secure additional offtake agreements for Andromeda. Some potential customers have previously signed letters of intent for Great White products. Conrad aims to translate potential interest into binding offtake agreements.

Additionally, Andromeda is in advanced discussion with potential customers located in Europe, the Middle East and other parts of Asia for the Great White refined halloysite-kaolin product.

Definitive feasibility study update

Andromeda advises that its definitive feasibility study (DFS) is “well advanced” but has only focused on the production of Great White CRM for the ceramics market.

The recent binding offtake agreement for Great White PRM for the coatings and polymer market will need to be incorporated into the DFS.

Mining lease application

Andromeda previously lodged a mining please application with the South Australian Department for Energy and Mining (DEM) on 25 February 2021.

The company forecasts the receipt of the mining please approval by mid-2022 in line with DFS and bankable feasibility study (BFS) completion.

Other updates

Andromeda is testing the potential use of its halloysite-kaolin product as a rheology modifier product for the concrete industry. The company has successfully lodged a patent and is currently undertaking additional test work. It said the addition of halloysite-kaolin to concrete could potentially reduce concrete costs, lower carbon footprint and improve performance for concrete suppliers.

The potential concrete application is currently in a testing phase and product marketing has yet to be performed. The company advised that this is unlikely to be included in the DFS.

Andromeda entered into a memorandum of understanding with AEM to use its patented process to make high purity alumina (HPA) using kaolin back in May.

Today’s announcement advised that HPA studies are progressing and samples have been provided to AEM for testing.

The Andromeda share price in 2021

Despite today’s positive list of updates, the Andromeda share price has slipped 6.67% to 21 cents today.

It’s possible today’s sharp fall could be exacerbated by the 1.8% drop in the S&P/ASX 200 Index (ASX: XJO).

The Andromeda share price is down 32% this year, with a year-to-date low of 16 cents.

The post Andromeda (ASX:ADN) share price slides 8% despite positive updates appeared first on The Motley Fool Australia.

More reading

• Why the Minotaur Exploration (ASX:MEP) share price is up 22% today
• Why the Andromeda Metals (ASX:ADN) share price is surging 20% today
• The Andromeda (ASX:ADN) share price is soaring 7% today. Here’s why

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 Telix Pharmaceuticals Ltd (ASX: TLX) share price has been among the worst performers on the All Ordinaries on Monday.

The biopharmaceutical company’s shares were down as much as 14% to $5.53 at one stage.

Despite this, the Telix share price is still up more than 300% over the last 12 months.

Why is the Telix share price crashing today?

The weakness in the Telix share price on Monday appears to be due to a combination of broad market weakness, profit taking, and slight concerns over a study update this morning.

In respect to the latter, this morning Telix released an update on its study of TLX101 in combination with external beam radiation therapy in recurrent glioblastoma multiforme.

According to the release, Telix has decided to cease recruitment after dosing a tenth patient in this recurrent disease (second line) treatment setting. This was well short of its original recruitment target.

Nevertheless, the company has been pleased with the interim analysis of safety and preliminary efficacy. It feels the data is sufficiently encouraging to warrant study in front-line therapy, where radiation therapy is more extensively used.

What is TLX101?

TLX101 is currently under evaluation for the treatment of recurrent glioblastoma multiforme at five sites across Australia and Europe. Recurrent glioblastoma is a highly aggressive cancer that progresses rapidly and has very few effective treatment options.

Telix’s Chief Medical Officer, Dr. Colin Hayward, commented: “We are highly encouraged by the safety profile of this single arm dose-escalation study, where different dosing regimens have been combined with external radiation therapy.”

“Whilst a small study of ten patients, promising overall survival and anti-tumour response observed from longitudinal imaging supports the decision to progress this candidate into an earlier line of therapy. A follow-on study is currently in planning to accelerate the development of TLX101 in this important therapy area with high unmet medical need,” he added.

The post Here’s why the Telix (ASX:TLX) share price is crashing 14% lower appeared first on The Motley Fool Australia.

More reading

• Why Bigtincan, Opthea, Seven West Media, & Telix shares are charging higher
• Telix (ASX:TLX) share price lower despite key FDA update
• Here are 2 mid cap ASX shares to watch closely
• Telix (ASX:TLX) share price backtracks despite positive update
• The Telix (ASX:TLX) share price has rocketed 12% today. Here’s why.

James Mickleboro owns Telix shares. 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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Where has the year gone? It’s nearly the end of June already, prompting a tax time refresher for ASX share investors.

As per usual, the Australian financial year ends on 30 June. Now don’t be alarmed, but that’s only 9 days away. Between now and then there are a few things to think about regarding your ASX share transactions.

Tax time certainly isn’t one of the most exciting parts of the share market. But it can have big impacts on your returns. So, what can you do to be best prepared and informed this year?

Have you sold some ASX shares?

The most obvious tax implication for most investors will come in the form of capital gains and dividends. While any dividends paid to you will be considered as ordinary income, capital gains are a little more complex.

In the event you have sold some ASX shares, any profits will be subject to capital gains tax (CGT). However, the duration of ownership is important. If you have owned the shares for less than 12 months, the full profit will be subject to tax at your marginal rate.

On the other hand, if the investment was held for more than 12 months, you will only pay tax on half of the profit.

For example, if you sold 50 shares in Commonwealth Bank of Australia (ASX: CBA) last week at $105 a piece that you bought late last year for $68 each – the full $1,850 profit would be taxed at your marginal rate. Whereas, if you had bought the same CBA shares a couple of years ago, you’d only be taxed on $925.  

Offsetting ASX share gains with losses

Furthermore, disbanding a losing investment from your portfolio like A2 Milk Company Ltd (ASX: A2M) comes with its own tax implications. The main thing to know is that any losses incurred can be used to offset any realised profits.

If A2 Milk or some other ASX shares are in the doldrums and you would rather crystallise the loss, cutting the line on a losing position isn’t a complete negative. For instance, a $1,000 loss on A2 Milk could bring that $1,850 profit on CBA down to $850 come tax time.

Remember that even there were no profit-making sells this year, a realised loss can be carried forward to future financial years as well.

Easy to forgets

When collecting all the documents for this tax year, there’s a few things that are easy to forget but are very important.

Firstly, any micro-investing apps such as RAIZ Invest Ltd (ASX: RZI) and Spaceship will have likely incurred some taxable returns for you to report. Jump across and gather the tax statements to establish any taxable returns.

Secondly, cryptocurrencies… If you have bought and sold any amount of cryptocurrency, this will need to be reported. Despite the marketing of ‘privacy’, the Australian Tax Office (ATO) can determine if any transactions with the digital asset have occurred thanks to the ‘know your customer’ regulations across exchanges.

Lastly, if you do sell an ASX share for a loss, be sure not to invest in it again the following financial year. This is known as a ‘wash sale’ and the ATO certainly doesn’t allow it.

Get the help of a tax advisor

In reality, the above commentary skims the surface of tax considerations and implications when it comes to ASX shares. A qualified tax advisor can help make light work of these matters and save you a pretty penny. And a dollar saved is worth more than a dollar earned — because you don’t pay tax on a dollar saved.

More money in your back pocket means more money for future great investments. Whether that is investing in the broad market through the S&P/ASX 200 Index (ASX: XJO) or tech high-flyers like Afterpay Ltd (ASX: APT).

The post Selling some ASX shares before tax time? Here’s what you should know appeared first on The Motley Fool Australia.

More reading

• ASX 200 sinks 1.9%: BOQ’s ME Bank acquisition approved, CBA divests insurance business
• Integrated Research (ASX:IRI) share price jumps 5% on trading update
• CBA (ASX:CBA) share price on watch after insurance business sale
• ASX 200 Weekly Wrap: ASX makes it 5 out of 5
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Mitchell Lawler owns shares of AFTERPAY T FPO and Commonwealth Bank of Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended A2 Milk. 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 Boral Limited (ASX: BLD) share price reached a new milestone this morning. In early trade, Boral shares hit a one-year high of $7.06 before partially retreating. At the time of writing, shares in the construction materials company are swapping hands for $6.79 – up by 0.15%.

By comparison, the S&P/ASX 200 Index (ASX: XJO) is down by a whopping 1.87%.

The price jump came after the company announced the sale of its North American business and guaranteed the term of its CEO and CFO for at least one more year.

Let’s take a closer look at today’s news.

Why the Boral share price is in the green

Boral shares are defying the wider market selloff today following the company’s latest update.

But before delving deeper into the ASX statement, it’s worth noting the announcement could have an impact on the proposed offer by Seven Group Holdings Ltd (ASX: SVW) to take over Boral. This morning, Boral updated its target statement to reflect the North American sale and shoring up of the CEO and CFO positions. Seven has not yet released any further updates regarding its takeover bid following Boral’s news.

Sale of North American business

In its first statement, Boral declared it had sold its North American building products business to a subsidiary of Westlake Chemical Corporation (NYSE: WLK) for US$2.15 billion.

The sale is subject to the usual processes and conditions, according to Boral. Though the company expects the sale to be finalised within the first half of FY22.

Boral CEO and managing director Zlatko Todorcevski said:

We are pleased to announce that we have entered into an agreement to sell Boral’s North American Building Products business, which is expected to unlock significant value for Boral’s shareholders. This agreement follows an extensive market testing process in which we received strong interest from a broad range of high calibre potential buyers.

The Board will determine the most appropriate way to return surplus capital to shareholders taking into account the availability of franking credits, the relative share price and the preferences of Boral shareholders as a whole.

Updated CEO and CFO arrangements

In its second statement, Boral said it will “strengthen” the job security of its CEO, Zlatko Todorcevski, and CFO, Tino La Spina. To that end, the company is guaranteeing neither will be removed from their positions without cause until July 2022. If Boral breaks this arrangement, it will be liable to pay either manager the bonus that would be owed to them up to July 2023.

Boral share price snapshot

Over the past 12 months, the Boral share price has increased by more than 80%. As stated, the company is subject to a takeover approach by Seven Holdings. The Boral board has asked its shareholders to reject the offer, saying it undervalues the company.

Based on the current Boral share price, the company has a market capitalisation of around $8 billion.

The post Why the Boral (ASX:BLD) share price just hit a 52-week record appeared first on The Motley Fool Australia.

More reading

• ASX 200 sinks 1.9%: BOQ’s ME Bank acquisition approved, CBA divests insurance business
• Why Boral, Integrated Research, Swick, & Swoop shares are pushing higher
• Here are the 3 most traded ASX 200 shares today
• Seven Group (ASX:SVW) shares jump as Boral takeover offer extended
• Buy these 6 ASX shares, say Wilson analysts

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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Coles Group Ltd (ASX: COL) could be one of the ASX dividend shares to consider for income.

Coles operating segments

The parent business has a number of different operating segments. There’s Coles supermarkets – it has more than 800 across the country. Coles also offers Coles Online for customers to buy products digitally.

Coles Group also has over 900 stores with brands like Liquorland, Vintage Cellars and First Choice Liquor.

Coles Express is one of Australia’s biggest fuel and convenience retailers, with over 700 sites.

It owns half of flybuys that has over eight million active members. There is also Coles Financial Services, which provides insurance, credit cards and personal loans in Australia.

How is the Coles dividend going?

The latest movement with the dividend was the FY21 half-year result. That was where the Coles board decided to increase the dividend by 10% to 33 cents per share.

That brought the rolling 12 months of dividends to 60.5 cents per share. At the current Coles share price, that means the trailing grossed-up dividend yield is currently 5.25%.

Commsec dividend forecast numbers suggest further dividend growth in FY22 and FY23.

The FY22 dividend is predicted to be $0.62 per share. Then there’s growth of almost 5% of the dividend in FY23 to $0.65 per share.

By the time FY23 ends, Coles is expected to have a grossed-up dividend yield of 5.6%.

Profit pays for dividends

Businesses pay for their dividends from the profits that they make each year.

Coles has seen profit increase materially since the onset of COVID-19.

In the first six months of FY21, not only did Coles experience high single digit sales growth but it experienced operating leverage which helped grow profit faster.

HY21 sales revenue increased by 8.1%, earnings before interest and tax (EBIT) grew by 12.1% and net profit after tax (NPAT) went up 14.5% to $560 million. Earnings per share (EPS) also increased 14.5% to 42 cents.

That result included significant levels in its digital consumer sales growth, with an increase of 61%. That was partly thanks to strategic investments made in the user experience and capacity leading to significant improvements in the perfect order rate and customer satisfaction.

One of the factors that is driving margins higher is the own brand revenue. Half-year own brand revenue grew 10% with 11 own brand products winning ‘product of the year’ awards.

Coles is working on its business with its ‘smarter selling’ strategy that is on track to produce more than $250 million of cost savings in FY21.

Some of those initiatives include better flow of fresh foods with a more efficient supply chain, providing greater shelf life. It’s looking for profit protection with optimising the markdowns of its products and loss prevention (entry gates, public view monitors etc).

Data and technology enhancements are also planned to be used to reduce manual handling of cartons and improve availability for customers.

At the current Coles share price, it’s valued at 22x FY21’s estimated earnings according to Commsec. . 

The post Why Coles (ASX:COL) might be a good ASX share for dividends appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET. 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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