The Alpha HPA Ltd (ASX: A4N) share price is having a woeful day, continuing its recent downhill trajectory.

This follows the mineral exploration and development company’s announcement of a successfully completed placement.

During late afternoon trade, Alpha shares are swapping hands for 59 cents, down 4.84%.

Alpha to accelerate commercial production plans

A possible catalyst for investors dragging down Alpha shares is an impending share dilution.

In a statement to the ASX, Alpha revealed it has raised $50 million (before costs) by a way of placement. Approximately 90.9 million new ordinary shares will be issued at a price of 15.5 cents each to participating institutional and sophisticated investors. This represents a discount of 11.3% on the last closing price of 60 cents per share.

The company will use its existing placement capacity to create the new shares. Under listing rule 7.1, this allows up to 15% of its shares to be issued without shareholder approval.

Funds raised from the placement will be allocated primarily towards accelerating the construction of Alpha’s Precursor Production Facility (PPF). The remaining monies will be used for the fast-tracking of long-lead items, land acquisition, and general working capital purposes.

What did the managing director say?

Alpha managing director, Rimas Kairaitis welcomed the successfully placement, saying:

We are delighted with the level of support received from new and existing shareholders and the strong endorsement for our PPF strategy. The Company is extremely excited by the opportunity to fast-track commercial production of its ultra-high purity precursors and establish itself as a premium supplier of these products into a rapidly growing array of end user markets.

Furthermore, Mr Kairaitis went on to talk about the company’s PPF strategy, adding:

The ability of the PPF to be integrated into our commercial plant will not only enable us to pull forward valuable additional cash flows for the business but importantly will facilitate the fast-tracking of several important work streams for the full-scale commercial facility. With the PPF now fully funded we look forward to executing on its timely delivery and positioning the Company as a recognised global producer of high purity aluminium products.

About the Alpha share price

Since this time last year, Alpha shares have posted a gain of more than 280%, reflecting positive investor sentiment. The company’s share price reached an all-time high of 67.5 cents late last month.

On valuation grounds, Alpha commands a market capitalisation of around $408 million, with 692 million shares on issue.

The post Alpha (ASX:A4N) share price drops on capital raising efforts appeared first on The Motley Fool Australia.

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There is a group of ASX dividend shares that have a history of growing the dividend each year.

Plenty of businesses had to, or decided to, cut their dividend in FY20 because of the impacts of COVID-19.

But these two have kept increasing the dividend:

APA Group (ASX: APA)

APA is one of the largest ASX dividend shares that have a long-term dividend growth streak that goes back to before the GFC.

It’s a large energy infrastructure ASX share that owns a national gas pipeline delivering around half of the nation’s natural gas. It also has investments in a number of gas-related and renewable energy assets.

Its distribution growth is funded by long-term operating cashflow growth. FY21 half-year operating cashflow grew 1.4% to $519 million and the interim distribution rose 4.3% to 24 cents per security.

APA recently announced an investment that could unlock further cashflow growth. It is going to commence the expansion of the transportation capacity on its east coast grid, linking Queensland with southern markets, by approximately 25% through expansion two stages. It also signed a “significant” new gas transportation agreement with Origin Energy Ltd (ASX: ORG).

This expansion by the ASX dividend share is going to come at a cost of around $270 million. Engineering and design works continue on a potential third stage expansion on the east coast grid to add a further 25% transportation capacity.  

The latest distribution increase means the APA distribution yield is currently 5.5%.

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi is one of the largest retailers in Australia and it sells a number of essential items for daily life including laptops, appliances and phones.

The ASX dividend share is currently rated as a buy by Credit Suisse. The broker has a price target on the retail business of $57.39, which suggests a potential upside of almost 20% over the next 12 months.

JB Hi-Fi has been increasing its dividend every year for almost a decade.

Strong retail sales growth of 23.7% saw net profit after tax and earnings per share (EPS) both increase by 86.2% to $317.7 million and 276.5 cents respectively.

It was this profit growth that funded a 81.8% increase in the interim dividend to $1.80 per share.

The business is benefiting from operating leverage as it gets bigger, with a focus on cost discipline and efficiency.

Despite the huge growth in online volume, JB Hi-Fi’s supply chain and logistics were able to keep up. Online sales soared 161.7% to $678.8 million.

Looking at Credit Suisse’s estimates for FY21, it’s expecting JB Hi-Fi to pay an annual dividend of $2.69 per share. That translates to a grossed-up dividend yield of 8%. JB Hi-Fi is valued at 15x FY22’s estimated earnings according to the broker.

The post These ASX dividend shares keep giving investors a payrise appeared first on The Motley Fool Australia.

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The gold price recovery appears to have stalled and investors are asking if the yellow metal is poised for another sell-off.

Rising bond yields triggered the drop in the safe haven asset since last August when it hit a record high of over US$2,000 an ounce.

Unlike government bonds, holding gold doesn’t pay you a regular distribution. As yields rise, the appeal for bonds increases over gold.

ASX gold shares following gold on a roller coaster ride

This largely explains why the gold price slumped to a low of around US$1,684 an ounce at the end of March 2021.

However, the commodity has since rebounded 13% although it remains stuck at around US$1,900 an ounce.

In the meantime, the fortunes of the Newcrest Mining Ltd (ASX: NCM) share price, Evolution Mining Ltd (ASX: EVN) share price and Northern Star Resources Ltd (ASX: NST) have fallen and risen along with gold.

Is the gold price overvalued?

What gold does next really depend on what happens to the United States, according to the analysts at Macquarie Group Ltd (ASX: MQG).

Future inflation expectations, measured by breakevens, suggest that the gold price is overvalued, but that’s only half the story.

Breakevens are the difference between nominal US Treasuries and Treasury Inflation-Protected Securities (TIPS).

“The strength of the US economic recovery, coupled with rising inflation, has been sufficient to lift 10y inflation breakevens to ~2.5%,” said Macquarie.

“However, inflation’s likely transitory nature, a supply constrained labour market recovery, and the Fed’s commitment to data rather than forecast dependence mean that 10y Treasury yields have stalled around 1.6%.

“Consequently pushing 10y TIPS yields back towards -90bps. Our team believe that Gold is trading ~$150/oz “rich” to currently depressed 10y TIPS yields.”

Gold shines in US dollar’s fall

But gold isn’t as expensive as that suggests. The weakening US dollar is an offsetting factor and Macquarie’s strategists believe the weakness will persist through to the September quarter.

“As a result, gold is only ~$80/oz above our cross-asset fair value estimate,” said Macquarie.

“The core question, in our view, is therefore the pace of the US service sector reopening and its feed through to the labour market, as the key determinant of when the Fed starts to openly ‘talk about tapering’.”

ASX gold shares to buy now

Regardless of the near-term gyrations in the gold price, Macquarie is urging investors to buy the Northern Star share price.

The broker is excited about the gold miner after it attended a site visit to its KCGM gold operation.

“The recent reserves and resources upgrades were dominated by KCGM, which accounted for 83% of the reserve and 89% of the group resource increase,” added the broker.

“The geological potential of the asset remains strong, with a large resource to reserve conversion opportunity.”

Macquarie has an “outperform” recommendation on the Northern Star share price with a 12-month price target of $13.30 a share.

The post Has the gold price and ASX gold miners past their peak? appeared first on The Motley Fool Australia.

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Some high-flying ASX-listed shares can easily go undetected in between the day-to-day inundation. One such company that has quietly been making a bounce back is Douugh Ltd (ASX: DOU) and its share price.

Today’s gain takes the financial wellbeing centric company’s shares to an increase of 38% in under two weeks.

If you’ve missed the recent developments driving the move, here’s your refresher.

Finserv partnership boosts Douugh share price

After somewhat of a drought in big moving announcements, Douugh delivered a sprinkle of excitement on Thursday last week.

The Douugh share price rallied after announcing a partnership with US-based financial technology company Fiserv Inc (NASDAQ: FISV)

According to the announcement, the partnership allows Douugh customers to withdraw cash from more than 37,000 ATMs across the US without incurring a transaction fee.

Making it all possible is Fiserv’s MoneyPass platform, which is recognised as one of the largest surcharge-free networks in the US.

The catalyst broke the Douugh share price out of a downward trending channel, which had been in action for the last 3 months. Over that time, shareholders were shaken down and left with a 68% fall in value.

Another one

One good day after a few months of red doesn’t do much to soothe the soul. While two… well it’s still not great – but it’s 100% better than one.

The second positive catalyst filtered through yesterday, with Douugh announcing a strategic alliance with foreign exchange services provider OFX Group Limited (ASX: OFX).

Douugh intends to start by offering brokerage-free US single stock and ETF trading via its recently acquired Goodments app. After which, it may extend its alliance to offer international money services as an integrated feature in the Douugh banking app, providing access to over 50 global currencies.

The release explains that Douugh’s customers will pay OFX a foreign exchange fee so they can then buy US securities. OFX will then pay a portion of the fee to Douugh in the form of a revenue share.

The post Douugh (ASX:DOU) share price lifts nearly 40% in 10 days appeared first on The Motley Fool Australia.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is continuing its charge and racing higher. At the time of writing, the benchmark index

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are tumbling lower:

Alpha HPA Ltd (ASX: A4N)

The Alpha HPA share price is down 5% to 59 cents. This morning the high purity alumina (HPA) company announced the successful completion of a $50 million placement to institutional and sophisticated investors. These funds were raised at an 11.3% discount of 55 cents per new share. The proceeds will be used for the construction and delivery of its Precursor Production Facility (PPF), the fast-tracking of long lead items for the full-scale commercial facility, and for general working capital purposes.

BetMakers Technology Group Ltd (ASX: BET)

The BetMakers share price has continued to sink and is down a further 4% to $1.09. This betting technology company’s shares have been sold off since announcing a $4 billion offer to acquire the Tabcorp Holdings Limited (ASX: TAH) Wagering and Media business last week. Given that $3 billion will be paid in BetMakers shares, shareholders appear concerned they will be diluted materially.

Mesoblast limited (ASX: MSB)

The Mesoblast share price has fallen 3% to $1.86. This follows the release of the allogeneic cellular medicines company’s third quarter update. During the quarter, the company reported a loss after tax of US$26.5 million. This brought its financial year to date loss to US$76.75 million. But thanks to a US$110 million private placement in March, the company finished the period with a cash balance of US$158.3 million. Management believes this is sufficient to meet its short-term goals, commitments, and ongoing operations during the next twelve months.

Wesfarmers Ltd (ASX: WES)

The Wesfarmers share price is down 2% to $55.13. This follows the release of its strategy briefing this morning. Wesfarmers provided an update on current trading with the briefing. That update reveals that its retail businesses have been cycling the impacts of COVID-19 in the prior year from mid-March. This has led to significant volatility in monthly sales growth results. It also revealed that online sales growth has moderated and that its Catch business has experienced a decline in sales since March.

The post Why Alpha HPA, BetMakers, Mesoblast, & Wesfarmers are tumbling lower appeared first on The Motley Fool Australia.

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As investors, we’re always on the hunt for the best returns. Well, one Aussie exchange-traded-fund (ETF) has managed to gear up ASX returns by more than 100% since the COVID-19 crash. This is pretty mind-boggling, considering its holdings mirror the ASX 200. So, what’s the secret?

Leverage magnifies ASX returns… and risk

The last 15 or so months have been golden for investors going long on the ASX share market.

If you had invested in the S&P/ASX 200 Index (ASX: XJO) at the very bottom of the COVID-19 crash on 23 March 2020, you’d have returned 61.6%, which is not to be sneezed at.

However, BetaShares Geared Australian Equity (Hedge Fund) (ASX: GEAR) took the recovery returns to a whole new level. In the same time frame, the leveraged ETF has increased 182% in value, significantly outstripping the benchmark index.

But how? The difference is a thing called leverage. It’s the same as when buying property – most people take out a loan so they can purchase a higher dollar-value property. Leverage in the stock market is essentially the same – but instead of a house, it’s ASX shares.

It’s important to note, applying leverage magnifies both returns and losses. If the benchmark index falls, a leveraged investment will fall more. And whether you’re making money or losing it, you’ll still have to pay interest on the loan amount.

According to BetaShares, one advantage of its GEAR ETF is the lower cost of borrowing. The fund makes this possible by using its size to borrow at cheaper rates than those available to individuals. This cost is wrapped into the 0.8% per annum management fee charged.

Not everyone is a fan

Despite delivering market-beating returns since the crash, not everyone is cheering for leveraged ETFs. In fact, Stockspot founder Chris Brycki thinks they shouldn’t be classed as ETFs at all:

I don’t think they should be classed as ETFs, they are basically dangerous structured products. Even if you get the direction right, these are terrible products to use because the compounding of daily returns makes them not appropriate as investments.

Even BetaShares managing director Alex Vynokur advises leveraged ETFs should not be used as a standalone investment. Instead, he says the product could be considered more of an insurance policy within a diversified portfolio.

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The Pure Hydrogen Corporation CDI (ASX: PH2) share price is lifting higher today following an update on its Venus-1 Pilot Well.

During early afternoon trade, the oil and gas exploration company’s shares are up 4.17% to 25 cents.

What did Pure Hydrogen announce?

Investors are pushing Pure Hydrogen shares higher today. This movement comes after the company’s latest positive release.

In a statement to the ASX, Pure Hydrogen advised that its Venus-1 Pilot Well has recorded initial gas breakout. The positive update also comes just after the company’s first 50 barrels of water production.

Pure Hydrogen stated that the early gas breakout confirms its findings of high gas reservoirs situated in the Walloon coals.

It was estimated that the gas breakout rate stood at 84,000 Computational Fluid Dynamics (CFD). This is expected to increase as the controlled pressure draw down expands into other high gas fields at the Venus-1 well.

The result of a flow test conducted by the company, along with the current gas pressure, could lead to fast-tracking commercial gas flow. A second stage enhancement to the Venus-1 vertical production well is currently being considered for execution in the coming weeks.

Additionally, the company noted that Venus-1 could convert from 130PJ 2C gas reserves to 2P gas reserves if commercial gas flows can be proven. 2P denoted to the term of “proven and probable reserves”, while 2C is defined as “best estimate of contingent resources”.

If Pure Hydrogen can achieve certification of these gas reservices, it’s possible a sizeable gas sales contract awaits.

Pure Hydrogen managing director, Scott Brown commented:

Pure Hydrogen is encouraged by the initial gas breakout after only 50 barrels of water production at Venus-1. It is a positive step towards proving commercial gas flows and the certification of material gas reserves at Project Venus located near the town of Miles in Queensland. We will continue to update shareholders on progress as our program unfolds.

Pure Hydrogen share price summary

Since the beginning of 2021, Pure Hydrogen shares have taken off, accelerating by more than 175%.

The company’s share price reached a multi-year high of 44 cents in March, before profit takers swooped in.

Pure Hydrogen has a market capitalisation of around $76 million, with more than 313 million shares outstanding.

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The Betmakers Technology Group Ltd (ASX: BET) share price certainly hasn’t had a week to remember… more like a week its shareholders would probably like to forget. Last Thursday, this was a company at a new 52-week (and all-time) high of $1.65 a share. That’s after having climbed a hefty 345% or so over the preceding 12 months.

But today, the Betmakers share price is down another 4.23% to $1.09 a share. Yep, in just under one week, this company has lost over 32% (or close to a third) of its market capitalisation. Ouch.

So what happened to this formerly high flying ASX share?

What has sparked the Betmakers share price sell-off?

Well, it appears investors are in something of a revolt against an announcement Betmakers made to the markets last week (you guessed it, on Friday). This announcement flagged Betmakers intention to acquire the wagering and media business of Tabcorp Holdings Limited (ASX: TAH) for a price of roughly $4 billion.

As we reported at the time, Tabcorp would receive $1 billion in cash and $3 billion in Betmakers shares under the proposed arrangement, which Betmakers will fund through debt financing and the issuance of new shares.

Here’s some of what Betmakers’ Matt Tripp said about the proposal:

I am excited by the potential opportunity to reinvigorate the Tabcorp Wagering and Media business. There is significant potential for the business to grow in partnership with Betmakers and I hope to get the opportunity to support the Australian racing industry which relies on the success and growth of TAB.

Well, it appears investors don’t quite agree, judging by the rather brutal sell-off this announcement has sparked. Interestingly, the Tabcorp share price has done a whole lot of not much since the proposal was gazetted. This possibly indicates that the market views the proposed arrangement as somewhat one-sided. However, it is worth noting that Tabcorp has yet to offer an opinion on the offer. It did release a statement last week that acknowledged the proposal, but stated the following:

The Tabcorp Board has not yet formed a view on the merits of the proposal and will assess it in the context of the previously announced strategic review.

At the current share price, Betmakers has a market capitalisation of $881.4 million.

The post Betmakers (ASX:BET) share price drops another 4%, now down 32% in a week appeared first on The Motley Fool Australia.

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Yesterday I had a look at a few ASX shares that Morgans has named as its best ideas for June. You can read about those here.

This afternoon, I’m going to keep going and bring a few more highly rated ASX shares to your attention. Here’s why this leading broker likes these shares:

BHP Group Ltd (ASX: BHP)

If you’re not averse to investing in the resources sector, then you might want to look at BHP. Morgans sees it as a low risk option in the sector due to its diverse operations.

It explained: “We view BHP as relatively low risk given its superior diversification relative to its major global mining peers. The spread of BHP’s operations also supplies some defence against direct COVID-19 impact on earnings contributors. While there are more leveraged plays sensitive to a global recovery scenario, we see BHP as holding an attractive combination of upside sensitivity, balance sheet strength and resilient dividend profile.”

Macquarie Group Ltd (ASX: MQG)

This investment bank could be good value according to Morgans. This is particularly given its exposure to growth markets. Its analysts currently have an add rating and $171.00 price target on its shares.

The broker commented: “We still see MQG as relatively inexpensive and continue to like its exposure to long-term structural growth areas such as infrastructure and renewables. Near term MQG is likely to face earnings pressures from the impact of soft economic conditions but it remains well positioned to ride out the current COVID-19 period and seize opportunities on the other side.”

Sonic Healthcare Limited (ASX: SHL)

Finally, thanks to COVID-19 testing volumes remaining strong, Morgans believes this healthcare company is well-placed for growth. It also sees opportunities for the company to make earnings accretive acquisitions. Morgans has an add rating and $36.15 price target on its shares.

Morgans said: “We see COVID-19 testing continuing into the foreseeable future, with growth potential in COVID-19 serology testing. SHL’s global base business is increasingly resilient, benefitting from geographical diversity. Strong B/S (gearing 21.6x; A$1.3bn headroom) opening the door to acquisitions, contracts and JVs.”

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Polynovo Ltd (ASX: PNV) had a tough May. Shares in the medical company were trading around $3.05 at the start of the month only to drop almost 15% to $2.60. 

The Polynovo share price is trading at $2.59 at the time of writing.

The jewel in the Polynovo crown is its NovoSorb product, a “novel range of bio-resorbable polymers whose unique properties provide skin regeneration for burn victims”, according to the company.

Once the ‘belle of the ball’

Polynovo growth numbers over the last two years have been impressive. The PolyNovo share price was one of the best performers on the ASX in 2019, up more than 190% for the year.

Then in 2020, the share price almost doubled in price with a 97% gain. It was a stock market favourite returning more than 825% over 5 years.

Then came COVID

Polynovo is a global business and relies on its ability to work with hospitals. As its half-yearly report indicates, the company currently operates in the United States, Australia, New Zealand, Europe, UK/Ireland, South Africa, Malaysia, Singapore, India, Israel and Saudi Arabia. For growth, the company relies on approaching surgeons with its medical applications. So business has taken a hit from the COVID-19 pandemic.

The Polynovo report advised that revenues had been affected by reduced access and elective surgery in all regions. Despite the bad news, the business reported that its Novosorb BMT sales had increased 31.2% to $11.25 million and its net loss swelled to $3.54 million in the six months ending 31 December. This from $2.42 million in the year-earlier period. 

The results appear to have disappointed the market and the shares have not really recovered since. The Polynovo share price traded flat at $2.42, following the result. Five months later, the share price is still struggling at $2.56.  

The winds are changing

The sentiment coming from management is positive. In a February interview with the Australian Financial Review (AFR) Polynovo managing director Paul Brennan said surgery rates had bounced back in some US states. Mr Brennan was confident that:

… thanks to the vaccine rollout progressing well in the UK and falling infection rates, surgery rates would begin to increase and it should see a corresponding sales increase.

What bear?… David has been buying 

Nothing ‘talks the talk’ of positive sentiment than when company insiders are buying shares. Especially if that insider is the chair of the company. Polynovo chair David Williams bought 100,000 shares on 10 March at $2.34 per share via on-market trade. 

According to the AFR, Williams raised his stake from 16.6 million ordinary shares to 18 million over six weeks after the half-year results in February. He bought shares at prices ranging from $2.47 to $1.40. 

The end of year financial report will provide insight into the Polynovo share price moving forward. Less frequent lockdowns and an accelerating vaccination process around the world is likely to be positive for a global company such as Polynovo.

Polynovo shares have fallen almost 34% year-to-date and 5% over the past 12 months. Shares in the medical equipment industry have lifted 12% over the corresponding 12-month period. 

The post Why did the Polynovo (ASX:PNV) share price drop 15% in May? appeared first on The Motley Fool Australia.

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