If you’re looking to invest in a growth share or two, then you might want to consider the ones listed below.

Here’s why these ASX shares could be top options for growth investors looking at long term buy and hold options:

Afterpay Ltd (ASX: APT)

The first option to look at is Afterpay. This buy now pay later (BNPL) provider could be a great buy and hold option due to its extremely positive long term growth outlook.

This is thanks to its leadership position in the rapidly growing BNPL industry and its expansion into other financial products and geographies.

In respect to the latter, the company recently expanded into mainland Europe and Canada and is now looking closely at the Asian market, where tech giant Tencent is supporting it.

As for the expansion of its product offering, the company plans to launch the Afterpay Money app in the coming months. This will provide savings accounts and cash flow tools, but may not stop there. There is speculation the company could eventually offer personal loans and even mortgages.

One broker that is positive on the company is Bell Potter. It currently has a buy rating and $168.50 price target on its shares.

Xero Limited (ASX: XRO)

Another ASX growth share that could be a top buy and hold option is Xero. It was an accounting platform provider which over the last few years has evolved into a full service cloud-based business and accounting solution to small and medium sized businesses globally.

This evolution has been a huge success and underpinned very strong customer and revenue growth. 

Looking ahead, the company looks well-placed to continue its strong growth thanks to its international expansion, the shift to the cloud, and the monetisation of its app ecosystem.

It is the latter that Goldman Sachs is particularly positive on. It believes Xero could have a multi-decade runway for strong growth if management can successfully monetise its app ecosystem. 

Goldman has a buy rating and $153.00 price target on its shares.

More reading

• Novatti (ASX:NOV) share price rockets 27% on Afterpay deal
• The Sezzle (ASX:SZL) share price is rising on new partnership
• The Tyro Payments (ASX:TYR) share price has gained 30% in 12 months
• Openpay (ASX:OPY) share price slides despite positive quarterly update
• Affirm shares are surging, why is the Afterpay (ASX:APT) share price left behind?

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 Xero. The Motley Fool Australia owns shares of 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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It has been a difficult week for JB Hi-Fi Limited (ASX: JBH) shareholders. Mostly due to losing its illustrious CEO, Mr Richard Murray, to Premier Investments Ltd (ASX: PMV), but also the decline in the JB Hi-Fi share price.

In the last week of trading, shares in the Australian retailer have fallen over 12%. Although, industry experts are pointing towards the suspicious 10% fall that occurred prior to Murray’s departure announcement.

Something more insidious in the JB Hi-Fi share price?

Given the abnormal slip in an otherwise quiet week for the company, some eyebrows have been raised following the subsequent announcement. As such, industry expert, Paul Rickard, has called for the corporate watchdog to investigate claims of insider trading in JB Hi-Fi shares.

Rickard’s perspective is the downward move in the retailer’s share price was completely understandable. In Richard’s words:

It is a huge coup for Solomon Lew (chairman of Premier Investments) because he has just hired Australia’s best retail executive… Murray’s exit is a huge loss for JB Hi-Fi.

The events leading up to this news are what have drawn calls for action. Mr Rickard laid out circumstantial evidence, mostly pertaining to the lack of news leading up to the big event while the share price collapsed.

Additionally, volume reportedly spiked to 1,085,000 shares across the 3 days prior to the news. This is compared to an average of 436,000 shares over the preceding 10 trading sessions.

Other cases of insider trading

The ASX is no stranger to cases of insider trading. It is likely there is plenty of insider trading that goes undetected. However, over the years there have been occurrences that have been uncovered.

We covered two such cases previously. These included a director of the company now called Weebit Nano Ltd (ASX: WBT) who was sentenced for illegally manipulating the company’s share price. The other incident involved a former director of the company now known as Nova Minerals Ltd (ASX NVA).

Who stands to benefit? 

In the case of JB Hi-Fi’s share price, Rickard gives an estimation of 50 people could have had inside knowledge. This list extended from both JB and Premier Investments’ directors down to investor relations teams and lawyers. In addition to those who had to work with sensitive information, other colleagues could have been privy to the move ahead of time.

Closing out, Rickard stated:

I am not pointing the finger at any Director, family member, work colleague or individual. But the recent trading in JB Hi-Fi shares stinks, and prima-facie, “insiders” were acting. Over to ASIC to investigate.

More reading

• Top brokers name 3 ASX shares to sell today
• Is there still upside to the JB Hi-Fi (ASX:JBH) share price?
• What’s triggered the 7% Kogan (ASX:KGN) share price surge?
• Here’s why the JB Hi-Fi (ASX:JBH) share price is tumbling lower today
• Why JB Hi-Fi, Link, Ramelius, & St Barbara shares are tumbling lower

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments 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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On Wednesday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three ASX shares that have just been given sell ratings by brokers are listed below. Here’s why these brokers are bearish on them:

JB Hi-Fi Limited (ASX: JBH)

According to a note out of Morgan Stanley, its analysts have retained their underperform rating and $46.00 price target on this retail giant’s shares. While JB Hi-Fi’s quarterly update was in line with expectations, it isn’t enough for a change of rating. Particularly given the recent update from Kogan.com Ltd (ASX: KGN), which noted excess inventory and increasing promotional activity. The JB Hi-Fi share price is currently fetching $46.22.

Macquarie Group Ltd (ASX: MQG)

A note out of Citi reveals that its analysts have retained their sell rating and $125.00 price target on this investment bank’s shares ahead of its full year results. According to the note, the broker is expecting a solid result from Macquarie and has lifted its dividend forecast for the full year to reflect this. However, due to one-offs boosting its result this year, it suspects that the company’s guidance for FY 2022 could be for a decline in earnings. As a result, it doesn’t see value in its shares at the current level. The Macquarie share price ended the day at $160.52.

Virtus Health Ltd (ASX: VRT)

Another note out of Morgan Stanley reveals that its analysts have retained their underweight rating and $5.05 price target on this fertility treatment company’s shares. The broker has been looking into industry data, which reveals strong growth in fresh IVF cycles so far in 2021. This bodes well for Virtus Health in the second half of FY 2021. However, it isn’t enough for a change of rating on valuation grounds. Instead, the broker sees more value in rival Monash IVF Group Ltd (ASX: MVF). The Virtus Health share price is trading at $6.04.

More reading

• Is there still upside to the JB Hi-Fi (ASX:JBH) share price?
• What is Macquarie’s (ASX:MQG) dividend outlook for 2021?
• What’s triggered the 7% Kogan (ASX:KGN) share price surge?
• Here’s why the JB Hi-Fi (ASX:JBH) share price is tumbling lower today
• Why JB Hi-Fi, Link, Ramelius, & St Barbara shares are tumbling lower

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 Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Kogan.com ltd and Virtus Health 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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Quarterly reporting season is drawing tough comparisons for ASX e-commerce shares following supercharged COVID-19 earnings in 2020. This has dragged the JB Hi-Fi Ltd (ASX: JBH) share price down 10% in the last five trading sessions.

There appears to be a diverging performance between e-commerce shares such as Redbubble Ltd (ASX: RBL) and Kogan.com Ltd (ASX: KGN) that have suffered sharp declines in recent weeks. And more traditional brick and mortar businesses such as Adairs Ltd (ASX: ADH) and Dusk Group Ltd (ASX: DSK) have soared to record territory. 

So where does JB Hi-Fi stand amidst this volatility and could this be a buying opportunity for discounted shares? 

Brokers mixed on what’s next for the JB Hi-Fi share price 

Brokers are divided as to whether or not a recent weakness in the JB Hi-Fi share price is a buying opportunity.  

On the bullish side, Credit Suisse upgraded its JB Hi-Fi share price target to $57.39 with an outperform rating. The broker was surprised by the strong March quarter results and believes the CEO transition will be smooth as could be. 

Credit Suisse believes the market is underestimating the momentum that still exists in the household goods market. Rather than seeing more volatility and downside risk ahead, the broker says that risks are now sufficiently to the upside. 

Conversely, Morgan Stanley is cautious on the business’ margins following Kogan’s update that flagged excess inventory and increased marketing costs. Despite meeting expectations, the broker was underweight on JB Hi-Fi shares with a $46 target price. 

Macquarie meets the bulls and bears in the middle with a neutral rating with a $50.40 target price. The broker observes strong momentum within home electronics but suspects a slowdown might take shape as consumer behaviour normalises. The broker expects flat like-for-like sales growth in the second half as the company cycles the peak panic buying from mid-March. 

Foolish Takeaway

It’s a tough call on the JB Hi-Fi share price as the business cycles through sky-high sales from last year. The market is clearly aware that a slowdown in sales is approaching in the near term. The million-dollar question is whether or not today’s prices reflect the slow-down, or is there more pain for the JB Hi-Fi share price in the coming months? 

More reading

• ASX 200 rises, Kogan jumps, gold miners sold off
• Downer (ASX:DOW) share price may only be at start of a capital return cycle
• What’s triggered the 7% Kogan (ASX:KGN) share price surge?
• Here’s why the JB Hi-Fi (ASX:JBH) share price is tumbling lower today
• Why JB Hi-Fi, Link, Ramelius, & St Barbara shares are tumbling lower

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends ADAIRS FPO. The Motley Fool Australia has recommended ADAIRS FPO and Kogan.com 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 Cann Group Ltd (ASX: CAN) share price is holding its ground today despite announcing a product recall from one of its customers.

During late afternoon trade, the cannabis company’s shares are fetching for 48.5 cents, up 1%. At one point, Cann shares reached an intraday high of 51 cents, before heading lower.

What happened?

Investors appear unfazed by the company’s latest announcement, keeping Cann shares in the green today.

Cann advised that one of its customers has commenced a class III recall for its 50ml medicinal cannabis oil products.

According to the Australian Therapeutic Goods Administration, a class III product recall is defined as follows:

Class III – Lowest risk – recall action occurs when the use of, or exposure to, the deficient therapeutic good(s) is not likely to cause adverse health consequences and they are therefore not safety-related.

Cann stated that 250 units of the recalled products were recently released to the Australian market. It noted that 11 units have been given to patients, with the remaining units being held by the customer’s distributor.

The products were manufactured and released by an approved third-party GMP licenced manufacturer, using ingredients from another third-party. Cann explained that the recall follows a similar batch of the product in which was notified by the manufacturer.

The sponsor of the product in Australia (the customer’s distributor) is currently in discussions with the TGA to coordinate the recall. Cann said that it’s working with the affected supply chain, and the customer to identify the cause of the issue.

About the Cann share price

Over the last 12 months, the Cann share price has almost halved in value, dragging down shareholder gains. Year-to-date has fared no better with the company’s shares down close to 20%.

On valuation grounds, Cann presides a market capitalisation of around $134 million, with roughly 277.8 million shares outstanding.

More reading

• Here’s why ASX cannabis shares are lighting up today

Motley Fool contributor Aaron Teboneras 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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Most weeks, Commonwealth Bank of Australia‘s (ASX: CBA) CommSec shares service tells us both the ASX and international shares (almost always just US shares) that are the most popular with its Australian customer base.

CommSec is one of the most popular brokers in the country. As such, this information gives us a nice insight into what the average Aussie investor is finding interesting beyond our shores.

My Fool colleague James Mickloboro already looked at the most popular ASX shares earlier this week. So here are the top 10 international shares that investors on CommSec were buying and selling last week. This week’s data covers 19-23 April. 

Tesla and Coinbase dominate most traded International shares on the ASX

1. Tesla Inc (NASDAQ: TSLA) – representing 4.8% of total trades with a 69%/31% buy-to-sell ratio.
2. Coinbase Global Inc (NASDAQ: COIN) – representing 4.4% of total trades with an 82%/18% buy-to-sell ratio.
3. GameStop Corp. (NYSE: GME) – representing 3.5% of total trades with an 89%/11% buy-to-sell ratio.
4. Apple Inc (NASDAQ: AAPL) – representing 2.5% of total trades with a 58%/42% buy-to-sell ratio.
5. Nio Inc – ADR (NYSE: NIO) – representing 1.4% of total trades with a 62%/38% buy-to-sell ratio
6. Palantir Technologies Inc (NYSE: PLTR)
7. Microsoft Corporation (NASDAQ: MSFT)
8. AMC Entertainment Holdings Inc (NYSE: AMC)
9. Amazon.com, Inc. (NASDAQ: AMZN)
10. Alibaba Group Holding Ltd – ADR (NYSE: BABA)

What can we learn from these trades?

Well, this week’s numbers are strikingly similar to what we reported last week. In fact, the only addition to the top ten list this week is Amazon, which displaced NVIDIA Corporation (NASDAQ: NVDA) from last week.

Perhaps the most interesting development though is how ASX investors are treating Coinbase Global. Last week’s data covered the first week of Coinbase’s US listing (it IPOed on the Nasdaq on 14 April). Then, we discussed how Coinbase was the most traded US share by a mile, with 98% of trades’ being ‘buys’. Well, it’s only been 2-and-a-bit weeks and apparently, some investors are already looking to cash out. Sell trades for Coinbase were up to 18% last week, which is sad for the sellers seeing as the company’s shares haven’t really stopped falling since its explosive IPO.

But electric vehicle and battery manufacturer Tesla is back on top after being briefly usurped from its throne last week. Investors are still net-buying Tesla, despite the Tesla stock price falling ~9% since 13 April. Tesla’s Chinese EV rival Nio is back in the top 5 as well after dropping out last week. Nio has bounced over the second half of the month – up more than 15% since 15 April.

Finally, it’s worth noting that Apple was also seeing some significant selling pressure with 42% of investors cashing out last week. They might be regretting that decision today, in light of Apple’s well-received quarterly results that were released this morning.

More reading

• Could the Apple (NASDAQ:AAPL) share price make it the first $3 trillion company?
• ACCC sends a warning shot at Apple and Google app stores
• The Core Lithium (ASX:CXO) share price jumped over 11% today
• Tesla’s Bitcoin sale helped boost quarterly profits
• Isn the right time to buy Spotify?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Coinbase Global, Inc. and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alibaba Group Holding Ltd., Amazon, Apple, Microsoft, NIO Inc., NVIDIA, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Palantir Technologies Inc and recommends the following options: long January 2022 $1920 calls on Amazon, short March 2023 $130 calls on Apple, short January 2022 $1940 calls on Amazon, and long March 2023 $120 calls on Apple. The Motley Fool Australia has recommended Amazon, Apple, and NVIDIA. 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 Ionic Rare Earths Ltd (ASX: IXR) share price is diving today after the company released the results of a completed scoping study.

During late afternoon trade, the mineral exploration company’s shares are going for 3.8 cents, down 19%.

What did Ionic Rare Earths announce?

Investors are heading for the hills, sending Ionic Rare Earths shares south after digest the company’s latest update.

According to its release, Ionic Rare Earths advised it has received positive results from its Makuutu scoping study. The results obtained showed the potential to develop a sustainable, long-life, critical rare earth supply to international markets.

The study looked at an open-pit mine running a modular heap leach operation to create a mixed rare earth carbonate product. The base case scoping study considered running the mine over an initial period of 11 years.

Within the first year, production output could achieve 800 tonnes of rare earth oxide equivalent product. However, as more modules are added, the study assumes production could reach up to 3,800 tonnes in year 11.

The life of the mine is expected to deliver earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.71 billion. In addition, post tax free cash flow would total $1.02 billion, with a net present value of $428 million.

Pre-production capital expenditure is projected to cost approximately US$89 million for the first module. Expanding operations to cater for the second module is forecasted to be about US$40 million. Thereafter, adding modules from 2 to 5 would amount to US$172 million funded by the company’s project cash flow.

Ionic Rare Earths declared a strong cash position of more than $12 million for the end of March.

More on the Makuutu Rare Earths project

Located 120 kilometres east of Kampala in Uganda, the Makuutu Rare Earths project is an ionic adsorption clay-hosted rare earth element deposit. The project is 100% owned by Rwenzori Rare Metals Ltd., a private Ugandan company. However, Ionic Rare Earths has acquired a 51% shareholding in Rwenzori Rare Metals.

The Makuutu project consists of 5 licences and is serviced by infrastructure such as roads, rail, power, and cell communications.

Words from the managing director

Ionic Rare Earths managing director, Tim Harrison commented on the result, saying:

The completion of this study with its positive project economics represents a critical milestone for the company. Combining the long life potential, with the low-cost modular capital development and high margin basket potential at Makuutu, confirms the project as one of the best potential new sources of critical and heavy rare earths in the near term.

We see this project as technically and financially robust and eminently financeable, and the company has received strong expressions of interest from strategic parties interested in accessing Makuutu’s unique basket composition that contains approximately 70—75% critical and heavy rare earths.

Looking ahead, Mr Harrison further commented on the company’s strategic direction, adding:

…We now move formally towards the BFS (Bankable Feasibility Study) which we plan to complete by Q3 2022, prior to submitting the Mining Licence in October 2022 that will allow us to make a Final Investment Decision with a low capital development threshold, and capable of generating strong shareholder returns over a long-life operation at Makuutu.

About the Ionic Rare Earths share price

Over the past 12 months, the Ionic Rare Earths share price has gained over 560%, with year-to-date performance sitting above 130%. The company’s shares reached a multi-year high of 6.5 cents earlier this month before profit-taking swooped in.

At today’s price, Ionic Rare Earths commands a market capitalisation of roughly $127 million, with 3.1 billion shares on issue.

More reading

• Why the Ionic Rare Earths (ASX:IXR) share price hit a 5-year high today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It’s hard to believe that this time last year, on 29 April 2020, Brent crude oil was selling for only US$22.54 per barrel. Or that Australian drivers were able to fill their cars with petrol for less than $1 per litre.

But then those were the early days of the COVID-19 pandemic. With most air, sea and even ground transportation idled due to lockdowns and social distancing, the world’s oil supplies suddenly very much exceeded the immediate demand.

Since then that demand has gradually increased as the world moves to reopen. This comes even as supplies have diminished, largely driven by output cuts from OPEC+ and reductions in US shale oil production.

The result has seen crude prices surge, with one barrel of Brent worth US$67.56 at the time of writing. An increase of 200% in just 12 months.

But crude oil could have significantly further to run.

Crude oil to US$80 per barrel?

According to analysts at Goldman Sachs, crude oil is set to benefit from a rapidly increasing demand in an industry that can’t simply drill new wells overnight.

In a note, Goldman Sachs’ Jeffrey Currie and colleagues wrote that they foresee (quoted by the Australian Financial Review) “a significant rebound in global oil demand in coming months, key to our forecast for higher oil prices”.

That forecast is based on downward trends in new coronavirus infections in Brazil, Chile and Europe. The analysts also point to nations leading the charge on vaccinations (the United States, Israel and the United Kingdom) returning to levels of higher mobility, writing:

As a result, we expect global oil demand to increase sharply by June, from 94.5 million barrels a day currently to 99 mb/d in the third quarter of 2021, as the pace of vaccination accelerates in Europe, finally unleashing pent-up travel demand. In particular, we expect the easing of international travel restrictions in May to lead global jet demand to recover by 1.5 mb/d.

Goldman Sachs is forecasting crude to reach US$80 per barrel in the next months. That’s more than 18% higher than the current price.

And it should offer some more welcome tailwinds to leading ASX 200 oil and gas shares.

Two leading ASX oil shares

Just as the price of oil was smashed in the early months after the outbreak of the pandemic, so too were the share prices of ASX oil and gas companies.

But as the price of the black gold they pump from the ground has rocketed, ASX oil shares have managed to recoup much of those early 2020 losses.

The Santos Ltd (ASX: STO) share price, for example, is up 56% in the past 12 months, far outpacing the 31% gain on the  S&P/ASX 200 Index (ASX: XJO). Year-to-date Santos continues to outperform, with shares up 10% so far in 2021. At the current price of $7.06 per share, Santos has a market cap of $14.7 billion.

On the smaller end of the scale, with a market cap of $587 million, Senex Energy Ltd (ASX: SXY) has also enjoyed a strong 12 months, with shares up 100% since 29 April last year. Year-to-date the Senex share price is up 27%.

Investors holding or considering ASX oil shares will surely be keeping a close eye on Goldman Sachs’ forecast of US$80 per barrel crude oil. Should that eventuate, share prices should enjoy a new round of tailwinds.

More reading

• Why ASX bank shares may be facing a big sell-off in the next few weeks
• Are Woolworths (ASX:WOW) shares too expensive?
• QBE Insurance (ASX:QBE) set to face AGM shareholder revolt
• Goldman Sachs has good news for ASX 200 copper shares
• Why do ASX dividend shares underperform the market?

Motley Fool contributor Bernd Struben 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 Vulcan Energy Resources Ltd (ASX: VUL) share price has been a strong performer on Thursday.

In afternoon trade, the Europe-based lithium developer’s shares are up 6% to $8.35.

Incredibly, this means the Vulcan Energy share price is now up over 200% since the start of the year.

Why is the Vulcan Energy share price charging higher today?

A number of lithium producers are climbing higher today despite there being no real industry news to speak of.

The likes of Galaxy Resources Limited (ASX: GXY), Orocobre Limited (ASX: ORE), and Pilbara Minerals Ltd (ASX: PLS) are all recording solid gains of their own.

So, today’s gain in the Vulcan Energy share price might have more to do with that than the release of its quarterly update this afternoon.

What did Vulcan Energy report?

Given that the company is still some way off producing lithium at the Zero Carbon Lithium Project in Germany, its quarterly report was more of a reminder of what it has achieved during the quarter. And it certainly has achieved a lot!

During the quarter the company undertook the Zero Carbon Lithium Project’s pre-feasibility study (PFS).

That PFS demonstrated strong potential to develop a cutting edge, combined renewable energy and lithium hydroxide project, in the centre of Europe, with net zero carbon footprint.

The study also estimates that the full project has a positive post-tax net present value (NPV) of 2.25 billion euros.

It also has options to phase its developments, with phase one estimated to have an NPV of 700 million euros and phase two having an NPV of 1.4 billion euros.

The company also successfully completed a $120 million placement, with strong support from ESG-focused institutions. Interestingly, the cornerstone investment was provided by Hancock Prospecting. It is one of the most successful private companies in Australian history, led by Executive Chair Gina Rinehart.

These funds will be used for project development, feasibility study costs and permitting, drill site acquisition and preparation, and strategic opportunities to accelerate project development. In respect to the latter, Vulcan advised that it is assessing options to acquire existing infrastructure in Germany to accelerate development.

More reading

• Why Bingo, Life360, Tabcorp, & Vulcan shares are storming higher
• Why the Vulcan (ASX:VUL) share price is surging 7%
• Vulcan Energy (ASX:VUL) share price slumps amid asset spin-off
• Why this broker thinks the Vulcan (ASX: VUL) share price can double again
• The Vulcan (ASX:VUL) share price has rocketed 9% today. Here’s why

Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. 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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ASX bank shares have been outperforming recently, but one expert is warning that the sector is in for a rude shock next month during their reporting season.

That’s when three of the big four ASX banks will hand in their profit report cards. And while their results are expected to be good, this may not be enough to save them from a big sell-off.

That’s the view of Bell Potter’s high profile institutional dealer Richard Coppleson.

ASX bank reporting season a double-edged sword

He pointed out that ASX bank shares typically rally into their results before falling off a cliff around the middle of May.

The three big banks that will report their results next month include Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking GrpLtd (ASX: ANZ) and National Australia Bank Ltd. (ASX: NAB).

Their shares have been outperforming the S&P/ASX 200 Index (Index:^AXJO) in the last three months.

ASX bank share prices outperforming

The ANZ Bank share price jumped 20%, the Westpac share price rallied 18% and the NAB share price gained 12%.

In contrast, the ASX 200 benchmark is up a more modest 6.5% over the period.

The outlier is the Commonwealth Bank of Australia (ASX: CBA) share price, which only kept pace with the broader market. The bank reported its first half results in February.

Seasonal weakness during the ASX bank reporting period

But their golden run could be interrupted. Coppleson noted that in six of the last 11 years, the ASX banking sector lost ground. The average loss over those years is around 1.6%.

History shows that it’s the Westpac share price and ANZ Bank share price that fare worse than the broader group too.

It’s worth pointing out that May tends to be a seasonally weak period for share markets. That’s how the adage “sell in May, go away” came about.

The interesting thing though is that ASX bank shares are usually the second worst performing group in May, right after ASX insurance shares.

Not all trends are your friends

Another significant point worth noting is that ASX bank shares have broken the rules in the last three consecutive years. These shares have rallied in the month of May from 2018.

The COVID-19 market rebound helped ASX bank shares chalk up an impressive 4.2% jump last year.

But Coppleson believes ASX bank shares will revert to trend and fall next month. This is because they are now a “crowded trade” as most institutional and retail investors have rushed to buy these shares.

Why this May could be particularly bad

Investor have jumped on the bandwagon due to high expectations of a good result and a big rebound in dividends.

This means they may be quicker to dump the three reporting big bank shares the instance they go ex-dividend by around the middle of next month.

Having said that, the sell-off could be temporary. The fact is, the outlook for our banks remain positive.

Further, ASX banks are tipped to keep increasing their dividends over the next few years. A sell-off may mark a buying opportunity for longer-term investors.

More reading

• Are Woolworths (ASX:WOW) shares too expensive?
• QBE Insurance (ASX:QBE) set to face AGM shareholder revolt
• Goldman Sachs has good news for ASX 200 copper shares
• Why do ASX dividend shares underperform the market?
• ASX 200 up 0.3%: Woolworths and Fortescue lower on updates, Newcrest impresses

Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and Westpac Banking. Connect with me on Twitter @brenlau.

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.

The post Why ASX bank shares may be facing a big sell-off in the next few weeks appeared first on The Motley Fool Australia.

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