The DigitalX Ltd (ASX: DCC) share price is storming higher towards the end of market trade. This comes after the blockchain and asset management services company released its March quarterly report for the FY21 year.

The DigitalX share price is swapping hands for 7.8 cents apiece at the time of writing, up 13%.

How did DigitalX perform?

For the quarter ending 31 March 2021, DigitalX delivered strong growth across all key metrics.

Liquid assets for the period increased to $46.4 million, representing a 122% jump from the prior quarter (December 2020). The result came from a strong performance of Bitcoin (CRYPTO: BTC), the DigitalX digital assets funds, and proceeds of a capital raise.

Cash receipts lifted to $265,000 for the 3 months, a 77% improvement when looking at quarter-on-quarter (QoQ) growth. Revenue for the March quarter stood at $713,000, a 232% QoQ jump.

The performance was underpinned by increased fees from the funds under the management division, totalling $31.9 million, rising 237% QoQ.

The company said it was continuing to focus on commercialising its Drawbridge RegTech product, which “supports listed companies in better managing their compliance and corporate governance policies”.

Several engagements with customer leads for the Drawbridge application are beginning to follow through. DigitalX revealed that 4 ASX-listed companies, including itself, have signed on as paid customers for the now-closed early adopter program.

In addition, the company has undertaken sales and marketing strategies to accelerate awareness of Drawbridge.

What did management say?

DigitalX CEO Leigh Travers commented on the company’s outlook:

DigitalX is well capitalised and well-positioned to deliver growth in both of our businesses in 2021. There is a growing focus for improving corporate governance, particularly in light of the ESG priorities from investors, and DigitalX enables this with Drawbridge.

Meanwhile, the digital asset funds management business is starting to gain traction on the back of a growing appreciation of the sector as a legitimate asset class and DigitalX is at the forefront of developments within this market.

About the DigitalX share price

The DigitalX share price has gained close to 200% in the past 12 months but is down just over 15% year-to-date. The company’s shares reached a 52-week high of 13.5 cents in late November before treading lower.

DigitalX commands a market capitalisation of about $57 million, with 736 million shares on issue.

More reading

• The DigitalX (ASX:DCC) share price is up 30% this week

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends 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 Silver Mines Limited (ASX: SVL) share price is up today following the release of the company’s quarterly results.

At the time of writing, the Silver Mines share price is 23 cents, up 2.2% from Friday’s closing price.

Let’s take a closer look at the company’s activities and balance sheet from the quarter ending 31 March 2021.

Silver Mines’ balance sheet

In the most recent quarter, Silver Mines reported an earnings before interest, tax, depreciation, and amortisation (EBITDA) loss of $1.01 million.

That number doesn’t include the government grants and tax incentives the company received this quarter, which were valued at a total of $41,000.

Silver Mines received $919,000 from the sale of entities over the quarter, including the sale of its the sale of its Webbs and Conrad Projects to Thomson Resources Ltd (ASX: TMZ). It also received $30 million from a capital raise it conducted in February.

Silver Mines also repaid just over $1 million worth of debt over the quarter.

After the costs of the company’s capital raise, and an income from the exercise of options, the company’s cash flow from financing activities was around $27.8 million.

Silver Mines ended the quarter with around $32.6 million in cash in the bank.

Quarterly activity highlights

During the March 2021 quarter, Silver Mines lodged a mining lease application for the development of the Bowdens Silver Project. The company advised there were no objections to the project from government agencies and it received large public support.

Currently, two diamond drilling rigs are operating at the project and testing for high-grade silver targets and extensions are ongoing. Bolstered by the outcomes of its current program, Silver Mines is now planning the expansion of drilling and other exploration activities.

During the quarter, the final drill assay results from the company’s Tuena Gold Project were returned. Drilling found many potential mineralised structures of quartz and carbonate veining, both with and without pyrite.

As part of Silver Mines’ capital raise, it issued around 136.3 million shares. A further 100,000 were issued following the exercise of options at 10 cents apiece, pursuant to Silver Mines’ employee incentive plan.

Silver Mines share price snapshot

The positive reception to the company’s quarterly results was much needed for the Silver Mines share price, which has had a tough time on the ASX lately.

Currently, the Silver Mines share price is down 11.5% year to date, although it is up by 155% over the last 12 months.

The company has a market capitalisation of around $267 million, with approximately 1.1 billion shares outstanding.

More reading

• Here’s why the Thomson (ASX:TMZ) share price is climbing today

Motley Fool contributor Brooke Cooper 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 Tempus Resources Ltd (ASX: TMR) share price is soaring today, leaving many investors wondering what’s provided the micro-cap with such a dramatic boost.

Tempus Resources shares boomed in early trade, at one point rocketing by 38% to trade at 24 cents.

At the time of writing, the mineral explorer’s shares are trading at 20.5 cents, still 24.24% higher than Friday’s closing price.

While there hasn’t been any news out of the company today to prompt these share price moves, Tempus has provided the market with several updates lately. Let’s take a look.

Tempus Resources placement 

On Friday, Tempus announced that its successful private placement raked in $1.9 million for the company, which it will put towards continuing the drilling program at its Canadian Elizabeth Gold Project. The placement included more than 12.4 million shares at 15.3 cents apiece. Publicly traded shares were going for 16.5 cents each before news of the placement broke.

The company’s drilling program was suspended in December last year after only completing 11 holes. Though, according to Tempus, the assay results from those holes returned bonanza-grade gold intercepts.

Assay results from the 11 holes included:

• 5.0m at 61.3 grams of gold per tonne from 116.5 metres, including 1.5 metres at 186.0 grams of gold per tonne from 118.0 metres; and,
• 3.2 metres at 28.1 grams of gold per tonne from 184.0 metres, including 0.5 metres at 178.0 grams of gold per tonne from 184.5 metres.

The drill program is fully permitted and expected to be completed in the second quarter of 2021.

What else has Tempus been up to lately?

Tempus released the assay results from the Elizabeth Gold Project‘s 11 holes on 8 February, sending its share price rocketing. Tempus shares closed the day trading at 30 cents – 25% higher than the previous session.  

Since then, prior to today’s surge, the Tempus share price has been mostly falling. As of Friday’s close, the company’s shares had dropped 45% since 8 February.

This was despite a number of seemingly positive announcements. 

On 22 February, Tempus announced it had finished the first phase of exploration at its Valle de Tigre II Project, located in Southeast Ecuador. It stated it had found coarse gold in streams using panning methods. The exploration also found visible copper.

While the announcement seemed positive, it included bad news of the company’s Rio Zarza project – also located in Ecuador. Due to COVID-19, Ecuadorian Presidential elections and recent exploration results, the company suspended strategic discussions regarding the Rio Zarza project.  

Then, in late March, Tempus shared two pieces of news.

Firstly, it announced it had completed a joint venture agreement with Robinhood Gold Corp. The agreement gave Robinhood the ability to earn a 75% interest in Tempus’ Mineral Creek Project. To do so it must spend $2 million in work commitments before the end of 2023. Robinhood was also given the option to purchase another 5% of the project for C$1 million. The Mineral Creek Project is located in Canada, in an area with a long history of gold mining.

Finally, Tempus shared the results from the sampling program at the Valle del Tigre II Project. The results confirmed the presence of both gold and copper and spurred further exploration.

Tempus Resources share price snapshot

Though there is no apparent reason for the surge, today’s boost to the Tempus Resources share price will be welcome news for shareholders, with the company’s shares performing poorly of late.

Even after today’s gains, Tempus Resources shares are still down by around 15% year to date. Although, they are still up by around 22% over the last 12 months.

The company has a market capitalisation of around $14 million, with approximately 86 million shares outstanding.

More reading

• Here’s why the Silver Mines (ASX:SVL) share price is on the rise today
• 4DMedical (ASX:4DX) share price wobbles on quarterly report
• Could the Resmed (ASX:RMD) share price face a similar selloff to Kogan?
• Why Bubs, Carbon Revolution, Paradigm, & Tyro shares are sinking
• If Afterpay leaves the ASX, what happens to the shares?

Motley Fool contributor Brooke Cooper 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 4DMedical Ltd (ASX: 4DX) share price is wobbling today after the company released its latest quarterly report. Shares in the company are currently trading 0.31% lower at a price of $1.62.

4DMedical is a medical imaging company that is focusing on commercialising its respiratory imaging program.

Route to commercialisation

During the quarter ended 31 March 2021, 4DMedical pressed ahead with a number of initiatives, primarily in the effort to get its XVD scanner — the world’s first dedicated lung scanner — closer to commercial use.

The company was granted $28.9 million in funding by the Medical Research Future Fund to be used towards development of the XVD Scanner.

4DMedical confirmed it will receive 100% of the revenue generated from the scanner sales and associated service revenue. The scanners are expected to be deployed in early 2022, with commercialisation coming one year later.

The company continues to press ahead securing clinical pilots and completing clinical trials with healthcare institutions. In January, 4DMedical announced the first clinical pilot for its lung ventilation analysis software would be conducted at St. Joseph Hospital. Located in Orange County, California.

In the quarter, 4DMedical also secured pre-contracts with the US Department of Defense and Veterans Affairs. This access will allow the department’s healthcare facilities first access to use the company’s technology. 4DMedical has negotiated a fixed price for the offering without requiring separate reimbursement, which it states will help streamlining commercial agreements in the future.

Clinical trials commence

In further good news for the company during the quarter, it was able to recommence clinical trials in the US, with the pandemic being brought under control by vaccines. As such, 4DMedical has 3 trials active.

The trials are all being conducted in separate institutions to ensure the validity of results.

What next for 4DMedical?

Following the company’s successful capital raising it now has $76.5 million in the bank as of March 2021. Net outflows for the quarter were $4.5 million, relating mainly to staff costs, R&D and operating costs.

Moreover, according to the release, a strong pipeline of clinical trials awaiting hospital readiness are expected to resume in the coming months.

On current prices, the 4DMedical share price is down more than 30% so far this year, but up 2.52% on this time last year. 

More reading

• Here’s why the 4DMedical (ASX:4DX) share price will be on watch today

Motley Fool contributor Daniel Ewing has shares in 4DMedical Ltd. 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 ResMed Inc (ASX: RMD) share price is as choppy as they come. Its shares have experienced multiple V-shaped recoveries starting with the initial COVID-19 selloff in March last year. 

Why it could be sink or swim for ResMed

ResMed will announce its third-quarter FY21 (3Q21) financial and operational results on Thursday, 29 April after the New York Stock market closes. 

ResMed has played a critical role through the global pandemic, providing ventilators, masks and circuits to countries in need around the world. This has likely accelerated its earnings, like many other ASX healthcare and tech shares.

However, as the COVID-19 environment unwinds, many ASX growth companies have been unable to repeat the supercharged earnings experienced in FY20. 

This has particularly been the case for ASX e-commerce shares including Kogan.com Ltd (ASX: KGN), Redbubble Ltd (ASX: RBL) and Temple & Webster Group Ltd (ASX: TPW). All of which have copped a heavy discount since last week. 

However, the key difference is that Kogan, Redbubble and Temple & Webster have all run well above pre-COVID highs. This compares to ResMed which has gone full circle, delivering near-zero capital gain since February 2020.

Brokers weigh in on the ResMed share price 

Credit Suisse and Morgan Stanley have put forth their opinions on what to expect for the company’s 3Q21 results on Thursday. 

Credit Suisse is bullish on ResMed shares with an outperform rating and a $29.50 target price. The broker is forecasting revenue growth of 3% and earnings growth of 7% for the current quarter. Its commentary highlights the company cycling through US$35 million in benefits from the pandemic in terms of ventilator sales, which it has not included in revenue estimates. 

The broker believes the company’s cash position could be building up, which could trigger a potential share buyback in FY22. 

Morgan Stanley has been more reserved with its opinions, expecting the business to continue to work towards pre-pandemic levels in its core sleep business. The broker is forecasting device sales in the United States and the rest of the world to be down 3% and 11% on the prior corresponding period. 

Morgan Stanley rates the ResMed share price as equal weight with a $27.40 target price. 

ResMed shares are down 1.20% at the time of writing, trading at $26.79. 

More reading

• Is the Temple & Webster (ASX:TPW) share price a bargain buy?
• These are the 10 most shorted shares on the ASX
• This broker thinks you should buy the Kogan (ASX:KGN) share price dip
• Leading brokers name 3 ASX shares to buy today
• 2 ASX shares that could be dividend stars of the future

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 and Temple & Webster Group Ltd. The Motley Fool Australia has recommended Kogan.com ltd, ResMed Inc., and Temple & Webster Group 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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In afternoon trade on Monday, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a small decline. At the time of writing, the benchmark index is down slightly to 7,057.7 points.

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

Bubs Australia Ltd (ASX: BUB)

The Bubs share price is down almost 2.5% to a two-year low of 43 cents. This is despite there being no news out of the infant formula company today. However, with its third quarter update due this week and analysts warning that trading conditions are very tough, investors may be jumping ship in anticipation of a very poor update.

Carbon Revolution Ltd (ASX: CBR)

The Carbon Revolution share price has crashed 22% to $1.83. Investors have been selling the carbon fibre wheels manufacturer’s shares following the completion of the institutional component of its underwritten entitlement offer and placement. According to the release, the company has raised $73.5 million at a discount of $1.60 per new share. It will now seek to raise a further $21.5 million from retail investors. These funds will be used to execute its mega-line strategy.

Paradigm Biopharmaceuticals Ltd (ASX: PAR)

The Paradigm share price is down almost 7% to $2.38. The biopharmaceutical company’s shares have come under pressure today after an update on its dealings with the US FDA. According to the release, on Friday Paradigm received a verbal indication from the FDA that the regulator would be putting further questions to Paradigm outside the 30-day investigational new drug (IND) application review period. This has the potential to delay proceedings and adds an element of uncertainty.

Tyro Payments Ltd (ASX: TYR)

The Tyro share price is down 3% to $3.81 following the release of a trading update. Investors have been selling the payments company’s shares despite it reporting transaction value of $1.741 billion month-to-date in April. This is up 155% on the prior corresponding period. Though, it is worth noting that this time last year the pandemic was hitting the economy hard.

More reading

• Tyro (ASX:TYR) share price drops despite April transaction values surging 155%
• Why the Paradigm (ASX:PAR) share price is sinking 5% today
• Why the Carbon Revolution (ASX:CBR) share price is frozen
• Why the A2 Milk (ASX:A2M) share price hit a multi-year low today
• Smartpay (ASX:SMP) share price lifts on fourth quarter trading update

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Carbon Revolution Limited and Tyro Payments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BUBS AUST FPO. The Motley Fool Australia has recommended BUBS AUST FPO and Carbon Revolution 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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There has been some big news coming out of buy now, pay later (BNPL) pioneer Afterpay Ltd (ASX: APT) over the past week or so. The Afterpay share price is now up more than 22% since 31 March, but that kind of move is old hat for Afterpay investors.

No, I’m talking about the quarterly update that Afterpay provided to the markets last week, last Tuesday to be exact.

In this announcement, Afterpay gave investors what they would be used to by now. An update showing triple-digit payment volume growth, as well as a 75% growth rate in active customers. The company’s presence in the United States and United Kingdom markets are growing well, and Afterepay continues to explore new markets.

Impressive as always, but also nothing we haven’t seen before. However, something we indeed have never seen before from Afterpay was also floated last week. A potential US listing for the company.

Afterpay to list in America?

As we discussed last week, Afterpay made an announcement in its quarterly update that it was “exploring options for a potential US listing”.

Here’s what the statement said:

Afterpay is currently working with external advisors to explore options for a US listing given the US market is now the largest contributor to our business and is expected to continue to grow strongly…

While Afterpay intends to remain an Australian headquartered company, our shareholder base is increasingly becoming more globally focused. A US listing would further accommodate this growing interest…

There is no timeline set for a Board decision on a listing and any listing would be subject to market conditions, approval by a US exchange and satisfying a number of other customary listing prerequisites.

That’s all.

However, this question of a US listing opens the doors to another question: What is going to happen to Afterpay’s ASX investors if the company does indeed pack up and move overseas. Well, Afterpay isn’t giving much away right now, as you can garner from the words above. But there are a few possibilities.

How will Afterpay shares look if they move to the US?

ASX dumped?

Afterpay could just delist from the ASX altogether, and become like that other Aussie tech company Atlassian Corporation (NASDAQ: TEAM). Aussies who want to invest in Atlassian simply have to buy shares on the US Nasdaq exchange, like they would for any other US company. There are no ASX-listed Atlassian shares.

If Afterpay did go down this path, it’s even possible (if perhaps unlikely) that ASX investors might be forced to sell their ASX Afterpay shares. Following that, they would then buy the US-listed shares when they become available if they still want to own Afterpay. A likelier outcome is that ASX investors would have their ASX shares ‘swapped’ with the US version of the shares.

Dual listing

Alternatively, Afterpay could follow a full dual-listing structure, which companies like BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) already employ. For example, BHP lists on the ASX, as we all know. But it also has a US listing in BHP Group Ltd (NYSE: BHP), as well as a listing in the UK in BHP Group plc (LON: BHP).

All of these shares have a similar structure, albeit with different pricing.

CDIs?

Finally, Afterpay could employ a CDI model. A CDI (or Chess Depositary Interest) is not quite the same as a dual listing. Instead of the shares being officially available on an exchange, a CDI is a certificate of sorts that says you have a beneficial ownership right to shares on another exchange. An ASX example of this type of listing is Resmed CDI (ASX: RMD).

Resmed Inc (NYSE: RMD) is officially the company’s ‘true’ listing. The ASX CDIs just allow ASX investors to buy those US shares on the ASX. But it will still be a US investment priced in US dollars. Thus, if Resmed’s US shares don’t change in value, but the Aussie dollar rises, the Resmed CDIs will fall in value.

This is another avenue Afterpay could go down.

Foolish takeaway

Whatever the outcome, it doesn’t appear as though ASX Afterpay investors have anything to fear from the company’s US listing aspirations. But we will have to wait for further updates on Afterpay’s plans to really get a gauge on this situation. Watch this space!

More reading

• 5 things to watch on the ASX 200 on Monday
• Afterpay (ASX:APT) share price given $40 price target
• Could a dual listing drive the Afterpay (ASX:APT) share price higher? 
• Why your ASX 200 shares aren’t going up with the market 
• Is the Afterpay (ASX:APT) share price fully valued?

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Atlassian. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends ResMed. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Fortescue Metals Group Ltd (ASX: FMG) share price is heating up again after a ~20% tumble between late February and late March. The Fortescue share price is up 10% in the past month, defying expectations that iron ore prices might retreat from decade highs.

Bell Potter believes iron ore will continue to defy expectations and upgraded Fortescue on  23 April from hold to buy with a $23.85 target price. The broker believes the dividend upside outweighs the potential iron ore price downside.

Here’s what the broker had to say about another potential Fortescue share price run. 

Iron ore continues to outperform 

The research note said that the “iron ore price has continued to defy bearish forecasts (including ours) predicated on recovering supply from Brazil, restrictions being placed on certain sectors within the Chinese steel industry, potential slowing of stimulus spending on infrastructure and construction there and negative jawboning by the Chinese Industry Ministry.”

The broker highlights a number of factors buoying iron ore prices including strong global steel demand and Chinese steel production, disappointing iron ore production out of Brazil and lower end of guidance ranges for Australian March quarter production. 

The broker made a modest cut to FY21 product forecasts due to lower shipping volumes reported out of Port Hedland for the March 2021 quarter. Weighing in both opinions, Bell Potter upgraded its near-term iron ore price forecasts by 23%, 43% and 11% for FY21, FY22 and FY23 respectively.

Buy the Fortescue share price for dividends 

Bell Potter has described that in a yield-hungry environment, Fortescue’s dividend has been “a tangible price support in the face of the downside risks to the iron ore price”.

With an improved near-term for iron ore prices, the broker believes a prospective 12-month dividend payout of A$4.01 including a final FY21 payment of A$2.41 is likely. This could represent an eye-watering yield of 18.5%.

More reading

• Meet the real ASX winners from record high Chinese steel prices
• High iron ore prices are boosting the Fortescue (ASX:FMG) share price again
• Why your ASX 200 shares aren’t going up with the market 
• Super profits tax risk rising for ASX miners as commodity prices chase record highs
• Why Rio Tinto (ASX:RIO) and BHP (ASX:BHP) look set for another profit upgrade

Motley Fool contributor Kerry Sun 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 Australian Primary Hemp Ltd (ASX: APH) share price is performing strongly during early-afternoon trade. This comes after the company announced it has teamed up with Annex Foods, an Australian-owned health and snack food company.

At the time of writing, the premium plant-based and wellness company’s shares are fetching 45 cents, up 7.14%.

New partnership agreement

Australian Primary Hemp shares are on the move, with investors appearing upbeat about the company’s future prospects.

According to this morning’s release, Australian Primary Hemp has signed a 2-year exclusive agreement with Annex Foods. This follows close collaboration between the two companies in helping expand Australian Primary Hemp’s market presence.

Under the deal, Australian Primary Hemp will supply its Australian-grown and processed Hammer Milled Hemp Meal to Annex Foods. This will be used exclusively as an ingredient for products under Annex’s ‘Red Tractor’ brand. Red Tractor is a well-recognised health food brand that is sold across leading supermarkets in Australia, and overseas in ten countries.

The latest agreement is expected to generate revenue of $250,000 for Australian Primary Hemp over the next two years.

Management comments

Australian Primary Hemp managing director and CEO Neale Joseph welcomed the new deal, saying:

We believe that this second agreement with Annex demonstrates our ability to meet customer needs in terms of product quality and customer service. The partnership with Annex continues our strategy of delivering great customer outcomes with Australian grown produce.

Annex managing director Kane Fetterplace went on to add:

Annex Foods is committed to using Australian grown ingredients in our products and is delighted to partner with progressive companies like APH. The agreement extends our range of Red Tractor Australian grown grains and seeds to include world class hemp products.

Australian Primary Hemp share price summary

Australian Primary Hemp shares have fared particularly well since the beginning of November 2020 and are up 150% in just 6 months. Looking at year-to-date performance, the company’s shares have gained around 29%.

More reading

• Why the Australian Primary Hemp (ASX:APH) share price is up 5%

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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The Downer EDI Limited (ASX: DOW) share price is rising today after the company announced the sale of its tyre business Otraco to the market. Shares in the company are up 1.76% and are currently sitting at $5.49.

The Downer share price has been relatively flat so far this year, returning 0.64% compared to the 5.3% rise in the All Ordinaries Index (ASX: XAO). 

What happened

This morning industrial company Downer announced that it has entered into an agreement to sell its tyre management business, Otraco. The sale of Otraco is to Japanese company Bridgestone for $79 million.

The completion of the transaction, which is subject to regulatory approvals and other conditions, is expected to occur before the end of 2021.

Furthermore, the sale follows Downer’s strategy of divesting its mining business as part of its renewed focus on Urban services.

Management comments

Downer CEO Grant Fenn welcomed the news, saying:

The sale of Otraco follows Downer’s exit from its Underground mining, Open Cut Mining West, Downer Blasting Services and Snowden consulting businesses and also our share in the RTL Mining and Earthworks joint venture.

Potential future sales

The CEO went on to talk about possible future sales, as the company looks to continue its divestment in its mining businesses.

According to the release the company is in ongoing discussions to sell its open cut mining business. Fenn stated that a number of parties are interested.

Moreover, the sale follows a number of large recent deals, which will deliver total proceeds of $605 million when concluded. To date $476 million has been received.

About the Downer share price

Downer is a services provider based in Australia and New Zealand. Listed on the ASX in 1998, the company is also a member of the S&P/ASX 100 Index (ASX: XTO).

The company’s shares have been performing well in the last month on the back of a large contract win. As such, the Downer share price is up 7% for the period.

More reading

• Is the Temple & Webster (ASX:TPW) share price a bargain buy?
• These are the 10 most shorted shares on the ASX
• 2 small cap ASX shares that are growing quickly
• Advanced Human Imaging (ASX:AHI) share price wobbles on agreement
• Peninsula (ASX: PEN) share price jumps on update

Motley Fool contributor Daniel Ewing 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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