Rumble Resources Ltd (ASX: RTR) shares are rocketing higher this morning after a discovery update from the Aussie miner. At the time of writing, the Rumble Resources share price is trading 88.89% higher at 34 cents.  

Why are Rumble Resources shares surging?

Rumble Resources has this morning announced the assay results of two RC drill holes fast-tracked at its Chinook Prospect. Those assay results have confirmed a Major Zinc-Lead Discovery for the Aussie mining group.

Today’s release said the Chinook Prospect has the potential to be at the upper end of the existing exploration target. That’s based on consistent grades of 4% to 5% zinc and lead.

Rumble noted the importance of the shallow Zinc-Lead mineralisation, which makes large-scale open cut mining possible.

The discovery news has seen the Rumble Resources share price rocket higher in early trade. Shares in the Aussie mining group jumped 97.2% at the open to 37 cents per share before retreating to their current level.

Rumble said the results have highlighted the potential for a very large-scale, Tier 1, Zinc-Lead System. The Chinook Prospect drilling has only tested 2km of the 45km of prospective mineralised strike.

That means the miner sees significant potential to delineate multiple large tonnage, shallow, open pit deposits.

Based on the Rumble Resources share price surge, investors are clearly buoyed by the discovery news and bullish sentiment in this morning’s update.

Rumble Resources also said RC drilling is now complete with a total meterage of 3,593 metres for 33 holes. Rumble fast-tracked the drill holes for multi-element assays with 26 holes at the Chinook Prospect and 7 holes at its Magazine Prospect.

Foolish takeaway

The Rumble Resources share price has shot out of the blocks with an almost 90% gain in early trade. That comes on the back of strong drilling results from the Aussie miner with significant upside potential.

More reading

• Why the Rumble Resources (ASX:RTR) share price is surging 28% today

Motley Fool contributor Ken Hall 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.

The post Why the Rumble Resources (ASX:RTR) share price is rocketing 90% today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3drlKls

ASX tech shares are some of the most sought after businesses by investors. They have the ability to earn high margins and potentially make good returns.

Brokers are always evaluating businesses, including those in the technology sector. If the broker thinks they’re good value for the next 12 months, then the broker will rate that company as a buy.

These two are ones that made the cut as buys:

Hub24 Ltd (ASX: HUB)

This fintech offers a number of financial services. Its investment and superannuation platform offers a range of investment options, with transaction and reporting options for all types of investors – individuals, companies, trusts, associations or self-managed super funds.

Hub24 says that it’s appealing for advisers and clients because of the choice and innovative products that it provides, which creates value.

It’s currently rated as a buy by Citi, with a price target of $26.40.

A couple of months ago the ASX tech share reported its FY21 half-year result to 31 December 2021. It reported that platform funds under administration (FUA) increased by 39% to $22 billion (and had increased another $2 billion to $24 billion). This included a half-year record of net inflows of $3.1 billion, up 24%.

It reported that total FUA, including the portfolio administration and reporting service (PARS) from Ord Minnett, rose to $31 billion.

All of the FUM growth helped the other financial statistics. Platform segment revenue increased 25% to $43.8 million. Platform underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 26% to $17.4 million.

Underlying net profit after tax (NPAT) went up 39% to $7.5 million. Statutory profit was $6.1 million after excluding costs related to acquisitions.

The company expects to continue its growth and has increased its FY22 target platform UFA range to $43 billion to $49 billion.  

On Citi’s numbers, the Hub24 share price is valued at 53x FY22’s estimated earnings.

Nextdc Ltd (ASX: NXT)

Nextdc is the owner and operator of high quality data centres. It says that it’s a data centre-as-a-service provider, building the infrastructure platform for the digital economy, delivering the critical power, security and connectivity for global cloud computing providers, enterprise and government.

Its cloud partner ecosystem is Australia’s most dynamic digital marketplace, comprising more than 600 carriers, cloud providers and IT service providers. It enables local and international customers to source and connect with cloud platforms, service providers and vendors to scale their IT infrastructure services.

There has been a significant increase in demand since the COVID-19 pandemic started as many businesses and organisation shifted their IT online.

Citi also rates Nextdc as a buy, with a price target of $14.45.

The ASX tech share’s half-year FY21 result was stronger than the broker was expecting, with more growth expected in the coming years.

Half-year data centre revenue grew 27% to $121.6 million. Underlying EBITDA went up 29% to $65.7 million and operating cashflow went up 219% to $44 million.

Over the 12 months to 31 December 2020, contracted utilisation went up 33% to 71MW and the number of customers went up 16% to 1,465.

Based on the strong level of demand, Nextdc increased its FY21 guidance for underlying EBITDA to a range of $130 million to $133 million.

Management said that second half sales had already exceeded expectations and it’s expecting further strong demand for its data centres into FY22.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Why ASX 200 tech shares are vital to manufacturers’ reshoring plans
• 2 of the best ASX shares to buy now
• Insiders have been buying NextDC (ASX:NXT) and this ASX share
• ASX 200 down 0.4%: Tech shares rise, Afterpay increases US stake

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd. The Motley Fool Australia has recommended Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 ASX tech shares rated as buys by brokers appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3x3WKs5

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

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

Earnings season is here. Banks kicked things off last week, and this week will include earnings reports from companies of varying industries. But two companies worth paying special attention to are Netflix (NASDAQ: NFLX) and Chipotle Mexican Grill (NYSE: CMG).

Over the past 12 months, Netflix shares are up 33% and Chipotle stock has nearly doubled. Now investors will look to these two hot companies’ financial reports to see if their latest results continue to justify their premium valuations.

Netflix

The big story to watch when Netflix reports is the company’s subscriber growth. Management guided 6 million new members during the period. But there’s a lot of uncertainty about whether or not the company will be able to hit this target. Because Netflix saw abnormal subscriber growth in 2020 as consumers sheltered at home, there’re concerns that some of these subscribers may have cancelled their service as the economy reopens and they’re subsequently not spending as much time at home.

Investors should also check on the company’s operating margin. Netflix’s operating margin has been steadily rising every year. In 2020, it rose five percentage points to 18%. For 2021, management is targeting a 20% operating margin. But it expects a 25% operating margin in Q1.

Netflix reports its first-quarter results after the market closes on Tuesday, April 20. 

Chipotle

In 2020, the resilience of Chipotle’s business was put on display. During a year that many restaurants struggled as consumers sheltered at home, Chipotle still managed to grow its revenue 7% year over year. Even more comparable restaurant sales, or sales at stores open 13 months or more, increased 1.8%.

Chipotle’s momentum was particularly strong at the end of the year with fourth-quarter revenue growing 11.6% year over year and comparable restaurant sales rising 5.7%.

In addition to checking on Chipotle’s quarterly revenue growth and its comparable restaurant sales, investors should look to see if the company managed to once again increase its restaurant-level operating margin on a year-over-year basis. In the fourth quarter of 2020, this key profitability metric was 19.5% — up 30 basis points from the year-ago period.

Finally, investors should look to see how digital sales growth has continued to perform. The company’s strong digital presence was a key reason Chipotle managed so well through the turbulence brought about by the pandemic last year. Total digital sales in 2020 increased 174% year over year. In Q4, digital sales rose 177%.

Investors should look for more triple-digit year-over-year growth in digital sales.

Chipotle reports its first-quarter results after market close on Wednesday, April 21. 

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Chipotle Mexican Grill and Netflix. The Motley Fool has a disclosure policy.

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

More reading

• Netflix is losing market share, but this is the actual risk to shareholders
• Netflix just fixed its only disadvantage in streaming
• Love tech shares? This ASX ETF is a great buy today
• Netflix is crushing Disney in this fast-growing market
• Netflix is experimenting with releasing new episodes over a longer timeframe

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

The post Earnings: 2 hot stocks to watch this week appeared first on The Motley Fool Australia.

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

from The Motley Fool Australia https://ift.tt/3tusbd7

Is the Afterpay Ltd (ASX: APT) share price a buy after already rising approximately 25% in April 2021 so far? The buy now, pay later business is getting a lot of investor attention.

What is happening to the Afterpay share price?

In the middle of February 2021, the market started going through some jitters due to inflation and interest rate worries. The Afterpay share price dropped by around a third to $101 at the end of March 2021.

But Afterpay has been making a recovery since then.

One of the most helpful things for the resurgence was a media update by the company on 1 April 2021 when it announced results and consumer shopping trends for its bi-annual Afterpay Day sale – the first time it included brick and mortar shopping.

Afterpay revealed that the US sale helped new active customers grow by 35% compared to Afterpay Day in August 2020.

The buy now, pay later business said that traffic to Afterpay’s brand partners was also strong. It sent nearly six million referrals to global merchants from its shop directory during the sale’s duration. Some of the most popular purchases were from Crocs, Nike, Fenty Beauty, Ulta Beauty and UGG.

The buy now, pay later business said it has more than 16 million US customers and over 75,000 global retail partners. It also said that it has a strong pipeline of new merchants continuing to launch in 2021. In December 2020, Afterpay referred more than 40 million customers to its merchant partners through its shop directory.

The Afterpay share price has been rising since this update.

FY21 half-year result

The first six months of the FY21 result was another period of triple digit growth.

Underlying sales went up 106% to $9.8 billion. Afterpay income went up by 108%.

Customer and merchant growth remained strong. Customer numbers rose by 80% to 13.1 million and merchant numbers rose by 73% to 74,700.

The income growth led to the net transaction margin growing 110% to $213.9 million. There was an increase in the net transaction margin as a percentage of underlying sales from 2.1% to 2.2%.

In terms of an operating profitability metric, Afterpay reported that its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) surged 521% to $47.9 million.

Whilst there was the expected growth in ANZ and the US, there were some promising developments in two other markets.

Canada continues to ramp up both in country and cross border. The current annualised underlying sales run rate is around $90 million.

In the UK, it achieved 288% growth of underlying sales to $0.8 billion. The number of active merchants went up 812% and the contribution from returning customers increased from 87% to 90% at 31 December 2020.

Is the Afterpay share price a buy?

There’s mixed views on Afterpay.

Broker UBS rates Afterpay shares as a sell, with a price target of $36. It’s worried about more competition in the space, such as from Commonwealth Bank of Australia (ASX: CBA). UBS is concerned about the rule changing where merchants are not currently allowed to pass on costs to customers. Regulations changing could be bad news for Afterpay.

However, Morgan Stanley has a buy rating on Afterpay with a price target of $149, with the ongoing adoption of Afterpay’s services as well as expansion in other non-retail sectors.

More reading

• Commonwealth Bank (ASX:CBA) CEO hits out at Afterpay and BNPL providers
• ASX 200 Weekly Wrap: ASX 200 hits new post-COVID high
• 3 of the best ASX shares to buy this month
• Zip (ASX:Z1P) eyes potential stock and crypto trading services
• Top broker tips Zip (ASX:Z1P) share price to rocket higher

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. 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.

The post Up 25% this month, is the Afterpay (ASX:APT) share price a buy? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3aoAXBT

At the start of each week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Webjet Limited (ASX: WEB) continues to be the most shorted ASX share despite its short interest pulling back to 11.4%. Concerns over the recovery of the travel market and its lofty valuation appear to be weighing on investor sentiment.
• Tassal Group Limited (ASX: TGR) has seen its short interest ease slightly to 9.8%. Investors have been shorting the seafood company due to weak salmon prices and concerns over the Australia-China trade war.
• Resolute Mining Limited (ASX: RSG) has seen its short interest rise week on week again to 9.1%. This gold miner has come under pressure from a series of disappointing developments such as its weak full year result and even weaker guidance. Positively, the termination of its Bibiani mining licence in Ghana was reversed last week.
• Flight Centre Travel Group Ltd (ASX: FLT) has short interest of 9.1%, which is up slightly week on week. As with Webjet, valuation and travel market recovery concerns are weighing on sentiment.
• Inghams Group Ltd (ASX: ING) has 8.3% of its shares held short, which is flat week on week. An unfavourable shift in its sales mix and the surprise exit of its CEO appear be weighing on investor sentiment.
• Metcash Limited (ASX: MTS) has seen its short interest remain flat at 7.4%. Valuation, price war, and high capital expenditure plans seem to be behind this short interest.
• Megaport Ltd (ASX: MP1) has short interest of 6.3%, which is up slightly since last week. Given its lofty valuation and rising bond yields, short sellers appear to believe its shares are overvalued.
• InvoCare Limited (ASX: IVC) has 6.2% of its shares held short, which is down slightly week on week. This high level of short interest appears to have been driven by concerns that the funeral company could be losing market share to its rivals.
• Temple & Webster Group Ltd (ASX: TPW) has seen its short interest remain flat at 6.1%. This appears to be another case of short sellers targeting a company that trades on sky high multiples while bond yields rise.
• JB Hi-Fi Limited (ASX: JBH) is back in the top ten with 5.9% of its shares held short. Short sellers may believe its shares are overvalued given how its earnings are likely to have peaked in FY 2021.

More reading

• ASX 200 Weekly Wrap: ASX 200 hits new post-COVID high
• Top brokers name 3 ASX shares to buy next week
• These were the best performing ASX 200 shares last week
• Can the Flight Centre (ASX:FLT) share price continue to rise?
• 2 highly rated ASX growth shares to buy

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 MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited, InvoCare Limited, MEGAPORT FPO, 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.

The post These are the 10 most shorted shares on the ASX appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3n5QdZp

More reading

• Up 25% this month, is the Afterpay (ASX:APT) share price a buy?
• These are the 10 most shorted shares on the ASX
• Why the Sims (ASX:SGM) share price is on watch today
• Crown (ASX:CWN) share price in focus after Oaktree offers to fund $3bn Packer exit
• What happened to the Cleanspace (ASX:CSX) share price?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Kate O’Brien owns shares of Apple and Rio Tinto Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post LIVE COVERAGE: ASX to rise; Orocobre and Galaxy to form lithium juggernaut appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2Arppiz

The Sims Ltd (ASX: SGM) share price will be on watch this morning after the company released a trading and forecast earnings update. At last week’s market wrap, the metal recycling company’s shares finished at $15.20.

Let’s take a closer look and see how Sims has been performing.

What could impact the Sims share price?

The Sims share price could be on the move today as investors digest the company’s latest results.

According to this morning’s release, the company’s business units are performing strongly, with some key improvements driving the lift. Highlights include:

• Intake volumes for Q3 FY21 have increased to roughly 95% of FY19’s average monthly volumes, compared to 85% in 1H FY21;
• Progress in gross margin per tonne has been made due to higher scrap prices and margin management;
• Annualised fixed cost savings in excess of $70 million in FY21 compared to FY19 have been achieved; and
• There was a significant contribution from SA Recycling led by high scrap prices, particularly for zorba linked products, intake volumes, and margin management.

Forecast earnings

In further news that could bump up Sims shares, the company provided a forecast earnings outlook. Sims is expecting to achieve underlying earnings before interest and tax (EBIT) of around $260 million to $310 million.

The company noted several factors that could weigh down the overall FY21 result, however. These include possible disruptions to operations caused by COVID-19, volatility in metal and non-metal prices, and supply chain issues. Furthermore, any macroeconomic and geological risks could also affect the end result.

Management commentary

Sims CEO and managing director Alistair Field hailed the company’s progress, saying:

It is pleasing to see the strong improvement in profitability driven by improved volumes, margin management, and achievement of targeted cost savings.

While the short-term outlook still has risks that could result in earnings volatility, in the medium-term Sims is well positioned to benefit from global infrastructure spending, the need for countries and companies to reduce their carbon footprint from steel production to meet CO2 commitments, and the potential for China to import meaningful volumes of recycled ferrous products.

Sims share price snapshot

Over the past 12 months, the Sims share price has accelerated by over 120%, with year-to-date gains above 10%. The company’s shares are within a whisker of breaking their 52-week high of $15.56 reached earlier this month.

On valuation grounds, Sims commands a market capitalisation of about $3 billion, with just over 201 million shares outstanding.

More reading

• Crown (ASX:CWN) share price in focus after Oaktree offers to fund $3bn Packer exit
• What happened to the Cleanspace (ASX:CSX) share price?
• Galaxy (ASX:GXY) and Orocobre (ASX:ORE) announce mega lithium merger
• The Eagers (ASX:APE) share price is near all-time highs
• What’s happening with the Neometals (ASX:NMT) share price?

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.

The post Why the Sims (ASX:SGM) share price is on watch today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/32uvC7q

The Crown Resorts Ltd (ASX: CWN) share price could be on the move on Monday morning.

This follows news that another private equity firm has tabled a proposal.

What did Crown announce?

This morning the casino and resorts operator announced that it has received an unsolicited, preliminary, non-binding and indicative proposal from a company on behalf of funds managed and advised by Oaktree Capital Management.

According to the release, Oaktree Capital Management has offered to provide a funding commitment of up to ~A$3.0 billion to Crown via a structured instrument.

Why is Oaktree offering to provide funds to Crown?

The release explains that Oaktree Capital Management has proposed that Crown uses the funds to buy-back some or all of the Crown shares which are held by Consolidated Press Holdings on a selective basis.

Consolidated Press Holdings is the company owned by former Crown Chairman James Packer. It currently owns a ~37% stake in the embattled company.

What now?

Crown responded by stating that any selective buy-back of Crown shares held by CPH would be subject to shareholder approval, with no votes being cast in favour of the resolution by CPH or its associates.

However, at this point, the Crown Board has not yet formed a view on the merits of the Oaktree Proposal. It will now commence a process to assess the proposal.

Crown has also advised shareholders that they do not need to take any action in relation to the Oaktree Proposal at this stage. It also warned that there is no certainty that the Oaktree Proposal will result in a transaction.

What about the takeover?

No comments were made on what impact this proposal would have on the unsolicited, non-binding and indicative proposal by The Blackstone Group and its affiliates.

In March, Blackstone tabled a takeover offer with an indicative price of A$11.85 cash per share. This will be reduced by the value of any dividends or distributions declared or paid by Crown.

More reading

• What’s with the Crown (ASX:CWN) share price today?
• These were the best performing ASX 200 shares in March
• ASX 200 Weekly Wrap: ASX 200 gets its mojo back
• These were the best performers on the ASX 200 last week
• 8 ASX 200 shares rated as ‘outperform’ by brokers

Motley Fool contributor James Mickleboro 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.

The post Crown (ASX:CWN) share price in focus after Oaktree offers to fund $3bn Packer exit appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/32qOXXk

Cleanspace Holdings Ltd (ASX: CSX) shares have endured a rough start to 2021. Shares in the ASX respirator company – which only listed on the ASX in October – took a sharp nosedive in late March following the release of a disappointing trading update.

The Cleanspace share price, which opened the year trading at $6.61, has shed close to a whopping 70% of its value and is now priced at just $2.05.

Company background

Founded in Australia in 2009, Cleanspace develops workplace respirators for the industrial and healthcare industries. The company sells a range of durable, lightweight respiratory protective equipment suited for many unique (and even dangerous) settings, including for use in potentially explosive environments.

While it originally targeted the industrial sector, Cleanspace began expanding more actively into healthcare during the pandemic.

What’s been impacting the Cleanspace share price?

The Cleanspace share price tumbled 50% on 30 March after the company reported that sales for the quarter ending 31 March 2021 were expected to be just $7 million. Compare that against the $39.7 million in revenues Cleanspace generated over the first half of FY21. This leaves the company with a Herculean task over the second half of the financial year if it wants to show any half-on-half growth in FY21.

Also putting pressure on Cleanspace shares is the shifts in demand for respirators being seen in the US. By the company’s own admission, “acceleration of vaccine rollout programs, spending constraints and a backlog stockpiling of low-tech disposable masks” are all combining to impact respirator sales in North America.

The question investors will be asking themselves is whether the company’s first-half FY21 results were an anomaly borne out of the pandemic, and the lower third-quarter sales represent a normalisation of the company’s revenues.

For its part, Cleanspace attempted to reassure investors that there was still plenty of room for growth beyond the COVID-19 pandemic. It values its addressable market at $6.3 billion and states that “a strong US hospital pipeline underpins sales in the medium to longer term.”

But it also conceded that “volatility is likely to continue for some time” and declined to commit to any earnings guidance for the second half of FY21.

Performance versus competitors

Cleanspace is up against some pretty stiff competition, particularly in the healthcare sector.

The two respirator heavyweights currently trading on the ASX are Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) and ResMed CDI (ASX: RMD). To get a sense of the size of these two companies compared with Cleanspace, New Zealand-based Fisher & Paykel brought in over NZ$900 million in operational revenues for the six months ended 30 September 2020, while ResMed generated US$800 million in revenues in the December quarter alone.

Despite these differences, shares in all three companies have had a rocky start to 2021 as market analysts and investors try to price in revenue projections beyond the pandemic. After starting the year at $27.50, the ResMed share price fell almost 15% to below $24 before recovering some of that ground more recently. Currently, Resmed shares are down a little over 3% year to date at $26.59. 

Fisher & Paykel shares have followed a similar trajectory, falling over 15% from their 2021 opening price of $30.77 to around $25.46 by early March. They have staged a more significant recovery than ResMed, and are currently slightly above water year to date at $30.79.

So far, the Cleanspace share price has not experienced the same rebound as either ResMed or Fisher & Paykel – but it doesn’t yet have the brand recognition or proven track record of its two established competitors. This means Cleanspace shares will undoubtedly be facing significant investor scrutiny for the remainder of this year.

More reading

• Is the Cleanspace (ASX:CSX) share price a buy after falling 50% yesterday?
• Why Blackmores, Cleanspace, PointsBet, & Treasury Wine shares are sinking
• Why the CleanSpace (ASX:CSX) share price is diving 50%

Motley Fool contributor Rhys Brock owns shares of CleanSpace Holdings Limited. The Motley Fool Australia has recommended CleanSpace Holdings Limited and ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post What happened to the Cleanspace (ASX:CSX) share price? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3eacb9K

The Galaxy Resources Limited (ASX: GXY) share price and the Orocobre Limited (ASX: ORE) share price will be on watch on Monday.

This follows the news that the two lithium miners are looking at a merger.

What was announced?

This morning Galaxy and Orocobre announced that they have agreed to a proposed $4 billion merger of equals that will establish a new force in the global lithium sector.

According to the release, the merger will create the fifth largest global lithium chemicals company with a diversified production base and exciting growth platform. Management also notes that there is the potential to unlock significant synergies and realise value for all shareholders.

What’s next?

The release explains that the two companies will merge via a Galaxy Scheme of Arrangement (scheme) pursuant to which Orocobre will acquire 100% of the shares in Galaxy.

Galaxy shareholders will receive 0.569 Orocobre shares for each Galaxy share held at the scheme record date.

Upon implementation, Orocobre shareholders will own 54.2% of the fully diluted share capital of the combined entity and Galaxy shareholders will own the remaining 45.8%.

The scheme is unanimously recommended by the Galaxy Board and each Galaxy director intends to vote in favour of it. This is subject to no superior proposal emerging and an independent expert’s report concluding that it is in the best interests of Galaxy shareholders.

The scheme is also endorsed and supported by the Orocobre Board, subject to no proposal for Orocobre emerging.

Changes at the top

Should the merger complete as planned, Galaxy’s Chairman, Martin Rowley, would become Non-Executive Chairman. Whereas Orocobre’s Chairman, Robert Hubbard, would become its Deputy Chairman.

Leading the company will be Orocobre’s CEO and Managing Director, Martín Pérez de Solay. Galaxy’s CEO, Simon Hay, will become President of International Business, reporting to Mr de Solay.

What the company will be named remains a mystery. The release explains that a name representing the global reach of the new entity will be chosen in due course.

Management commentary

Galaxy’s Chairman, Martin Rowley, commented: “This transaction has the potential to be a significant value-creating opportunity for Galaxy and Orocobre shareholders. The Scheme provides shareholders of Galaxy with the opportunity to share in the significant benefits of being part of a larger diversified group and the synergies expected to be available to help enhance and progress our portfolio of world class assets. The merged entity’s growth opportunities in both brine and hard rock position it uniquely to take advantage of expected rising EV demand for lithium.”

This sentiment was echoed by Orocobre’s Chairman, Robert Hubbard.

He commented: “The logic of this merger is compelling. Both Orocobre and Galaxy shareholders, will benefit from the diversification, growth and scale of a top 5 global lithium chemicals company. I take this opportunity to re-iterate the group’s ongoing commitment to the principles of delivering the highest level of transparency of our environmental, social and governance performance, the foundations upon which our assets have and will continue to be developed.”

Orocobre’s CEO and Managing Director, Martín Pérez de Solay, also spoke very positively about the plans.

Mr de Solay said: “The merger brings together assets and teams with highly complementary skills and knowledge, with a unique opportunity to create a leading independent lithium company. The merger consolidates the combined group’s position in Argentina and will give us significant operational, technical and financial flexibility to deliver the full value of our combined portfolio.”

Galaxy CEO Simon Hay concluded: “The merger with Orocobre represents an exciting opportunity for both Orocobre and Galaxy shareholders to consolidate and realise the full potential of our asset portfolios and technical capabilities. The transaction will allow the group to materially accelerate the development of our combined growth projects.”

This news is likely to have gone down well with investors. So all eyes will be on both the Galaxy share price and the Orocobre share price at the open.

More reading

• What’s happening with the Neometals (ASX:NMT) share price?
• Why this broker thinks the Vulcan (ASX: VUL) share price can double again
• Why Ampol, Netwealth, Orocobre, & Race Oncology shares are storming higher
• Top brokers name 3 ASX shares to sell today
• Strike Energy (ASX:STX) goes into trading halt for $80m cap raise

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.

The post Galaxy (ASX:GXY) and Orocobre (ASX:ORE) announce mega lithium merger appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/32xjouN