Australia’s CEOs may not agree on many things, but when it comes to cyber security the nation’s chief executive officers are united…in fear.

According to a survey by PwC, released last month, 95% of Aussie CEO’s name cyber security issues as the biggest threat to their business’s growth outlook this year.

To combat tis threat, 78% of CEOs in the survey reported they would be increasing their long-term investments into cybersecurity measures.

Cyber attacks go viral Down Under

Hackers have been around since the first days of the internet. But as the pandemic swept the globe it ushered in rapid growth in the digital world as people switched to working, shopping and socialising from home. And so too did we witness an explosion in cybercriminal activity.

Speaking at the Australian Financial Review Banking Summit last week, Australia and New Zealand Banking GrpLtd (ASX: ANZ) head of institutional banking, Mark Whelan said cyber security was the biggest threat facing the banking sector. Whelan reported that hacking attacks had ramped up during the COVID outbreak, with ANZ hit by 8–10 million attacks every month.

Telstra Corporation Ltd (ASX: TLS) chairman John Mullen is also all too familiar with the potential damage caused by cyber breaches. Mullen is also the chairman of Toll Group, which was hit by 2 cyber attacks last year.

According to Mullen (as quoted by the AFR):

I can’t remember the time of day now, but you get those calls at midnight or one o’clock in the morning. We were all on deck almost immediately. We didn’t know for some while how far it had gone and how damaging it was, but it escalated by the hour. It was really scary and as a director you really have to look at yourself in the mirror and say: ‘Jesus, what could I have done to have at least mitigated it, if not stopped it?’

So long as we continue to increase our dependence on digital communications and transactions, cyber criminals will continue to try to find ways to steal or ransom valuable data.

But that doesn’t mean we have to make it easy for them.

This ASX ETF is battling the cyber security threats

While there are a number of small ASX listed cyber security shares, the biggest players in cyber defence remain international shares.

ASX investors seeking exposure to some of the biggest names in cyber security can consider the Betashares Global Cybersecurity Etf (ASX: HACK). The exchange traded fund (ETF) holds 40 leading cyber security shares, with the top holdings including Cisco Systems Inc, Accenture Plc, Splunk Inc, and Crowdstrike Holdings Inc.

Despite the soaring number of cyber attacks in Australia, and around most of the world, the Betashares Global Cybersecurity ETF has underperformed the All Ordinaries Index (ASX: XAO) over the past 12 months. The HACK share price is up 18% since this time last year while the All Ords has gained 30%.

With the majority of CEOs reporting their intentions to up spending on cyber security (indeed BetaShares forecasts global spending in 2022 to reach US$224 billion), the shares held within the Betashares Global Cybersecurity ETF could be the ones to benefit.

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• Telstra (ASX:TLS) and 2 other ASX dividend shares offer yields over 5% today

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of BETA CYBER ETF UNITS. 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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Here’s the thing about property prices: once you accept that houses and units have become a mainstream ‘financial’ asset (as opposed to a ‘lifestyle’ asset), the recent surge shouldn’t be a surprise.

But, not just that.

It should have been expected.

We have known for decades that when money is cheap (i.e. interest rates are low), asset prices tend to be higher than they otherwise would be.

When money is expensive (when rates are higher), asset prices tend to be lower.

It is Economics 101: the law of supply and demand.

We see supply and demand playing out clearly in the affordability statistics: property repayments, as a percentage of income, are cheaper now, than they’ve been in years.

What?

No, I didn’t say ‘prices’.

I said ‘repayments’.

It has always been the case that most of us pay more attention to our ‘borrowing capacity’ than our ‘borrowing comfort’.

We ask — sometimes ourselves, sometimes the bank manager or broker — ‘How much can I borrow?’ or ‘What can I afford to buy?’

And the answer is generated by working out what fortnightly/monthly payments you can afford, which is then reverse engineered into a dollar figure to work out how much you can afford to pay for your new house or unit.

I know you’re probably ahead of me by now, but just in case: at a given repayment level, the lower the interest rate, the more you can borrow.

So, as interest rates have come down, affordability (as a percentage of income) doesn’t change, BUT affordability (expressed in total dollars you can use to buy a house) goes up.

You don’t have to like it.

I don’t have to like it.

But that’s the (pretty basic) maths.

And so you don’t have to do it yourself, here’s what MoneySmart says:

If you could afford to repay, say, $4,000 per month (and assuming no mortgage fees) you could borrow $949,000 million at 3%

But, then rates fell…

Now, if you could still afford to repay $4,000 per month, and rates come down to, say, 2%, you can borrow $1.082 million.

That’s a 14% increase.

You don’t have to borrow more, of course.

But you probably didn’t ask the bank manager ‘How much could I have borrowed 12 or 24 months ago?’, did you?

No-one else does, either.

So, in an incremental and invisible quasi-auction, prices slowly (or not so slowly) creep up, as competing would-be buyers have more to spend.

Yes, we truly are our worst enemies. Or, more accurately, we’re each other’s worst enemies. 

At least if you’re a would-be buyer.

If you’re a seller, you’re more than happy for this to play out.

By now, a decent number of you are metaphorically, if not literally, yelling at your device right now.

You’re saying that it’s not right.

Not fair.

That it’s the Boomers’ fault.

Or the government’s.

For what it’s worth, I think the intergenerational blame game is pretty boring (I’m yet to be invited to a meeting of my generation to decide what we’re going to do to you others!), but the impacts are very real.

I’m not sure high(er) house prices are particularly good for our society (though it’s also true that the money goes around, so it’s not like those high prices are removing money entirely from circulation). 

But, again, it’s no less affordable, at current rates — I think the ‘sticker price’ of a house is missing the main game.

Others of you (and some of the same people as above) are yelling that the maths also works in reverse — that as interest rates go up, borrowing capacities will reduce (sans reasonable wages growth).

Which is exactly right.

And this one, I think, is the real issue.

If you’re buying a house because prices always go up, or because they don’t — or can’t — come down, I hope this is a dose of reality.

There was a time, when deposits were higher, bank managers were more cautious, and housing wasn’t seen as a financial asset in the same way.

But that was decades ago.

And since the early 1990s rates have really only gone one way (with small interludes): down.

We’re yet to really live through a meaningful ‘tightening cycle’ (rates going up) with this level of indebtedness and with property well and truly a ‘financial asset’.

So, it will pay to be ready, mentally, emotionally and financially.

No, I’m not forecasting price falls. I don’t do predictions.

But I’m saying, very clearly, that it’s very, very possible.

That you should be prepared for it.

And that, particularly if you’re investing in property, you should be careful.

Yes, property bulls, I hear you; the same is true of share prices.  But there’s one difference. Profits tend to go up, over time, and — at least over the long term — at a faster rate than wages.

Meaning that, all else being equal, I expect share prices to be less impacted, over the long term and on average, than housing (whose ‘earnings’ — the wages of the mortgage-holder — won’t grow anywhere near as fast) from such a change.

Could I be wrong?

Yep.

About any or all of the above.

But I don’t think I am.

And at the very least, I hope you’ll seriously consider the odds that I’m right, and the impact on you, and on your investments.

(And, if you haven’t already, why not give the Motley Fool Money podcast a listen!)

Fool on!

More reading

• What’s happening with the Perenti Global (ASX:PRN) share price?
• 3 safer ways to invest in Bitcoin
• ASX stock of the day: The Greenland Minerals (ASX:GGG) share price is up 18% today
• Why ASX travel share prices are slipping today
• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor Scott Phillips 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 Perenti Global Ltd (ASX: PRN) share price is sliding today, down almost 1%.

This comes after the ASX mining services company reported on a new contract for its subsidiary.

What new contract did Perenti report?

Perenti Global shares are slipping despite the company reporting a significant contract extension for its African mining subsidiary, African Underground Mining Services (AUMS).

The 2-year contract extension, effective immediately, will see AUMS continue with its operations at AngloGold Ashanti’s Geita Mine in Tanzania. Perenti reported the new contract will increase its current work in hand by roughly $235 million.

Geita Mine transitioned from an open-pit mine to an underground project in 2016. AUMS has provided its underground mining services since the transition.

Commenting on the renewed contract, Mark Norwell, CEO of Perenti said:

[T]his contract extension includes the addition of Geita Hill, a new underground development within the Geita Complex, which will see a steady increase in our scope of works and revenue run rate as the development ramps up from a single heading decline into multiple work areas and then into production later in 2021.

This contract extension is expected to generate an improved earnings contribution for Perenti over the contract term. Winning new contracts and extending existing contracts is one of our key strategic priorities and we continue to make great progress on the execution and delivery of our 2025 strategy.

The contract will see Perenti transfer 20% of equity in AUMS Tanzania to BG Umoja Services Limited. The newly created mining support services company is an 80:20 JV between Perenti and local company Geofields Tanzania Limited.

Perenti share price snapshot

Over the past full year the Perenti share price is up 22%. That trails the 30% gains posted by the All Ordinaries Index (ASX: XAO) over that same period.

Perenti shares fell hard in February, with the selling likely triggered by a disappointing half year earnings report, which saw the company post a net loss after tax of $63.8 million. So far in 2021, the Perenti share price is down 21%.

More reading

• ASX 200 down 0.3%: Webjet completes note offering, Xero pushes higher
• ASX 200 flat, Flight Centre drops, Air New Zealand rises
• Here’s why the Perenti (ASX:PRN) share price is edging higher
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 Weekly Wrap: Inflation fears hold ASX down

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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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.

The Bitcoin (CRYPTO: BTC) boom isn’t over yet, as the cryptocurrency continues its upward trend. Since the beginning of the year, Bitcoin’s price has jumped nearly 100% as investors scramble to get involved in the digital currency mania.

Despite its popularity, though, it’s still an incredibly risky investment. While some investors believe it’s a gamechanger, others aren’t as optimistic about its potential. It’s also experienced extreme price fluctuations, dropping by roughly 20% on three separate occasions since January of this year.

Nobody knows what the future has in store for Bitcoin, and not everyone can stomach the risk involved in investing in the cryptocurrency. However, if you’re determined to invest in Bitcoin, there are ways to limit your risk to better protect your money.

1. Make sure you have a well-diversified portfolio

No matter where you choose to invest, it’s always wise to have a well-diversified portfolio. However, if you’re considering investing in Bitcoin, a healthy portfolio is especially critical to limit your risk.

The more diversified your portfolio is, the less impact Bitcoin will have on your overall investments if it takes a turn for the worse.

Aim to invest in at least 10 to 15 different stocks from multiple industries if you’re choosing to invest in individual stocks. Or you can invest in index funds or ETFs, which provide instant diversification because each fund includes hundreds or even thousands of stocks.

Also, it’s a good idea to make sure your core portfolio is as stable as possible. For example, you could choose to invest the bulk of your money in S&P 500 index funds, then invest a very small amount in Bitcoin. That way, even if Bitcoin doesn’t perform well, most of your money is still safe.

2. Invest through an ETF

Investing in Bitcoin directly is possible, but it can be a hassle. Cryptocurrencies trade differently from regular stocks, and to invest directly in Bitcoin, you’d need to create a digital wallet and sign up on a cryptocurrency exchange. This can also be a security concern because if you lose the password to your digital wallet, you can’t access your investments.

A Bitcoin ETF would mimic the price of the cryptocurrency, but you wouldn’t be investing in Bitcoin directly. In other words, the ETF would make it so that you can invest in Bitcoin like you would any other stock through a traditional exchange.

Currently, the Securities and Exchange Commission (SEC) hasn’t approved any U.S.-based Bitcoin ETFs. However, Bitcoin ETFs do exist in Europe and Canada, and some experts believe the SEC will start allowing them in the U.S. within the next year or so. If or when that happens, it will make it easier (and safer) for Americans to invest in Bitcoin.

Keep in mind, though, that even if you do invest in a Bitcoin ETF, it’s still important to have a diversified portfolio. Just as you would by investing in Bitcoin directly, make sure the bulk of your money is spread across a wide variety of stocks in addition to a Bitcoin ETF.

3. Consider crypto stocks

Perhaps the safest way to invest in Bitcoin doesn’t involve investing in Bitcoin at all but instead investing in crypto stocks.

A crypto stock is a company that is involved in the cryptocurrency market in some way. Examples of crypto stocks include:

• Tesla: CEO Elon Musk recently announced a $1.5 billion investment in Bitcoin, and the company also allows payment in the form of Bitcoin.
• Square: The company allows users to offer cryptocurrencies, including Bitcoin, as a form of payment. It has also purchased more than $200 million worth of Bitcoin since October 2020.
• Salesforce: Although not directly involved with Bitcoin, the company builds blockchain solutions — which is the technology behind cryptocurrencies. If Bitcoin becomes mainstream, Salesforce could benefit from it.

The key to investing in crypto stocks is to invest in them because they are solid companies — not solely because they’re involved in cryptocurrencies. Strong companies will do well over the long term regardless of what happens with Bitcoin. But if Bitcoin does turn out to be a life-changing investment, these stocks may experience even higher returns.

Is it time to invest in Bitcoin?

There are a variety of ways to invest in Bitcoin, with some safer than others. Keep in mind, though, that at the end of the day, Bitcoin is still a highly volatile investment. Even if you try your best to mitigate your risk, only invest money you’re prepared to lose.

Bitcoin has the potential to be a lucrative investment, but it’s not right for everyone. If you choose to invest in Bitcoin, be sure you’ve done your homework and invest wisely to keep your money as safe as possible.

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

More reading

• ASX stock of the day: The Greenland Minerals (ASX:GGG) share price is up 18% today
• Why ASX travel share prices are slipping today
• Leading brokers name 3 ASX shares to buy today
• What’s happened to the Freedom Foods (ASX:FNP) share price?
• Santos (ASX:STO) share price rises on latest CEO pay arrangement

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

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The Greenland Minerals Ltd (ASX: GGG) share price is having another corker of a day today. Greenland shares are up 18.18% at the time of writing to 13 cents a share after closing at 10 cents on Friday and opening at 12 cents a share this morning.

The Greenland Minerals share price is now up a lofty 44.44% since last Thursday. However, the picture is less rosy for Greenland shareholders if we zoom out a little. This was a company trading at 34 cents a share back in January. In fact, Greenland was asking 18 cents a share just last week. 

So what is this company? And why are Greenland shares bouncing so hard off such a sudden low today?

Greenland far from home

Greenland Minerals is a rather interesting company. It’s an Australian miner that has operated exclusively in the Danish province of Greenland since 2007. Its major asset is the Kvanefjeld rare earth project in southwest Greenland, which houses a significant deposit of the minerals collectively known as ‘rare earths’.

Rare earths are a series of elemental metals, including yttrium, lanthanum and neodymium. These metals have a wide range of modern manufacturing applications, most prominently in rechargeable batteries, electric motors, magnets, renewable energy generation and smartphones.

They are so central to today’s economy that governments worldwide are scrambling to secure supplies for the future. We have seen this in action with the ASX’s fellow rare earths miner Lynas Rare Earths Ltd (ASX: LYC).

Last year, Lynus signed a supply contract with the US Department of Defense, which underscores the importance that countries like the US are placing on rare earths.

Greenland Minerals’ Kvanefjeld project houses many of these rare earths, as well as deposits of uranium, fluorspar and zinc.

The project will consist of a mine, a concentrator and a refinery for processing these minerals. Once up and running, the company expects rare earths to make up 80% of Kvanefjeld’s revenues, with the remaining 20% coming from uranium, zinc and fluorine.

What’s with the Greenland Minerals share price?

As we touched on earlier, this company has had a wild ride over the past few weeks. Most of this volatility came last week when the Greenland share price plummeted 45% in one day.

As we reported at the time, this was a result of a recent election. The environmentalist Inuit Ataqatigiit party reportedly won 37% of the vote. One of its election pledges was to halt the mining project on the basis that it would cause environmental pollution, especially that from uranium, which is radioactive. 

As such, the path forward for Kvanefjeld looks to be in tremendous jeopardy.

However, today’s Greenland Minerals share price performance appears to be a continuation of a ‘bounce back’ the company has been enjoying since 9 April. On that date, Greenland Minerals released a market statement addressing investors’ concerns. 

All is not lost

In this statement, Greenland Minerals highlighted that the Inuit Ataqatigiit would still need to form a coalition government seeing as it did not obtain an outright majority. 

It also stated the following:

Uranium at Kvanefjeld occurs at relatively low grades compared to most primary uranium mines. However, it can be recovered at low incremental cost during rare earth production. It is not of great economic significance to the Kvanefjeld Project.

However revenues along with those from other by-products would serve to reduce rare earth production costs. In the leadup to the election, the IA Party leadership expressed an anti‐uranium position and has reaffirmed this position since the election win…

Greenland Minerals Ltd has operated its 100%‐owned Kvanefjeld rare earth project effectively under all successive Greenland Governments since commencing operations in 2007. The company looks forward to engaging with the new government once it has been established.

As such, it looks as though Greenland Minerals is implying it can make modest adjustments to the mines’ operations that will result in Kvanefjeld remaining online and viable.

We will have to wait and see how this unfolds. But judging by the Greenland Minerals share price performance today, it appears as if investors are keeping an open mind.

On the current Greenland Minerals share price, the company has a market capitalisation of $174.4 million. 

More reading

• Why the Greenland Minerals (ASX:GGG) share price is rocketing 17% today
• Why Aurelia Metals, Brickworks, Greenland Minerals, & Resolute are tumbling lower
• Why the Greenland Minerals (ASX:GGG) share price is crashing 45% lower today
• The new race between US and China is good news for these ASX shares
• The Lynas (ASX:LYC) share price is bouncing back, what’s next?

Motley Fool contributor Sebastian Bowen 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 Qantas Airways Limited (ASX: QAN) and Webjet Limited (ASX: WEB) share prices are sinking today after Deloitte Access Economics’ quarterly business outlook predicted full overseas travel would not return until 2024.

At the time of writing, Qantas is down 2.48% at $5.32, and Webjet is down 1.48%, also trading at $5.32.

In an AAP report, Deloitte economist Chris Richardson’s predicted that incoming travellers from at least some parts of the world would face incoming quarantine restrictions for years to come.

“That keeps international travel – both inbound and outbound – pretty weak in 2022, and it may not return to pre-pandemic levels until 2024,” he said.

How have ASX travel shares fared?

The Qantas share price has been increasing substantially recently, up 12% in 2021 and 53% over the past 12 months. Despite the lack of airline travel, it’s also beating the industrials sector by 37% and the S&P/ASX 200 Index (ASX: XJO) by 23%.

The Webjet share price has also posted substantial gains, although has been a little more volatile of late. Despite losing 11% so far this month, its up 83% over the past 12 months and has risen by 6% in 2021 so far.

Shares in both companies are now trading higher than $5, a $2-$3 rise above their respective share prices 12 months ago near the beginning of the coronavirus pandemic’s impact on Australia.

A slow broader economic recovery expected

Deloitte’s report was published before the Australian government changed its stance on the AstraZeneca PLC (LSE: AZN) COVID-19 vaccine after it was found to cause blood clots in receivers. The government now only recommends it for people over 50-years-old.

Australia has ordered an additional 20 million doses of the Pfizer vaccine, but they’re not expected to arrive until later this year at the earlier.

Richardson praised the “pedal to the metal” approach of Australia’s central banks in lowering interest rates, also saying that the economy’s “fundamentals are moving pretty fast off the back of that”.

Deloitte also doesn’t expect interest rates to reach the Reserve Bank’s 2-3% target range until 2023/24.

“A sustained lift in inflation requires a conga line of things to happen,” Richardson told AAP. “This is going to be a slow-moving train, not a fast one.”

More reading

• ASX 200 down 0.3%: Webjet completes note offering, Xero pushes higher
• Fund managers have been buying Webjet (ASX:WEB) and this ASX share
• Brokers name 3 ASX shares to buy today
• ASX 200 up 0.25%: EML surges on acquisition news, Westpac’s APRA update
• Why EML, NextDC, Qantas, & Recce shares are racing higher

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet 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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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

BlueScope Steel Limited (ASX: BSL)

According to a note out of Ord Minnett, its analysts have upgraded this steel producer’s shares to a buy rating with an improved price target of $26.00. The broker made the move in response to higher steel price estimates. Ord Minnett notes that BlueScope’s steel spreads continue to widen, which it expects to lead to a guidance upgrade in the near future. The BlueScope share price is trading at $20.40.

Tabcorp Holdings Limited (ASX: TAH)

A note out of Credit Suisse reveals that its analysts have upgraded this gaming company’s shares to an outperform rating and increased the price target on them to $5.70. According to the note, the broker believes that the company’s lottery business is performing very well and has upgraded its earnings to reflect this. In addition, the broker has been looking at its strategic review options and suspects a demerger of some assets could happen. This has the potential to create value for shareholders. The Tabcorp share price is fetching $4.93 today.

Xero Limited (ASX: XRO)

Analysts at Goldman Sachs have retained their buy rating but trimmed their price target on this accounting platform provider’s shares to $153.00. According to the note, the broker was pleased with its acquisitions of Planday and Tickstar and believes they will accelerate Xero’s platform strategy. Goldman also notes that they provide a platform for Xero to launch its core accounting product in Scandinavia, where there is a total addressable market (TAM) of 2.2 million subscribers. The Xero share price is trading at $141.43 today.

More reading

• ASX 200 down 0.3%: Webjet completes note offering, Xero pushes higher
• Why the Xero (ASX:XRO) share price can go even higher from here
• ASX 200 Weekly Wrap: ASX sees 7,000 points once more
• 5 things to watch on the ASX 200 on Monday
• Why it looks like a V-shaped recovery for the Xero (ASX:XRO) share price

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 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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Long-term shareholders of ASX health foods company Freedom Foods Group Ltd (ASX: FNP) received a rude shock last month. The embattled company’s shares resumed trading in late March after a months’ long hiatus triggered by the resignation of former managing director and CEO Rory Macleod in June of last year.

Unfortunately for investors, the Freedom Foods share price opened around 90% below the price it was fetching back in June when shares were originally suspended.

Why did the Freedom Foods share price plummet?

You may have missed it in amongst all the COVID-related news over the last 12 months, but 2020 was not a good year for Freedom Foods. And not just because of the business headwinds created by the pandemic.

In June, Freedom Foods announced it had been forced to write off $60 million worth of inventory. This included obsolete and out-of-date stock dating back as far as 2017. Not only that, but the company was also forced to raise significant doubtful debts provisions, as well as reverse some revenue already recognised in prior periods.

The total impact of these adjustments on FY20 earnings before interest, tax, depreciation and amortisation (EBITDA) was a negative adjustment of $10 million (this was in addition to $4 million worth of doubtful debt provisions that had already been raised earlier in the year).

At the same time, the company announced it was seeking to suspend trading in Freedom Foods shares pending further investigation into its financial position. And then, less than a week later, it was announced that company CEO Rory Macleod – who had been on leave – had resigned.

Now what?

The Freedom Foods share price suspension went on, and on, and on. In the meantime, a number of class actions were launched against the company and it also got itself into a nasty dispute with one of its suppliers, US-based Blue Diamond Growers. It also sold off its cereal and snack assets to the Arnott’s Group for $20 million in cash.

For its part, Freedom Foods has ploughed on with an extensive recapitalisation plan and board management shakeup. The company is raising up to $265 million in new capital, comprising $130 million of convertible notes to wholesale investors, and a further $200 million from its majority shareholder, investment company Arrovest.

In addition, senior lenders National Australia Bank Ltd (ASX: NAB) and HSBC will provide further funding through a number of debt facilities, the size of which will depend on the exact amount of proceeds raised through the company’s other capital raising initiatives.

Recent financials

In the midst of all this other activity, Freedom Foods released its first-half FY21 results. The company reported a 15% jump in revenues from continuing operations (versus its restated first-half FY20 result) to $291.4 million, while total revenues came in at $317.3 million. Adjusted EBITDA from continuing operations came in at $21.7 million, an increase of $48.2 million over its restated first-half FY20 earnings loss of $26.5 million.

New CEO Michael Perich commented on the result, stating that “while there remains a lot of work to be done to ensure Freedom Foods Group can meet its full potential”, the recapitalisation plan will give the company the capital structure that will allow it to “continue to focus on delivering on [its] turnaround strategy and restore the Group to sustainable and long-term profitable growth.”

Investors will be hoping that this translates to a recovery in the Freedom Foods share price, which is now down 90% over the last 12 months. At the time of writing, the company’s shares are also trading 4.26% lower at 45 cents so far during Monday’s session. 

More reading

• Airtasker and Zip were among the most traded ASX shares last week
• ASX 200 climbs, Crown soars, Mineral Resources drops
• Why Fortescue, Freedom Foods, QBE, & Singular Health are sinking
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Rhys Brock owns shares of Freedom Foods Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends HSBC Holdings. The Motley Fool Australia has recommended Freedom Foods Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Santos Ltd (ASX: STO) share price is up today. The positive price movement comes as the oil and gas producer announced a new incentive pay scheme for its CEO.

At the time of writing, the Santos share price was trading for $7.11, up 0.57%. By comparison, the S&P/ASX 200 Index (ASX: XJO) is 0.31% lower.

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

Santos share price and CEO pay up

Santos announced its board has agreed to provide CEO Kevin Gallagher a “once-off growth projects incentive” to ensure he “sees through the successful delivery of Santos’ major growth projects and energy transition strategy to 2025”.

In today’s statement, Santos credited Mr Gallagher with turning around its business since his arrival in February 2016. Investors seemingly agree. The Santos share price surged from a base of $2.92 in 2016 to trade at $9.00 just before the 2020 COVID-19 market crash. Post-crash, the share price is still 142.47% higher than it was on Mr Gallagher’s first day.

According to Santos, shareholders have received a 159% return on investment during the CEO’s tenure, when dividends are taken into account.

What’s the incentive?

The incentive scheme has a face value of $6 million. It will be delivered in the form of share acquisition rights, “subject to strict performance hurdles related to the successful delivery of major growth projects, the energy transition strategy and continued employment,” according to the company.

Santos listed the Barossa, Dorado and Moomba carbon capture and storage projects as areas of major growth. The company also wishes to become carbon-neutral by 2040. Santos is factoring in the achievement of this commitment as part of Mr Gallagher’s incentive.

According to a recent study, ASX shareholders have been pushing for CEO compensation that includes incentive packages, such as this one.

Management commentary

Santos chair Keith Spence said Mr Gallagher had a clear track record of delivering for shareholders:

Kevin is critical to the successful delivery of the company’s strategy, major growth projects and driving the energy transition over the next five years.

Commenting on today’s news, Mr Gallagher said:

It is a privilege to lead Santos. We have made significant progress on our transformation journey, but the job is not yet done.

I am delighted to commit to continuing to drive the delivery of our growth strategy, the transition to a leading clean fuels business and to achieve our net-zero emissions targets.

Santos share price snapshot

The Santos share price has increased 54.01% in the past 12 months. In early March, the company hit a 52-week high of $7.80 as oil prices boomed on OPEC production cuts.

Santos has a market capitalisation of $14.8 billion.

More reading

• ASX 200 energy shares outlook boosted by mega African oil project
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Wednesday
• Why 88 Energy, Chorus, Incitec Pivot, & Santos shares are sinking

Motley Fool contributor Marc Sidarous 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 Orocobre Limited (ASX: ORE) share price is fighting back after it got hit with a broker downgrade.

The Orocobre share price tumbled more than 3% in early trade but bounced to be up 0.7% at $5.59 at the time of writing.

In contrast, the S&P/ASX 200 Index (Index:^AXJO) shed 0.3% of its value as mining, energy and property shares weighed.

Why JPMorgan downgraded the Orocobre share price

The positive sentiment towards all-things lithium can’t be easily turned off even as JPMorgan cut its recommendation on the Orocobre share price to “neutral” from “overweight”.

This isn’t to say that the broker has a negative take on the mineral. If anything, it believes supply will quickly tighten as demand for electric vehicles revs up.

The issue is the rapid rise of the Orocobre share price, which surged by over 150% in the past year.

Hard to cool the lithium fever

But perhaps enthusiasm towards the Galaxy Resources Limited (ASX: GXY) share price today is lifting all boats in the lithium bay.

The Galaxy share price charged up 9.1% to a near three-year high of $3.26 during lunch time trade. Shares in the spodumene producer is running hot after management issued a positive update this morning.

Two drivers for the rocketing Galaxy share price

But this may not be the only news boosting the stock. JPMorgan has upgraded its price forecast for spodumene but left its estimates for lithium chemicals unchanged.

“We have increased spodumene prices a further 5-10% with reports of recent trades above US$600/t,” said the broker.

This is good news for Galaxy but has no impact on the Orocobre share price as the latter produces lithium carbonate from brine from its joint-venture Olaroz lithium project in Argentina.

Differences in how lithium is mined

Spodumene occurs as crystals in hard rock and can be used to produce lithium carbonate or lithium hydroxide. The latter is becoming more highly prized by battery producers, reported newagemetals.com.

But regardless of where lithium comes from, most experts agree that global supply will struggle to keep up with expected demand for EVs. We could see shortfalls of the mineral as early as 2023.

This is the main reason why ASX lithium shares have been on a tear, although the speed of their ascend could cause concern.

Foolish takeaway

Few would think a bubble is forming but the risk is rising. Also, we shouldn’t forget the saying in commodity markets – that nothing cures high prices like high prices.

It means that high spodumene and lithium carbonate prices will spur miners to ramp up production via brownfield or greenfield projects.

The undersupply issue may not last as long as some ASX investors believe.

More reading

• Fighting the Fed: The next choice for ASX investors
• ASX 200 energy shares outlook boosted by mega African oil project
• ASX 200 down 0.3%: Webjet completes note offering, Xero pushes higher
• Why Anteotech, Credit Clear, Galaxy, & Mach7 shares are storming higher
• The Galaxy Resources (ASX:GXY) share price is on watch. Here’s why

Motley Fool contributor Brendon Lau owns shares of Galaxy Resources Limited and Orocobre Limited. 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.

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