Australia’s top brokers have been busy adjusting their estimates and recommendations again, leading to the release of a number of broker notes.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Accent Group Ltd (ASX: AX1)

According to a note out of Citi, its analysts have retained their buy rating and $2.85 price target on this retailer’s shares. This follows Accent’s investor day event earlier this week. Citi was pleased with the investor day presentation and the notes the company’s entrepreneurial spirit. Accent announced yet another new store brand launch at the event – 4 Workers. While it acknowledges that not all new launches will be a success, it believes the company is well-placed to get behind the ones that do and super charge their growth. The Accent share price is trading at $2.39 this afternoon.

Brickworks Limited (ASX: BKW)

A note out of Ord Minnett reveals that its analysts have initiated coverage on this building products company’s shares with a buy rating and $25.50 price target. According to the note, the broker believes that Brickworks is well-positioned to benefit from improving housing activity in Australia. In addition to this, the broker is a fan of the company’s property business and believes this offers potential upside. The Brickworks share price is fetching $20.29 on Friday.

Temple & Webster Group Ltd (ASX: TPW)

Analysts at Morgan Stanley have retained their overweight rating and $14.00 price target on this online furniture and homewares retailer’s shares. According to the note, the broker believes that Temple & Webster’s shares are good value at the current level. Furthermore, based on its current growth profile, it believes the company is cheaper than other ecommerce companies. It suspects Temple & Webster could increase its sales to $1.5 billion by FY 2030. This compares to annualised sales of $320 million it achieved in the first half. The Temple & Webster share price is trading at $10.07 on Friday afternoon.

More reading

• Brokers are bullish on these 4 ASX 200 shares
• ASX 200 rises, Brickworks builds, Netwealth sinks
• 2 ASX 200 shares that keep growing their dividends
• Why Brickworks, McPherson’s, MedAdvisor, & Premier Investments are storming higher
• ASX 200 up 0.3%: Brickworks impresses, Resolute hammered, Netwealth crashes

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 Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Brickworks. The Motley Fool Australia has recommended Accent Group 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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The AMP Ltd (ASX: AMP) share price crashed yesterday and has rebounded today on intense speculation surrounding the future of the company’s CEO, Francesco De Ferrari. Trading in the company’s shares was paused just before 4 pm yesterday before resuming trading this morning.

AMP shares finished Thursday at $1.335 – down 3.61%. By comparison, the S&P/ASX 200 Index (ASX: XJO) finished the day 0.17% higher. However, today the AMP share price is up 0.75% to $1.345.

Is AMP CEO Francesco De Ferrari resigning?

The AMP share price has been on a wild ride. News of Mr De Ferrari’s possible departure was first broken by the Australian Financial Review (AFR) yesterday. The newspaper then claimed to have confirmed the news this morning.

However, AMP released two short statements on the rumours. Yesterday, the company said:

AMP Limited notes the media reports today and confirms that Francesco De Ferrari remains as Chief Executive Officer of the group.

Today, the company stated:

AMP confirms there has been no change to the CEO’s position and that Mr De Ferrari has not resigned. The Board and Mr De Ferrari are working together and constructively discussing the future strategy and leadership of the group, post the completion of AMP’s portfolio review. These discussions are ongoing, and AMP will provide updates as required.

Neither statement gave any clear indication as to Mr De Ferrari’s position going forward, only that he had not resigned.

De Ferrari’s history with AMP

De Ferrari, who took the helm of the beleaguered company in December 2018, has seen a precipitous fall in the company’s value during his tenure. The former Credit Suisse banker became CEO in the wake of the devasting Banking Royal Commission, which found AMP had lied to regulators and charged clients for services it did not deliver.

The AMP share price has fallen by more than 45% in the 2¼ years De Ferrari has been in charge. Scandal has not evaded the company during his reign either.

The man who would likely replace De Ferrari on an interim basis, were he to in fact step down, is Scott Hartley, according to the AFR. Hartley’s immediate predecessor as CEO of group subsidiary AMP Australia, Alex Wade, was forced to resign after sending explicit photos to a subordinate.

The former CEO of another subsidiary, AMP Capital, Boe Pahari, was also forced out soon after, along with group chair David Murray and AMP Capital chair John Fraser, after it was revealed he was promoted despite facing similar sexual harassment complaints. Pahari was paid a $1 million bonus despite only holding the job for 53 days and resigning in disgrace. Parts of AMP Capital are now subject to a takeover by Ares Management Corp (NYSE: ARES).

In its full-year report for FY20, AMP reported net profits for the group fell by 33% on the previous year to total $295 million. Total assets under management (AUM) were $255 billion. That was 6% lower than FY19 and the resulting revenue from the AUM was 10.5% lower ($10.5 billion total).

AMP share price snapshot

While investors have been leaving in droves during De Ferrari’s tenure at AMP, many seem to fear further upheaval if and when he goes even more.

As mentioned, many had been offloading their shares on the news he was to resign, only to buy back in once no decision was made. Over the long term, however, the company has been in decline. Yet if an investor bought AMP shares 12 months ago today, they would be sitting on an 8.5% return on investment.

It should be noted, however, that one year ago was the midst of the brutal coronavirus market crash.

AMP has a market capitalisation of $4.6 billion.

More reading

• 5 things to watch on the ASX 200 on Friday
• Dexus (ASX:DXS) share price rises on proposed $15 billion fund merger
• AMP (ASX:AMP) selling assets too cheaply warns Macquarie
• Bank of Queensland (ASX:BOQ) share price rises as it inks office deal with AMP (ASX:AMP)
• Demoted AMP exec paid $1m bonus for 53 days’ work

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 Digital Wine Venture Limited (ASX: DW8) share price is through the roof today, after news the company intends to partner with eBay.

The online beverage distributor has signed a memorandum of understanding (MOU) with online shopping giant eBay to partner with Digital Wine Venture’s WINEDEPOT.

At the time of writing, the Digital Wine share price is up 50%, trading at 16.5 cents.

Let’s look further into the potential eBay partnership.

WINEDEPOT and eBay

Under the MoU, eBay and WINEDEPOT will negotiate the terms of a partnership in which Australian wineries would be able to sell their products on eBay without an account of their own.

Instead, WINEDEPOT’s trading platform, DIRECT, would enable wineries to list products on a range of channels, including eBay. WINEDEPOT would then pick, pack, and deliver wine orders made on eBay to customers.

Digital Wine Venture said this would allow eBay’s 12 million monthly visitors to purchase from multiple wineries at the same time and take advantage of WINEDEPOT’s same and next day deliveries in selected locations.

Commentary from management

Digital Wine CEO Dean Taylor says he was confident a partnership with eBay would help local producers generate more sales. He also mentioned that, in time, the partnership could benefit international wine lovers as WINEDEPOT looks to begin overseas delivery.

eBay Australia’s managing director Tim MacKinnon also commented on the MoU:

We know bushfires and COVID border closures along with limited venue capacities have left countless Australian businesses doing it tough.

eBay exists to create economic opportunity, which is why we’re excited to partner with WINEDEPOT, enabling local wine producers – many of which are located in regional areas – to scale their online offering and giving their local regions a much-needed economic boost.

Digital Wine share price snapshot

The online beverage distributer’s share price opened at just 11.5 cents this morning; it is currently trading at 16.5 cents.

The Digital Wine share price has had a great year on the ASX, up 312% year to date and up 1,550% over the last 12 months.

The company has a market capitalisation of around $182 million, with approximately 1.6 billion shares outstanding.

More reading

• Why the Digital Wine (ASX:DW8) share price is up an astonishing 18%

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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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) has followed the lead of US markets and is pushing higher. At the time of writing, the benchmark index is up 0.45% to 6,820.8 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are pushing higher:

Galaxy Resources Limited (ASX: GXY)

The Galaxy share price is up 6% to $2.40. On Thursday the lithium producer announced the achievement of battery grade lithium carbonate at its wholly owned brine project in Argentina, Sal de Vida. The company revealed that test results demonstrate that battery grade lithium carbonate can be achieved through a simple, bolt-on process. Positively, this can be seamlessly incorporated into the Stage 1 project development.

HUB24 Ltd (ASX: HUB)

The HUB24 share price has rebounded 4.5% to $21.74. This follows a 14% decline in the wealth management platform provider’s shares on Thursday after a rival announced changes in its deposit arrangement. Analysts at Goldman Sachs believe this is a buying opportunity and put a buy rating and $24.58 price target on HUB24’s shares this morning.

Paradigm Biopharmaceuticals Ltd (ASX: PAR)

The Paradigm share price is up almost 7% to $2.56. Investors have been buying the biopharmaceutical company’s shares after it announced the submission of its Investigational New Drug (IND) application to the US Food and Drug Administration (FDA). This is for the planned pivotal study and extension study with PPS (Zilosul) for the treatment of patients with Knee Osteoarthritis (OA).

Telstra Corporation Ltd (ASX: TLS)

The Telstra share price has risen 3% to $3.43. This morning the telco giant announced that it would be delisting its New Zealand listed shares in June. Telstra explained that it was making the change partly to streamline its shareholder services and notes that New Zealand investors now have easy access to the ASX. It believes the move is in the best interests of shareholders and the company.

More reading

• Why the Paradigm (ASX:PAR) share price is charging 6% higher today
• Why the Centuria Industrial (ASX:CIP) share price is gaining today
• Telstra (ASX:TLS) share price on watch following NZ update
• Is it time to buy HUB24 (ASX:HUB) and Netwealth (ASX:NWL) shares?
• Don’t ever buy defensive shares: fundie

James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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.

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The Cyprium Metals Ltd (ASX: CYM) share price is down 5.66% today, despite good news from the company regarding favourable assay results. The drop has come at a bad time for the mineral mining company, as it endures the final day of trading in a particularly volatile week.

At the time of writing, the Cyprium share price is down nearly 17% over the course of this week and is currently trading at 25 cents.

Let’s take a closer look at the company’s news.

Assay results

The Cyprium share price is on the slide again today despite the company releasing its most recent assay results. The miner reported it has found extensive, shallow copper and gold mineralisation at its Nanadie Well Copper-Gold Project.

So far, the company has results for 38 out of 66 holes from its drilling program at Nanadie Well.

The drilling program found near-surface oxide and supergene mineralisation with potential mineralisation over a strike of 750 metres.

The drilling program began in January 2021, with the company stating the first lot of results are encouraging.

The Nanadie Well Copper-Gold Project is located in Western Australia, about 650kms from Perth. The company acquired 100% of the Project in July 2020. 

Management commentary

Commenting on the company’s assay results, Cyprium executive director Barry Cahill said: 

As anticipated, the results are continuing to show an extensive shallow and broad oxide copper-gold mineralisation.

We are really excited and encouraged from what we are seeing in these assay results from the supergene horizon at Nanadie Well. It gives us increasing confidence in the potential of the sulphide mineralisation. We are looking forward to the results of the assays of the diamond drill core and results of the downhole geophysics in that part of the mineralised zone.

We anticipate continued positive news flow over the coming weeks as the results for the remaining RC drill holes are received.

Cyprium share price snapshot

The Cyprium share price had a rough trot in 2020, but it has since bounced back. Currently, the company’s share price is up by more than 170% over the last 12 months. It is also up by almost 9% year to date.

Cyprium has a market capitalisation of around $26.12 million, with approximately 98 million shares outstanding.

More reading

• ASX shares making the biggest moves 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 Atrum Coal Ltd (ASX: ATU) share price is having a terrible day’s trade after the company ended a trading halt with bad news this morning.

The coal mining company announced that the Alberta Government has reinstated a coal policy that affects the ASX-listed company’s flagship Elan Hard Coking Coal Project. Atrum also announced a number of changes to its board.

At the time of writing, the Atrum Coal share price is down a whopping 85%, trading at 6.1 cents.

Let’s dig deeper into the company’s announcement.

Reinstated coal policy

The Alberta Government has reinstated a coal policy that it removed in 2020. As result, Atrum has paused all significant site-based activities at its Elan Project, including any planned future drilling.

Atrum Coal said the government had restricted surface mining in Category 2 lands. This means coal exploration at the Elan Project is banned until a new coal policy is created.

The company noted that any environmental studies needed to continue prior work and activities already approved under its 2020 Coal Exploration Permit would not stop.

It is beginning cost reduction measures, as it now predicts much lower levels of site activities in 2021.

Atrum Coal said that there had been exemptions in the past that allowed open-pit mining on Category 2 lands. The company is seeking advice on what conditions open-pit mining might be possible.

Commentary from management

Atrum CEO Andrew Caruso commented on the government decision, saying:

We fully accept the Alberta Government’s reinstatement decision. We also welcome a consultation process that is rigorous, inclusive and transparent.

(Atrum Coal believes) such a process is precisely how all key stakeholders including First Nations, ranchers, local communities, industry and other land users can work towards a balanced, modern policy that makes Alberta a world leader in sustainable resource development.

Mr Caruso went on to emphasise that Elan mined hard coking coal (also known as metallurgical coal).

Unlike thermal coal, for which there are many alternative energy sources, there is no viable substitute for hard coking coal in the production of high strength and hardness carbon steel via the blast furnace route.

Steel is essential to modern life and socio-economic development, including in the construction of many of the renewable energy technologies and infrastructure that form the basis of the world’s transition towards a carbon-neutral setting.

Changes to Atrum Coal’s board

This morning’s announcement also included mention of upcoming resignations from the company’s board.

Both non-executive chair Chuck Blixt has resigned and will be replaced by non-executive director Glen Koropchuk.

Non-executive director George Edwards has also resigned, and Jeff Gerard and Anita Perry have been appointed as independent non-executive directors.  

More disruption to the board is set to come, as another non-executive director, Charles Fear, has announced that he will not stand for re-election in 2021. 

Atrum Coal share price snapshot

The company’s share price opened this morning trading at a healthy 25 cents and took a turn for the worse after Atrum Coal ended its trading halt mid-morning.

Today’s losses have plunged Atrum Coal’s down again after a poor year so far on the ASX. Currently, its share price is down 77% year to date. It’s also 65% over the last 12 months.

Atrum Coal has a market capitalisation of around $145 million, with approximately 581 million shares outstanding.

More reading

• Cyprium (ASX:CYM) share price slumps 6% despite positive news
• How much is the Fortescue (ASX:FMG) dividend worth today?
• Here’s why the Australian Strategic Materials (ASX:ASM) share price is rising today
• 3 attractive ASX shares currently in a dip
• Why the CIMIC (ASX:CIM) share price is lifting this morning

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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Fortescue Metals Group Limited (ASX: FMG) has been an S&P/ASX 200 Index (ASX: XJO) favourite for investors over the last year or so. At the time of writing, the Fortescue share price is trading at $20.06.

Buoyed by rising iron ore prices, Fortescue shares have risen by more than 90% over the past 12 months. And that’s after falling 22% since early January.

But it gets even better for long-term investors. Over the past 5 years, Fortescue shares are up a staggering 683%. Not bad for a blue-chip iron miner.

But even after the massive run up of the past year, Fortescue today offers a trailing dividend yield of 12.31%. And that comes fully franked to boot. If you include the value of these franking credits, this dividend grosses-up to an almost-inconceivable 17.59%.

So let’s, er, dig a little deeper here.

An ASX dividend giant

Fortescue’s last two dividend payments were a $1.47 per share interim dividend that was paid on Wednesday, and a $1 per share final dividend that was paid out on 2 October 2020. For some context, the two dividends before that were an interim dividend of 76 cents per share, and a final dividend of 24 cents per share.

So there has been a massive ramp up over the past 2 years. This large gap can be easily explained by looking at Fortescue’s policy when it comes to dividends.

Fortescue has what’s called a ‘payout ratio’ dividend policy. Its official position, which the company reiterated in its latest earnings report, is to payout 50% to 80% of full-year net profits after tax (NPAT), targeting the top end of the range. For the first half of the 2021 financial year (1H21), Fortescue’s NPAT came in at US$4.08 billion, which was a massive increase on 1H20’s figure of US$2.45 billion.

The dividend of $1.47 per share represented 80% of that NPAT figure for 1H21. So right at the top of the range. It was also the highest dividend Fortescue has ever paid its shareholders.

Will the Fortescue dividend survive?

So, some takeaways here. Firstly, as an iron ore miner, Fortescue is completely at the mercy of the iron ore price. The monstrous dividend of $1.47 a share was possible because of historically high iron ore prices over the past year. As this dividend was at the upper range of Fortescue’s payout ratio, it will need to bring in at least a very similar level of profits in the future to maintain a dividend near this level.

But this might not be a challenge for the company, at least in the short term. In its earnings report, Fortescue told us that its average realised price per dry metric tonne was US$114. Today, the iron ore price is US$155.60 a tonne, which is actually on the lower end of its recent range. It was over US$172 a tonne as recently as 8 March.

In all likelihood, the current heights of the Fortescue dividend won’t last forever, given how volatile the price of iron ore has historically been. But on the other hand, the dividend looks pretty safe in the short- to medium-term, judging by the metrics we have discussed. This is certainly an interesting ASX dividend share to keep an eye on!

More reading

• How do brokers rate the Fortescue (ASX:FMG) share price?
• Where to reinvest your Fortescue (ASX:FMG) dividends
• 5 things to watch on the ASX 200 on Wednesday
• The Fortescue (ASX:FMG) share price is down 20% in March
• An important lesson from today’s Fortescue (ASX:FMG) share price

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 Australian Strategic Materials Ltd (ASX: ASM) share price is gaining today, up 2.2% in late morning trade.

Below, we take a look at the ASX resource shares capital raising announcement.

What did the company report?

The Australian Strategic Materials share price is moving higher after the company reported it had received firm commitments to raise $65 million via the placement of 13.5 million shares.

The company will issue the new shares for $4.80 per share. That’s 5.7% below the current share price of $5.09 per share. The placement is scheduled to settle on 1 April.

The company also said it plans to raise an additional $41 million by undertaking a “1 for 14 pro-rata non-underwritten, non-renounceable entitlement offer to eligible shareholders”. The company expects the entitlement offer, also at $4.80 per share, to open on 7 April and close on 16 April.

Australian Strategic Materials intends to use the new funds for the final stage of engineering and construction of its proposed Korean Metals Plant and additional engineering work at its New South Wales Dubbo Project.

Words from management

Commenting on the capital raising, ASM managing director David Woodall said:

The funds raised significantly bolster our balance sheet, placing the company in a strong position as we progress key workstreams which include development of the proposed Korean Metals Plant and advancing key FEED workstreams on the Dubbo Project in New South Wales.

Importantly, we continue to advance our strategy for sustainable growth, with a primary focus on developing ASM into a globally relevant, independent and integrated metals producer by 2022.

Australian Strategic Materials share price snapshot

Australian Strategic Materials is a relative newcomer to the ASX, having first listed on 30 July 2020.

Since then, the ASX resource share has provided shareholders with a good run, with shares up 265% over the past 12 months. By comparison, the All Ordinaries Index (ASX: XAO) is up 37% over that same time.

Year-to-date, the Australian Strategic Materials share price is down 23%.

More reading

• Australian Strategic Materials (ASX:ASM) share price on watch after trading halt
• ASX 200 up 0.45%: Premier Investments results, Xero acquisition, Computershare halted
• ASM (ASX:ASM) share price in flux after deal with South Korean Government
• ASM (ASX:ASM) share price jumps as scoping study supports $45m plant build

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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An ASX share fund has revealed 3 stocks that it holds and loves, which are currently in a price dip.

Aberdeen Standard told clients in a monthly update that Australian stocks are now “in something of a sweet spot”.

“The central bank remains committed to a dovish stance, with interest rates expected to remain low until 2024 at least. Meanwhile, commodity prices could rise further as the global growth outlook improves amid the wider rollout of Covid-19 vaccines,” the memo read.

“In addition, rosier macro conditions and more upbeat company updates strengthen hopes of a rebound in corporate earnings.”

In light of this, it picked out 3 shares in its portfolio that have an optimistic future:

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

The New Zealand healthcare player has had a rough few weeks. From $32.94 on 27 January, its shares tumbled to as low as $25.46 this month. They’re currently trading at $29.90 early Friday afternoon, so is still in a dip.

Aberdeen noted Fisher & Paykel stocks descended because demand for its respiratory hardware was boosted by COVID-19 last year.

“With the global vaccine rollout underway, we expect hospitalisation rates to moderate and resultant hardware sales to reverse from current elevated levels.”

But the investment house deemed this to be a temporary dip in earnings.

“We continue to view Fisher and Paykel Healthcare as an attractive holding exposed to longer-term structural growth drivers,” the memo read.

“We remain upbeat on the longer-term opportunity to increase higher-margin consumables sales. This will be driven by both a larger number of devices now in circulation, as well as changes.”

Mercury NZ Ltd (ASX: MCY)

Another Kiwi business listed on the ASX, the electricity company’s stocks are currently in a price dip, having lost almost 19% since 8 January.

But Aberdeen’s Ex-20 Australian Fund went as far as selling down its Afterpay Ltd (ASX: APT) shares to get a piece of the action.

“We re-invested these proceeds into Mercury New Zealand, a 100% renewable electricity generator, with the recent share-price pullback offering an attractive entry point.”

The 100% green energy business model, according to Aberdeen, is what makes the company compelling.

Wesfarmers Ltd (ASX: WES)

Shares for the conglomerate have come down to $52.48 since they hit a 52-week high of $56.40 back in early February.

And that’s caught the eye of Aberdeen’s Australian Equities Fund. 

It all has to do with Australia’s escalating real estate prices.

“Our investment in Wesfarmers reflects our view that the domestic housing recovery will continue to underpin robust earnings at household hardware chain Bunnings over the medium term,” Aberdeen told clients.

“Furthermore, we think it will benefit from its recent investment in lithium processing.”

More reading

• Don’t ever buy defensive shares: fundie
• Why is the Woolworths (ASX:WOW) share price up 5% in a week?
• ASX retail shares beware: Aldi e-commerce is coming
• How to counter the ASX 200’s Achilles heel
• Why the Mercury (ASX:MCY) share price is surging today

Motley Fool contributor Tony Yoo owns shares of AFTERPAY T FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO and Wesfarmers 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 Cimic Group Ltd (ASX: CIM) share price is up this morning after the company announced it had signed a new performance bond facility.

Shares in the ASX 200 construction, mining, and services company opened higher this morning and are currently trading up 1.32% at $18.00.

Let’s take a closer look at the news driving the CIMIC share price.

The importance of the bond facility

In today’s release, Cimic advised that its new $1.4 billion bond facility was a 3-year syndicated performance bond.

A performance bond is issued to one party in a contract as security against another party’s ability to perform. It offers an alternative to upfront guarantees for contract security and performance pledges. As it doesn’t always tie assets or cash as collateral, it can be a useful, flexible financing tool.  

As a large corporation operating in the mining and construction fields, CIMIC is a prime candidate for such bond facilities. The company is an engineering-led construction, mining, services and public-private partnerships corporation, which works across the lifecycle of assets, infrastructure and resources projects.

Commentary from management

CIMIC Group CEO Juan Santamaria said:

The facility reflects CIMIC’s strong financial position and supports our ability to meet the significant number of projects coming through the pipeline.

Access to bonding is an advantage for the group, ensuring we can provide our clients the required surety for our contractual obligations.

Cimic share price snapshot

The CIMIC share price has had a poor start to 2021, down 27.51% year to date. It has also fallen by 25.23% over the last 12 months.

The company has a market capitalisation of around $5.3 billion, with approximately 311 million shares outstanding. 

More reading

• Santos (ASX:STO) share price rises on production update
• Why is the ASX 200 (ASX:XJO) so reliant on the US stock market?
• 5 things to watch on the ASX 200 on Friday
• ASX 200 rises, Brickworks builds, Netwealth sinks
• Why is the Woolworths (ASX:WOW) share price up 5% in a week?

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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