The Zicom Group Limited (ASX: ZGL) share price has had an exceptional trading run today, closing 128% higher at 13 cents.

The Zicom share price blasted off the blocks this morning – even reaching a new 52-week high of 22 cents – off the back of a multi-million dollar deal announced yesterday.

Zicom Group is an integrated manufacturer of marine deck machinery, fluid regulating and metering stations, transit concrete mixers, foundation and geotechnical equipment and precision engineered and automation equipment. The company also provides production integration solutions and hydraulic system services. 

Why is the Zicom share price rocketing? 

Yesterday, Zicom announced a $60 million deal to design and supply LNG propulsion systems for several oil product tankers being built for a leading European oil tanker owner. The orders have been scheduled for delivery in 2022/2023.

The company cited this deal as a testament of its momentum to transform Zicom’s marine sector. Zicom advised that it has been developing technology for green energy propulsion systems for ocean-going vessels over the past 3 years.

The company believes that this strategy now enables Zicom to expand into the entire shipping industry rather than only focussing on offshore marine applications.

Zicom also noted that demand in the offshore marine sector appears to be showing some positive signs.

New shipping regulations position Zicom for growth

The International Maritime Organisation (IMO), which is part of the United Nations, regulates international shipping.

According to Zicom’s announcement, the IMO 2020 rules mandate ocean-going vessels to reduce sulphur emission from engines to 3.5%, down from 4.5%.

Meeting this mandate will require that vessels install scrubber filtration systems or use a low sulphur fuel in place of diesel. 

Each of these options will require technological updates which Zimcom believes the company can support. It therefore views the implementation of the new IMO 2020 rules as a strong growth opportunity.

Today’s gains see the Zimcom share price recover from its trading lows over the previous 12-month period. Its shares fell from 12 cents last February to a low of 4 cents in the coronavirus market meltdown of March.

More reading

• 2 ASX 200 shares to buy for growth
• 2 ASX shares rated as buys by brokers
• Financials sector rallies as ASX 200 sees third day of gains
• GameStop chaos: How Aussie fund doubled money in 2 days
• Why this Goldman Sachs forecast could see these 3 ASX energy shares lift off

Motley Fool contributor Gretchen Kennedy 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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There are some S&P/ASX 200 Index (ASX: XJO) shares that continue to generate growth despite all of the impacts from COVID-19.

Here are two of the ASX 200 shares generating growth and could be worth looking at:

Wesfarmers Ltd (ASX: WES)

Wesfarmers is largely a retail conglomerate that runs various major retailers such as Bunnings, Officeworks, Catch, Kmart and Target.

During this difficult COVID-19 pandemic period, the department store businesses have been struggling with lower foot traffic going into the stores. However, online sales across the business has been booming to help the overall picture.

The ASX 200 share gave a trading update in November to outline how it had done in the first four months of FY21 to October 2020.

It said that Bunnings total sales were up 25.2%, Kmart total sales had risen by 3.7%, Target sales had fallen by 2.2%, Catch’s gross transaction value had gone up 114.4% and Officeworks sales had climbed 23.4% higher.

In the year to date, Wesfarmers’ retail businesses had achieved total online sales growth of 166%, excluding Catch. Excluding online sales in metro Melbourne, which were significantly elevated due to government trading restrictions, online sales growth was 98%. Including Catch, total online sales across the group increased to $1.3 billion in the year to date.

Bunnings is by far the largest profit generator for Wesfarmers. Management said that the DIY hardware business had seen continued strong growth in both consumer and commercial segments. Consumer sales were particularly strong as customers spent more time undertaking projects around the home. Excluding metro Melbourne stores, total sales growth of 29.3% was recorded for the year to date.

Management are pleased with Bunnings’ digital strategy, with online sales penetration excluding metro Melbourne of 1.5% during the year to date, and digital engagement with both consumer and trade customers continuing to increase.

According to Commsec, the Wesfarmers share price is valued at 29x FY21’s estimated earnings.

Premier Investments Limited (ASX: PMV)

Premier Investments is another ASX 200 retail share. It owns various brands like Just Jeans, Jay Jays, Peter Alexander and Smiggle.

FY20 was a year of disruption and transition as Premier Investments adapted to the COVID-19 impacts on retail.

In a trading update for the first 24 weeks of FY21, it generated $146.2 million of online sales, which was up 60% compared to the prior corresponding period. This contribution was 20.4% of total sales, up from 13.4% in the prior corresponding period.

Premier Retail said that its online sales delivered a significantly higher earnings before interest and tax (EBIT) margin than the retail store network.

The ASX 200 share now expects Premier retail EBIT for the 27-week period to 30 January 2021 to be in the range of $221 million to $233 million, up between 75% and 85%.

Total global like for like sales for the 24 weeks to 9 January 2021 were up 18%, with Australian like for like sales growth of 26.2%. Premier said that there has been “outstanding” sales and gross margin growth in Peter Alexander, Just Jeans and Jay Jays in both Australia and New Zealand.

The company has also been focused on reducing its rental costs. In the trading update, Premier Investments said that it had achieved strong cost controls, including reaching agreements with key landlords on COVID-19 rent abatements.

According to Commsec, the Premier Investments share price is valued at 15x FY21’s estimated earnings.

More reading

• The ASX small cap with the best global expansion potential may not be tech
• ASX 200 Weekly Wrap: Reality (and GameStop) finally hits ASX
• RBA to cut the cash rate again? These ASX dividend shares have attractive yields
• What to expect from the Wesfarmers (ASX:WES) first half result
• These ASX clothing retailers’ share prices are storming to record highs

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool Australia owns shares of 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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Brokers regularly update their estimates and recommendations about many ASX shares. The two in this article have been rated as buys by at least three brokers. 

Some ASX shares are well liked by many brokers, whilst others get mixed reviews. 

These two ASX shares are ones rated as buys by brokers:

A2 Milk Company Ltd (ASX: A2M)

A2 Milk shares are liked by at least four brokers including UBS and Morgans.

The A2 Milk share price is down by around 45% over the last six months.

UBS believes that A2 Milk could benefit from a recovery of sales with infant formula as it reactivates its daigou channel over the next year and a half. The broker also thinks that company could achieve market share gains at Chinese mother and baby stores.

However, whilst there continues to be COVID-19 restrictions for international visitors, combined with disappointing export data, it’s likely that there will be weak infant formula sales for the time being.

A2 Milk itself has admitted to these problems. In the most recent update the company said that the disruption in the daigou channel, which represents a significant portion of the infant nutrition sales in the Australia and New Zealand business, was proving to be more significant and protracted than was previously anticipated.

One problem for the ASX share is that the daigou channel disruption is having a material impact on the cross border e-commerce channel (CBEC). A2 Milk says that the daigou channel plays an important role in stimulating demand across multiple sales channels, including CBEC.

A2 Milk said that it intends to strengthen its focus on reactivating the daigou channel in the second half of FY21.

On the mother and baby store (MBS) front in China, A2 Milk said that this remains very strong – it’s expecting to report revenue growth of 40% from this channel. The 12-month rolling market value share in MBS also continues to increase, it was 2.3% as at the end of October, with increases in both same store sales and the number of new stores in the first half.

ResMed Inc (ASX: RMD)

The ASX share is rated as a buy by at least three brokers.

ResMed recently announced its FY21 second quarter result for the three months to 31 December 2020.

In US dollar terms, it said that revenue increased by 9% to $800 million and went up 7% on a constant currency basis. The non GAAP (generally accepted accounting principle) gross profit margin improved by a further 20 basis points to 59.9%.

Net operating profit went up by 12%, whilst non GAAP operating profit went up 16%.

In the company’s core businesses of sleep apnea, chronic obstructive pulmonary disease (COPD) and asthma it’s seeing improvements in new patient volume and ongoing adoption of the mask and accessories resupply program. ResMed has also seen accelerated adoption of digital health and an increase in the usage of out-of-hospital healthcare over the last 12 months.

The above result was better than Morgans was anticipating with the revenue growth and expanding gross margins. The broker also liked the limited expense growth, leading to growing operating leverage.

Morgans thinks that ResMed’s core sleep apnea business will steadily improve whilst the mask supplies remain in strong demand.

More reading

• Leading brokers name 3 ASX shares to buy today
• Why Afterpay, ResMed, Temple & Webster, & Worley shares are dropping lower
• Here are the 10 most shorted shares on the ASX
• 2 beaten-up infant formula ASX shares to buy
• 3 very impressive ASX quarterly updates from last week

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (XJO) popped up 0.9% today after touching an 11-month high this morning of 6852.9, and the financials sector was a major driver.

Financials sector continues its rally

The financials sector is presently powering up 1.82%. It’s the third consecutive day that the sector has been on the rise.

Australia and New Zealand Banking Grp Ltd (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) all posted gains of between 1–2%for the day.

The Australian Financial Review reported that the rally of the big four banks has collectively added $8 billion in market capitalisation today alone. 

According to Nasdaq, the financials price jump can be put down to the central bank’s upbeat economic outlook, as the market responded to Reserve Bank of Australia (RBA) governor Philip Lowe’s latest update.

Reserve Bank reiterates quantitative easing

In his speech, governor Philip Lowe reiterated that quantitative easing (QE) has been an effective mechanism to lower interest rates and keep the Australian dollar lower than it would otherwise be.

Dr Lowe also announced that the RBA will hold the official interest rate at 0.1% for now. This is with the aim of reaching an inflation target of 3%. 

Dr Lowe added that he doesn’t expect this target to be reached until 2024.

With the QE outlook extended, it means that the banks can keep selling securities back to the central bank. These sales create liquidity for the banks, which can potentially support issuing more loans and offering more products.

Does quantitative easing mean that bank share prices go up?

Put simply, no. QE supports low-interest loan environments, however, demand is impossible to predict. QE does not guarantee the banks, or any other business, a strong financial performance.

While the banks continue to work in the QE environment going forward, the RBA will no doubt be keeping its eye on the inflation rate with hope that its current policy approach continues to bolster the Australian economy.

More reading

• 2 generous ASX dividend shares to beat low rates
• GameStop (NYSE:GME) dominates the US shares ASX investors have been buying
• ASX 200 up 0.9%: Credit Corp impresses, Afterpay jumps, bank shares rise
• ASX 200 Weekly Wrap: Reality (and GameStop) finally hits ASX
• 2 strong blue chip ASX shares rated as buys by brokers

Motley Fool contributor Gretchen Kennedy 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 Australian shares fund doubled its investment in just a few days, thanks to collateral damage from the GameStop Corp (NYSE: GME) saga.

Forager Funds international shares fund portfolio manager Gareth Brown and analyst Chloe Stokes gave an update to clients this week that would have made them all smile.

No, the fund didn’t own GameStop shares before they rocketed up.

Their story was how the short squeeze super-charged a more conventional stock pick that they made.

It was all about the journey of US retailer Bed Bath & Beyond Inc (NASDAQ: BBBY).

This company was heavily shorted, just like GameStop.

“One of the stocks highest on our to-do list was also one of the market’s shorted stocks, with more than 60% of its outstanding shares sold short,” said Stokes.

This was because the homewares chain had been in deep strife in recent times.

According to Stokes, Bed, Bath & Beyond had an overpaid management team that had neglected to get on the e-commerce wagon and the industry trend towards own-brand products.

“Add the expected cash burn from COVID-impacted sales, and many bears expected the company to go bankrupt.”

Why was Forager interested in a dud stock?

Stokes told clients that 2 years ago a group of activist investors dragged the company into the 21st century.

“Since then we’ve had a complete board and management team overhaul,” she said.

“And many of the new hires had experience with business transformation and operating omni-channel businesses.”

Bed, Bath & Beyond’s online presence ramped up, non-core businesses and assets were sold off and debts repaid.

“In the most recent quarter, 31% of the company’s sales were online, and it should be even higher than that in the next quarter.”

Stokes and Brown’s team felt that the bear case had now eroded considerably. With the share price still pretty low, they judged that it now had “almost 100% upside”.

How GameStop triggered a Bed Bath & Beyond windfall

But as they were thinking about the case, the GameStop saga exploded.

This was because the hedge fund that was devastated by the GameStop short squeeze, Melvin Capital, also had a huge short position on Bed Bath & Beyond.

Melvin would likely have to liquidate some holdings to survive. If Forager was to buy in, they didn’t have much time.

“We had to work really really quickly. There was massive short interest in a market where everyone was suddenly taking notice of that,” said Brown.

“We need to hurry up because [Melvin] might need to close out their position in a hurry, which means they have to buy stock. The stock skyrockets, we miss our opportunity.”

Stokes said Forager managed to buy Bed, Bath & Beyond shares about “10 days ago”. This would have been around 20 January when it was priced around US$25.

A few days later, the GameStop short squeeze hit the fan. 

As Melvin Capital was sent broke, just as Forager predicted, it had to buy Bed, Bath & Beyond shares to cover its short positions. 

“The stock has doubled,” said Stokes.

“So it’s hit our base case estimate in just 10 days.”

At the height of the GameStop mania last week, Bed, Bath & Beyond shares hit US$53.90.

The higher the price went, the riskier it became to hold onto the shares – so Stokes’ team quickly sold off to lock in the profits.

Brown admitted this isn’t the usual way to make money.

“It’s really hard to grumble about doubling your money in a couple of days,” he said.

“[But] we feel more comfortable when an investment thesis takes a year or two to play out.”

The share market is currently in “a very, very unusual” state and many of Forager’s recent purchases have “worked out blisteringly quickly”.

“Others that we’ve been looking at and hoping to buy have skyrocketed before we’ve had the chance.”

More reading

• COVID, US stimulus, Gamestop and a retreating Reddit army: The battles continue
• Millionaire maker! Rent.com.au (ASX:RNT) share price now up 300% in a week
• Here’s what could really feed a stock market bubble
• GameStop (NYSE:GME) dominates the US shares ASX investors have been buying
• Why investors should look beyond the Reddit army to these ASX fundamentals

Motley Fool contributor Tony Yoo 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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Like it or not, fossil fuels are going to be powering much of our energy needs for decades to come. 

Despite the rise of electric vehicles, that remains particularly true for many of our cars and trucks. Not to mention boats, planes and… well, you get the idea. 

Yes, the price of oil crashed in 2020. With demand evaporating as COVID-19 travel restrictions idled planes, boats and cars, Brent crude oil tumbled to US$19.33 a barrel on 21 April last year.

Since then energy prices have been steadily regaining lost ground. Brent crude currently is worth US$57.67 per barrel. That’s up 54% (from US$37.46 per barrel) just since 30 October.

Part of the price rise is due to increased demand as parts of the world relaxing some of the stricter virus restrictions. Reduced supply due to output cuts from OPEC members has also helped lift the oil price.

According to an analysts at UBS and Goldman Sachs, oil prices are likely to head still higher from here.

As Bloomberg reports:

UBS forecast that Brent crude would reach $US63 a barrel by the second half of this year and $US65 by the first quarter of 2022. Goldman Sachs said it expected the benchmark to reach $US65 by July.

Those forecasts would mean another 13% hike in the price of Brent crude. So what does that mean for ASX energy shares? 

3 leading ASX energy shares that stand to benefit

The ASX has no shortage of energy shares. While many factors determine how their share prices move, they’re all likely to perform better when they receive more for the oil and gas they pump from the ground.

We’ll stick to 3 of the biggest energy stocks trading on the S&P/ASX 200 Index (ASX: XJO).

First, there’s Oil Search Ltd (ASX: OSH), with a market cap of $8.3 billion. Since oil prices hit a low on 21 April last year, the Oil Search share price is up 62%. Oil Search pays an annual dividend yield of 1.7%, unfranked.

Next, we have Santos Ltd (ASX: STO), with a market cap of $14 billion. Santos’ share price has gained 70% since Brent bottomed on 21 April. Santos pays an annual dividend yield of 1.6%, fully franked.

Third, there’s Woodside Petroleum Limited (ASX: WPL), with a market cap of $24 billion. Since 21 April’s rock bottom oil prices, the Woodside share price is up 27%. Woodside pays an annual dividend yield of 4.8%, fully franked.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Oil Search (ASX:OSH) share price rises today after a week in the red
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 Weekly Wrap: Reality (and GameStop) finally hits ASX
• 5 things to watch on the ASX 200 on Monday

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

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The BPH Energy Ltd (ASX: BPH) share price was a very strong performer on Wednesday.

At one stage, the biotechnology and mineral exploration company’s shares were up as much as 32% to 22.5 cents.

The BPH Energy share price ultimately gave back some of these gains and ended the day 23.5% higher at 21 cents.

Why did the BPH Energy share price rocket higher?

Investors were buying BPH Energy shares this morning after they returned from a trading half following the successful completion of a placement.

According to the release, the company has raised a total of $9 million via the placement of ~69.2 million shares to sophisticated and professional investors at a price of 13 cents per share. This placement price represents a 23.5% discount to its last close price.

The placement was led by Everblu Capital, which placed $7 million and will receive a fee of 6% of the funds raised together with 6 million share options. These options have an exercise price of 26 cents per share and an expiry date of 8 February 2023.

In addition to this, 62 Capital placed $1.5 million and will also receive 6% of the funds raised together with 1,285,714 share options.

Finally, an amount of $500,000 was placed by Grandbridge Securities, which will receive a fee of 6% of these funds raised.

BPH Energy’s Managing Director, David Breeze, commented: “The Company is pleased to receive funding from a range of investors including existing and new shareholders, and others who participated in the Placement through Everblu Capital and 62 Capital.”

Everblu Capital added: “We were extremely pleased to see the quality of new investors on the register. The level of demand highlights the company’s current growth trajectory, and we look forward to BPH continuing to deliver to shareholders.“

How will the company spend the proceeds?

Management advised that the majority of the proceeds will be used to invest in Advent Energy.

These funds will then be used by Advent to progress well planning, engineering, and environmental approvals for drilling at the Baleen drill target in the PEP11 offshore permit in NSW. Approximately $5.75 million of the capital raised is expected to be used for this purpose.

It will increase its shareholding in Advent from 22% to approximately 33%, subject to any required approvals.

In addition to this, the company intends to use $0.5 million of the proceeds to increase its shareholding in Cortical Dynamics from 16% to 18%. These funds will then help Cortical Dynamics to further develop its Brain Anesthesia Response Monitor (BARM).

More reading

• BHP Energy and Zip were among the most traded ASX shares last week
• Why BPH Energy (ASX:BPH) shares are in a trading halt

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.

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Yesterday marked one of the most anticipated Reserve Bank of Australia (RBA) meetings in recent months.

Speculation was swirling whether RBA governor Dr Philip Lowe would induce a ‘taper tantrum’ on the share market by hinting that its unprecedented levels of monetary stimulus would start to be wound back.

The phrase ‘taper tantrum’ entered the investing vernacular back in 2013. Back then, the chair of the US Federal Reserve Ben Bernanke hinted that the US’s quantitative easing (QE) programs would have to be unwound. The share market plunged on the news, and the ‘tantrum’ was born.

But there are no signs of a tantrum on the ASX today, quite the opposite in fact. At the time of writing, the S&P/ASX 200 Index (ASX: JXO) looks set to finish the trading day up a healthy 1.1% to 6,840 points, close to a new post-coronavirus crash high. Why? You guessed it, Dr Lowe didn’t exactly make investors’ worst fears come alive yesterday.

RBA doubles down on QE

Contrary to the rumours, the RBA has doubled down on stimulus and QE. It announced that far from winding up Australia’s first QE program, it would double it. The RBA will initiate another $100 billion of government bond purchases when the current QE program winds up in April, with the RBA set to buy $5 billion worth of bonds every week. 

Even though Dr Lowe is pleased that the progress the Australian economy is making in the face of the coronavirus-induced recession, it has decided that more assistance is necessary. Here’s some of what he had to say yesterday:

The board remains committed to maintaining highly supportive monetary conditions until its goals are achieved. Given the current outlook for inflation and jobs, this is still some way off…

The board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. For this to occur, wages growth will have to be materially higher than it is currently. This will require significant gains in employment and a return to a tight labour market. The board does not expect these conditions to be met until 2024 at the earliest.

Today, the Australian Financial Review (AFR) reports that Dr Lowe subsequently stated that a partial reason behind these moves is also to depress the Australian dollar. Since other central banks around the world have also been pursuing ultra-easy monetary policy, failure to match these policies puts upward pressure on our currency. And that’s something the RBA does not want since it dampens export competitiveness.

So what does all of this have to do with ASX shares?

Fuel to the ASX fire

Well, quite a lot. The share market prices companies based on their profits, and the potential to keep delivering and growing said profits.

But another factor in market price discovery is risk versus reward. And with near-zero interest rates and an expanding QE program, the RBA is ensuring that there are no risk-free alternatives to shares.

QE programs deliberately lower the yields investors can expect from ‘risk-free’ government bonds. This phenomenon directly cascades into other ‘safe’ investments like bank accounts and term deposits. Have you wondered why your savings account used to give you 4%, but now offers 1% if you’re lucky? Low interest rates and QE are responsible.

So because investors have almost nowhere else to turn for a real return on their cash, the share market and property markets are where most investors find themselves turning to. That’s probably why our share market has all-but shaken off the coronavirus pandemic and is today higher than it was in January last year before the virus even struck.

Same with the property market. Over in the US, the S&P 500 Index (INDEXSP: .INX) is more than 13% higher today than where it was at its pre-pandemic peak.

Party at Phil’s

And the RBA has just all-but promised that it will keep the stimulus taps open… until 2024! Nothing is guaranteed in investing of course. But this strongly indicates that the ASX 200 has just been given the green light to push even higher. If any ‘taper tantrum’ is only coming in 2024, then there’s not much that will stand in the way of rising asset prices until then.

William Martin, a former chair of the US Federal Reserve, famously once said that, “the Federal Reserve’s job is to take away the punch bowl just as the party gets going”. Well, Dr Lowe has just rolled out a few kegs for the ASX. Let’s see how long this party lasts.

More reading

• ASX 200 up 1.1%: Amcor jumps, South32 sinks, Virgin Money UK rockets
• ASX coal stocks increasingly isolated with rise of start-ups like MGA Thermal
• 5 things to watch on the ASX 200 on Wednesday
• 2 ASX 200 shares to buy for dividends
• ASX 200 jumps 1.5%, RBA doubles QE, Afterpay soars

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 NRW Holdings Limited (ASX: NWH) share price is close to retesting its one-year high after declaring its bid for Primero Group Ltd (ASX: PGX) unconditional.

The NWH share price jumped 3.7% to $3.10 in late afternoon trade while the PGX share price added around the same amount to 60 cents a share.

NRW Holdings is trying to entice any Primero shareholders holding out from accepting the $100 million offer with accelerated payment terms.

NWH takeover of PGX fait accompli?

The bidder is promising to pay PGX shareholders within 10 days of valid acceptances and the share price of the target suggests that the takeover is all but a done deal.

NRW is offering 27.5 cents cash plus 0.106 of NRW shares in exchange for each PGX share. At the current NWH share price, this implies an offer price of 60 cents for the target.

If NRW gets 90% of PGX, it can compulsorily acquire PGX. Any target shareholders who do not tip their stock into the bidder’s hat before then will have to wait longer to receive their payment.

NRW share price growing via acquisitions

Some of Primero’s shareholders were holding out hope that NRW would increase its offer price. But the highly acquisitive NRW board held firm. The buyer recently bought BGC Contracting in December 2019 and parts of RCR Tomlinson’s businesses in January of that year.

The latest takeover will help NRW expand its capabilities across civil, mining, mining technology and drill and blast contracting.

There’s been a fair bit of mergers and acquisitions (M&As) in the mining services space recently. Both Downer EDI Limited (ASX: DOW) and Lendlease Group (ASX: LLC) have or are in the process of selling these businesses to other trade buyers.

What’s driving strong M&A activity

But M&A activity won’t be confined to this sector. Record low interest rates are one big factor behind the expected pick-up in takeovers.

Money has never been this cheap before and would-be acquirers should have a relatively easy time to raise needed funds.

Further, cashed up companies (and there are quite a few of them despite COVID-19) are looking to grow revenues and profit.

They will see acquisitions as a relatively quick way to achieve this goal. Just be conscious that most M&As actually leave shareholders of bidders worst off.

Other ASX stocks in the spotlight

But this won’t stop a flurry of activity in 2021. The Tabcorp Holdings Limited (ASX: TAH) share price is the latest to be touched by such speculation as it could divest its struggling wagering division.

Other ASX stocks in the M&A or divestment spotlight include the AMP Limited (ASX: AMP) share price and Suncorp Group Ltd (ASX: SUN) share price – just to name a few.

More reading

• Tabcorp (ASX:TAH) share price soars 10% on potential buyout
• Why the NRW (ASX:NWH) share price is flying higher today
• Jailing of NAB exec a scary déjà vu for NAB (ASX:NAB) share price
• IOOF exec says she was sacked for mental illness
• Broker lists the best ASX stocks to own for an up to 30% gain in 2021

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

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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

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:

Corporate Travel Management Ltd (ASX: CTD)

According to a note out of Ord Minnett, its analysts have upgraded this travel company’s shares to a buy rating with an improved price target of $22.11. The broker made the move on valuation grounds after a recent pullback in the company’s share price. It believes this has brought the company’s shares down to an attractive level, especially given its positive growth outlook once the pandemic passes. The Corporate Travel Management share price is trading at $18.36 on Wednesday.

Healius Ltd (ASX: HLS)

A note out of UBS reveals that its analysts have upgraded this healthcare company’s shares to a buy rating with a $4.40 price target. According to the note, the broker believes Healius is in a strong position to benefit from increased demand for COVID-19 testing. In addition to this, the broker notes that its strong form and a recent asset sale has brought back the possibility of a resumption in dividend payments and also potential share buybacks. The Healius share price is fetching $4.16 on Wednesday afternoon.

Volpara Health Technologies Ltd (ASX: VHT)

Analysts at Morgans have retained their add rating and lifted the price target on this healthcare technology company’s shares to $1.92. This follows Volpara’s announcement of the acquisition of breast cancer risk assessment company CRA Health for US$22 million. According to the note, Morgans believes the company has paid a fair price and expects the acquisition to broaden its reach. The Volpara share price is currently trading at $1.56.

More reading

• ASX 200 jumps 1.5%, RBA doubles QE, Afterpay soars
• Why Afterpay, Credit Corp, Healius, & Volpara shares are storming higher
• 2 little known ASX growth shares to buy
• These 2 ASX stocks jumped after a broker upgrade to “buy” today
• Here’s why the Volpara (ASX:VHT) share price is surging 5% higher

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and VOLPARA FPO NZ. 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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