The Cardinal Resources Ltd (ASX: CDV) share price is surging higher today on news the company has received an unsolicited takeover bid. The conditional, off‐market takeover offer at $1.05 per share is from a Ghana incorporated company, and is the third takeover bid Cardinal has received this year. 

At the time of writing, the Cardinal share price has lifted higher than the actual offer price, up 5.94% to $1.07. 

What happened today

Mineral explorer Cardinal says it received a bid of $1.05 per share in the form of cash from Engineers & Planners Company Limited, a company incorporated in Ghana.

The bidder’s statement advised the offer was conditional upon 50.1% minimum acceptance by Cardinal shareholders, as well as regulatory approvals. These approvals include the Foreign Investment Review Board in Australia, as well as approvals in Ghana by the relevant authorities.

Cardinal has advised its shareholders to take no action at this time while the board considers the proposal. 

Other recent takeover bids for Cardinal

Earlier in the year, Cardinal was embroiled in a takeover battle for the company by two overseas-based miners – Shandong Gold (SHA: 600547) from China, and Russian company Nord Gold. 

In June, Cardinal received a takeover bid from Hong Kong-based Shandong Gold at an offer price of 60 cents per share, valuing the company at around $300 million. The Chinese company, which is the second-largest gold producer in China, then increased its offer price for Cardinal to $1 a share in September. This was meant to outbid another interested party Nordgold, a Russian gold miner which had previously increased its own offer from 60 cents to 90 cents a share.

Today’s price of $1.05 represents a 5% premium to the last offer price from Shandong Gold of $1, which the board at the time unanimously recommended shareholders to accept. 

About Cardinal Resources

Cardinal is a West African gold‐focused exploration and mining company that holds interests in tenements within Ghana, West Africa. The company is focused on the development of the Namdini Gold Project, and released its feasibility study on 28 October 2019 which concluded that it had an ore reserve of approximately 5.1 million ounces.

The Cardinal share price has more than doubled in 2020. It began the year at 31 cents before rising to today’s price of $1.07. The company currently commands a market cap of $575 million. 

More reading

• Why fund manager optimism is at almost 3-year highs
• Why ASX, Kogan, Myer, & Northern Star shares are dropping lower
• Could Citi’s forecast spell good news for the Lendlease (ASX:LLC) share price?
• PayGroup (ASX:PYG) share price rocky following half year results
• Why ASX gold shares are the worst performers so far today

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s hard to get away from COVID-19.

Even if you eschew the news, you’re reminded of it every time you go to the shops or really anywhere in public as social distancing remains the norm.

If you’re working from home, you’re reminded of it simply by the fact that you’re not at the office; no longer communicating face to face.

And if you’ve been planning any international travel, you’ll be reminded of it by your empty suitcase, still waiting patiently for borders to reopen.

Like I said, it’s hard to get away from this insidious virus. And the few items I listed above are tame compared to the far harsher reminders millions of people are faced with across the world. That of serious illness and the deaths of loved ones.

COVID’s ‘push-and-pull’

Unfortunately, with global cases soaring by some half-million per day, we’ll be stuck in this viral rut until one or more vaccines are widely distributed.

Fortunately, that timeline is looking ever nearer.

With two highly promising vaccines already announced in November, AstraZeneca plc (NASDAQ: AZN) became the third company to announce its vaccine is more than 90% effective in the latest trials.

Nowhere is this almost daily mix of really bad and really good news more clearly visible than in the share markets

As David Carter, chief investment officer at Lenox Wealth Advisors in New York, is quoted as saying by the Australian Finance Review (AFR):

Markets are still stuck in a push-and-pull between the dramatic rise of new COVID cases versus apparent progress on vaccines. This is likely to continue until we have an approved and distributed vaccine.

Why fund manager optimism is soaring

In the ongoing push-and-pull between the virus and humanity’s all-out race for a cure, hopes for a rapid vaccine rollout are trumping fears of an extended pandemic.

According to AMP Capital portfolio manager Dermot Ryan (quoted by the AFR):

We’re coming home strong in 2020. I think from a bottom-up perspective, we’ve seen some strong AGM [annual general meeting] guidance upgrades coming through in the last few weeks…

Those reopening trades are all benefiting as we get back to normal and demand can increase. The vaccine trade has just put a rocket under that… We [Australia] basically get a head start on the recovery and it allows domestic companies to build momentum faster than offshore companies…

We’re quite bullish on the employment numbers. We think the recovery is well and truly in play. The RBA called the start of it in September but this is a globally synchronised recovery and now we’re coming out of it.

As Bloomberg reports, Ryan is far from the only fund manager with a bullish outlook. In fact, Bank of America Corp‘s (NYSE: BAC) latest fund manager survey revealed the highest level of optimism since January 2018.

According to Chris Gaffney, president of world markets at TIAA Bank, “It’s been almost impossible being bearish. The Fed sets us up to be very anti-bearish going forward, even with bad Covid news, even with economic shutdowns.”

Matt Forester, chief investment officer of BNY Mellon’s Lockwood Advisors notes that it’s the central banks and governments working together that have really encouraged share markets:

Markets always feel it’s difficult to be bearish when there is such a large degree of federal coordination, fiscal and monetary policy helping to support the markets. Markets have become accustomed to these short-term volatility events that recover very quickly, and I think that does condition them to come in and buy the dip whenever there’s any challenges.

Jonathan Boyar, managing director at Boyar Value Group, shares their optimism, but sounds a note of caution (from Bloomberg):

In the short-term, anything is possible and from a humanitarian perspective it is awful that the people who currently need the most help are not getting it. But with multiple viable vaccines on the horizon, I think the market will largely look through the horrible headlines. There certainly, however, will be some fits and starts along the way.

Morgan Stanley’s Mike Wilson also cautions this many bulls create the potential for a share market correction (from the AFR):

Most noticeable to us last week is the almost universally bullish view from investors, including retail. In fact, it’s very hard to find a bear on 2021 — a dramatic shift from even three months ago. The high efficacy of the vaccines combined with a market friendly election outcome (divided Congress) are good reasons. However, price action appears exhaustive and the market seems ripe for another correction.

Any correction should offer new buying opportunities

Chris O’Keefe, managing director at Logan Capital Management, isn’t overly concerned about the next correction, saying (from Bloomberg), “Every time the market has pulled in, it’s been a good buying opportunity. There’s that desire to chase that momentum.”

And, as the AFR reports, David Cassidy, Wilsons head of investment strategy, believes the forecast earnings recovery for shares in the energy, financials and travel sectors – projected for 2024–2025 – could be too pessimistic.

Cassidy says, “A fast-tracked global vaccine rollout during 2021–22 has the potential to bring forward activity levels and earnings expectations, and we are closely watching evidence on this front.”

If activity levels and earnings expectations do come forward from recent expectations, it could spell good news for some of the leading S&P/ASX 200 Index (ASX: XJO) travel shares.

The Qantas Airways Limited (ASX: QAN) share price, for example, is up 3.9% at the time of writing, but Qantas shares are still down 22.2% since 2 January.

Then there’s travel agency Flight Centre Travel Group Ltd (ASX: FLT). Flight Centre’s share price was ravaged by COVID-19, falling more than 77%. The Flight Centre share price is up 0.3% in intraday trading, but still down 59% year-to-date.

More reading

• Why Brickworks, Mesoblast, Qantas, & Telix shares are storming higher
• Qantas (ASX:QAN) to make COVID vaccine mandatory for passengers
• JobKeeper saved 700,000 jobs, reveals RBA
• Why ASX shares are in awesome shape vs overseas markets
• Qantas (ASX: QAN) share price on the rise as more flights resume

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to record a very strong gain. At the time of writing, the benchmark index is up 1.1% to 6,634.7 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

ASX Ltd (ASX: ASX)

The ASX share price is down almost 2% to $77.84. Investors have been selling the stock exchange operator’s shares this week after it confirmed that ASIC is conducting an investigation into the ASX Trade outage on Monday 16 November 2020. ASX responded by saying that it acknowledges that this is appropriate given ASIC’s regulatory oversight.

Kogan.com Ltd (ASX: KGN)

The Kogan share price is down 4.5% to $16.54. This ecommerce company’s shares continue to slide as investors rotate out of COVID-winners and into other areas of the market which have struggled in 2020. This latest gain means the Kogan share price is now down 20% since the start of the month.

Myer Holdings Ltd (ASX: MYR)

The Myer share price is down is down 5% to 35.2 cents. This appears to have been driven by profit taking after a sizeable gain in November. Speculation that the department store operator could be a takeover target has led to its shares surging over 50% higher since the start of the month.

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price has sunk almost 7% lower to $13.00. Investors have been selling the gold miners today after AstraZeneca provided an update on its COVID-19 vaccine candidate. One dosing regimen was found to be 90% effective at preventing the virus. Given its low cost and easy storage, this has sparked hopes that the pandemic will be brought to an end next year. It isn’t just Northern Star tumbling lower. The S&P/ASX All Ordinaries Gold index is down 5.6% at the time of writing.

More reading

• ASX 200 jumps 1.2%: Technology One results, Brickworks update, gold miners sink
• Why the Myer (ASX:MYR) share price is at an 8-month high
• 5 things to watch on the ASX 200 on Tuesday
• Why BlueScope, Home Consortium, IAG, & Kogan shares are dropping lower
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage

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 Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Like many ASX property shares, the Lendlease Group (ASX: LLC) share price was hammered during the initial COVID-19-driven market rout. The property developer’s shares plummeted 51% from 21 February through to 27 March.

Following those lows, the Lendlease share price has regained 51% since 27 March. At first blush you might think that a 51% recovery following a 51% loss means shares have regained their 21 February highs. But remember, if a share loses 50% of its price it needs to go up 100% to recoup the losses.

Hence the Lendlease share price remains down 26% since 21 February. By comparison, the S&P/ASX 200 Index (ASX: XJO) is down 7% since that same date.

However, if Citi’s outlook for residential property prices in today’s ultra-cheap money environment proves correct, could Lendlease shareholders be major beneficiaries?

We’ll get to that in a tick. But first…

What does Lendlease do?

Lendlease Group develops and owns international property and infrastructure projects. Its operations span across Australia, Asia, the Americas and Europe. The company’s integrated business model comprises development, construction, investment management and ownership of property and infrastructure assets.

The company is active in the residential, retail and commercial office market spaces.

Why is Citi’s outlook for credit growth important?

According to the Australian Financial Review, Citi believes the forecast for credit growth and bank earnings don’t fully take into account the potential for a big surge in residential real estate prices in today’s easy money environment.

Citi’s Brendan Sproules and Thomas Strong said:

The RBA’s almost singular focus on the currency will lead to the inevitability of what always happens when rates fall – asset prices go up. Particularly housing. Certainly, the AFR’s Banking Summit gave credence to this view, with a broad acknowledgement that housing would accelerate.

Residential real estate makes up a significant share of the Lendlease portfolio. As the company notes, it “shapes cities, creating strong and connected communities”.

In the early months of the pandemic, house prices in Australia were widely forecast to fall into 2021. Atop the impact on the retail sector, this put a lot of pressure on the Lendlease share price.

But if house prices now look to spike higher, as Citi highlights, the pressure on the Lendlease share price could potentially lift.

More reading

• Why ASX gold shares are the worst performers so far today
• ASX 200 jumps 1.2%: Technology One results, Brickworks update, gold miners sink
• ASX 200 to rise after positive AstraZeneca COVID-19 vaccine news
• 5 things to watch on the ASX 200 on Tuesday
• Is Transurban’s (ASX:TCL) grip on Sydney roads set to tighten?

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The PayGroup Ltd (ASX: PYG) share price is rocky today after the payroll and human capital company announced its half-year results for the six months ended 30 September 2020.

In early trade, PayGroup shares rose 3.49% to 60 cents, before pulling back and losing ground to be in the red by lunch. The company’s current market capitalisation is close to $43 million.

About PayGroup

PayGroup is a specialist provider of payroll and human capital management solutions, and is a holding company for brands such as PayAsia, TalentOz, and Astute One.

PayAsia provides software-with-a-service (SwaS) and payroll solutions. It enhances its offer to the market by using a cloud-based human capital management platform called TalentOz. Clients are multinational.

Astute One delivers workforce management solutions for complex businesses, with clients predominantly based in Australia and New Zealand.

PayGroup itself now has staff in 11 countries and services almost 1,000 clients.

Financial reports

In today’s report, PayGroup reported revenue for the first half of FY21 of $6.8 million, up a staggering 100% on the second half of FY20. The company stated that this growth was largely driven by organic growth and acquisitions.

PayGroup also reported earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.6 million, compared to a loss of $1 million in the prior corresponding period. 

Net profit after tax also represents a healthy turnaround for the company, going from a loss of $1.4 million in the prior corresponding period to a profit of $444,000.

Conditions and growth

Although PayGroup noted strong revenue growth and cost efficiencies as key drivers for the financial outcomes, other factors were also at play. It highlighted that JobKeeper also helped ease the burden in Australia, and other government incentives were noted to help in the Asia market.

The company also noted that during the time of the coronavirus pandemic, it continued to drive strong investment in both technology and staff. 

Following a successful capital raise of $3.5 million in September 2020, PayGroup now has a cash balance of $5.2 million. The goal is to use these funds for further company expansion. 

PayGroup has said that the outlook for the second half of FY21 is strong. It is currently completing another acquisition of Payroll HQ, with plans to capitalise on the strongly re-bounding Asia Pacific economies following COVID-19. 

What did management have to say?

In the announcement, PayGroup’s managing director Mark Samlal commented on the company’s performance:

We have now transitioned our business to become a full-service provider of Human Capital Management and payroll services. This is opening up a significant number of new customer opportunities.

I am very pleased with the financial performance of PayGroup this half as we have reported a profitable period, supported by a strong and growing base of contract revenues. We expect continued growth in contracted sales and earnings as we see the full contribution from our acquisitions and the benefits from our enlarged customer base and addressable markets.

The PayGroup share price

The PayGroup share price recovered well following the March market crash, rebounding from lows of 43 cents to heights of 90 cents in just a few months. However, in the current financial year, the share price has been less than favourable for investors, falling more than 30% in less than 6 months.

Today, PayGroup shares rose immediately on the opening bell, however failed to keep their footing throughout morning trade. The PayGroup share price is currently trading at 58 cents, down 0.86%.

More reading

• Why the PayGroup (ASX:PYG) share price has climbed today

Motley Fool contributor Glenn Leese has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It looks like we’re having another top day on the ASX boards today. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is up 1.15% to 6,636.90 points, a new 8-month high. But not all shares are sharing in the spoils.

Looking at a list of the worst-performing ASX shares today, and a very consistent theme is obvious. The ASX gold mining sector is being smashed today. The worst performing ASX 200 share today (at the time of writing anyway) is Silver Lake Resources Limited (ASX: SLR), whose shares are down 7.69% to $1.72. Next up is De Grey Mining Limited (ASX: DEG), down 8.77% to $1.04. Evolution Mining Ltd (ASX: EVN) is down 6.24% to $5.11, while Saracen Mineral Holdings Limited (ASX: SAR) is down 6.72% to $4.86.

So what’s going on here?

Is gold losing its shine?

You don’t have to look too far to understand why ASX gold miners might be falling today. This morning, we woke up to the price of gold itself a lot lower than it was yesterday. Gold has fallen from roughly US$1,877 an ounce earlier in the week to the price of US$1,834 an ounce, at the time of writing.

Since gold miners can only sell their gold at the market price, this move represents a hit to these companies’ profitability (at least if gold stays at these levels) as their costs largely remain fixed. And gold has been in a tailspin for a while now, ever since making a new all-time high of US$2,061 an ounce back in early August.

But why is gold itself falling?

Well, reporting in the Australian Financial Review (AFR) this month sheds some light on that matter. The AFR asserts that the primary reason that gold is having a case of the wobbles lately is the positive news we’ve seen in recent weeks surrounding the development of coronavirus vaccines.

Remember, gold is viewed as a ‘safe-haven’ asset’, which was obviously a boon in a year of a global pandemic. However, now that a vaccine for said pandemic looks to be firming, the AFR implies that investors’ appetite for safe-haven assets is subsequently dropping.

However, it’s not all bad news for gold bugs. The AFR also quotes Joe Foster, the gold portfolio manager at VanEck. Mr Foster remains bullish on gold, stating:

We’re still going to continue to see the economy struggle (through 2021)… We’ll probably see more stimulus on the fiscal and monetary side and there will be a lot of risks. That should enable gold to stay above the $US2000 level for most of the year…

Countries all over the world have been blowing out their balance sheets by distributing trillions of dollars of QE (quantative easing). We’re seeing liquidity being pumped into the financial system on a scale we’ve never seen before… All this liquidity is creating a very high risk to the financial system.

Mr Foster sees gold rising to US$3,000 an ounce over the next 3-5 years as a consequence of “low real interest rates, blown-out balance sheets and a period of unfettered inflation”.

More reading

• ASX 200 jumps 1.2%: Technology One results, Brickworks update, gold miners sink
• ASX 200 to rise after positive AstraZeneca COVID-19 vaccine news
• 5 things to watch on the ASX 200 on Tuesday
• Is Transurban’s (ASX:TCL) grip on Sydney roads set to tighten?
• ASX 200 rises again on Monday

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Cann Group Ltd (ASX: CAN) shares are flying after the company held its annual general meeting (AGM) this morning. The Cann share price has gained 25.71% so far today, rising to a price of 44 cents.

The news comes a day after the company announced that it had secured a $50 million debt facility with National Australia Bank (ASX: NAB).

What Cann does

Cann is an Australian cannabis producer, manufacturer and distributer located in Melbourne. The company supplies medicinal cannabis throughout Australia and in approved overseas export markets. Through its advanced cultivation facility near Mildura the company is focused on commercialising a range of imported and locally sourced and manufactured medicinal cannabis products.

The company was first listed on the ASX in mid 2017, but despite an initial surge the stock has struggled to perform in recent years. Cann currently trades at 44 cents and boasts a market cap of $118 million.

Whats driving Cann’s share price?

This morning Cann’s chair and CEO, Allan McCallum and Peter Crock, held the company’s AGM. Subsequently the presentation for the meeting was also released.

The pair spoke about the challenges that have faced the company during 2020, and their plans for the future.

It was noted that COVID-19 is causing regulatory delays both locally and overseas. Inevitably, this has impacted sales revenue from the first half of the year. As a result, the projected revenue will be weighted heavily towards the second half of the year.

The company is due to ship 10,000 bottles of its product to Germany and the UK in the coming months. This will be the single largest export of Australian grown and manufactured cannabis to date.

On the back of this information, the company reaffirmed its guidance of approximately $15 million for FY21.

Mildura expansion

In an aim to grow the company, it was also announced that Cann’s Mildura facility will be receiving an upgrade. The Nab facility announced yesterday will be utilised in the upgrade process.

It is expected that remobilisation of the construction team in Mildura will occur on February 2021, with the first crop to be manufactured and released by March 2022.

More reading

• Cann Group (ASX:CAN) share price rockets on NAB (ASX:NAB) update
• Why Ampol, Cann, Fortescue, & Mesoblast shares are surging higher
• Why ASX shares are in awesome shape vs overseas markets
• ASX 200 Weekly Wrap: ASX continues to climb, despite outage
• What would it take for the ASX 200 to hit 7,000 again?

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Money3 Corporation Limited (ASX: MNY) share price is closing in on pre-COVID-19 levels with an 87% increase since March lows. The Money3 share price jumped up 4.44% yesterday and is trading higher again today at $2.87.

Let’s take a closer look at the company and its share price trajectory.

What’s moving the Money3 share price?

Money3 a non-bank lender operating in secured subprime automotive loans. The company yesterday announced positive first quarter results and a new low cost warehouse securitisation facility expected to save it more than $10 million per year.

New funding facility

The lower cost warehouse facility will start with $250 million from international bank Credit Suisse Group AG (NYSE: CS). Money3 intends to use the facility to help achieve its goal of a $1 billion loan book. The company will also use it to increase market share in both automotive sectors.  In addition, Money3 will be able to offer loans in car repair finance.

Money3 CEO Scott Baldwin, said:

The new funding facility positions Money3 in the strongest position in our history to continue the growth of the Australian loan book. We are delighted with the flexibility and incremental funding this provides for our growing Australian operations.

This facility reflects the quality of our existing loan book and operations, providing significant validation from what is a globally recognised A+ rated bank.

First quarter highlights

In first quarter results, Money3 saw its revenues increase by 12.3% against the previous corresponding period (pcp). Consequently, statutory net profits after tax (NPAT) also increased by 33.3% pcp. This is a continuation of the solid results delivered in the company’s FY20 annual report, despite the pandemic. 

In presenting the results yesterday, Mr Baldwin highlighted the cash collections and improving credit quality. This rose by 31.1% pcp and is attributable largely to government stimulus, and the superannuation capital release in Australia.

Following the easing of Victorian COVID-19 lockdown restrictions, new loan originations continue to improve. In fact, October 2020 produced more loan book growth than the first three months of FY21. Moreover, November 2020 has started with good results and the company loan book now exceeds $456m.

Mr Baldwin referenced the demand for second-hand cars, and the rise in second-hand car prices. He acknowledged that car loans in the subprime sector may increase by an average of $1000 per loan in the short term.

More reading

• Why the Electro Optic Systems (ASX:EOS) share price is shooting higher today
• ASX 200 jumps 1.2%: Technology One results, Brickworks update, gold miners sink
• Why Brickworks, Mesoblast, Qantas, & Telix shares are storming higher
• Are ASX lithium shares making a comeback?
• Primero (ASX:PGX) share price surges 10% on takeover news

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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SRG Global Ltd (ASX: SRG) shares shot up more than 10% this morning, after the engineering company announced two new separate contracts worth $100 million. At the time of trading, the SRG Global share price is up 9.23% at 35.5 cents.

SRG Global provides asset services, mining services and construction operating across the entire asset lifecycle. It has a global portfolio of work, including The Emirates Tower in Dubai.

What were the new contract wins

SRG Global has secured contracts in Brisbane and Perth worth $100 million.

The first is with Multiplex to complete specialist facade work at the Oueen’s Wharf residential tower in Brisbane. The scope of works includes the design, supply and installation of engineered curtain wall facades. The work is expected to be completed by March 2023.

The second contract, with D&C Corporation, is to complete structure works at the Elizabeth Quay West development in the Perth CBD. This is SRG Global’s fourth major contract for the Elizabeth Quay waterfront precinct. The project is expected to start immediately and end around June 2022.

Other recent contract wins

Only last week, SRG Global announced it had won three contracts worth $55 million. These projects include work on the NSW Government’s New England Highway upgrade, a 20ML water tank for the Water Corporation in Karratha, and remedial works at Paradise Dam for Sunwater and CPB Contractors.

Overall, the company has secured contracts worth a total of $550 million since the start of the first half of FY21.

SRG Global managing director David Macgeorge is pleased with the progress, saying:

We continue to secure significant contracts, on some of the most important developments across Australia, demonstrating the value of our long-term, trusted relationships with our key clients.

These contract awards are also evidence of our strong technical expertise and 40-year track record of delivering specialist building projects.

With $550 million of new contract wins since July, many of them long-term, SRG Global is in a period of significant momentum that we anticipate extending well into calendar 2021. Importantly, the contract wins are being achieved across a diversity of sectors and geographies, positioning SRG Global well for long-term, sustainable growth.

About the SRG Global share price in 2020

The SRG Global share price started the year at 40 cents. It dropped dramatically to 18 cents in the COVID-19 crash in March before recovering to today’s level of 35.5 cents. The company commands a market cap of $143 million.

More reading

• SRG Global (ASX:SRG) share price up 5% on new contract wins

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Electro Optic Systems Holding Ltd (ASX: EOS) share price is shooting higher today follow the company’s release of its SpaceLink presentation. At the time of writing, the Electro Optic Systems share price is up 2.59% to $6.73. In comparison, the All Ordinaries Index (ASX: XAO) is edging 0.9% higher to 6,829 points.

Let’s take a look at what’s driving the Electro Optic Systems share price today.

What’s moving the EOS share price?

The Electro Optic Systems share price is on the move after the company advised it will build and operate a medium earth orbit (MEO) satellite constellation. It projects to have the system launched and operational in 2024, producing a positive operating cash flow.

The new era of satellite communications will be optimised for defence and government customers. The company said that a vast majority of current commercial systems are unsuitable for the special needs of its target market.

Most satellite constellations are either geosynchronous equatorial orbit (GEO) or low earth orbit (LEO) satellites. Both are considered expensive and limited by the availability of radio frequencies. This hinders continuous connectivity in downloading data in real-time, especially in ocean regions or insecure land networks.

MEO satellites provide high bandwidth and low latency satellite communications. In addition, security levels are much more heightened when compared to the current constellations used.

SpaceLink target market

Electro Optic Systems will seek to target defence and government customers from the Five Eyes alliance for its SpaceLink market. Five Eyes is a signals alliance between the United States, Canada, Australia, the United Kingdom, and New Zealand.

According to estimates, it’s projected that the total Five Eyes defence budget will exceed US$6.3 billion by 2024. This is a lift from US$4.6 billion today, representing an annual compound growth rate of 7.8%.

Most pleasingly for the company, is that it already has long-standing relationships with key Five Eyes customers.

Project cost

Looking at the project from an economics prospective, capital expenditure is forecast to be around US$800 million to US$1 billion. This will equate to roughly four tranches of $200 million to $250 million over a four-year period.

Electro Optic Systems revealed there will be a mix of debt and equity funding. The project will be 70% financed from vendors and export credit agencies. The other 30% will come from external sources into a special purpose vehicle.

The company will look to secure firm customer commitments for US$150 million to underwrite project funding. Based on Electro Optic Systems’ business plan, the internal rate of return is predicted to be above 20%.

More about the Electro Optic Systems share price

The Electro Optic Systems share price went on a mini-rollercoaster ride when COVID-19 hit the global economy. Although defence orders for its products remained, supply chain logistics became disrupted. In turn, this sent its share price south, hitting a low of $2.95 in March.

The Electro Optic Systems share price is still nearly 38% off its all-time high of $10.80 reached in February.

More reading

• Why the Electro Optic Systems (ASX:EOS) share price is up today

Aaron Teboneras owns shares of Electro Optic Systems Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Electro Optic Systems Holdings Limited. The Motley Fool Australia has recommended Electro Optic Systems Holdings Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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