The S&P/ASX 200 Index (ASX: XJO) had a pretty ho-hum kind of day, down 0.49% at market close to 6,418 points.

Despite this, the index is still up around 4.4% over the past week, so ASX 200 investors don’t have too much to complain about today.

The ASX 200 is currently at its highest levels since March, when global share markets were in freefall as the impact of the coronavirus pandemic was first becoming obvious. It might be easy to forget, but back in January and February, the ASX 200 was well over 7,000 points. It actually crossed the 7,000-point threshold for the first time ever in January, and went on to go as high as 7,162 points by mid-February, before things started to hit the fan.

On the current level, the ASX 200 is now just 4.1% below where it started the year and just 10.4% below the all-time high we saw in February.

This last point is significant because when the index closed yesterday, it was sitting at 6,446 points, which is equivalent to 9.9% below February’s all-time high. According to reporting in the Australian Financial Review (AFR) yesterday, that means that the ASX 200 is now officially out of ‘correction territory’.

A correction is a share market event that describes the situation when the share market falls more than 10% from the most recent high watermark. Thus, a correction is technically ‘over’ when this 10% gap is once again closed.

What’s pushing ASX 200 shares up?

The ASX 200 is a weighted index, which means the largest companies within it have the largest impact on the overall index.

The top 5 largest companies on today’s levels are as follows: CSL Limited (ASX: CSL), Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC).

Over the past month, CSL shares are up 3.58%, Commonwealth Bank shares are up 5.23% and BHP shares are essentially flat. Meanwhile, NAB shares are up 10% and Westpac is down 3.3%.

So CSL, Commonwealth Bank and NAB are the shares most likely behind the ASX 200’s rise over the past month.

As we discussed earlier in the week, various commentators have attributed the recent ASX 200 performance (including the above shares) to a combination of the Biden victory in last week’s presidential election, together with the Reserve Bank of Australia’s decision at the start of the month to slash interest rates to another all-time low of 0.1%. 

It seems that these factors have now also enabled the ASX 200 to finally ‘correct the correction’ after 8 long months.

More reading

• Broker tipping a ~10% jump in the Medibank (ASX:MPL) share price by Tuesday
• Why the Dubber Corp (ASX:DUB) share price is surging today
• Top brokers name 3 ASX shares to sell today
• Why are ASX tech shares all over the place today?
• Here’s how ASX investors have reacted to a Biden win

Sebastian Bowen owns shares of National Australia Bank Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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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There are a large number of growth shares listed on the Australian share market for investors to choose from.

So many, it can be hard to decide which ones to buy ahead of others. Two growth shares that have been rated as buys recently are listed below. Here’s what you need to know about them:

a2 Milk Company Ltd (ASX: A2M)

a2 Milk Company is a leading New Zealand-based fresh milk and infant formula company. Although FY 2021 is likely to be a rare off-year for the company because of the pandemic’s impact on the daigou channel and pantry stocking pulling forward sales into FY 2020, management remains confident that these are short term headwinds. It commented: “We are of the view that this short-term impact to the daigou channel will prove to be temporary, assuming stabilisation of COVID-19 related issues in Australia.”

One broker that agrees with this view and expects a2 Milk Company’s growth to accelerate once the headwinds ease is UBS. Earlier this week the broker put a buy rating and NZ$20.50 (A$19.37) price target on its shares. It believes investors should look beyond short-term volatility and focus on the potentially substantial gains in market share in China in the future.

Pro Medicus Limited (ASX: PME)

Pro Medicus is a leading provider of radiology information systems (RIS), picture archiving and communication systems (PACS), and advanced visualisation solutions to healthcare organisations across the globe. It has been growing at a consistently strong rate over recent years thanks to increasing demand for its software.

This has caught the eye of analysts at Morgans, which recently put an add rating and $33.32 price target on the company’s shares. The broker believes the company’s leading software puts it in a position to win new contracts in an industry expected to grow at a strong rate in the future.

More reading

• 2 ASX 50 shares to buy today
• The A2 Milk (ASX:A2M) share price is up 4% today. Here’s why.
• These were the best performing ASX 200 healthcare shares in October
• 2 must-buy ASX growth shares to buy in November
• Why the Pro Medicus (ASX:PME) share price rocketed 22% higher last month

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended A2 Milk and Pro Medicus 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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The Vulcan Energy Resources Ltd (ASX: VUL) share price rocketed up to a record high earlier today based on an update on its Taro lithium asset. After jumping 19.28% to its peak of $1.98 this morning, the Vulcan share price has since retreated significantly. It’s now trading up 2.11% at $1.69 at the time of writing.

What did Vulcan announce?

Vulcan released an updated and reclassified resource estimate for its Taro asset. The new estimate indicated that the Taro asset includes .83 million tonnes of lithium carbonate equivalent (LCE) at a grade of 181 milligrams per litre of lithium. This was based on the acquisition and interpretation of seismic and well data. 

The company also announced:

• Taro inferred resource estimate revised upward to 1.44 million tonnes of contained LCE at a grade of 181 milligrams per litre of lithium
• Upper Rhine Valley project now estimated to contain 16.19 million tonnes LCE indicated and inferred with a grade of 181 milligrams per litre of lithium

The company will also include the higher resource estimates into its pre-feasibility study for the Upper Rhine Valley project. Vulcan aims to produce lithium hydroxide for electric cars with the lowest carbon dioxide equivalent footprint in the world from this “zero carbon lithium” project. 

About the Vulcan share price

Vulcan Energy Resources is a lithium development company with assets in Germany. Vulcan has been listed on the ASX since 2018.

In the quarter to 30 September 2020, Vulcan Energy Resources spent $2.23 million on exploration and evaluation. The company had cash of $5.11 million at the end of the September quarter.

In September, former Tesla Inc (NADAQ: TSLA) director Jochen Rudat joined Vulcan as a sales and marketing consultant. Mr Rudat previously reported directly to Tesla CEO Elon Musk. 

The Vulcan share price is up 1316.67% since its 52-week low of 12 cents, and 962.50% higher than the beginning of the year. The company’s shares are up 1207.69% since this time last year. 

More reading

• Why the Talga Resources (ASX:TLG) share price hit a record high today
• The People Infrastructure Ltd (ASX:PPE) share price is up 250% since March
• Woolworths (ASX:WOW) share price flat after AGM and sustainability update
• The Secos (ASX:SES) share price has soared 13% higher today. Here’s why.
• Broker tipping a ~10% jump in the Medibank (ASX:MPL) share price by Tuesday

Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. 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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Although the Talga Resources Ltd (ASX: TLG) share price finished the day 2% lower at $1.74 on Thursday, that is only really half the story.

At one stage today, the battery anode company’s shares stormed as much as 13.5% higher to a record high of $2.01.

When the Talga Resources share price hit that level, it meant it had gained a remarkable 328% since the start of the year.

Why is the Talga Resources share price at a record high?

Investors have been fighting to get hold of the company’s shares this month following a couple of promising announcements.

The first came on 2 November when the company announced that it had entered into a non-binding tripartite letter of intent with international high-tech mining and minerals group Luossavaara-Kiirunavaraa Aktiebolag and Mitsui & Co. Europe.

The three parties are discussing the joint development of the Vittangi Anode Project in Sweden. This project is part of its plan to establish a European supply of sustainable, low-CO2 emission anode materials for lithium-ion batteries.

Two days later the company revealed that it has received a commitment for grant funding under the UK Government’s Automotive Transformation Fund to complete a preliminary feasibility study into the commercialisation of its silicon anode product in the UK.

Talga has been developing its silicon anode lithium-ion battery product, Talnode-Si, both at its battery materials centre in Cambridge, UK, and under the now concluded Faraday SAFEVOLT program.

It notes that this work demonstrated a promising commercial route to produce higher-energy density anodes for Li-ion batteries, with the potential to significantly increase the driving range of electric vehicles.

Talga’s Managing Director, Mark Thompson, commented: “With a large automotive industry employing nearly 800,000 people and a rich history of iconic manufacturers such as Jaguar-Land Rover, Rolls-Royce, Bentley, Aston Martin, McLaren and many more, we see significant growth opportunities in the UK’s electrification process causing increased demand for our battery materials.”

“Our Cambridge-based battery material and technology facility has and continues to receive excellent support from Government agencies committed to a sustainable UK automotive industry,” he added.

More reading

• The People Infrastructure Ltd (ASX:PPE) share price is up 250% since March
• Woolworths (ASX:WOW) share price flat after AGM and sustainability update
• The Secos (ASX:SES) share price has soared 13% higher today. Here’s why.
• Broker tipping a ~10% jump in the Medibank (ASX:MPL) share price by Tuesday
• 3 shares that have reacted adversely to vaccine news

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. 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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ASX workforce management and staffing solutions company People Infrastructure Ltd (ASX:PPE) has faced plenty of challenges this year.

With the onset of national coronavirus lockdowns back in March and April, it looked like People Infrastructure’s business model would come under severe pressure. Reduced staffing needs across multiple sectors, particularly the hospitality industry, meant revenues were drying up. As you might expect, its share price plummeted, from a mid-February high of around $4 all the way down to just $0.90 by late March.

Things weren’t looking good.

But in the months since the company has been able to turn its fortunes around. With a diversified customer base serving many large-scale corporations, People Infrastructure was able to generate significant revenue growth despite the impacts of COVID-19. And its share price zoomed. Opportunistic investors who snapped up shares in People Infrastructure back in March are now sitting on gains well in excess of 250%.

So how did the company do it?

Although COVID-19 did negatively impact People Infrastructure’s business, the effects were relatively short-lived. More than half of People Infrastructure’s business is generated by healthcare and community services, while a significant chunk also comes from information technology.

Despite a ban on elective surgeries, healthcare staffing requirements have remained high throughout the pandemic. And many companies operating in the information technology space have seen business increase during lockdowns, due to increased demand for IT infrastructure and support services.

What were its FY20 results?

Revenues were up 34% year-on-year to $374.2 million, while normalised earnings before interest, tax, depreciation and amortisation (EBITDA) expenses jumped by 49% to $26.4 million. Normalised net profit after tax but before amortisation expenses also soared 53% to $18.4 million. The fact that earnings growth outpaced top line revenue growth is a positive sign, showing both the scalability of the business, and also its success in driving down costs.

People Infrastructure is cautiously optimistic about FY21. Despite continued market volatility caused by COVID-19, People Infrastructure’s management team is focussed on pursuing organic growth opportunities. It also has $80 million to $90 million at its disposal to pursue acquisitions and is already conducting due diligence on a number of targets.

The company’s positive results for FY20 earned it a place on Motley Fool’s Dividend Investor scorecard back in August. At that point, it was paying out a dividend yield of 3.8% fully franked on a share price of $2.23.

Since our Foolish analysts recommended it, People Infrastructure’s share price has jumped a further 55% to $3.45, which means the dividend yield has dropped down to about 2.4%.

More reading

• Attention value investors: These ASX shares could be very cheap

Motley Fool contributor Rhys Brock has no position in any of the stocks mentioned. The Motley Fool Australia has recommended People Infrastructure 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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The Woolworths Group Ltd (ASX: WOW) share price has been on the move on Thursday on the day of its virtual annual general meeting.

However, after a series of ups and downs, the retail conglomerate’s shares ended the day flat at $38.25.

What did Woolworths speak about at its annual general meeting?

At the meeting, the company provided investors with a summary of its performance in an eventful FY 2020, an update on trading during the new financial year, and its sustainability plan.

In respect to current trading, as announced last week, Woolworths has started FY 2021 in fine form. During the first quarter, group sales came in 12.3% higher than the prior corresponding period to $17.9 billion.

This was driven largely by a 12.9% increase in Australian Food sales to $12.03 billion and an 87% lift in group e-commerce sales to $1.5 billion. This was supported by a 20.4% increase in Big W sales and a 21.4% jump in Endeavour drinks sales, which offset weakness in its Hotels business.

Commenting on the remainder of the half, Woolworths CEO Brad Banducci said: “While we don’t like to make predictions, particularly in the current environment, for the rest of the calendar year we expect elevated sales and costs to continue as customers spend more time at home and continue to embrace eCommerce.”

The Woolworths sustainability plan.

Woolworths also touched on the 2025 sustainability plan it released yesterday.

This plan details an ambitious set of goals and commitments that Woolworths has set itself for a better tomorrow.

Mr Banducci explained: “As Australia and New Zealand’s largest retailer, we care deeply about our impact on people and the planet and we want to go further than just reducing negative impacts – we want to create good.”

“Our Sustainability Plan is ambitious but we have a responsibility to get this right, because our customers and team increasingly want to be healthier, they want to be less wasteful, and they want to cut down on the plastic packaging that pollutes our oceans,” he added.

Among the goals Woolworths has set for 2025 are using 100% green electricity and putting zero food waste into landfill. Further afield, it wants to be net positive for carbon emissions by 2050.

The former will make a huge difference for the environment. Woolworths notes that as a group, it uses around 1% of Australia’s electricity at present.

The company also wants to materially increase healthier choices for customers and make 100% of its own brand packaging and sourcing sustainable.

Management commented: “We are working hard to make our packaging as sustainable as possible by reducing the use of virgin plastic and increasing the amount of recycled content in our Own Brand packaging. We will label all of our Own Brand products with the Australasian Recycling Label so customers can clearly see which elements they can recycle.”

Though, it acknowledges that it cannot do this alone and will be investing in innovation and education.

“We cannot achieve our ambitious goals alone. We will invest in innovating, educating and advocating in a way that brings our partners, farmers, suppliers, customers and team members with us on the journey,” it concluded.

More reading

• Best and worst ASX retail stocks to own in the COVID recovery
• Why big brokers are bullish about the Woolworths (ASX: WOW) share price 
• ASX 200 Weekly Wrap: US election special
• ASX 200 ends mixed on Wednesday
• Here’s why the Woolworths (ASX:WOW) share price is inching higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Woolworths 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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The Secos Group Ltd (ASX: SES) share price is soaring higher today after the sustainable package materials company announced a positive sales update. At the time of writing, the Secos share price is trading up 12.9% higher at 18 cents. Let’s take a look.

Sales growth

Secos reported its September quarter sales were $5.8 million, up 19% on the June quarter. Biopolymer sales jumped more than 75% compared to the prior corresponding period. This represented its strongest quarter result on record.

The company said that sales were expected to further increase more than $8 million in the current December quarter. Demand for its Cardia biopolymer resin, film and bags continues to grow with increased awareness of compostable plastics as an effective alternative.

Organic treatment programs

Secos said there were further opportunities for growth in organic treatment programs.

Typically run by councils, food organic, garden organic (FOGO) programs enable the use of compostable biopolymer bags to dispose of household waste.

Secos said that using eco-friendly bags rather than traditional methods significantly reduced cost and the environmental impact. With more than 120 councils in Australia adopting FOGO programs, that amounts to around 20% growth in the sector in the last two years.

Operating highlights

To cater for the increase in customer orders, the group has focused on expanding production capacity during the past few months. Proceeds of a recent $15 million equity placement were invested into new manufacturing assets and working capital.

Capital expenditure investment was made in film and bag lines for local government council food and organic waste bags, and dog waste bags.

In addition, Secos committed to meeting $1.5 million sales orders of resin, by increasing capacity at its Malaysian plant.

Fixed operating costs were well-contained, with a portion of savings from employee and administration expenses redeployed to marketing investments. It’s anticipated that this will support retail store sales as well as its own branded line of products.

FY21 outlook

Secos advised that it expected the robust global demand in its core segments to continue into FY21. However, no guidance was given by the company.

Commenting on the company outlook, Secos CEO Ian Stacey said:

We remain on track to meet or exceed our internal sales targets and are actively expanding capacity to supply current sales commitments and to cater for additional growth opportunities that we see.

About the Secos share price

The Secos share price reached a low of 4.6 cents in April, representing a drop of 269% on today’s price. The company has been making tailwinds in recent months with a raft of positive announcements and a shift in consumer behaviour towards eco-friendlier alternatives.

More reading

• Broker tipping a ~10% jump in the Medibank (ASX:MPL) share price by Tuesday
• 3 shares that have reacted adversely to vaccine news
• Bellevue Gold (ASX:BGL) share price sinks lower: Is this a buying opportunity?
• Why the Dubber Corp (ASX:DUB) share price is surging today
• Top brokers name 3 ASX shares to sell today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Medibank Private Ltd (ASX: MPL) share price has yet to recover lost ground from the COVID‐19 crisis, but that could change by next week.

The MPL share price is down by around 10% since the start of 2020 when the S&P/ASX 200 Index (Index:^AXJO) dipped 3.5%.

The private health insurer is at least holding up better than its rival. The NIB Holdings Limited (ASX: NHF) share price shed nearly a quarter of its value over the same period.

Medibank share price health could soon improve

But the Medibank share price might get a chance to play catch-up to the rest of the market as Morgan Stanley thinks it could rally by nearly 10% by Tuesday.

That’s when the Australian Prudential Regulation Authority (APRA) is expected to release its private health insurance (PHI) statistics for the September quarter.

How APRA’s data feeds into Medibank’s stock valuation

The data will not only show the change in people with PHI but also the benefits paid. The first will provide insight into Medibank’s revenue growth (or lack of), while the latter will lend insight into its profit margin.

“We believe membership growth direction and the number of episodes will drive market expectations on MPL’s future earnings,” said Morgan Stanley.

The deferment of elective surgeries due to the pandemic is a boon for PHI companies but a drag for hospital stocks like the Ramsay Health Care Limited Fully Paid Ord. Shrs (ASX: RHC) share price. This is well understood by the market.

3 possible outcomes for the MPL share price

But the revenue growth outlook for insurers is convoluted by the deferred increase in premiums as the industry moved to help its customers through the recession.

Morgan Stanley believes there is one of three possible outcomes on Tuesday. The data could show a more than 0.5% drop in PHI membership, a flat outcome with no more than a 0.5% change, or a more than 0.5% increase.

The broker rates the probability of the first outcome (contraction) at 10% and the second flat outcome at 20%.

Pumped and primed

Its base case is for memberships to increase, which would add 2% or more to Medibank’s earnings per share in FY21.

More significantly, if this comes to pass, the broker reckons the stock will shoot up to $3.10 on the news.

The MPL share price is trading at $2.85 ahead of the market close.

However, if the data points to a 0.5% or worse decline, the stock could tumble to $2.50. In the flat scenario, the stock will hover around $2.80.

But Morgan Stanley is an optimist. It’s recommending the Medibank share price as “overweight” (or “buy”) with a price target of $3.10.

More reading

• Why the Dubber Corp (ASX:DUB) share price is surging today
• Why are ASX tech shares all over the place today?
• Here’s how ASX investors have reacted to a Biden win
• Why the Aristocrat (ASX:ALL) share price could jump next week
• The Hipages (ASX:HPG) share price jumped 16% after its IPO

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia has recommended NIB Holdings Limited and Ramsay Health Care 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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The ASX market has been on a high since news of an imminent vaccine for COVID-19 broke out. Before today’s retreat of 0.5% , the ASX 200 index has been on a consecutive day winning streak as investor confidence begins to seep back into the markets. 

However, not all companies have had positive price reactions to the vaccine news. Here we’ll take a look at three ASX growth shares that slid following the vaccine news.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Domino’s Pizza share price had gained more than 60% on a year-to-date (YTD) basis shortly prior to the vaccine news. It has lost 8% of that gain since news of the vaccine was released on Monday, and is currently trading at $78.20. 

The company has been a big beneficiary of the lockdown, as more people dine at home and order food deliveries. Its strong results in 2020 was underpinned by the strong demand on its food delivery network. Traditionally, more than 50% of Domino’s global sales come from digital channels and deliveries. As lockdown restrictions are gradually being lifted and restaurants resume business, this source of revenue for Domino’s is perceived to be gradually weakening. 

Even before the vaccine news, brokers had already downgraded its outlook on Domino’s after its first quarter results came out only slightly better than expected. 

JB Hi-Fi Limited (ASX:JBH)

JB Hi-Fi is a discount retailer of consumer electronics. Its share price had gained 30% leading up to the vaccine news, and has lost 8% since the news hit the markets, and is currently trading at $45.24.

JB Hi-Fi’s business did really well in the past six months as more people were buying home entertainment products as a result of lockdown restrictions. Soon after the vaccine news came out, equity analysts at Macquarie Group Ltd (ASX: MQG) downgraded the company’s shares to a neutral rating and cut the price target on them by almost 10% to $49.50.

Brokers in general have reduced the multiples for shares that it believes are likely to be impacted by a redirection in spending as the world returns to normal. 

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

Fisher & Paykel is a manufacturer of devices used in respiratory care, acute care, and the treatment of obstructive sleep apnea. Its share price was travelling well this year, gaining more than 60% just before the vaccine news. In the last four trading days, it has fallen by 8%, and is currently trading at $31.05.

There has been strong demand  for the company’s hospital respiratory care products in the last six months due to the ongoing spread of the coronavirus pandemic around the world, especially in the northern hemisphere. Investors have been reassessing the future demand for Fisher & Pykel’s products, especially its respiratory devices post-COVID.

More reading

• Top brokers name 3 ASX shares to sell today
• Why the Aristocrat (ASX:ALL) share price could jump next week
• Best and worst ASX retail stocks to own in the COVID recovery
• JB Hi-Fi (ASX:JBH) share price sinks lower on broker downgrade
• Why Bingo, Evolution, JB Hi-Fi, & Super Retail shares are dropping lower

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Domino’s Pizza Enterprises 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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The Bellevue Gold Ltd (ASX: BGL) share price is out of form on Thursday and is sinking lower again.

At the time of writing the gold-focused mineral exploration company’s shares are down 6% to $1.32.

This latest decline means the Bellevue Gold share price is now down over 11% since hitting a record high of $1.49 on Monday.

Why is the Bellevue Gold share price sinking lower?

Investors have been selling the company’s shares over the last few days after a meaningful pullback in the gold price.

This has been driven by news of a potentially effective COVID-19 vaccine being developed by Pfizer, which has given risk sentiment a boost and put pressure on safe haven assets.

The impact has been so great that it has overshadowed a positive update by the company this week in relation to its resource estimate at its Bellevue Gold Project in Western Australia.

According to the release, the company’s drilling activities have resulted in its indicated resource increasing by 20% to 1.04 million ounces of gold at 11.4 grams per tonne.

Management believes the increased estimate will further strengthen the baseline economic study now underway on the project, providing scope for longer mine life, an increased production profile, and stronger financial returns.

Bellevue Gold’s Managing Director, Steve Parsons, commented: “This is an outstanding result which demonstrates the exceptional quality of the mineralised system at Bellevue. To have an Indicated Resource of this size and this grade and with such immense scope for further increases highlights the underlying strength of the project.”

Is this a buying opportunity?

One broker that believes the recent weakness in the Bellevue Gold share price is a buying opportunity is Macquarie Group Ltd (ASX: MQG).

This morning its analysts have responded to its updated resource estimate by retaining their outperform rating and lifting the price target on the company’s shares to $1.55.

This price target implies potential upside of over 17% for its shares over the next 12 months.

More reading

• Bellevue Gold’s (ASX:BGL) share price leaps 9% to new record highs
• RED 5 (ASX:RED) share price in focus as gold production nears
• Why the Bellevue (ASX:BGL) share price is dropping lower

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie 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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