ASX investors have embraced news that the US Democratic Party now controls both houses, but it isn’t all good news for equities.

You’d be forgiven for thinking otherwise though with the The S&P/ASX 200 Index (Index:^AXJO) surging 1.6% to finish near its intraday peak on Thursday.

The Australian share market isn’t the only one rejoicing at the “Blue Wave”, a term coined to describe how the Democrats control all three layers of government.

US stock benchmarks also jumped last night and the futures market is pointing to further gains when their market opens later this evening.

Blue Wave reflation trade to flood markets

The party will soon install the next president, Joe Biden, while it controls both the Senate and the House. This will enable President Biden to push through just about any legislation.

Investors are excited because they expect the Democrats to launch a much larger stimulus program that’s targeted at lower income families. The market is betting on the Mother of reflation trades because the assumption is that lower income consumers will spend any government handout.

Return of inflation and higher rates

This means inflation is likely to return with the US bond market pricing in a more than 2% inflation rate on average for the next decade. This is the first time since November 2018 that inflation is tipped to jump above 2%.

Equity markets love growth, but it isn’t all good news. Once ASX investors come off their high, they will soon realise that there will be winners and losers from the Blue Wave.

This is because one consequence of large stimulus is a weaker US dollar. The US government will have to go much further into debt to fund this reflation trade.

Currency headwind for ASX stocks

A weaker greenback must lead to a stronger Australian dollar. That’s not good news for many large cap ASX stocks as they derive a significant proportion of their income in US dollars.

When they convert revenues to Australian dollars, investors here will get less bang for their buck. Some of these currency losers include the CSL Limited (ASX: CSL) share price, Amcor CDI (ASX: AMC) share price and James Hardie Industries plc (ASX: JHX) share price – just to name a few.

Risk free rate to climb in 2021

Another potential negative is rising bond yields. The US 10-year government bond yield has jumped over 1%.

As I’ve highlighted last week, at some point, the increase in the benchmark yield will lower the valuation of equities.

No one knows exactly where this tipping point is, but I don’t think we are far from it, especially given how little bad news is priced into stocks.

One possible group of ASX winners

On the flipside, I see the Blue Wave as being a big positive for the gold price, and ASX gold miners by extension.

A falling US dollar that’s triggered by burgeoning US government debt will prompt investors to search for safe havens outside the world’s reserve currency, which is the greenback.

As much as crypto aficionados would like you to believe, Bitcoin doesn’t cut it as a substitute for institutional investors. This puts gold in prime position.

We could see the Newcrest Mining Ltd (ASX: NCM) share price and Evolution Mining Ltd (ASX: EVN) share price outperform in 2021.

More reading

• We’re in a massive bubble: This is when it’ll pop
• These are the latest 2021 ASX “buy” ideas from top brokers
• ASX 200 up 1.55%: ANZ & Westpac surge higher, Afterpay & Xero tumble
• Are these 4 ASX medical shares set for a healthy 2021?
• Why the Oil Search (ASX:OSH) share price is surging higher today

Brendon Lau owns shares of CSL Ltd., Evolution Mining Limited, James Hardie Industries plc, and Newcrest Mining Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Amcor 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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With the S&P/ASX 200 Index (ASX: XJO) moving higher today, up 1.59% at the time of writing, it draws interest to the shares bucking the trend.

These 3 mid-cap shares have had a rough month and are hitting 1-month lows today.

Which mid-cap shares are hitting 1-month lows today?

Altium Limited (ASX: ALU)

This $4.33 billion mid-cap share is down 4.05% to $31.74 today, hitting a 1-month low.

Altium provides popular printed circuit board (PCB) design software products, including Altium Design and Altium 365. Altium’s collection of software solutions are used by many large, recognisable companies in America and Australia. 

During last year’s COVID-19 crash, Altium fell from its 52-week share price high of $42.76 to its 52-week low of $23.11, in 35 days. Consequently, Altium released business updates over the following months providing commentary on the impacts.

The company started to see signs of existing and potential customers in financial distress, leading to their own preservation of cash. This increased the difficulty for Altium to sign new deals and upsell customers. Altium responded to the market softening by offering discounted software subscriptions to retain and grow customers.

Since then, Altium announced the divestment of its embedded software development tool ‘TASKING’. The decision is to facilitate future investment in the company’s cloud platform, Altium 365. Altium will disclose the full impact of the divestment in its half-year results on 15 February.

Appen Ltd (ASX: APX)

This $2.95 billion mid-cap share has dropped 1.33% to $23.78 today, hitting a 1-month low.

Appen collects and annotates images, text, speech, audio, and video for the use of improving artificial intelligence (AI) systems. The company utilises its AI-assisted data annotation platform in conjunction with its 1 million global contractors, to provide solutions across a range of sectors.

Appen experienced what the company described as negligible impact on the first half-year results, when announced in August 2020. However, on 10 December, Appen provided a trading update to the contrary. The company advised that the usual ramp-up experienced in Q4 was not occurring, indicating that COVID-19 had interrupted business.

Underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) for FY20 was revised to be between $106 million to $109 million. The company remains optimistic for the long-term performance, with spending on artificial intelligence growing at 28% annually.

PolyNovo Ltd (ASX: PNV)

This $2.43 billion mid-cap share is down 3.80% to $3.54 today, hitting a 1-month low.

PolyNovo is a medical device company based in Australia that primarily focuses on the design, development, and production of its patented dermal regeneration solution, NovoSorb BTM.

However, unlike Altium and Appen, PolyNovo has been all systems go without a material impact on the business. In a trading update in April 2020, the company recorded a record sales month in the US for March. As a result, sales grew 173% for the month compared to March in the previous year.

PolyNovo highlighted a significant increase in BTM sales, reaching $19.1 million in the FY20 results. Reportedly PolyNovo successfully entered new markets, improved gross margin, and secured US$15 million of funding from the United States Biomedical Advanced Research and Development Authority.

Most recently, PolyNovo announced it was bringing its breast device in-house to ramp up development. Chair David Williams stated, “We believe we can develop breast and a number of other devices more quickly on our own.”

For context, the PolyNovo share price has rallied 90% in the last year. Though it has since retreated from its December high, slipping by 11.5%.

More reading

• Brokers name 3 ASX shares to buy right now
• 3 quality SaaS ASX shares to buy
• Are these 4 ASX medical shares set for a healthy 2021?
• ASX 200 drops 1.1%
• 2 high quality ASX growth shares to buy today

Mitchell Lawler owns shares of Appen Ltd and POLYNOVO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd and POLYNOVO FPO. 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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On 7 October 2020, Syrah Resources Ltd (ASX: SYR) shares closed at 47 cents. By the close of market today, the Syrah share price was trading at $1.21, up 2.5% for the day and a whopping 157% since 7 October.

According to Syrah Resources, the company’s vision is to become the world’s leading supplier of quality graphite products, specifically active anode material (AAM).

Let’s take a closer look at what the company does and how it managed to double its share price over a three-month period.

What’s been driving the Syrah share price?

The Syrah share price hit a 52-week high in December 2020 when it popped to 95 cents. This achievement followed an announcement regarding the company’s Vidalia, Louisiana AAM production facility in the United States. 

In the 1 December 2020 announcement, Syrah revealed it had completed a bankable feasibility study (BFS) for the expansion of the Vidalia site. The AAM produced at the site is an important component of lithium-ion batteries, which are commonly used in electric vehicles and portable electronic devices. 

This was a significant win with respect to Syrah’s goal of becoming the first vertically-integrated producer of natural graphite AAM outside of China. With its US location, Syrah is seeking to actively participate in the electric vehicle market across the States as well as in Europe.

What’s a vertically integrated producer?

Vertical integration is a business strategy under which a company controls its own supply chain. In the case of Syrah, the graphite necessary to produce AAM is being mined via the company’s Balama graphite operation in Mozambique.

A vertical integration strategy can benefit a business in many ways. For example, it can assist a company to maintain supply chain control, achieve significant cost savings, and make general efficiency improvements along its production chain. By mining its own graphite, as opposed to sourcing it from an external supplier, Syrah seeks to uphold greater control over the raw materials necessary for AAM production at its Vidalia facility.

What’s next for Syrah Resources?

According to Syrah’s latest quarterly report, the company is on track to achieve its goal of becoming the first vertically-integrated producer of natural graphite AAM outside China. The company reported ending the quarter with a strong cash balance of US$44 million.

Syrah’s quarterly update also cited a timeline which includes the first production of AAM occurring at the Vidalia site in the first quarter of 2021. The company expects to dispatch AAM to potential customers for evaluation in the second quarter of this year. 

Over the past couple of months, Syrah Resources has been reasonably accurate with predicting the timing of important company milestones. AAM production is a big one, and investors will no doubt be watching the Syrah Resources share price to see whether the company can continue meeting its anticipated deadlines. 

More reading

• Why CSL, Lovisa, Lynas, & Syrah shares are dropping lower
• Why the Syrah (ASX:SYR) share price is sinking 10% lower today
• Why the Syrah Resources (ASX:SYR) share price is in a trading halt

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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It certainly was a stunning day of trade for the Rio Tinto Limited (ASX: RIO) share price on Thursday.

The mining giant’s shares stormed as much as 9% higher to hit a record high of $126.18 before ending the day 8.5% higher at $125.66.

Also hitting new highs today were its rivals BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG).

Why did the Rio Tinto share price rocket higher?

Investors were fighting to buy the company’s shares on Thursday after the iron ore price continued its ascent following positive news out of the US.

The steel making ingredient and other commodities climbed higher after the Democrats won the Georgia Senate run-off. This effectively hands control of the Senate to the Democrats, paving the way for further stimulus to boost economic growth in the United States.

This in turn should underpin demand for many commodities and support the high prices that many are commanding.

How is the iron ore price performing?

The iron ore price rose a further 80 US cents or 0.5% overnight to hit US$167.95 a tonne. This bodes very well for Rio Tinto and its shareholders in FY 2021.

The mining giant is targeting Pilbara iron ore unit costs of US$14 to US$15 per tonne. This means it is operating with a margin of over US$150 a tonne at present.

And given the strength of its balance sheet, the sizeable free cash flow it is generating is likely to be returned to shareholders through dividends.

What dividend will Rio Tinto pay?

According to a recent note out of Macquarie, its analysts are expecting the company to pay shareholders a fully franked ~$8.84 per share dividend in FY 2021.

Based on the current Rio Tinto share price, this will mean a very generous 7% dividend yield over the next 12 months.

More reading

• BHP (ASX:BHP) share price storms to new high
• Do ASX mining companies carry the Australian share market?
• ASX 200 drops 1.1%
• Goldman points to commodities super-cycle: Which ASX mining shares will benefit?
• ASX 200 down 0.3%: BHP & Rio Tinto rise, big four banks drop, Zip sinks

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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The Lithium Power International Ltd (ASX: LPI) share price is rising today as the company announced that it would be recommencing its exploration activities, leading to a gain of 7.55%. As a result, shares are currently trading at 28 cents, which is close to its highest price since the pandemic struck in March.

Exploration activity recommences

The Lithium Power share price has risen today after the company announced it is recommencing exploration adjacent to the Greenbushes lithium mine.

The Greenbushes project is located in the south west of Western Australia. It is wholly owned by the lithium explorer and is located adjacent to the world’s highest grade spodumene lithium mine.

Covid-19 placed its exploration efforts on hold for most of 2020. However, with the recent improvements in lithium prices, which are forecast to increase during 2021, it has been deemed worthwhile to resume activity.

Moreover, Greenbushes consists of two tenements covering more than 398km, which both have approved work and environmental plans. The mine is at the centre of a 20km zone with lithium deposits found nearby, outlined in published studies. Other elements that lie in close proximity to the mine include arsenic, tin, boron, and beryllium. Notably, the presence of arsenic in the soil is positive as this is a significant indicator element.

What did management say?

In this morning’s announcement, CEO Cristobal Garcia-Huidobro welcomed the news, commenting:

With the increased market interest in lithium, we feel it is opportune to re-start our WA exploration activities. The recent move by IGO Limited to acquire a portion of the Greenbushes mine adjacent to our project reiterates the significant value of high-grade lithium pegmatites and the Greenbushes project in particular, in a secure global jurisdiction. We look forward to updating shareholders on our exploration activities as they advance to drilling.

Foolish takeaway

The Lithium Power share price has been unchanged since last year, recovering well after its March lows. Nonetheless, shares in the company have been slimly outperformed by the All Ordinaries Index (ASX: XAO), which rose 1% in the same period.

More reading

• We’re in a massive bubble: This is when it’ll pop
• The Flight Centre (ASX:FLT) share price dropped 60% in 2020: Will 2021 be better?
• BHP (ASX:BHP) share price storms to new high
• Here’s why the Orocobre (ASX:ORE) share price is on the move today
• Why the Boart Longyear (ASX:BLY) share price is rocketing 50% today

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. 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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One of the world’s most influential investors has warned share markets are in the late stages of a massive bubble.

And that it will all end in tears very soon.

GMO co-founder Jeremy Grantham wrote in a letter to investors this week that the very long bull market that started in 2009 has now “matured” into a “fully fledged epic bubble”. 

“Featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior, I believe this event will be recorded as one of the great bubbles of financial history – right along with the South Sea bubble, 1929, and 2000.”

The S&P/ASX 200 Index (ASX: XJO) and S&P 500 Index (INDEXSP: .INX) have climbed 48% and 68% respectively since March.

Governments have poured in unprecedented support and central banks have erased interest rates to get the world through COVID-19. But none of that matters now, according to Grantham, because this bubble is about to burst.

“Make no mistake – for the majority of investors today, this could very well be the most important event of your investing lives,” he said.

“Speaking as an old student and historian of markets, it is intellectually exciting and terrifying at the same time.”

Grantham reminded his readers that the Nasdaq Composite (INDEXNASDAQ: .IXIC) fell 82% when the tech bubble popped 20 years ago.

“And here we are again, waiting for the last dance and, eventually, for the music to stop.”

He took the unstoppable rise of Tesla Inc (NASDAQ: TSLA) as a demonstration of a bubble at play.

“As a Model 3 owner, my personal favorite Tesla tidbit is that its market cap, now over US$600 billion, amounts to over US$1.25 million per car sold each year versus US$9,000 per car for General Motors Company (NYSE: GM),” Grantham said.

“What has 1929 got to equal that?”

When will this bubble burst?

Trying to predict the end of a bubble is always a mug’s game, according to Grantham. But he took a stab at when he thought share investors might get a rude wake-up call.

“My best guess as to the longest this bubble might survive is the late [northern] spring or early summer, coinciding with the broad rollout of the COVID vaccine,” he said.

“At that moment, the most pressing issue facing the world economy will have been solved. Market participants will breathe a sigh of relief, look around, and immediately realise that the economy is still in poor shape, stimulus will shortly be cut back with the end of the COVID crisis, and valuations are absurd.”

One big sign of a bubble imminently about to burst is a “rising hostility toward bears”.

“In the last few months the hostile tone has been rapidly ratcheting up,” said Grantham.

“The irony for bears though is that it’s exactly what we want to hear. It’s a classic precursor of the ultimate break – together with stocks rising, not for their fundamentals, but simply because they are rising.”

According to Grantham, the bursting of a bubble is hard to pick because it often happens when conditions for stocks are still excellent.

“The great bull markets typically turn down when the market conditions are very favorable – just subtly less favorable than they were yesterday. And that is why they are always missed.”

The entire financial industry is rigged to be bullish

Even with a crash looming, bears will always be in the minority, according to Grantham.

“Every career incentive in the industry and every fault of individual human psychology will work toward sucking investors in.”

You would always see the big investment houses and fund managers be bullish because it’s “good for business and intellectually undemanding”. 

“It is appealing to most investors who much prefer optimism to realistic appraisal, as witnessed so vividly with COVID,” Grantham said.

“And when it all ends, you will as a persistent bull have overwhelming company. This is why you have always had bullish advice in a bubble and always will.”

What to do with your shares to prepare for a bubble burst

A major feature of bubbles is a massive disparity between the valuations of different asset classes or sectors, according to Grantham.

This time around, this gap is between growth and value stocks.

“Those at the very cheap end include traditional value stocks all over the world, relative to growth stocks. Value stocks have had their worst-ever relative decade ending December 2019, followed by the worst-ever year in 2020, with spreads between growth and value performance averaging between 20 and 30 percentage points for the single year!”

Another disparity is between shares in the US and developing nations. Australian stocks often mimic the fortunes of the US market.

“Emerging market equities are at 1 of their 3, more or less co-equal, relative lows against the US of the last 50 years.”

So Grantham recommends positioning your portfolio to take advantage of both of these imbalances.

“We believe it is in the overlap of these two ideas, value and emerging, that your relative bets should go, along with the greatest avoidance of US growth stocks that your career and business risk will allow.”

More reading

• These are the latest 2021 ASX “buy” ideas from top brokers
• ASX 200 up 1.55%: ANZ & Westpac surge higher, Afterpay & Xero tumble
• Why the Oil Search (ASX:OSH) share price is surging higher today
• ASX 200 drops 1.1%
• What strong jobs data means for ASX 200 shares

Tony Yoo 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. 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 Flight Centre Travel Group Ltd (ASX: FLT) share price was well and truly out of form in 2020.

The travel agent giant’s shares were among the worst performers on the S&P/ASX 200 Index (ASX: XJO) with a whopping 60% decline.

Why did the Flight Centre share price crash lower in 2020?

Investors were of course selling the travel agent’s shares due to the negative impact the coronavirus pandemic was having on bookings.

With travel markets coming to a standstill at the height of the pandemic, Flight Centre was left generating next to no revenue and still had considerable operating costs to pay.

This led to the company having to undertake a material capital raising, which diluted shareholders, to give it the liquidity it needed to survive the crisis.

It also resulted in the company delivering a huge loss in FY 2020. For the 12 months ended 30 June 2020, Flight Centre reported an underlying loss before tax of $510 million. This was before one-off items, including COVID-19 induced expenses of $339 million.

On a statutory basis, Flight Centre delivered a loss of $849 million before tax.

Will 2021 be better for the Flight Centre share price?

One leading broker that believes Flight Centre’s shares could be market beaters in 2021 is Bell Potter.

This morning it retained its buy rating and $19.00 price target on the company’s shares. This price target implies potential upside of approximately 20% over the next 12 months.

Although the broker acknowledges that there is a lot of uncertainty in the short term because of COVID-19, it remains very positive on the future. Bell Potter is particularly positive on its corporate business and expects this to be the key driver of growth over the long term.

It also believes that the company will eventually restore its earnings at higher margins. This is due partly to the removal of structural costs.

This could make Flight Centre one to watch in 2021.

More reading

• Bell Potter names the ASX shares to buy in 2021
• These are the 10 most shorted shares on the ASX
• 5 things to watch on the ASX 200 on Monday
• 2 important investment lessons from 2020
• The 5 worst performing ASX 200 shares of 2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The shares of the world’s biggest commodities producer, BHP Group Ltd (ASX: BHP), were given a strong boost today by a record rally in commodity prices including iron ore and copper metals.

In fact, the BHP share price at one point reached a new record high of $46.98, but has pulled back slightly to trade at the current price $46.92, rising by 6.13%.

Other mining shares also climbed today, with the Rio Tinto Limited (ASX: RIO) share price surging by almost 8%, and Fortescue Metals Group Limited (ASX: FMG) higher by almost 4%.

What’s driving the BHP share price to record highs?

The rise in the BHP share price today is driven by increases in commodity prices across the board.

The price of iron ore reached US$168/tonne overnight in London trading, before retreating to the current price of US$166. The industrial metal has been rising steadily since October 2020, and has been hovering at levels not seen since 2011. 

The record rise in iron ore has mostly been underpinned by huge demand from China, which in 2019 was making half of the world’s crude steel. Iron ore is of course the main ingredient in making steel.

The recent rally has also been caused by an apparent undersupply in the market, after giant Brazilian miner Vale SA cut its production guidance all the way to 2022 following an accident at one of its mines in December.

Investors are also flocking to BHP’s shares today, as the price of copper shot to an 8-year high. In London trading on Wednesday, the price of the copper metal rose to US$8,103.50 a pound.

The demand for copper has also stemmed from Chinese demand, particularly as China has now begun ramping up its smelting capacity again after COVID-19 closed some of the facilities.

About the BHP share price

The BHP share price has risen by 18% over a 12-month period.

The company provided cost guidance of US$13 to US$14 a tonne for its iron ore operations in FY21. As the world’s biggest commodity producer, BHP commands a market valuation of $130 billion.

More reading

• 3 highest yielding ASX dividend shares
• Do ASX mining companies carry the Australian share market?
• ASX 200 drops 1.1%
• Goldman points to commodities super-cycle: Which ASX mining shares will benefit?
• Why Fortescue, Nick Scali, Santos, & Zip shares are charging higher

Motley Fool contributor Eddy Sunarto owns shares of BHP Billiton 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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It has been yet another very strong day for Australia’s leading lithium miners.

Investors have continued to pile into the industry on Thursday and have driven their shares notably higher.

For example, at the time of writing, the Galaxy Resources Limited (ASX: GXY) share price is up 8% and the Pilbara Minerals Ltd (ASX: PLS) share price is up 7.5%. Both have hit 52-week highs at one stage today.

This has been driven by optimism over lithium prices thanks to growing electric vehicle adoption and President-elect Joe Biden’s favourable policies on clean energy and renewable technology.

What about the Orocobre share price?

The Orocobre Limited (ASX: ORE) share price also climbed to a 52-week high on Thursday before fading as the day went on.

The softening of its shares today appears to have been caused by the release of a change of director’s interest notice this afternoon.

That notice revealed that its non-executive director, Richard Seville, has taken advantage of the recent rise in the Orocobre share price to offload some shares.

According to the notice, Mr Seville sold 208,656 shares through an on-market trade on 31 December. The director received a total consideration of $939,080.11 for the parcel of shares, which equates to an average of approximately $4.50 per share.

However, it is worth noting that the director still has a considerable holding, which means his interests are still firmly aligned with shareholders.

Following this sale, Mr Seville owned a total of 5,333,953 Orocobre shares. Which, based on the current Orocobre share price of $5.04, have a market value of just under $27 million today.

Where next for the Orocobre share price?

One broker that believes the Orocobre share price has now peaked is Ord Minnett. Last month its analysts put a hold rating and $3.45 price target on its shares.

While it believes lithium prices have now bottomed, it isn’t as positive as the market on near term demand. Especially given the significant latent short term supply.

More reading

• The Galaxy Resources (ASX:GXY) share price has rocketed 20% in 2021
• Why Atomos, BOD Australia, Galaxy, & Zebit shares are racing higher
• Why these ASX shares just stormed to 52-week highs or better
• ASX 200 drops 1.1%
• Why the Pilbara Minerals (ASX:PLS) share price jumped 8% to a 52-week high

Motley Fool contributor James Mickleboro owns shares of Galaxy Resources 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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The Boart Longyear Ltd (ASX: BLY) share price has been the top percentage riser on the ASX so far today. This comes after the company announced it has engaged the services of a world-renowned advisor to provide it with strategic recommendations.

At the time of writing, the Boart Longyear share price is racing 52.94% higher to $1.04. This is just below its intraday high of $1.05 that was achieved mid-morning.

What did the company announce?

The Boart Longyear share price is gaining significant interest today with investors scrambling to get in on the action.

Prior to the market’s open this morning, Boart Longyear advised it has engaged multinational investment bank and financial services firm Rothschild & Co to assist with the company’s strategic direction.

The decision to seek advisory support from Rothschild comes as Boart Longyear is looking to tackle its debt obligations. Net debt recorded at the end of the September period stood at $823 million, increasing $67 million from financing costs.

The company’s current debt facilities are expected to mature during the second-half of 2022. Management said that possible options to service the growing debt profile could include refinance or recapitalisation.

CEO commentary

Boart Longyear CEO Mr Jeff Olsen commented on the company’s position, saying:

It is important for the company to start exploring all available options to address its future debt maturities and set us up to take advantage of future growth opportunities. There are clear signs that the mining and metals market is seeing increased activity as demonstrated through recent investments in our sector with major mining houses signalling increased exploration spend.

We are also seeing intermediate and junior miners accessing capital through significant equity raisings allowing them to get out and explore for tomorrow’s resources.

Boart Longyear share price snapshot

Despite today’s meteoric rise, over the past 12 months, the Boart Longyear share price has dropped nearly 40%.

Reaching a 52-week high of $1.75 last January, Boart Longyear shares took a dive following the onset of the pandemic. Furthermore, throughout the second half of 2020, and prior to today’s rise, the company’s shares had barely managed any significant recovery. It’s also worth noting that the Boart Longyear share price hit an all-time low of 29.5 cents just last month.

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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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Boart Longyear (ASX:BLY) share price is rocketing 50% today appeared first on The Motley Fool Australia.

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