Apple Inc (NASDAQ: AAPL) is a company I’d wager almost everyone on the planet would be familiar with. Its flagship product, the iPhone, is among the most popular consumer goods in the world.

If you throw in all of its other famous devices, such as the Mac, the iPad, AirPods and (more recently) Apple Pay, you can get a grasp of this company’s scale. No wonder Apple is one of, if not, the world’s most valuable companies by market capitalisation at US$2.18 trillion. 

But a new report from the Australian Financial Review (AFR) today could herald a new, and massive, chapter in this company’s incredible history. According to the report,  Apple is “moving forward with self-driving car technology, and is targeting 2024 to produce a passenger vehicle”.

The vehicles “could include [Apple’s] own breakthrough battery technology” as well.

iCar for Apple?

Apple has reportedly been developing self-driving technology since 2014 through the dramatically named ‘Project Titan’. This project has apparently had a haphazard strategy, and has gone through various cycles of ‘will it, won’t it’.

But according to the report, “Apple has progressed enough that it now aims to build a vehicle for consumers”. And central to these plans is Apple’s battery technology. This, the report states, could “radically” reduce the cost of batteries and “increase the vehicle’s range”. 

“If there is one company on the planet that has the resources to do that, it’s probably Apple. But at the same time, it’s not a cellphone,” is what a Project Titan worker told the report. 

However, Apple is far from guaranteed success in this endeavour. The supply chain construction alone would require enormous capital and planning. And Apple would have to play catchup to the likes of Tesla Inc (NASDAQ: TSLA), which has been scaling its own vehicle production to great success using its own in-house and world-leading battery technology in recent years.

Not to mention other electric car companies that have been enjoying positive news of late too, such as Nio Inc (NYSE: NIO) and Rivian. As well as the plethora of existing internal combustion engine car companies like Toyota, Volkswagen, Ford Motor Company (NYSE: F), General Motors Company (NYSE: GM) and Honda that are turning to electric drivetrains.

It’s also not the only tech giant dabbling in this space either. Alphabet Inc‘s (NASDAQ: GOOG)(NASDAQ: GOOGL) Waymo has been developing its own self-driving technology for years now.

But still, none of these companies has the combination of size, cash or brand power that Apple does. So it will be an interesting space to watch.

More reading

• In a record-breaking year, here are some of the world’s most popular shares
• Why shares are less risky now than 30 years ago
• US “mum and pop” investors leaving the pros in the dust in 2020 stock rally
• What will happen when Tesla (NASDAQ:TSLA) joins the S&P 500 today?
• The 1 mega-cap tech stock that doesn’t fear Washington

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares) and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, and Tesla. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. 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 clock is ticking on 2020. And for most Australians, the new year can’t come too soon.

Hopes are growing that multiple coronavirus vaccines will largely put this year’s pandemic woes behind us. And along with those hopes, ASX investors are turning their attention to the recovery trade.

4 ASX 200 shares that have soared on the recovery trade

The true scope of COVID-19’s impact on the Aussie and global economies became clear towards the end of February. And investors took note. Commencing on 21 February, most every share on the ASX sold off heavily through to late March.

Shares in the travel sector were some of the most impacted as domestic and international travel slowed to a trickle. They’ve also seen some of the strongest rebounds in recent months as investors eye the light at the end of the viral tunnel.

Here are 4 examples, all part of the S&P/ASX 200 Index (ASX: XJO).

The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price crashed 48% by 19 March. Since that low shares have rebounded by 38%.

The Qantas Airways Limited (ASX: QAN) share price plummeted 70% by 19 March. Shares are up 124% since then.

The Flight Centre Travel Group Ltd (ASX: FLT) share price cratered 78% by 19 March. The share price has bounced back 68% since that low.

And finally, toll road developer and operator, Transurban Group‘s (ASX: TCL) share price dropped 39% by 19 March. Shares have gained 38% since then.

Why this fund manager prefers Transurban shares

Atlas Funds Management chief investment officer Hugh Dive believes investors eyeing the recovery trade may be getting ahead of themselves when piling into some of these ASX 200 travel shares.

According to Dive (quoted by the Australian Financial Review):

I’m very surprised at how fast these stocks have all bounced back given they’re a long way out of the woods. Flight Centre, at close to $16, the margin of safety just isn’t there like it was at $7 and you’re staring down the barrel of a long, slow recovery. That price is reflecting a much quicker bounceback than that. We’d like to own Sydney Airport but again, it just doesn’t have that margin of safety.

Something like a Transurban is quite unaffected and traffic in Sydney is pretty much back to where it was. That’s been a better place to put our money than Sydney Airport or Qantas… One of the key things we’re looking for is dividend yield and it’s hard owning a Qantas or a Sydney Airport for a dividend when there’s no revenue.

The Transurban share price is slipping today, down 1%.

More reading

• In a record-breaking year, here are some of the world’s most popular shares
• ASX 200 down 0.85%: ANZ CFO resigns, tech shares tumble, iron ore jumps
• Transurban (ASX:TCL) share price wobbles on new CFO announcement
• 3 best and worst performing ASX transport shares of 2020
• ASX 200 ends slightly down

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban Group. 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 Sandfire Resources Ltd (ASX: SFR) share price has dropped today despite the company announcing record shipments of copper concentrate.

Near market close, the Sandfire share price was trading down 1.83% at $5.37.

Record shipment

Earlier today, Sandfire advised that it has completed the largest-ever single shipment of copper concentrate. The mineral was extracted from its 100% owned DeGrussa operations in Western Australia.

Weighing more than 23,000 wet metric tonnes (wmt), the copper concentrate left the Port of Geraldton in Western Australia bound for Europe, to be refined in smelters. The process will be overseen by Sandfire’s strategic partner, Concord Resources.

At the current spot copper prices, its estimated that the shipment is worth more than $52 million.

Management commentary

Commenting on the shipment, Sandfire managing director and CEO Karl Simich said:

Apart from being a significant milestone in itself, this record shipment is also testament to the strong demand for the high-grade, high-quality copper concentrate that we produce at DeGrussa from a range of long-term customers around the world.

Sandfire has a strong global network of concentrate customers spanning China, Japan, Korea, The Philippines and Europe which we have built up over the past decade, thanks to the consistency of production from the DeGrussa Operations and the exceptional quality of our product.

Addressing the US$150 billion industry as a whole, Mr Simich said government stimulus measures around the world had positively impacted the copper market. This included measures taken to increase infrastructure, green energy and reduce carbonisation – all of which were heavily reliant on copper.

He added:

Europe and China are both currently investing heavily in incentivising electric vehicles, which underpins a buoyant demand outlook for copper over the medium and long-term.

About the Sandfire share price

The Sandfire share price has been on a rollercoaster ride over the past 12 months. It reached as high as $6.27 in January before falling to a decade low of $2.75 in March. The company’s shares are 10% down year-to-date.

Sandfire has a market capitalisation of $962.7 million and a price-to-earnings (P/E) ratio of 12.5.

More reading

• UBS just downgraded these outperforming ASX mining stocks
• These were the best performing ASX 200 shares last week
• Why Laybuy, Mesoblast, Sandfire, & Telix shares are charging higher
• ASX 200 down 0.2%: Zip’s November update, Mesoblast jumps, Westpac’s asset sale
• Why the Sandfire Resources (ASX:SFR) share price is soaring 10% higher

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.

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The S&P/ASX 200 Index (ASX: XJO) fell by 1% today to 6,600 points.

Here are some of the highlights from the ASX:

Magellan Financial Group Ltd (ASX: MFG)

Magellan announced it’s buying a 10% stake in GYG for $86.8 million. GYG is an Australian based quick service restaurant chain specialising in made to order, fresh Mexican food with 147 restaurants across Australia, Singapore, Japan and the US.

GYG is led by founder and CEO Steven Marks as well as chairman Guy Russo, who used to be the CEO of McDonalds as well as Kmart and Target.

Hamish Douglass, the chairman of Magellan, said: “We are extremely pleased to become a shareholder in GYG. Magellan has deep investment experience in the quick service restaurant industry and we believe Magellan can both add and gain considerable insights as a major investor and supportive shareholder. GYG is a world class business with enormous growth potential and represents a highly attractive investment opportunity for our principal investments business.”

GYG founder and CEO Steven Marks said: “We are incredibly excited to welcome Magellan to the GYG family. Our ambition is to be the best restaurant company in the world and, to achieve that, we need the support of the best partners and strongest board. Magellan’s global experience and track record in the QSR space is truly world class and we could not think of a better qualified or more aligned partner to have alongside as we enter the next, most exciting phase of the GYG journey.”

The Magellan share price went down by around 0.3% today.

David Jones property

Charter Hall Group (ASX: CHC) announced that a consortium of Charter Hall funds and partnerships have exchanged contracts to purchase the David Jones flagship Elizabeth Street store in Sydney for a price of $510 million.

This property comprises 12 levels on a strategic 3,530 sqm prime CBD retail site which overlooks Hyde Park with views to Sydney Harbour.

David Jones, as the vendor, has in recent years completed a significant capital works program which has created a world class showcase of department store retailing according to Charter Hall.

Charter Hall’s consortium has acquired the property on a sale and leaseback transaction. It has a 20-year, triple-net lease with a minimum of 2.5% per annum rent increases, supplemented by an agreed turnover rent linked to sales performance. Charter Hall itself will hold a 25% holding, whilst Charter Hall Long WALE REIT (ASX: CLW) will own another 50% and the final 25% will be owned by Charter Hall DVP partnership.

The purchase price reflects a 5% initial yield based on the initial annual net rent of $25.5 million.

Charter Hall CEO and managing director David Harrison said: “This acquisition is consistent with our strategy in so many ways, namely: securing long weighted lease expiry, triple-net leased assets, combining the appetite of our managed funds and partnerships to partner with the group on high conviction prime real estate acquisitions, co investing group capital alongside our partners to secure attractive earnings growth from our property investment portfolio, whilst also expanding the group’s FUM platform.”

The Charter Hall share price fell by around 0.5% today.

Volpara Health Technologies Ltd (ASX: VHT)

Medical technology business Volpara announced that it has signed a five-year software as a service (SaaS) contract with BreastScreen Queensland.

It has run a successful pilot trial with BreastScreen Queensland on the Gold Coast. BreastScreen Queensland is the third largest public breast screening programme in Australia – the contract will roll out VolparaEnterprise to 11 BreastsScreen Queensland services operating in Brisbane and elsewhere in the state. The BreastScreen Queensland services comprise 69 gantries and 43 sites that include 10 mobile units. Volpara expects the service to go live in early 2021.

The terms and conditions of the contract with BreastScreen Queensland are confidential.

Volpara CEO Dr Highnam said: “We are delighted to now have BreastScreen Queensland signing up to use our software, making it the second major public breast cancer screening programme in Australia signed up to Volpara products. This is news that will resonate around the world, and we are extremely pleased that our software will be helping women in the fight against breast cancer.”

The Volpara share price rose 4.5% today. 

More reading

• Why ASX energy shares in this beaten down sector could rally in 2021
• How to get the best out of the 2021 mining boom
• 2 reasons why the Magellan (ASX:MFG) share price is attractive
• With an 8% dividend yield, is the AGL (ASX:AGL) share price a buy?
• Why a2 Milk, Doctor Care Anywhere, McPherson’s, & Volpara are pushing higher

Tristan Harrison 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 VOLPARA FPO NZ. The Motley Fool Australia has recommended VOLPARA FPO NZ. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The SciDev Ltd (ASX: SDV) share price has surged up today, after the company announced record quarterly sales in its United States oil and gas business.

At the time of writing, the SciDec share price is trading up 7.64% at 78 cents.

What’s moving the SciDev share price?

Investors are buying the water engineering company’s shares today, after it announced increased activity levels within its US oil and gas sector business.

It says that drilling activity continues to recover from the COVID-19 lows of the June quarter, and the company is continuing to win business, gain market share and grow revenue in the sector.

The second-quarter FY21 revenue from the oil and gas sector is now forecast to be approximately $4 million, ahead of the previous quarter of $3 million.

SciDev also said that activities in the Canadian oil-sands industry are on track with progress outcomes to be reported in calendar year 2021.

Commenting on this latest update, SciDev managing director and CEO, Lewis Utting, said:

SciDev, through our highland fluid technology (HFT) services, continue to see strengthening activity levels in the US oil and gas sector.

Our supply chains remain strong and customer demand is growing. Our investment in organisational capability during 2020 is yielding results, with HFT capturing an increasing amount of market share.

New contracts update

In today’s release, SciDev also announced that a purchase order from a major South Texas company for completion fluids has been extended, and the company is seeing an expansion of purchase orders from other existing clients.

It also said that a major European oil company has seconded HFT staff to provide product development for the new environmentally friendly oilfield performance chemistry. Several patent applications have been lodged with commercial activities now under consideration.

About the SciDev share price in 2020

SciDev develops chemistries and engineering solutions to help clients with a range of operational issues associated with water.

The company acquired the HFT business, which provides a range of water chemicals and professional services to the oil and gas sector, for $5 million in March this year.

In its latest quarterly update in October, the company reported a record $9.4 million in sales, which included $4.6 million in sales during September alone. 

The SciDev share price meanwhile, has had a volatile year, trading within a low-high price band of 280% – between 25 cents and 95 cents. 

However, the share price has now gone full circle and back to roughly where it started at the beginning of the year.

At the current share price, the company boasts a market cap of $117 million.

More reading

• Why ASX energy shares in this beaten down sector could rally in 2021
• Why the Hub24 (ASX:HUB) share price could go higher
• The Cimic (ASX:CIM) share price is down 2% lower today. Here’s why
• How to get the best out of the 2021 mining boom
• 2 reasons why the Magellan (ASX:MFG) share price is attractive

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. 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 imminent death of fossil fuels has been trumpeted by all manner of analysts for decades now.

Tied into that are the forecasts of an ever-declining market – and share prices – for the companies that dig up and process fossil fuels.

Topping the list of energy sources we’ve repeatedly heard are destined for the near-term scrapheap is coal. Particularly thermal coal, the variety used to generate electricity, over coking coal, which sees more use in the manufacture of steel.

Now coal shares, and the investors who back them, have become increasingly controversial as the world tries to de-carbonise in an effort to mitigate climate change.

But here’s the thing.

According to the International Energy Agency’s (IEA) latest annual coal report, coal is still the largest source of electricity on Earth. And the IEA expects it won’t lose that mantle to renewables and gas for another 5 years.

Even then, the agency says the decline in coal use will be gradual.

Steady or growing mid-term demand for coal

Keisuke Sadamori is the IEA’s director of energy markets and security. And he pours cold water on predictions of the rapid demise of coal.

According to Sadamori (as quoted by the Australian Financial Review), “[W]ith coal demand still expected to remain steady or to grow in key Asian economies, there is no sign that coal is going to fade away quickly.”

In fact, the IEA forecasts global demand for coal will increase 2.6% in 2021 as both industrial activity and electricity demand bounce back. That follows on a 5% fall in 2020, driven by lower demand during the coronavirus pandemic.

We have China to thank for the fact that the demand for coal didn’t plummet even further this past year. “The decline would have been even steeper without the strong economic rebound in China, the world’s largest coal consumer, in the second half of the year,” Sadamori said.

The IEA expects the growing global demand for coal to top out in 2025 at around 7.4 billion tonnes.

That’s darn near 1 tonne of coal for every person on the planet.

Every single year.

And it’s only a touch below the record coal use of 8 tonnes set in 2013.

That hardly sounds like an industry in its death throes.

China is likely to remain the world’s largest consumer of coal – at some 4 billion tonnes per year. However, most of the new demand is forecast to come from India, Vietnam and a handful of other southeast Asian nations where new coal-fired power plants continue to be constructed and industrial activity is expected to ramp up.

Now, these figures won’t come as good news to activists concerned about coal’s impact on the environment. But they could provide a much needed tailwind for some of the shares in Australia’s beaten down coal sector.

While Indonesia was the largest bulk coal exporter in the world in 2019, the IEA reports that Australia (the number 2 bulk exporter) earned the number 1 spot in terms of energy and value.

China the wild card

The outlook for Australian coal shares remains muddied by the recent trade disruptions with China, the biggest market for Aussie coal.

The Australian Government has now downgraded its estimates for thermal coal (this excludes coking coal) for the 2020-2021 financial year.

As reported by the AFR, the Department of Industry’s latest quarterly resources and energy report states:

Coal markets are in a state of flux dealing with issues quite separate to COVID-19. Shipments of (mainly Australian) coal faced delays at Chinese ports.

Price differentials have changed dramatically; the bottom line for Australian coal producers is lower profitability, and the likelihood of production cuts the longer the Chinese restrictions remain in place.

The Department of Industry lowered its coal export projections for the financial year from 208 million tonnes to 199 million tonnes. It expects export earnings from coal to fall from $20 billion to $15 billion year-on-year.

3 ASX coal shares

No one – save perhaps China’s President Xi Jinping himself – can predict how long China’s import restrictions on Aussie coal will remain in place.

What we do know is there are already reports of rising electricity prices in China that may be tied to the restrictions. And we do know that global demand is set to ramp up over the next years, as coal remains the top source for the world’s electricity.

With that in mind, Whitehaven Coal Ltd (ASX: WHC), one of the worst performers on the S&P/ASX 200 Index (ASX: XJO) in 2020, could see a turnaround in the year (or years) ahead.

Year-to-date Whitehaven’s share price is down 37%. Though it has regained 14% from the 16 March lows. Whitehaven pays a 0.91% dividend yield, unfranked.

Yancoal Australia Ltd (ASX: YAL) also has yet to fully recover from the pandemic selloff earlier this year. The Yancoal share price is down 18% since 2 January. Yancoal pays an 8.99% dividend yield, unfranked.

On the smaller end of the spectrum, with a market cap $216 million, is Stanmore Coal Limited (ASX: SMR).

Year-to-date, Stanmore’s share price is down 22%. Stanmore pays a 3.66% dividend yield, fully franked.

More reading

• How to get the best out of the 2021 mining boom
• With an 8% dividend yield, is the AGL (ASX:AGL) share price a buy?
• ASX 200 down 0.85%: ANZ CFO resigns, tech shares tumble, iron ore jumps
• The Unibail Rodamco Westfield (ASX:URW) share price has dipped 3% today
• US Congress finally confirms more stimulus. Higher markets to follow?

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

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Hub24 Ltd (ASX: HUB) is one of few ASX shares to not only break above its pre-COVID highs, but almost double in year-to-date returns. The investment and superannuation portfolio administrator has experienced significant growth in its platform revenue and funds under administration (FUA) over the past five years.

But, despite the Hub24 share price currently sitting at over $20, according to one broker, the company still has a significant market share opportunity at hand. Here’s the Hub24 growth story so far and why this broker thinks the company still has a solid runway ahead of it. 

Hub24 highlights 

Hub24’s investment and superannuation platform offers a comprehensive range of investment options, with enhanced transaction and reporting solutions, for all types of investors, individuals, companies, trusts, associations or self-managed super funds. 

The platform has continued to scale with a 5-year compound annual growth rate (CAGR) for FUA of 59% and a 5-year CAGR for platform revenue of 55%. More recently, in FY20, the company achieved a 37% increase in platform revenue to $74.3 million and a 34% increase in FUA to $17.2 billion whilst underlying net profit after tax (NPAT) soared 49% to $10.1 million. 

The company made a series of compelling acquisitions in FY20 to strengthen its position as a leading platform provider. Three companies including Xplore Wealth Ltd (ASX: XPL), PARS and an investment of up to 40% of Easton Investments Ltd (ASX: EAS) were added under the Hub24 brand for a total consideration of $93 million. These acquisitions are expected to result in approximately 13% earnings per share (EPS) accretion in FY22 and expected synergies of $10 million per annum by FY24. 

Despite the company’s record growth, acquisitions and achievements to date, according to Citi, the market share opportunity for Hub24 is still significant. In FY20, the company’s market share increased from 1.5% to 2.1%. 

IOOF agreement 

Last Friday, Hub24 announced it had entered into a binding heads of agreement with IOOF Holdings Limited (ASX: IFL) to collaborate on developing a range of solutions. These include an investment and superannuation wrap platform, utilising HUB24’s custody, administration and technology capabilities, as well as a suite of managed portfolios. 

Under this proposed arrangement, Hub24 will provide custody and administration services for IOOF’s new private label investment and superannuation solution that will extend the range of products and services offered to the IOOF adviser network and its clients. This is expected to be launched by the second quarter of calendar year 2021.

Citi bullish on Hub24 share price 

On Monday, Citi retained its Hub24 share price target of $24.00 as well as its buy rating. The broker believes the company is well placed to take advantage of the ongoing structural shifts in the wealth management sector. It also sees the agreement with IOOF as a positive which will allow the business to build additional volume and scale. 

More reading

• Why the IOOF (ASX:IFL) share price is one to watch on Friday
• ASX stock of the day: Why are Netwealth (ASX:NWL) shares up 7%?
• Here are the best 5 ASX financials shares of 2020
• Easton Investments (ASX:EAS) share price up 8%, hits 52-week high
• IOOF (ASX:IFL) share price lifts after investor briefing

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd. The Motley Fool Australia has recommended Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Cimic Group Ltd (ASX: CIM) share price is treading lower today despite the company announcing another positive release to the market. Just yesterday, the group advised its affiliate, Ventia, won two significant contracts. Today, its minerals processing company, Sedgman was granted an extended contract award.

However, the upbeat news is still not enough to lift the Cimic share price today, which is 2.04% down to $24.96 at the time of writing.

What did Cimic announce?

In early afternoon trade, Cimic advised the market that Sedgman has secured an extended contract with Mach Energy. The agreement will see the latter perform operations and maintenances services at the Mount Pleasant mine in New South Wales.

Mach Energy provides energy management solutions for commercial real estate property managers, operators, engineers, and owners. The company looks after some of Australia’s most iconic buildings, with properties across the country.

Terms of the deal

Sedgman will operate and maintain Mach Energy’s Mount Pleasant coal handing and preparation facilities for an additional 3-year period. The company completed construction of the facility in 2019 and has been operating ever since

The contract extension is estimated to generate revenue of around $120 million to Sedgman based on work volumes. This will bring the total revenue from the entire contract to $200 million.

Management commentary

Commenting on the alliance, Cimic group executive chair and CEO Juan Santamaria said:

Sedgman and the CIMIC Group have a strong history with MACH Energy which we’re pleased to continue. Sedgman’s leadership in minerals processing will ensure maximum resource recovery for our long-term client.

Sedgman managing director Grant Fraser said the contract was testament to the partnership forged with MACH Energy, and the integration of its engineering and operations capability.

How has the Cimic share price performed in 2020?

The Cimic share price has lost more than 24% of its value since the start of 2020. Although COVID-19 played a part in the overall downturn across Cimic’s industries, its share has yet to fully recover.

The Cimic share price reached a 52-week high of $35.75 in January before falling to a 52-week low of $11.87 in the months after.

More reading

• Cimic (ASX:CIM) share price falls despite positive update
• Why the Cimic Group (ASX:CIM) share price is on watch today
• Cimic (ASX:CIM) share price flat despite another contract win
• ASX 200 goes up on Friday
• Cimic (ASX:CIM) share price inches up on $112 million contract wins

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.

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The second best performing ASX sector this year is well placed to take the top position in 2021.

I am talking about the Materials sector, which is dominated by ASX mining stocks. This group rallied nearly 13% in 2020 when the S&P/ASX 200 Index (Index:^AXJO) is struggling to reach breakeven.

Only the ASX Technology sector is beating Materials. This is largely due to to the big surge in the Afterpay Ltd (ASX: APT) share price and Xero Limited (ASX: XRO) share price.

ASX miners to outperform ASX tech stocks?

But while the outperformance of ASX tech stocks have pushed these stars into the valuation stratosphere, many ASX miners are still looking cheap.

It’s for this reason I think mining stocks will overtake tech stocks in 2021, particularly given the outlook for commodity prices.

Citigroup believes miners could keep their edge in 2021. If the broker is right, it will mark the sector’s fifth year of outperformance against the general market.

Monetary policy a lead indicator

“Key markets China and the US are running supportive monetary policy,” said the broker.

“Citi expects China M2 and TSF [total social financing] to grow around 9% and 11% in 2021. Global central bank policy rates point to the potential for upside surprise in Global Mining equity indices in CY21 should we see a strong coordinated recovery in global growth across key metal intensive economies.”

TSF purports to measure the total amount of funds going into the real economy from the entire financial system.

Easing commodity prices not a big threat

While analysts believe the record high iron ore price of over US$170 a tonne is not sustainable through 2021, our iron ore producers will still be generating a lot of cash.

Citi believes the price of the commodity will average US$115 a tonne in 2021 before gradually slipping to US$74 a tonne in 2024.

Even then, the broker estimates that Rio Tinto Limited (ASX: RIO) will make enough to repurchase around 13% of its shares. That would put the Rio Tinto share price on a price to cashflow (PCF) multiple of 7.2 times, which is cheaper than the through cycle average.

How to get the best return from ASX mining sector

UBS is also upbeat on the sector as it sees material valuation upgrades across the sector if spot prices can be sustained.

However, to get the best bang for your investment dollar, the broker believes you should sell the strongly performing base metal miners and buy precious metal miners.

It is also urging investors to hang on to bulk miners like the iron ore producers.

Some miners that UBS prefers include the Fortescue Metals Group Limited (ASX: FMG) share price, Newcrest Mining Ltd (ASX: NCM) share price and South32 Ltd (ASX: S32) share price.

More reading

• In a record-breaking year, here are some of the world’s most popular shares
• With an 8% dividend yield, is the AGL (ASX:AGL) share price a buy?
• Here’s why a big broker thinks you should avoid these ASX gold shares 
• ASX 200 down 0.85%: ANZ CFO resigns, tech shares tumble, iron ore jumps
• 2 of the best ASX 50 shares to buy today

Brendon Lau owns shares of Newcrest Mining Limited, Rio Tinto Ltd., and South32 Ltd. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post How to get the best out of the 2021 mining boom appeared first on The Motley Fool Australia.

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There are some compelling reasons why the share price of Magellan Financial Group Ltd (ASX: MFG) looks attractive, according to a couple of fund managers.

A quick overview of Magellan

Magellan describes itself as a specialist funds management business established in 2006 and it’s based in Sydney. Magellan Asset Management managed approximately $103 billion of funds under management (FUM) at 30 November 2020 across its global equities, global listed infrastructure strategies and Australian equities for retail, high net worth and institutional investors. Magellan employs over 120 staff across the world.

Magellan’s investment in Guzman y Gomez (GYG)

Before I get to the reasons why fund managers like Magellan, the company announced a major investment today. It’s buying a 10% stake in GYG for $86.8 million. GYG is an Australian based quick service restaurant chain specialising in made to order, fresh Mexican food with 147 restaurants across Australia, Singapore, Japan and the US.

GYG is led by founder and CEO Steven Marks. The chairman is Guy Russo, who used to be the CEO of McDonalds as well as Kmart and Target.

Hamish Douglass, the chairman of Magellan, said: “We are extremely pleased to become a shareholder in GYG. Magellan has deep investment experience in the quick service restaurant industry and we believe Magellan can both add and gain considerable insights as a major investor and supportive shareholder. GYG is a world class business with enormous growth potential and represents a highly attractive investment opportunity for our principal investments business.”

GYG is aiming to become the best restaurant company in the world and it think it’s now entering the most exciting phase of growth.

Reasons to consider Magellan at this share price

Dr Don Hamson from Plato Investment Management, which specialises in maximising retirement income for retirees, said that Magellan was a good dividend share. He liked the Magellan FY20 result and pointed to the fact that Magellan increased its final dividend by 10% compared to last year.

In terms of the FUM and growth, he said that it bodes well for Magellan that the average FUM was up 26% over the year to $95.5 billion. Dr Hamson said that Magellan is doing really well in the current market COVID-19 environment. The growth stocks in the US, which Magellan is exposed to, is doing really well according to Plato.

In the Magellan FY20 result it also said that its adjusted net profit after tax (NPAT) grew by 20% to $438.3 million. Adjusted earnings per share (EPS) grew by 17% to 241.5 cents.

Meanwhile, James Gerrish from Market Matters thinks that Mr Douglass has steered the Magellan ship admirably over the years.

Mr Gerrish said that Magellan is a quality manager that called the transition to the US and global tech shares extremely well. Market Matters said that it’s valued at a premium to most of the fund management sector, but Market Matters thinks it’s deserving of this status.

Market Matters says that it likes Magellan shares in the mid $50 region. At the time of writing the Magellan share price is indeed at around $55 after the Guzman y Gomez investment news.

According to Commsec projections, at the current Magellan share price it’s valued at 17x FY23’s estimated earnings. It also offers a partially franked dividend yield of 3.9%.

More reading

• Why the Magellan (ASX:MFG) share price is on watch today
• Magellan (ASX:MFG) launches new ETF offerings
• How to turn $20,000 into $950,000 in 10 years with ASX shares
• These were the worst performing ASX 200 shares last week
• Why the Magellan (ASX:MFG) share price dipped lower today

Motley Fool contributor Tristan Harrison 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 2 reasons why the Magellan (ASX:MFG) share price is attractive appeared first on The Motley Fool Australia.

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