Damstra Holdings Ltd (ASX: DTC) is a provider of workplace management solutions in the form of integrated hardware and SaaS solutions for industries where safety and compliance is of utmost importance such as mining, resources and construction. It’s been exactly one year since its initial public offering (IPO) at an offer price of $0.90 per share. With its recent share price and business performance, could Damstra be the ASX tech share to own? 

What does Damstra do? 

Damstra provides solutions to various workplace safety and compliance sensitive segments. This includes: 

• Workforce management and onboarding, particularly contingent, casual, part-time or contractor workforces that are paid on an hourly basis 
• Access control used to restrict access to properties, facilities, buildings and rooms
• Learning management to offer courses to staff and provide an organisation with the ability to track and record enrolment, progress and completion of learning and development modules 
• Asset management software used to track fixed assets in organisations such as the depreciation values on fixed assets and track repair and overhaul schedules 
• Health, safety and environmental management including policies, risk assessments, incident reports, training records  

FY20 performance 

Damstra delivered a strong FY20 performance across the board with a 46.6% increase in revenue to $23.5 million and $4.8 million underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) compared to $1.8 million in FY19. The company’s growth is accelerating with 30.5%, 47.7% and 46.6% increase in revenue between FY18-20 respectively. Its accelerating growth demonstrates the benefits of its scalable software and hardware platform. 

COVID-19 has acted as a tailwind for the Damstra business with many clients seeking a ‘COVID’ solution for workplace safety and compliance. This includes features such as fever detection, mobility tracking, managing people’s access and integration with other systems.

What makes Damstra a leading ASX tech share candidate? 

I believe the combination of high client retention rates and stickiness combined with a scalable technology, digital adoption tailwinds and further product innovation makes Damstra a very strong ASX tech share candidate. 

It’s engaged with organisations and sectors that it believes require an efficient, integrated and scalable solution that reduces staff down-time, injury rates and manual labour while improving risk and compliance outcomes relative to an on-premise model. The integration of both hardware and software in its solution increases the stickiness of its clients and creates a barrier of entry for competitors. This also creates further opportunities to sell new products and features to existing clients.

Its solutions have been designed to be scalable on a global basis, incorporating an industry agnostic platform which can be configured to accommodate the requirements of multiple segments of the market across various jurisdictions. 

Taking into consideration the bigger picture, the company is arguably in its early days, with its FY20 report providing multiple examples of its future potential. This includes revenue growth from cross-selling products to existing clients, fever detection integrated with facial recognition and smart paperless forms. 

Foolish takeaway

The Damstra share price has run up more than 25% in the last five trading sessions and is trading up 3.14% at $2.30 at the time of writing. Its characteristics in growth, M&A and innovation is reminiscent of sales and marketing software provider, Bigtincan Holdings Ltd (ASX: BTH), which has also experienced a significant share price run in recent years. While I wouldn’t be buying Damstra at today’s prices,  I would watch closely for an entry opportunity. 

More reading

• Why the the Damstra (ASX:DTC) share price has surged 5%
• Top ASX Stock Picks for October 2020

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

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It is sometimes hard for investors to commit to ASX shares with eyewatering valuations. Buying ASX shares that are value orientated can feel more tangible with the added benefit of dividends. Here are two cheap ASX shares for those who like to stick to the fundamentals. 

2 ASX shares I think are ideal for value investors

1. Bell Financial Group Ltd (ASX: BFG) 

Bell Financial Group is an Australia-based provider of stockbroking investment and financial advisory services to private, institutional and corporate clients. Across its companies, Bell Potter Securities, Bell Potter Capital and Third Party Platform, it services over 600,000 clients with funds under advice exceeding $58.4 billion. 

In the company’s half year announcement on 12 August, it announced a 7.4% increase in revenue to $129.6 million, a profit after tax of $23.5 million and $88 million net cash with no core debt. The Bell Financial share price trades at a relatively cheap price-to-earnings (P/E) ratio of just 12, despite a strong track record of growth, with a compound annual growth rate (CAGR) of 8.1% for revenue and 15.6% for NPAT between 2015 to 2019. Its consistency towers over many other ASX shares in the financials sector. The reliability of Bell Financial shares could make them a worthwhile value pick backed up by modest growth. The company also pays a generous, fully franked dividend yield of 6.20% at today’s prices. 

2. Pact Group Holdings Ltd (ASX: PGH) 

Pact Group is a leading provider of specialty packaging solutions in Australasia, servicing both consumer and industrial sectors. It specialises in the manufacture and supply of rigid plastic and metal packaging, materials handling solutions, co-manufacturing services, recycling and sustainability services. 

Pact Group represents a recovery story following significant higher input costs and a one-off restructuring cost in late 2018. The company delivered a sound FY20 performance driven by solid organic growth in contract manufacturing for hygiene category items and in-crate pooling services. Its sales fell 1% to $1,809 million while NPAT improved to $92 million, up from a $290 million loss in FY19. 

The concept of Pact Group being a turnaround business is prevalent in its FY20 presentation with the business focused on transforming its Australian packaging segment, pivoting towards recycling and creating a competitive platform in the ANZ fresh food segment. 

The business estimates that by 2022, it will be the largest PET recycler in the ANZ region. It aims to use local recycled material to differentiate its packaging products to meet the increasing demand for more sustainable packaging solutions. Sticking with the theme of recycling, the business wants to establish a leading position for the supply of locally sourced recycled packaging to the fresh food segment. The company has entered into an agreement to acquire Flight Plastics NZ, a leading provider of plastic trays and containers for the fresh food segments. This acquisition will give Pact access to over 5,000 tonnes of recycled PET to sell into food grade packaging in the ANZ region.

With an improvement in earnings and a clear vision for the future, I believe Pact Group could be a turnaround ASX share for value investors.

More reading

• Bell Financial (ASX:BFG) share price up 7% following presentation

Motley Fool contributor Lina Lim 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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At lunch on Monday the S&P/ASX 200 Index (ASX: XJO) has just dropped into negative territory. The benchmark index is currently down 0.1% to 6,097.5 points.

Here’s what has been happening on the market today:

CBA COVID-19 loan deferrals update.

The Commonwealth Bank of Australia (ASX: CBA) share price is pushing higher on Monday after the release of an update on its COVID-19 loan deferrals. According to the release, the banking giant has experienced another reduction in the number of loans on deferral. At the end of September, the total number of loan repayment deferrals stood at 129,000. This is down from 174,000 in August and 210,000 in June.

Link receives takeover approach.

The Link Administration Holdings Ltd (ASX: LNK) share price is rocketing higher on Monday after receiving a takeover approach. The administration services provider has received a non-binding and indicative offer of $5.20 cash per share from a consortium comprising Pacific Equity Partners, Carlyle Group, and their affiliates. This represents a 30% premium to its last close price. Major shareholder Perpetual Limited (ASX: PPT) intends to vote in favour of the proposal, subject to no superior proposal being tabled.

Gold miners charge higher.

The likes of Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) shares are racing higher today with the rest of the gold miners. A strong first quarter update from Evolution, a broker upgrade for Newcrest, and a solid rise in the gold price has lifted their shares. At the time of writing, the S&P/ASX All Ordinaries Gold index is up a sizeable 1.8%.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Monday has been the Link share price by some distance with its 25% gain. This follows the receipt of its takeover approach this morning. The worst performer has been the Orica Ltd (ASX: ORI) share price with a 3.5% decline. This morning it revealed that its FY 2020 underlying earnings before interest and tax (EBIT) would be slightly above $600 million. This compares to EBIT of $665 million in FY 2019.

More reading

• Evolution (ASX:EVN) share price is punching higher. Here’s why.
• Why Evolution, Link, Newcrest, & NEXTDC shares are charging higher
• Why Event, Flight Centre, Oil Search, & Orica shares are dropping lower today
• Link (ASX:LNK) share price rockets 26% higher on takeover approach
• Why I’d watch the Platinum (ASX:PTM) share price this week

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Link Administration Holdings Ltd. The Motley Fool Australia has recommended Link Administration Holdings 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 Evolution Mining Ltd (ASX: EVN) share price is surging in mid-morning trade following the release of its quarterly results.

At the time of writing, the Evolution share price is punching higher since the opening bell, up 4.15% to $6.14.

The Australian mining and exploration company owns and operates five gold and silver mines in New South Wales, Queensland and Western Australia. Let’s see how it performed for the first quarter of FY21.

Quarter results for FY21

Evolution reported a strong quarterly result for the period ending September 30. The company achieved a gold production of 170,021 ounces, with an all-in sustaining cost (ASIC) of $1,198 per ounce. Before C1 cash costs, royalties, general corporate and administration expenses, all-in cost stood at $1,663 per ounce.

Operating mine cash flow came in at $272.3 million, and a net mine cash flow of $183.4 million.

Evolution advised net bank debt of $180.3 million, a decrease of the $196.4 million reached at the end of June.

The gold miner announced it was tracking ahead of its FY21, and hit a major milestone for the Cowan underground mine development. Evolution submitted a significant state development (SSD) application and modification 16 development application to the New South Wales Department of Planning, Industry and Environment. An environmental impact study will form part of the SSD.

Evolution is forecasting FY21 gold production of between 670,000 – 730,000 ounces, of an ASIC of $1,240–$1,300 per ounce.

What did the CEO say?

Evolution executive chair Jake Klein said it was great to start the new financial year with continued positive momentum. He added:

Our operations are performing well and it is pleasing to be ahead of where we had planned to be at the end of the first quarter. Most importantly, the business continues to generate sector leading cash flow per ounce and our balance sheet remains strong with net debt reducing even after rewarding shareholders with their 15th consecutive dividend of A$153.8 million.

Mr Klein also spoke about the company’s future plans:

The submission for approval of the Cowal underground mine is another important step towards achieving our objective of producing 350,000 ounces per annum of low-cost gold from this cornerstone operation.

Is the Evolution share price in the buy zone?

I think that a little bit of gold exposure is good for every portfolio. This is where established gold miners like Newcrest Mining Limited (ASX: NCM) or Northern Star Resources Limited (ASX: NST) have a little advantage.

As attractive Evolution’s opportunities may seem, I will be watching its developments from the side lines for now.

More reading

• ASX 200 down 0.1%: CBA’s COVID-19 loan deferrals improve, Link receives takeover approach
• Why Evolution, Link, Newcrest, & NEXTDC shares are charging higher
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday

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 S&P/ASX 200 Index (ASX: XJO) is fighting hard to maintain its winning streak on Monday. In late morning trade the benchmark index is up slightly to 6,105.3 points.

Four shares that are climbing more than most today are listed below. Here’s why they are charging higher:

The Evolution Mining Ltd (ASX: EVN) share price is up 4.5% to $6.16 following the release of its first quarter update. The gold miner delivered a result ahead of expectations, with production coming in at 170,021 ounces. This was achieved with an all-in sustaining cost of $1,198 per ounce and an all-in cost margin of $871 per ounce. As a result, Evolution generated operating mine cash flow of $272.3 million for the quarter.

The Link Administration Holdings Ltd (ASX: LNK) share price has jumped almost 25% higher to $4.97. This follows news that the administration services provider has received a takeover approach from a consortium comprising Pacific Equity Partners, Carlyle Group, and their affiliates. An offer of $5.20 cash per share has been tabled. Major shareholder Perpetual Limited (ASX: PPT) intends to vote in favour of the proposal.

The Newcrest Mining Limited (ASX: NCM) share price has risen 3% to $32.24. Investors have been buying Newcrest and other gold miners on Monday following a solid rise in the gold price on Friday night. In addition to this, analysts at Citi upgraded the company’s shares to a buy rating with a $37.00 price target this morning. This follows news that its board has approved the expansion of its Cadia operation.

The NEXTDC Ltd (ASX: NXT) share price is up 2.5% to $13.10. This morning the data centre operator announced a new $1.5 billion debt facility. This debt facility has lowered the company’s cost of debt notably and positioned it for growth. It is also worth noting that some of the facility is multi-currency. This could be a sign that NEXTDC has its eyes on expanding internationally in the near future.

More reading

• Link (ASX:LNK) share price rockets 26% higher on takeover approach
• NEXTDC (ASX:NXT) share price hits record high on debt update
• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 next week

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Link Administration Holdings Ltd. The Motley Fool Australia has recommended Link Administration Holdings 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 Qantas Airways Limited (ASX: QAN) share price has plummeted by around 40% year to date. On top of this, the national airline has recently announced it is terminating its 30-year sponsorship of Rugby Australia due to the deteriorating market conditions.

With all the trouble the Australian aviation industry is facing this year, namely the debt crisis, outbound travel restrictions and labor disputes, should investors consider buying Qantas shares?

Will COVID-19 permanently impact Qantas?

In Qantas’ recent FY20 Chairman’s report, Chairman Richard Goyder AO commented that “Aviation is all about connecting people and place, which is exactly what the public health response to COVID-19 is designed to avoid.”

There is no doubt that the COVID-19 pandemic is hitting the aviation industry hard, and the current crisis is worse than the problems Qantas faced in 2019 (namely, cost of fuel and a low Australian dollar). With the restrictions on international and domestic travel, the airlines are grounded, and the significant 22% drop in passenger revenue since June 2019 has hit Qantas’ balance sheet hard.

Can the business revive itself?

One of the most critical business indicators in the aviation industry is the cost of available seat kilometres (CASK). This is used to measure the unit cost expressed in cash value to operate each seat for every kilometre.

CASK has increased 11% to 8.87 since FY19 as a result of rising operational costs and less available seats due to pandemic restrictions. Qantas has a difficult time in controlling its CASK given the high revenue volatility from a range of external factors, including fluctuating exchange rate movements and higher fuel cost.

However, the Morrison Government announced a $165 million bailout plan earlier in April to keep the airline afloat. Furthermore, Qantas conducted a successful $1.9 billion capital raising via institutional investors in July, which demonstrates that investors still see equity value in Qantas. This bodes well for the airline’s future.

Three-year recovery plan to keep the iron bird alive

While the economic outlook still looks skinny, Qantas has decided to focus on cost cutting given its limited opportunity to generate income in the current environment.

It is clear to me that the coronavirus pandemic is pushing Qantas into a corner, so this cost cutting is probably the best defensive strategy the national airline can do to manage further downside risks at the moment.

While Qantas turned to the private placement market to shore up its balance sheet, the airline also launched a ‘flight to nowhere’ program in September to maintain its cash flow and keep its pilots working. The plane takes off and lands at the same airport and has proved popular – the first of these 7-hour routes around the country saw 134 seats sold out in 10 minutes.

Foolish takeaway

It may seem attractive for short-term traders to buy Qantas as it looks like a good bargain based on its share price. However, I think it will take a substantial effort for Qantas to return to its former glory.

With the continual refusal of the Queensland and Tasmania premiers to open up state borders in the near future, I would say the negative sentiment has not been fully priced in yet, and perhaps Qantas will also need to resume its dividend payment to further restore investors’ confidence in the long run. 

More reading

• ASX 200 up 2.3%: Big four banks charge higher, Qantas soars, energy shares jump
• Why Costa, Qantas, Santos, & Westpac shares are storming higher today
• Leading broker upgrades Qantas (ASX:QAN) shares to buy rating
• 5 things to watch on the ASX 200 on Monday
• The ASX shares that fund managers were buying this month

Motley Fool contributor MWUaus 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

People are flocking to Netflix (NASDAQ: NFLX) as many entertainment alternatives worldwide have been temporarily suspended because of the pandemic. Demand for in-home entertainment is surging, and Netflix has been at the forefront, providing viewers with a vast library of thousands of titles and reliable service throughout the lockdowns. 

The company reports its third-quarter results on 20 October. Here are three things to look for when Netflix releases earnings.

Subscriber growth is fueling profits for Netflix

First and foremost, investors will want to look at subscriber growth in the third quarter. In the first half of 2020, Netflix added a total of 26 million paid subscribers, nearly matching the additions seen in all of 2019. This led the company to tamp down expectations in the latter half of the year and forecast sequential member growth of 2.5 million in the third quarter. However, with coronavirus cases still surging in many regions of the world, it is likely the company will exceed its guidance. As of 30 June, the company had a massive base of 193 million subscribers worldwide.

Investors should also keep an eye on revenue growth. In the second quarter, revenue increased 24.9% year over year. For the current period, Netflix expects revenue to grow 20.6%, which would be the lowest rate of growth since the second quarter of 2013. Notably, as of 30 June, Netflix offered plans from as low as $3 per month to more than $20 per month, depending on the country and the tier of service purchased. Overall, average revenue per user (ARPU) was $10.80 last quarter – up ever so slightly from the ARPU of $10.76 in the prior-year period. With most of the global economy trying to battle a pandemic, increasing prices do not appear imminent.

Lastly, look for management to discuss the state of content creation. Many productions were put on pause to help slow the spread of the coronavirus. The combination of revenue growth and low content expenses led to Netflix reporting $899 billion in free cash flow in the most recent quarter. Additionally, the company’s operating profit margin increased nearly eight percentage points year over year to 22.1%.

Netflix can benefit from continued growth and expanding profitability as long as consumers remain hesitant to travel, dine out, or do anything else that may expose them to COVID-19, making this consumer goods stock one to watch. As millions of people cut the cord and turn to streaming for their digital entertainment, the challenge for Netflix will be fighting off the new competition.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Netflix will surge 28% to $650, according to this analyst
• Better buy: Amazon vs Netflix

Parkev Tatevosian 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 Netflix. The Motley Fool Australia has recommended Netflix. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) has fought back from a soft start and is edging higher. At the time of writing, the benchmark index is up 0.1% to 6,109.2 points.

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

The Event Hospitality and Entertainment Ltd (ASX: EVT) share price is down 5% to $9.10. This morning the entertainment company revealed that the sale of its German cinema business to Vue International has hit a stumbling block. Event advised that Vue is seeking to renegotiate the terms of the transaction.

The Flight Centre Travel Group Ltd (ASX: FLT) share price has fallen 1.5% to $14.06. This is despite there being no news out of the travel company. However, an uptick in COVID 19 cases in Victoria and New South Wales appears to have investors concerned that border restrictions could weigh on travel markets longer than hoped.

The Oil Search Limited (ASX: OSH) share price has dropped almost 2.5% lower to $2.82. Investors have been selling Oil Search and other energy shares on Monday after a pullback in oil prices on Friday night. The price of oil came under pressure after oil workers in Norway ended their strike. Nevertheless, oil prices still managed to rise by 9% over the week.

The Orica Ltd (ASX: ORI) share price has dropped 3.5% to $16.06. This follows the release of a business update by the commercial explosives company. This morning Orica advised that its second half Ammonium Nitrate volumes will be at the low end of its guidance range and down 15% on the expected pre-COVID-19 volumes. In light of this, the company expects FY 2020 underlying earnings before interest and tax (EBIT) to be slightly above $600 million. This compares to EBIT of $665 million in FY 2019.

More reading

• Why it is important to diversify your ASX portfolio and how you can do it
• 5 things to watch on the ASX 200 on Thursday
• A2 Milk and Mesoblast were among the most traded shares on the ASX last week
• Why Baby Bunting, Northern Star, Oil Search, & Telix shares are storming higher
• ASX 200 up 2.3%: Big four banks charge higher, Qantas soars, energy shares jump

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. 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 Mount Gibson Iron Limited (ASX: MGX) share price has jumped higher today following the release of its first quarter results for FY21.

At the time of writing, the Mount Gibson share price is swapping hands for 74 cents, up 2.76% in early morning trade. This compares to the All Ordinaries Index (ASX: XAO) which is down 0.1% at 6,308 points.

How did Mount Gibson perform in Q1?

Mount Gibson reported a solid Q1 FY21 result for the period ending September 30. The iron ore producer reached sales of 1.4 million wet metric tonnes (mwmt). This comprised of 0.7 mwmt of high-grade ore at its Koolan Island, and 0.7 mwmt of low-grade material from Mid-West.

Total ore sales revenue equated to $129 million free on board (FOB), reflected upon a stronger Australian dollar against the greenback.

Mount Gibson recorded cash on hand for the ending period at $445 million, compared to $423 million from the prior period.

Group cash flow for the quarter came in at $32 million, mostly operating expenses from Koolan Island’s advanced waste stripping investment.

Unit cash costs stood at $56/wmt FOB, an improvement from the $66/wmt recorded prior its waste stripping project.

The company also completed a new airstrip in Koolan Island, with first flights schedule this month. The new infrastructure is expected to deliver significant efficiency and cost reduction benefits to its Koolan Island operations.

What did management say?

Mount Gibson CEO Peter Kerr welcomed the results, saying:

Mount Gibson has made a positive start to the new financial year with improved quarterly ore production and sales, completion of the new Koolan Island airstrip, ongoing low-grade ore sales in the Mid-West and, recently, declaration of Ore Reserves for the initial stage of the Shine Project.

We are also tracking to achieve first ore sales from the Shine Project in mid-2021, subject to finalising the last commercial and permitting requirements, which will extend our Mid-West business by at least two years and potentially longer should market conditions remain supportive.

Outlook

Mount Gibson advised it would focus on increased mining movements at Koolan Island to complete its planned open pit waste stripping phase. In the Mid-West, the company will look to finalise its low-grade sales from Extension Hill.

Mount Gibson expects ore sales guidance for 2020/21 of 2.8-3.3 mwmt at a group cash cost between $60-$65/wmt FOB.

In addition, the company is pushing ahead for stage 1 of the Shine Iron Ore project, targeting first sales in mid-2021.

About the Mount Gibson share price

It has been a bumpy road for Mount Gibson shareholders, with its share price swinging in the past 6 months. The company reached a 52-week high of $1.03 at the start of the year and fell to a year low of 54 cents.

More reading

• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• Optiscan (ASX:OIL) share price flat on FDA update
• The Mount Gibson (ASX:MGX) share price is falling today
• What’s driving the PayGroup (ASX:PYG) share price higher today
• Why the PYC Therapeutics (ASX:PYC) share price is up 9% 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 Link Administration Holdings Ltd (ASX: LNK) share price has been an exceptionally strong performer on Monday.

In morning trade the administration services provider’s shares are up a sizeable 26.5% to $5.05.

Why is the Link share price surging higher?

Investors have been fighting to get hold of the company’s shares on Monday after it revealed that it has received a takeover approach.

According to the release, Link has received a conditional, non-binding indicative proposal from a consortium comprising Pacific Equity Partners, Carlyle Group, and their affiliates.

The consortium has offered to acquire 100% of the shares in Link by way of a scheme of arrangement with an indicative cash price of $5.20 per share. Management advised that the proposal also includes a reference to potential scrip alternatives.

The consortium’s offer implies a 30% premium to the company’s last close price and assumes no further dividends, distributions, or reductions in capital being paid.

What now?

The consortium’s proposal is subject to a number of conditions. These include due diligence, negotiation and execution of transaction documentation, securing debt financing, final investment committee approval, and certain regulatory and other approvals. The latter includes the Foreign Investment Review Board.

Major shareholder Perpetual Limited (ASX: PPT), which holds a 9.65% stake, is happy with the proposal. It has stated that it intends to vote its shares in favour of the proposal at a price of no less than $5.20, should one proceed.

Though, it notes that this statement is subject to the absence of a superior proposal and Perpetual continuing to hold its shares on the date of any meeting.

The Link board hasn’t yet made a decision on whether to support the proposal. It is considering the offer and is obtaining advice from its financial and legal advisers.

As a result, it has advised shareholders that they do not need to take any action in relation to the proposal at this point. It also warned that there is no certainty that the discussions with the consortium will result in any transaction.

In the meantime, Link will inform shareholders of any meaningful developments when they happen, as required under its continuous disclosure obligations.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Link Administration Holdings Ltd. The Motley Fool Australia has recommended Link Administration Holdings 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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