The Xero Limited (ASX: XRO) share price was among the best performers on the S&P/ASX 200 Index (ASX: XJO) last month.

Despite weakness in the tech sector, the cloud-based business and accounting software platform provider’s shares stormed 20% higher over the month.

Why did the Xero share price surge higher in November?

As well as benefiting from improving investor sentiment thanks to positive COVID vaccine developments, Xero’s shares were given a boost from the release of a strong half year result.

For the six months ended 30 September, Xero reported a 21% increase in operating revenue to NZ$409.8 million. Management revealed that this was driven largely by a 19% increase in total subscribers to 2.45 million.

Xero finished the period with 1 million subscribers in Australia, 414,000 in New Zealand, 638,000 in the UK, 251,000 in North America, and 136,000 in the Rest of the World.

This led to its total subscriber lifetime value (LTV) metric growing once again. Its LTV increased 15% over the prior corresponding period to NZ$6.2 billion.

Earnings growth accelerates.

Also growing strongly was the company’s earnings thanks to operating leverage.

Xero’s earnings before interest, tax, depreciation and amortisation (EBITDA) increased by a massive 86% to NZ$64.9 million during the half.

And on the bottom line, Xero’s net profit after tax came in a whopping 26 times greater at NZ$34.5 million.

Management revealed that its strong earnings growth was reflective of its disciplined financial control during a highly uncertain period. This approach led to a 10% reduction in sales and marketing costs when compared to the prior corresponding period.

What about the future?

Due to the continued uncertainty created by COVID-19, the company was unable to provide guidance for the full year.

However, management spoke positively on its long term prospects.

Xero’s CEO, Steve Vamos, commented: “This result demonstrates the value our customers attribute to their Xero subscription and the underlying strength of Xero’s business model. We continue to prioritise investment in customer growth and product development in line with the long term opportunity we see.”

More reading

• Why healthcare, tech and consumer staples shares underperformed the ASX 200 in November
• Top brokers name 3 ASX shares to sell next week
• ASX 200 falls on Thursday
• Top brokers name 3 ASX shares to sell today
• ASX 200 up 0.8%: Fisher & Paykel Healthcare impresses, Harvey Norman’s profits surge

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 Xero. 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 Westpac Banking Corp (ASX: WBC) share price has climbed by 0.65% despite being slapped by a temporary 10% increase to its liquidity capital ratio (LCR) by the regulator, due to errors in calculations of its liquidity requirements going back to 2019.

At the time of writing, the Westpac share price is trading at $20.26.

What did the regulator say

The Australian Prudential Regulation Authority (APRA) has ordered Westpac to initiate an independent review of its systems, and apply a 10% increase to its liquidity ratio immediately until the matter has been fully investigated. This order came following the bank admitting to making several errors in its LCR calculations during the past two years. 

LCR refers to the percentage amount of liquid assets such as cash or short-term securities that large banks are required to hold as reserves to meet their short-term financial obligations during a crisis event. 

Westpac has since revealed that the problem stemmed from its New Zealand operations, and that it has now been rectified. Following Westpac’s revelation, the Reserve Bank of New Zealand says it’s now considering its options with regards to the bank’s LCR. 

Westpac called “immature’ by APRA

In a busy day for Westpac, the news of the LCR breach happened just one hour before the bank released a statement on APRA’s response to Westpac’s deep-dive review into its risk governance. In that statement, Westpac said that APRA has now notified the bank of its progress, findings, and proposed next steps. In particular, APRA identified that Westpac has an “immature and reactive risk culture, unclear accountabilities, capability shortfalls and inadequate oversight.”

Westpac chief executive Peter King said, “We acknowledge the findings of APRA’s review and accept the need to work faster to address our shortcomings.”

As part of the next steps, Westpac says it expects to enter into an enforceable undertaking over risk governance remediation. The bank says it will work constructively with APRA on the detail of the enforceable undertaking, and expects to update the market when it is finalised.

Westpac share price in 2020

Westpac has had a year to forget. In September, the bank agreed to pay the largest fine in Australian corporate history — a $1.3 billion civil penalty for more than 23 million breaches of anti-money laundering laws.

The Westpac share price has lost around 19% in 2020. This fall is also partly due to the subdued markets arising from the COVID-19 pandemic. 

More reading

• CBA (ASX:CBA) and the ASX banks just had an amazing month
• Fund managers are snapping up these ASX stocks at a record pace
• Bank of Queensland (ASX:BOQ) issues Capital Notes 2 as bank shares fall
• Here’s when your ASX bank dividends are being paid in December
• Why the banks are back in the ASX 200 spotlight

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

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The ASX 200 Real Estate Sector Index (ASX: XRE) has risen by more than 0.9% today. This comes after a CoreLogic report released today shows that Australian property prices rose for the second consecutive month in November, rising overall by 0.8%.

The report says that regional Australia has driven this growth, with regional home values rising on average by 1.4% — double that of the capital cities.

Here’s what moved the ASX property shares today

CoreLogic publishes daily and monthly residential value indices, including summary monthly movement data. Today’s release provided a strong boost to the property sector, which has seen a 2.1% drop in home values between April and September as a result of the construction slump caused by the COVID-19 pandemic.

The report says that across all the capital cities, Canberra and Hobart led the pack with prices increasing 1.9% and 1.4%, respectively, in November. Adelaide saw a 1.3% growth, while Perth grew by 1.1%. Australia’s three biggest cities, Sydney, Melbourne and Brisbane, saw more modest growths of 0.4%, 0.7%, and 0.6%, respectively.

Regional Australia saw the biggest growth in property prices during November of 1.4%, with regional Queensland posting a 3,2% lift, followed by regional NSW where values are up 3.1%. The trend towards regional areas is consistent with people’s living preferences away from heavily populated metropolitan areas after the pandemic struck.

Corelogic’s head of research, Tim Lawless, provided more optimism to the data, saying:

The national home value index is still seven tenths of a per cent below the level recorded in March, but if housing values continue to rise at the current pace we could see a recovery from the COVID downturn as early as January or February next year.

I’d be surprised if the growth rate started to falter between now and then.

ASX property shares reacted positively to the report

The release of today’s report has breathed some life into most of the ASX property shares today. 

Australia’s biggest property company, Goodman Group (ASX: GMG), has risen by more than 2% to $19.06 at the time of writing. The Charter Hall Group (ASX: CHC) share price also reacted positively to the report, and is currently trading higher by 3.24% to $14.18. Meanwhile the Lendlease Group (ASX: LLC) share price is up more modestly by 0.64% to $14.25.  

More reading

• ASX 200 up 1%: Domino’s rockets, Collins Foods delivers strong result, GPT offloads asset
• 2 of the best ASX shares for your retirement portfolio
• 2 ASX 50 shares to buy today
• Stockland (ASX:SGP) share price up 3% after new chief announced
• ASX stock winners from the $23 billion Victorian state budget

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

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On Monday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below.

Here’s why these brokers are bearish on these ASX shares:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

According to a note out of Credit Suisse, its analysts have retained their underperform rating and $58.71 price target on this pizza chain operator’s shares. This follows the company’s investor day event. Although it took away a number of positives from the event, such as store growth plans and strong operating leverage potential, it still appears concerned over its valuation. And with nothing on the horizon with the potential to support a re-rating, Credit Suisse is sticking with its underperform rating. The Domino’s share price is up 12.5% to $83.36 this afternoon.

Treasury Wine Estates Ltd (ASX: TWE)

Analysts at Citi have downgraded this wine company’s shares to a sell rating and cut the price target on them to $8.20. According to the note, the broker is expecting Chinese tariffs to have a significant impact on Treasury Wine’s earnings in the near term. In addition to this, it has concerns over the excess supply of its wine after effectively being shut out of the lucrative market. The Treasury Wine share price is fetching $8.41 on Tuesday.

Virgin Money UK CDI (ASX: VUK)

A note out of Morgans reveals that its analysts have retained their reduce rating but lifted the price target on this UK-based bank’s shares to $2.00. Morgans notes that Virgin Money UK fell short of its expectations in FY 2020 due to its higher than expected impairments. However, the prospect of a working COVID-19 vaccine being released in the near future has led to the broker lowering its impairment estimates and boosting its earnings estimates. Though, not enough for a change of rating. Morgans still believes its valuation is looking stretched. The Virgin Money UK share price is trading at $2.40 this afternoon.

More reading

• Why healthcare, tech and consumer staples shares underperformed the ASX 200 in November
• ASX 200 up 1%: Domino’s rockets, Collins Foods delivers strong result, GPT offloads asset
• Why Collins Foods, Domino’s, Macquarie Telecom, & PolyNovo shares are charging higher
• Leading broker upgrades Domino’s (ASX:DMP) share price to conviction buy rating
• These were the worst performing ASX 200 shares in November

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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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.

Facebook Inc (NASDAQ: FB) announced in a blog post on Monday that it would acquire privately held start-up Kustomer. The company provides a customer-relationship management (CRM) platform that helps businesses manage customer communications across a variety of channels.  

The price of the deal wasn’t disclosed but was reportedly worth just over $1 billion, according to a report in The Wall Street Journal, citing “people familiar with the matter.” 

One of the consequences of the pandemic has been an acceleration in the digital transformation. Facebook noted this shift, pointing out that “texts and messages have become just as important as that phone call — and businesses need to adapt.” More than 175 million people contact businesses via its WhatsApp social media platform, and the number is growing, according to Facebook.

After releasing several tools recently to allow customers to communicate with businesses more easily via Messenger and WhatsApp, Facebook was ready to take the next step, bringing Kustomer onboard. The CRM platform is an omnichannel tool that gathers customer communications from a variety of channels and brings them together in a single screen. It also automates repetitive tasks, allowing customer-service personnel to “maximize the time and quality of interactions with customers.”

Kustomer allows businesses to aggregate and respond to customer communications, and was previously integrated with Messenger. Facebook began incorporating similar capabilities into Instagram just last month.

Kustomer’s founders, Brad Birnbaum and Jeremy Suriel, spent a previous stint at Salesforce.com Inc (NYSE: CRM) and have a history of successful start-ups. The pair sold their cloud-based customer app Assistly to Salesforce in 2011 for $80 million.

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

More reading

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• 10 most searched shares in Australia
• I have too many tech shares: Do I sell, buy or hold?
• It’s official: Like it or not, millions will own Tesla stock soon
• Here are the shares Magellan has been buying recently

Danny Vena owns shares of Facebook. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Facebook and Salesforce.com. The Motley Fool Australia has recommended Facebook. 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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Legend Mining Limited (ASX: LEG) shares are up nearly 15% in afternoon trading following the company’s positive drilling announcement at its Mawson prospect in Western Australia. Today’s gains comfortably put long-term shareholders in the green for the year, with the Legend share price up 37.5% since 2 January.

By comparison the All Ordinaries Index (ASX: XAO) is flat year to date, despite a strong performance today.

What does Legend Mining do?

Legend Mining is an Australian minerals exploration company. Its focus is on the company’s nickel-copper Rockford Project in the Fraser Range of Western Australia, alongside its Joint Venture partners and major shareholders, Creasy Group and Independence Group NL.

The Legend Mining share price first began trading on the ASX in 1999.

What did Legend announce to send its share price higher today?

In its ASX release this morning, Legend Mining reported it had achieved its best diamond drillhole results to date at its Mawson prospect within the Rockford Project.

The company stated its first drillhole, RKDD033, tested the northern extension of the “strong 25,000-70,000S off hole conductor”, which had been identified during previous test drilling.

Legend drilled its second drillhole, RKDD034, to provide a representative massive nickel-copper sulphide sample for Phase 1 metallurgical test work.

Commenting on the drill results, Legend Managing Director, Mark Wilson, said:

The 2020 field season has ended in spectacular fashion at Mawson with hole RKDD034 intersecting 43.1m of massive nickel-copper sulphide including one section of 31.1m of continuous massive mineralisation. The scale of the massive mineralisation in this hole talks to the potential of Mawson. The hole was designed to provide samples for phase 1 met testing, the results of which are expected in February next year.

Diamond hole RKDD033 has also provided a potentially significant pointer for work next year, with nickel-copper sulphide intersected within intrusive host rocks at a deeper level than previously drilled at Mawson.

Both nickel and copper are forecast to remain in strong demand over the coming years. Nickel is primarily used in stainless steel, but you’ll also find it in batteries and mobile phones. Copper is used in plumbing and electrical wiring, and its demand is forecast to grow as the world turns towards renewable energy solutions and electric vehicles.

With the company potentially having unearthed a trove of both, it will be interesting to see where the Legend share price goes from here.

More reading

• What you need to know about the RBA’s rate decision today
• Flight Centre and Mesoblast were among the most traded shares on the ASX last week
• Why the Sandfire Resources (ASX:SFR) share price is soaring 10% higher
• The Lynas share price (ASX:LYC) rose 34% in November. Here’s why
• CBA (ASX:CBA) and the ASX banks just had an amazing month

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

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The Reserve Bank of Australia (RBA) has good news for ASX investors but not so good news for workers.

Our central bank believes it will need to keep pumping liquidity into the market and the job market won’t be firing on all cylinders for at least three years.

Equity markets have developed an unhealthy addiction to monetary stimulus and this is one of the key reasons that have sent stocks soaring since March.

RBA to act as safety net for ASX stocks

The S&P/ASX 200 Index (Index:^AXJO) surged 45% since the COVID‐19 market low and investors will keep partying into 2021 as the RBA isn’t showing any signs of removing the punch bowl.

While RBA Governor Philip Lowe kept the current policy settings, the Reserve Bank appears to be resigned to the fact that it will need to do the heavy lifting over the next few years.

Job market the Achilles heel

Dr Lowe acknowledged that global news has been mixed. Infection rates have soared in Europe and the United States and their economies are suffering as a result.

On the other hand, a number of COVID vaccines are showing promise and their widespread use will reinvigorate the global economy.

“The recovery is also dependent on ongoing support from both fiscal and monetary policy,” said Dr Lowe.

“Hours worked in most countries remain noticeably below pre-pandemic levels and inflation is low and below central bank targets.

“The extended period of high unemployment and excess capacity is expected to result in subdued increases in wages and prices over coming years.”  

Why some inflation is desirable

So, while a rebound in recent job ads here is a cause for celebration, Australia remains stuck in a low growth world. This was a similar situation pre-COVID, although the pandemic has pushed back hopes for a return of “good” inflation for at least three years.

You will be forgiven to think that inflation is a bad thing as no one likes paying higher prices for things. But we need some inflation to get wages growth and the sweet spot, in the RBA’s view, is between 2% and 3%.

No growth without inflation

We won’t see those types of numbers for a while yet. The central bank is forecasting inflation of just 1% in 2021 and 1.5% the year after.

“The Board views addressing the high rate of unemployment as an important national priority,” added Dr Lowe.

“Its policy decisions over recent months will help here. These decisions are complementary to the significant steps taken by Australian governments to support jobs and economic growth.”

Why ASX investors are the lucky bunch

At least on the gross domestic product (GDP) front, we might not need to wait as long for conditions to return to what they were before COVID.

The RBA’s central scenario predicts GDP will recover to the levels at the end of 2019 by the end of 2021.

As I mentioned at the start, ASX investors have much more reason to feel optimistic about the future than other Aussie battlers.

More reading

• The Legend Mining (ASX:LEG) share price is rocketing 15% higher. Here’s why
• Flight Centre and Mesoblast were among the most traded shares on the ASX last week
• Why the Sandfire Resources (ASX:SFR) share price is soaring 10% higher
• The Lynas share price (ASX:LYC) rose 34% in November. Here’s why
• CBA (ASX:CBA) and the ASX banks just had an amazing month

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

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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Australia’s leading investment platform provider CommSec has released data on the most traded ASX shares on its platform from last week.

Once again, there were a number of familiar faces filling up the top five over the period.

Here’s the data:

Flight Centre Travel Group Ltd (ASX: FLT)

This leading travel agent was far and away the most traded share on the CommSec platform last week. It was attributable to 3.3% of trades over the five days, with a massive 74% coming from buyers. Those investors will be pleased to learn that the Flight Centre share price climbed almost 8% over the five days. Investors have been buying the company’s shares due to COVID-19 vaccine optimism.

Mesoblast limited (ASX: MSB)

This biotechnology company’s shares were popular with investors and accounted for 2.2% of trades on CommSec last week, with the buying and selling evenly split. It looks as though the buyers will be the happier group. The Mesoblast share price climbed a further 12% last week, stretching its month to date gain to 35%. A major deal with Novartis has given its shares a big lift.

Webjet Limited (ASX: WEB)

Investors have also been buying Webjet’s shares due to COVID-19 vaccine news and the reopening domestic borders. Its shares accounted for 2.1% of trades on the platform last week, with buyers contributing 76% of them. Those buyers will have been pleased to see the Webjet share price climb almost 8% last week. This took its month to date gain to a whopping 64%.

Zip Co Ltd (ASX: Z1P)

This buy now pay later provider was popular with CommSec investors again. Its shares were responsible for 1.7% of trades on the platform. And although 58% of these trades came from the buy side, it wasn’t enough to stop the Zip share price from falling 2%. This is despite the release of a strong trading update.

Qantas Airways Limited (ASX: QAN)

Qantas shares were in demand last week and contributed 1.6% of trades on the CommSec platform. As with Flight Centre and Webjet, a sizeable portion (71%) of these trades were from buyers. They appear bullish on its prospects now domestic borders are opening and a vaccine (or three) is on the way. The Qantas share price rose almost 5% last week, making it four weekly gains in a row.

More reading

• Why the Afterpay (ASX:APT) share price and these ASX stocks could get a boost next week
• 2 ASX 200 healthcare shares that outperformed in November 
• Which ASX travel shares performed the best in November? 
• These were the best performing ASX 200 shares in November
• Qantas (ASX:QAN) axes 2,000 jobs

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 ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. 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 Sandfire Resources Ltd (ASX: SFR) share price is up 10% in afternoon trading. This comes following a series of releases to the ASX this morning.

Importantly the announcements include significant new high-grade drilling results at the company’s A4 copper silver deposit, along with a detailed strategy update and Sandfire’s approval of a new long-life copper mine in Botswana.

We’ll look at the details of the new mine below. But first, what’s been happening with Sandfire’s share price?

Sandfire’s share price on the rebound

Despite today’s 10% surge, Sandfire Resources’ share price remain down 19% year-to-date.

Like many ASX shares, the company has yet to recover from the bashing it took during the COVID-led market rout earlier in the year. From 20 January through to 23 March, shares fell by 55%. Since the 23 March lows, the share price is up 71%.

By comparison the S&P/ASX 200 Index (ASX: XJO) is up 45% from the 23 March trough.

What did Sandfire announce about its Botswana mine?

In this morning’s announcement, Sandfire revealed its board has given the green light to develop the T3 Motheo Copper-Silver Project in the Kalahari Copper Belt in Botswana. The company says this is an important step in its international growth and diversification strategy.

The cost is estimated at $371 million, which includes mining pre-strip, process plant construction, site infrastructure development, tailings storage, owner’s costs and contingency.

The company’s positive Definitive Feasibility Study (DFS) showed a base case 3.2 million tonnes per annum (Mtpa) operation with the potential for a rapid expansion to 5.2Mtpa.

Forecasting a long-term copper price of US$3.16/lb and all-in sustaining costs of US$1.76/lb for the first 10 years of operations, Sandfire reported an estimated life-of-mine (LOM) revenue of $3.5 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.4 billion.

The company expects a payback time of 3.8 years from the production start date.

Commenting on the new mine approval, Sandfire’s CEO Karl Simich said:

Today we have given the green light to the development of a new, long-life copper operation based on the T3 open pit, which we envisage will become the core of our Motheo Production Hub – a new copper production hub in the central portion of the world-class Kalahari Copper Belt, where we have a dominant 26,645 square kilometre ground-holding in Botswana and Namibia… The key message for our shareholders and investors is that this is the start of a much bigger long-term copper production and exploration story for Sandfire in Botswana…

This is, in effect, the dawn of a new global copper province – as evidenced by the scale of the new underground mining operation currently being constructed immediately to the north-east of our project by Cupric Canyon Capital at their Khoemacau Project.

As the new mine gets underway, the Sandfire Resources’ share price will be one to watch.

More reading

• RCEP trade deal boosts Australian exporter share prices
• Why the Encounter Resources (ASX:ENR) share price is up today
• ASX copper miners brush off latest Chinese tariff threat
• Why IDP Education, Sandfire, Telix, & Treasury Wine shares are dropping lower
• Sandfire Resources (ASX:SFR) share price lower amid China copper ban rumours

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

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The Lynas Corporation Ltd (ASX: LYC) share price has just had a top month. Lynas shares started November at $2.83, and closed yesterday at $3.78. That means the Lynas share price is up 33.57% for the month of November.

You might remember Lynas from its dalliance with the giant conglomerate Wesfarmers Ltd (ASX: WES) a couple of years ago. Back then, Wesfarmers tried (unsuccessfully) to buy out Lynas and add it to the company’s massive portfolio of subsidiary businesses. Incidentally, Wesfarmers bid $2.25 a share for the company back then.

But Lynas has shown it has what it takes to thrive on its own two feet since. The Lynas share price is up nearly 63% year to date. It’s also up more than 250% from the lows we saw back in March. It even hit a new 52-week high last week.

But why?

A great month (and year) for the Lynas share price

Lynas is a rare earth miner, namely of lithium, the primary ingredient in most rechargeable batteries.

The recent goodwill surrounding Lynas shares appears to have been kicked off by a contract with the United States Department of Defense back in July. This agreement inked a plan to construct a heavy rare earth separation facility. It is set for completion during the current financial year (FY2021).

This goodwill was further boosted by a quarterly update for the quarter ending 30 September 2020. In this announcement, Lynas updated investors on the production issues that had previously plagued both its flagship Mt Weld mine in Western Australia, and its Malaysian operations. After the initial issues, Lynas told the market that output had resumed at 75%. It also reported solid sales numbers, as well as positive cash flow. The Lynas share price hit what was a new 52-week high on that news.

Then, just last week, Lynas yet again came to the market with a positive development. This time, Lynas announced that the company had found “significant and continuous intersections of rare earth minerals… including light rare earth elements and heavy rare earth elements” at its Mt Weld site.

Lynas’ chief executive officer, Amanda Lacaze, had this to say on this discovery:

We are encouraged by these new Exploration Results which go beyond the area of the 2018 Mineral Resources and Ore Reserves Statement. We are committed to exploring below the current mineral resource understand the potential for primary REE mineralisation below the weathered zone.

It’s this avalanche of good news that is likely behind the Lynas share price’s stellar performance over the month of November. And indeed, over 2020 so far.

More reading

• Why the Lynas (ASX:LYC) share price just hit a 52-week high
• ASX 200 events this week that could move the market
• Which 5 ASX shares hit 52-week highs on Friday?

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

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