Qantas Airways Ltd (ASX: QAN) shares are marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) airline stock closed yesterday trading for $6.00. In early afternoon trade on Tuesday, shares are changing hands for $6.06 apiece, up 0.9%.

That’s right about in line with the 1.0% gains posted by the ASX 200 at this same time.

And it sees Qantas shares up more than 13% so far in 2024.

That’s the latest price action for you.

Now here’s why Qantas shares could catch some sustainable updrafts from China.

Qantas shares eyeing panda diplomacy

In a boost for Qantas shares, 2024 has seen domestic air travel within Australia rebound to just about pre-COVID levels.

“After four years of instability, the domestic airline industry has returned to more typical seasonal levels that were last seen before the pandemic,” ACCC commissioner Anna Brakey noted last month.

International air travel has also surged since borders reopened post-pandemic. However, international numbers remain below 2019 figures.

That’s particularly true for China.

As The Australian reported, Chinese travellers counted as Australia’s biggest international tourist group, bringing in $3.3 billion that year. But in April this year short-term visitors from China still only represented 60% of pre-pandemic numbers.

However, thawing relations between the two nations could see those numbers tick back up, offering a potential boost for Qantas shares.

In a move likely to be welcomed by international travellers heading in both directions, China is adding Aussies to the list of citizens who can travel there without visas for trips of up to 15 days. That eliminates the $110 tourist visa Australians are required to pay currently to travel to the Middle Kingdom.

After meeting with Prime Minister Anthony Albanese, Chinese Premier Li Qiang said that in addition to the visa-free pass for Aussie travellers, Australia would offer “reciprocal access to five-year multiple entry visas for tourism, business and visiting family members.”

Commenting on the visa travel exemption that could provide tailwinds for Qantas shares, Sydney Airport CEO Scott Charlton said (quoted by The Australian):

In terms of inbound visitors from China, at the end of March this year we were just over 80% recovered, and today’s announcement represents a good first step in continuing to backfill that gap.

Last month Qantas announced it was suspending its Sydney-Shanghai flights commencing on 28 July “due to low demand”.

“Qantas will continue to monitor the Australia-China market closely and will look to return to Shanghai when demand has recovered,” the ASX 200 airline stated.

With the lifting of visa requirements for Aussie travellers and Australia’s reciprocal measures for Chinese travellers, demand may recover sooner than expected, potentially lifting the medium-term performance of Qantas shares.

According to Australian Airports Association CEO James Goodwin:

It’s hoped the renewed focus on trade and tourism between the two countries will see an increase in airline capacity. More airline seats available between Australia and China will mean more passengers through our terminals and out exploring our cities and regional areas as tourists.

The post Could Qantas shares be poised to catch some Chinese tailwinds? appeared first on The Motley Fool Australia.

More reading

• 3 reasons to be positive on ASX 200 shares in FY25 (and 3 to be wary)
• Where Aussies are spending their money, and the ASX shares that could benefit
• These ASX shares could rise 25% to ~50%
• Why are ASX investors so excited by the Qantas share price?
• Qantas share price lifts after nabbing remaining TripADeal stake

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is back on form on Tuesday and storming higher. In afternoon trade, the benchmark index is up 0.95% to 7,773.6 points.

Four ASX shares that are rising more than most today are listed below. Here’s why they are pushing higher:

Capitol Health Ltd (ASX: CAJ)

The Capitol Health share price is up 10% to 29.7 cents. On Monday, this diagnostic imaging company announced that it had accepted a merger offer from Integral Diagnostics Ltd (ASX: IDX). The latter made an offer with an implied exchange ratio of 0.12849 Integral Diagnostics shares for every Capitol Health share. This equated to 32.6 cents per share at the time, which was a 33% premium to Friday’s closing price. Ord Minnett notes that the proposed merger will establish a clear number three player in the Australian diagnostic imaging sector.

Infratil Ltd (ASX: IFT)

The Infratil share price is up almost 4% to $10.43. Investors have responded positively to the infrastructure investment company’s capital raising. It has raised NZ$1 billion at a 6.8% discount of NZ$10.15 per new share. Infratil CEO, Jason Boyes, said: “We are very pleased with the strong level of support for the Placement, particularly from our existing shareholders. We are also excited to welcome several high quality institutional investors onto our register. The capital raised will create significant capacity to fund growth investments at our Trans-Tasman data centre platform, CDC, and across the broader Infratil portfolio.”

Newmont Corporation (ASX: NEM)

The Newmont Corporation share price is up almost 2.5% to $62.51. This appears to have been driven by a broker note out of UBS this morning. According to the note, the broker has upgraded the gold miner’s shares to a buy rating with a $75.00 price target. This implies potential upside of 20% for investors from current levels.

Race Oncology Ltd (ASX: RAC)

The Race Oncology share price is up 18% to $2.08. Investors have been buying this clinical stage biopharmaceutical company’s shares after the United States Food and Drug Administration (FDA) extended Rare Paediatric Disease Designation (RPDD) to RC220 bisantrene for the treatment of childhood subtypes of acute myeloid leukemia (AML). This qualifies a sponsor eligible to receive a Priority Review Voucher (PRV) from the FDA at the time of marketing approval or authorisation for drug in the paediatric rare disease area. PRVs are transferable and very valuable. Management notes that two PRVs have been sold in recent times for US$110 million.

The post Why Capitol Health, Infratil, Newmont, and Race Oncology shares are charging higher appeared first on The Motley Fool Australia.

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• Buy ’em now! Brokers name 3 ASX All Ords shares to add to your portfolio
• ASX healthcare stock surges 11% on ‘incredibly valuable’ FDA news
• Why Bapcor, Chalice Mining, Integral Diagnostics, and Winsome Resources shares are dropping
• Why Capitol Health, Capricorn Metals, Credit Clear, and Telix shares are storming higher
• Guess which ASX All Ords share is raising $1.1 billion to back generative AI

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Integral Diagnostics. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a solid gain. At the time of writing, the benchmark index is up 0.95% to 7,774.7 points.

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

Beach Energy Ltd (ASX: BPT)

The Beach Energy share price is down 2.5% to $1.53. This is despite oil prices rising overnight and the release of the energy producer’s strategic review this morning. In respect to the latter, Beach Energy has laid out a plan that it believes will result in operating cost and capital reductions totalling ~$135 million. This will come from a 23% headcount reduction, ~$35 million field operating cost savings, and a ~$100 million sustaining capital expenditure reduction. Management believes that this will help it deliver leading shareholder returns through the sustainable supply of energy.

Fortescue Ltd (ASX: FMG)

The Fortescue share price is down 4.5% to $21.95. This has been driven by news that a major block trade has taken place at a decent discount to yesterday’s close price. It remains unclear who is selling, but there are reports that a large institutional investor offloaded $1.1 billion worth of the iron ore miner’s shares through a block trade this morning. These shares were sold at $21.60 per share, which is a 6% discount to where Fortescue’s shares ended yesterday’s session.

Kina Securities Ltd (ASX: KSL)

The Kina Securities share price is down 7.5% to 88 cents. This morning, this Papa New Guinea-based financial services provider revealed that it has identified a recent instance of fraud impacting several accounts belonging to a small number of customers. The amount involved is the subject of ongoing investigation. However, the aggregate loss is expected to be in the range of PGK12 million to PGK15 million (A$4.74 million to A$5.9 million) on a pre-tax basis. Through root cause analysis, certain system vulnerabilities were identified and promptly addressed. Kina Securities has downgraded its guidance to reflect this.

Melbana Energy Ltd (ASX: MAY)

The Melbana Energy share price is down 36% to 4.3 cents. This follows news that the appraisal of the Alameda-3 well in Cuba wasn’t successful. Two attempts were made at flowing the well, however in both cases the complete removal of drilling mud and downhole fluids from the test string was not achieved and oil did not flow to surface. Preparations for testing of the shallower Alameda formation now underway.

The post Why Beach Energy, Fortescue, Kina Securities, and Melbana Energy shares are dropping today appeared first on The Motley Fool Australia.

More reading

• Fortescue shares drop as $1.1 billion stake hits the market
• What’s happening with the big 3 ASX 200 iron ore stocks today?
• Why did this ASX All Ords stock just crash 45%?
• 3 reasons to be positive on ASX 200 shares in FY25 (and 3 to be wary)
• Why the best dividend days may be over for Fortescue shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

A number of ASX stocks are making their shareholders smile today by rising to 52-week highs or better.

Among the names reaching these milestones are the stocks listed below. Here’s what you need know:

Aristocrat Leisure Limited (ASX: ALL)

The Aristocrat Leisure share price has hit a record high of $48.58 on Tuesday. This stretches its 12-month return to an impressive 24%. Investors have been buying the gaming technology company’s shares since the release of its half-year results.

Aristocrat posted a 6.1% increase in revenue to $3,269.6 million and a 16.8% jump in net profit after tax to $723.3 million. The latter was significantly better than the market was expecting. Other positives were the ASX stock boosting its dividend, announcing an additional $350 million share buyback, and suggesting that it could look to divest its digital gaming operations.

Commonwealth Bank of Australia (ASX: CBA)

The CBA share price has risen to a new record high of $127.75. Investors appear to be piling into the banking sector on the belief that trading conditions are favourable thanks to the prospect of falling interest rates in the near term. Combined with the recent Federal Budget, the banks look unlikely to suffer from a spike in bad debts in the near future, which could have happened if rates continued to rise. For the same reasons, Bendigo and Adelaide Bank Ltd (ASX: BEN) and National Australia Bank Ltd (ASX: NAB) have also hit 52-week highs today.

DroneShield Ltd (ASX: DRO)

The DroneShield share price has continued its rampant run and hit a record high of $1.57 on Tuesday. This latest gain means the counter drone technology company’s shares are now up over 300% since the start of the year. Investors have been scrambling to buy this ASX stock recently thanks to its staggering performance in FY 2024. During the first quarter of FY 2024, the company’s revenue increased 10x over the prior corresponding period to $16.4 million.

In addition, a number of big announcements have been made that could be supportive of further strong sales growth. One was that the NATO Support and Procurement Agency (NSPA) has approved the first counter-small UAS (CUAS) procurement framework agreement in NATO history. DroneShield’s CEO, Oleg Vornik, described it as one of the “most strategically noteworthy agreements since the company was founded.” The company also announced a major new contract win from a U.S. Government customer. Droneshield advised that it has received a repeat order of A$5.7 million for a number of its CUxS (Counter-UxS) systems.

The post CBA, DroneShield, and these ASX stocks just hit 52-week highs appeared first on The Motley Fool Australia.

More reading

• ‘Attacked from all angles’: Why this fundie is betting against the momentous rally in CBA shares
• Can owners of NAB shares bank on a good outlook for FY25?
• Why the ‘opportunity is immense’ for DroneShield shares: fundie
• What is the outlook for CBA shares in FY25?
• 3 reasons to be positive on ASX 200 shares in FY25 (and 3 to be wary)

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Macquarie Group Ltd (ASX: MQG) shares have gathered steam lately, with a 3% rise in the past month of trade.

Over the past year, however, Macquarie shares have underperformed the S&P/ASX 200 Banks Index (ASX: XBK) by more than 15.5%

The recent momentum hasn’t gone unnoticed. Analysts at leading broker Morgan Stanley have a promising outlook on the bank and see further upside potential for the ASX banking stock.

Here’s a look at the broker’s insights.

Macquarie shares could grow

Morgan Stanley analyst Andrei Stadnik laid out the case for owning Macquarie shares in a recent note to clients.

The analyst highlighted Macquarie has its fingers in many pies, ranging from mergers and acquisitions (M&A), alternative assets and private credit

It’s worth noting Macquarie also holds equity stakes in seven data centres worldwide. Point is – these are all high-growth domains.

“Macquarie is the overall standout beneficiary of private markets flywheel re-accelerating in our Australian coverage”, Stadnik said, according to The Australian.

Stadnik project’s 22% earnings growth for the bank in FY 2025, driven by a stronger market for capital raising, and its various sources of revenue.

At its full-year FY 2024 results in May, the company reported that earnings per share (EPS) were down 32% year over year to $9.17 apiece.

Even with a dip in operating profits this year, the bank achieved a 13% return on equity (ROE) in H2 FY 2024, surpassing the industry’s five-year average of 11%. It paid shareholders a dividend of $6.40 per share.

That means if the broker is right, Macquarie could produce $11.18 in EPS for FY 2025.

Morgan Stanley set a buy rating on Macquarie shares with a price target of $215 per share. At the current share price of $196.30, this represents a potential 10% upside.

According to CommSec, the consensus of broker ratings is a moderate buy on Macquarie shares. While 6 have it as a buy, 6 also have it as a hold, with 2 rating the stock as a sell at the time of writing.

Potential competitive advantage

Macquarie sets itself apart from other Australian banks through its diversified services. It operates in investment, asset management, commodities, and infrastructure.

In my view, this broad exposure gives Macquarie more recession-proof earnings compared to banks solely reliant on their net interest margins (NIMs).

The bank’s current price-to-earnings (P/E) ratio is 21 times, meaning investors are paying $21 for every $1 of its earnings. This does not include dividends.

Meanwhile, they are paying around $18 for every $1 of the iShares Core S&P/ASX 200 ETF (ASX: IOZ). Perhaps investors are paying more because they expect more. We shall find out.

The post Macquarie shares have 10% upside: Morgan Stanley appeared first on The Motley Fool Australia.

More reading

• 3 reasons to be positive on ASX 200 shares in FY25 (and 3 to be wary)
• 3 high-quality ASX 200 shares to buy forever
• Analysts say these 5 ASX 200 growth shares are top buys
• Top ASX shares to buy in June and hold for retirement
• Is Macquarie the best ASX bank stock for you?

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ANZ Group Holdings Ltd (ASX: ANZ) share price is up 0.76% to $29.02 at the time of writing.

Meantime, the S&P/ASX 200 Index (ASX: XJO) is up 0.86% to 7,766.8 points as the market awaits the next Reserve Bank interest rate decision later today.

There is no official news from ANZ today.

ANZ and the other big ASX 200 bank shares have had a remarkable run of price growth since the early Santa Rally began in November last year.

The chart below shows what’s happened over the past seven months.

The strong run-up in share prices has led to valuations being “overstretched“, according to Ray David from Blackwattle Partners.

National Australia Bank Ltd (ASX: NAB) shares hit a nine-year high last week, and Commonwealth Bank of Australia (ASX: CBA) shares have once again reset their all-time high at $127.75 this morning.

Goldman Sachs says most investors should consider locking in their gains and moving on.

In a recent note, the broker said:

… while the deterioration in earnings appears to now be finished, we see very limited upside risk, and therefore, with valuations skewed asymmetrically to the downside, we now think a more negative view on the banks is appropriate …

The broker has sell ratings on CBA and Westpac Banking Corp (ASX: WBC) shares.

As my colleague Zach reports, Goldman is concerned about valuation and risks in technology disruption for both of these ASX 200 bank shares.

In a note, the broker said: “We don’t think [CBA stock] justifies the extent of its valuation premium to peers”.

It has a neutral rating on NAB due to its solid fundamentals but stretched share price.

Meanwhile, ANZ shares get a buy rating.

What do the experts say about the ANZ share price?

Goldman analysts Andrew Lyons and John Li said the ANZ share price trades at a discount to the sector (ex-dividend adjusted).

They explained other factors in their buy rating as follows:

We are Buy-rated on ANZ given i) we are seeing evidence of ANZ’s ability to derive productivity benefits (A$201 mn in 1H24) and management noted there remains a large pipeline available which can be used to offset cost inflation.

Furthermore, ii) the improving profitability of ANZ’s Institutional business remains a key driver of our positive investment thesis.

We continue to see upside for Group returns due to accretive mix shifts in the Institutional business towards higher ROE Payments and Cash Management business.

Dylan Evans from Catapult Wealth also notes ANZ’s more attractive price-to-earnings (P/E) ratio. He says the ANZ share price represents the best value among the bank shares, but he rates it a hold for now.

He explains on The Bull:

The ANZ offers the best value of the major banks, in our view.

The acquisition of Suncorp‘s banking division paints a brighter outlook, as it will add important retail exposure to the mix.

The group was recently trading at a price/earnings discount to peers, and on an attractive fully franked dividend yield above 6 per cent.

ANZ share price snapshot

ANZ shares have soared by 22.95% over the past 12 months, while the ASX 200 has risen 6.52%.

The post Is the ANZ share price ‘the best value of the major banks’? appeared first on The Motley Fool Australia.

More reading

• Is there any chance of an interest rate cut in Australia next week?
• If I buy 1,000 ANZ shares, how much passive income will I receive?
• Big bank bargain: Are this week’s tumbling ASX 200 bank shares a good buy?
• Will the US Fed finally cut interest rates this week?
• 2 ASX large-cap stocks that look cheap right now

Motley Fool contributor Bronwyn Allen has positions in Anz Group and Commonwealth Bank Of Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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 Scott Phillips.

Commonwealth Bank of Australia (ASX: CBA) shares are storming higher today.

Again.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed up 0.1% yesterday, trading for $125.49. During the Tuesday lunch hour, shares are swapping hands for $127.41 apiece, up 1.5%.

For some context, the ASX 200 is up 0.8% at this same time.

As you can see on the chart below, today’s intraday gain sees Australia’s biggest bank stock up 12% in 2024 and up 27% over 12 months. And that doesn’t include the two fully franked dividend payments made over the full year.

You may also notice that CBA shares are, once more, poised to close at a new all-time high.

So, can this strong momentum continue? Or is the big four bank about to hit a wall?

Have CBA shares flown too close to the sun?

A large number of bearish analysts have been caught out to date amid the ongoing bull run in CommBank stock.

Like the other big Aussie banks, CBA has benefited from a higher interest rate environment, which has supported its net interest margins (NIMs).

But the new record high share prices are not stopping Philip King, chief investment officer at Regal Funds Management, from taking up a short position in CBA shares.

Trading at a price-to-earnings (P/E) ratio of 22 times, King says the big four Aussie bank has some of the world’s highest valuations.

According to King (quoted by Bloomberg):

Australian banks are now getting attacked from all angles by competition. Buy now, pay later operators are taking share in consumer lending, non-bank lenders are taking share in business lending and private credit are making inroads across the entire loan book.

King added that Australia’s strict capital requirements are making Aussie banks “increasingly uncompetitive”.

And with King forecasting that CBA’s earnings per share (EPS), currently at $6.09, will decline in the coming years, he’s betting the ASX 200 bank stock’s recent rally is set to reverse.

Explaining why he took up a short position in CBA shares earlier this year, King said, “For 20 years the share price was driven by strong EPS growth, but over the last 10 years EPS growth has stalled.

He added that following the last year’s blistering rally, CBA now counts as “one of the most expensive banks in the world and could derate over the next 10 years if EPS falls as we expect it will.”

The post ‘Attacked from all angles’: Why this fundie is betting against the momentous rally in CBA shares appeared first on The Motley Fool Australia.

More reading

• What is the outlook for CBA shares in FY25?
• 3 reasons to be positive on ASX 200 shares in FY25 (and 3 to be wary)
• Where Aussies are spending their money, and the ASX shares that could benefit
• Is there any chance of an interest rate cut in Australia next week?
• Here’s how much I’d have if I’d bought 500 CBA shares 10 years ago

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

The ASX small-cap share sector can be a great place to find small, undervalued opportunities. I’m going to talk about two businesses that could become much bigger companies in the coming years.

I believe good, smaller companies are able to deliver strong results over the long-term because it’s much easier to grow a business from $100 million to $200 million than it is to go from $10 billion to $20 billion.

Of course, a small business isn’t guaranteed to grow. We need to find the right businesses which ideally have useful tailwinds. In my opinion, the below ASX small-cap shares are delivering on their promising potential.

Playside Studios Ltd (ASX: PLY)

Playside develops video games for mobile, PC, consoles, virtual reality and mixed reality, with a portfolio of approximately 60 titles.

The company publishes its own games based on “original intellectual property”. It also provides end-to-end game development services in collaboration with game studies and major technology and entertainment companies, including Activision Blizzard, Meta Platform Technologies, Netflix Games and Take Two Interactive.

The ASX small-cap share also has a publishing arm that provides funding, development support, marketing and publishing of third-party games from smaller independent studios.

The video gaming sector is growing at a solid rate – according to VanEck, revenue has grown by an average of 12% per annum since 2015. Video games, and particularly e-sports, are seeing strong long-term growth thanks to a growing audience.

Playside is expecting to report strong growth in FY24. Revenue is forecast by the company to be between $63 million to $65 million, which would represent growth of between 64% to 69%.

FY24 earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be between $16 million to $18 million, up from previous guidance of $11 million to $13 million. It’s a positive indicator when a business is able to upgrade its guidance, showing good momentum. The company made a $1.7 million loss in the prior corresponding period.

I think it’s a great sign when a business reaches the milestone of positive earnings, and it bodes well for what effect future revenue could have on the company’s bottom line.

Close The Loop Ltd (ASX: CLG)

This business collects and repurposes or recycles products through takeback programs, with locations in the US, Australia, South Africa and Europe. It also has a sustainable packaging division which “enables greater recoverability and recyclability”, according to the company.

The world is aiming to become more sustainable, and Close The Loop is an ASX small-cap share that can enable that goal.

One of Close The Loop’s key customers is HP, which wants to reach a ‘circularity’ target of 75% for its products and packaging by 2030. HP ships around 40 million PCs every year, including all of the printers and other products the company makes. There is a large opportunity for the company, which was recently awarded HP’s ‘Renew Solutions Launch Partner’ of the year.

HP recently told the market its HP Renew Solutions margins are “at least as profitable as new PCs and printers, making this a win for HP and the environment”, according to Close The Loop.

Close The Loop recently announced it was exploring expansion opportunities in the US, EU, and the Middle East. It also said a new plant in Mexico will be running by October 2024, the European print consumables program will be expanded into Spain and Portugal, and a second TonerPlas line will be constructed after the awarding of $2.2 million in government funding.   

According to Commsec, the Close The Loop share price is valued at just 7x FY24’s estimated earnings. This looks cheap, in my opinion, for how promising the company’s future seems.

The post 2 ASX small-cap shares I’d buy for massive growth potential appeared first on The Motley Fool Australia.

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• Why Playside Studios, Pro Medicus, Strike Energy, and Winsome shares are charging higher
• Why Appen, Mayne Pharma, Playside, and PYC shares are storming higher
• 2 great value ASX shares I want to buy
• 1 overlooked ASX growth stock I’m chasing for multibagger potential

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has positions in Close The Loop. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Close The Loop, HP, Meta Platforms, Netflix, and Take-Two Interactive Software. The Motley Fool Australia has recommended Close The Loop, Meta Platforms, and Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Fortescue Ltd (ASX: FMG) share price is being pulverised today amid news of a mega sale.

Shares in the Australian iron ore miner are down 4.6% to $21.93 as we approach the midpoint of today’s session. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is putting the pedal to the metal, bounding 0.66% higher to 7,751.4 points.

The crimson-red performance of the Fortescue share price isn’t doing the materials sector any favours. Unlike the rest of the market, ASX materials are negative today, led by the bleeding out of optimism from the ASX iron ore giant.

Who’s behind the sale?

According to reports, $1.1 billion worth of Fortescue shares are up for sale.

The jumbo-sized sale equates to approximately 1.6% of Andrew Forrest’s Pilbara wealth pit’s market capitalisation. And if today’s trading data is anything to go on, the hefty stake has likely already found a buyer.

An average day would see roughly 5 million Fortescue shares trade hands. Today’s trading activity blows that figure right out of the water, surpassing 58 million shares traded before midday. But, who is the seller behind this outrageously large exit?

It turns out it is cloaked in mystery.

The seller is reportedly an institutional investor. Furthermore, the sale is said to be the last in a complete exit by a large fund manager. Given the position did not meet the conditions of a ‘substantial shareholding’ (more than 5% stake), there probably won’t be an accompanying change in holding notice.

A quick look at the company’s last ownership details only shows two holdings around this size… a $1.1 billion stake held by the founder, Andrew ‘Twiggy’ Forrest, himself, and a $1.4 billion position held by BlackRock Inc. — the United States asset manager.

However, the truth is that it is merely speculation as to who made the sale.

The shares were offered at $21.60, a 6% discount on the previous trading price.

Why sell Fortescue shares now?

There are many reasons why someone might choose to sell, many of which can be completely unrelated to the company itself.

However, we know the Fortescue share price is down 25% in 2024, as shown above. We’re also heading towards the end of the financial year. This time of year is renowned for tax-loss harvesting, which reduces the amount of capital gains tax due.

On the other hand, Fortescue is facing a couple of challenges. Last week, the company was hit with yet another executive resignation. After 11 years at Fortescue, Julie Shuttleworth, head of global growth, waved goodbye to the iron ore miner.

Secondly, the entire industry is dealing with a significant retraction in the price of the steelmaking commodity this year. In the first week of 2024, iron ore fetched over US$140 per tonne. Now, it is going for around US$107.

The post Fortescue shares drop as $1.1 billion stake hits the market appeared first on The Motley Fool Australia.

More reading

• What’s happening with the big 3 ASX 200 iron ore stocks today?
• 3 reasons to be positive on ASX 200 shares in FY25 (and 3 to be wary)
• Why the best dividend days may be over for Fortescue shares
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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.