Tag: Fool

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.

More reading

• This ASX growth stock just leapt 6% on international expansion plans
• 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
• 2 top ASX 200 passive income stocks I’d buy now to boost my retirement
• Here’s the iron ore price forecast through to 2027

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.

S&P/ASX 200 Index (ASX: XJO) iron ore stocks are delivering some divergent results today.

In morning trade on Tuesday, the ASX 200 is up 0.9%.

Here’s how the big three ASX 200 iron ore stocks are faring at this same time:

• Fortescue Metals Group Ltd (ASX: FMG) shares are down 4.4%
• BHP Group Ltd (ASX: BHP) shares are up 0.7%
• Rio Tinto Ltd (ASX: RIO) shares are up 1.2%

So, what’s going on?

ASX 200 iron ore stocks shrug off Chinese headwinds

Rio Tinto and BHP shares are shrugging off headwinds today thrown up by a retrace in the prices of their top earning metals.

The Fortescue share price look to be coming under selling pressure amid news that 50.3 million shares were sold in a block trade at a price of $21.60 per share. That’s 6.0% below yesterday’s closing price of $22.98 a share.

On the metals front, iron ore declined 2.1% overnight to trade for just over US$105 per tonne. Even hot-running copper slipped, with the red metal down 0.8% to US$9,666 per tonne.

BHP and Rio Tinto shares saw their internationally listed stocks slide overnight. The BHP share price closed down 1.0% on the New York Stock Exchange (NYSE), while Rio Tinto shares fell 0.8%. But Aussie investors aren’t following their US counterparts in selling the ASX 200 iron ore stocks today.

This week’s industrial metals’ price decline looks to be linked to ongoing weakness in China’s economic recovery.

Yesterday, China’s National Bureau of Statistics released a trove of data, most of which fell short of analyst expectations.

While industrial production in the world’s number two economy was up 5.6% year on year, it was down from April, coming in below the median forecast of a Bloomberg survey.

And China’s steel-hungry property markets showed ongoing signs of weakness, with real estate investment and house prices falling again in April.

What are the experts saying?

Commenting on the disappointing Chinese data that could throw up headwinds for ASX 200 iron ore stocks down the road, Jacqueline Rong, chief China economist at BNP Paribas said (quoted by Bloomberg), “The most disappointing in May’s data is probably that property sales barely saw any improvements even after so many supportive measures.”

Indeed, this has seen numerous economists call for more government stimulus measures to get the economy back up to speed.

“We still need to see new stimulus coming in. Otherwise, the growth momentum could very much weaken,” Helen Qiao, chief Greater China economist at Bank of America Global Research said.

More fiscal support may be in the pipeline. But ASX 200 iron ore stocks will likely be waiting a while for monetary easing with China’s government wary of further devaluing the yuan against the greenback.

According to Bloomberg economists Chang Shu and David Qu:

Policy support could make a significant difference. But the People’s Bank of China’s focus on currency stability appears to have tied its hands on cutting interest rates, at least until the Federal Reserve moves.

Stay tuned!

The post What’s happening with the big 3 ASX 200 iron ore stocks today? appeared first on The Motley Fool Australia.

More reading

• Fortescue shares drop as $1.1 billion stake hits the market
• Should investors be bullish about BHP shares with the FY25 outlook?
• Buying Rio Tinto shares? Here’s why this ‘world-class’ lithium project could be back on track
• 3 lower-risk ASX shares I think are perfect for beginners
• Are BHP or Wesfarmers shares a better buy?

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 All Ordinaries Index (ASX: XAO) is up 0.76% to 8,003.8 points in early trading on Tuesday.

As reported in The Australian, 3 All Ords stocks have just gained buy ratings from top brokers.

Let’s check them out.

Capstone Copper Corp CDI (ASX: CSC)

ASX All Ords copper shares are benefiting from the global focus on future decarbonisation. Copper is a key material required in electric vehicles, wind turbines, and solar energy systems.

It’s also an essential building material for data centres, which is an explosive growth segment of the property market supporting today’s global artificial intelligence boom.

Copper futures rose to a record high of US$5.20 per pound last month but have since retreated to US$4.45 per pound on fears that short-term demand in China may fall due to lower industrial output.

The long-term outlook for copper is still very positive, though.

Most experts say that gradually rising demand as decarbonisation grows, set against a looming lack of supply due to the high cost of starting new copper mines, will keep the commodity price rising over time.

Copper futures remain 17.7% higher than this time last year, and top broker Goldman Sachs has a year-end price target of US$5.44 per pound.

This all bodes well for the dual-listed Canadian-based Capstone Copper, which only began trading on the ASX in April.

Macquarie has commenced coverage on the ASX All Ords copper share with an outperform rating and a 12-month price target of $9.80.

At the time of writing, the Capstone Copper share price is already higher than the target at $10.02, up 2.24% for the day so far.

Integral Diagnostics Ltd (ASX: IDX)

Integral Diagnostics is an ASX All Ords healthcare share. The company provides medical imaging services.

Yesterday, Integral Diagnostics announced it had made an offer to merge with competitor Capitol Health Ltd (ASX: CAJ).

Investors weren’t too impressed with the all-scrip offer, and the ASX All Ords healthcare share fell 4.14% to close at $2.43 yesterday.

A rebound is occurring today, with the Integral Diagnostics share price up 4.53% to $2.54 at the time of writing.

Meantime, JP Morgan is backing the ASX All Ords healthcare share for growth.

The broker has raised its rating on the stock to overweight, with a 12-month price target of $2.80.

Life360 Inc (ASX: 360)

Canaccord has started coverage on this popular ASX All Ords technology share with a buy rating.

The broker has a 12-month share price target of $40 on the stock.

UBS has also started coverage on Life360, but it’s less ambitious about potential share price growth.

The broker has a neutral rating on Life360 shares and a $32 share price target. Still, that’s more than double the current share price.

The ASX All Ords tech share is changing hands for $15.30 apiece today, down 0.91% at the time of writing.

Life360 is the location technology company behind the Life360 app, which millions of families worldwide use to keep track of each other.

As my colleague James reports, Life360’s monthly active users increased by 4.9 million during the first quarter to 66.4 million.

This is boosting revenue amid management’s efforts to increase average revenue per user and the number of paid subscribers.

The post Buy ’em now! Brokers name 3 ASX All Ords shares to add to your portfolio appeared first on The Motley Fool Australia.

More reading

• 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
• This ASX All Ords stock is rocketing 20% after accepting a takeover offer
• 3 explosive ASX tech stocks to buy and hold forever
• Top ASX AI stocks to buy in June 2024

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in Macquarie Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, JPMorgan Chase, Life360, and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. 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.

I think that it can be useful for investors to keep an eye on which shares are experiencing meaningful insider buying.

This is because insider buying is often regarded as a bullish indicator, as few people know a company and its intrinsic value better than its directors.

If they are buying, it could be a sign that they are confident in the direction the company is heading and/or see value in its shares.

With that in mind, listed below are a few ASX shares that have reported meaningful insider buying recently.

And as they are all down heavily year to date, it’s possible that these directors believe they have been oversold. Let’s see what has been happening:

Chrysos Corporation Ltd (ASX: C79)

This mining technology company’s shares are down a disappointing 40% since the start of the year.

One director that is taking advantage of this weakness to buy their first shares in the PhotonAssay creator is Gregory Holt. According to change of director’s interest notice, Holt picked up 12,000 shares through an on-market trade on 12 June.

The insider paid an average of $5.05 per share, which equates to a total consideration of $60,600.

Shaw & Partners would likely be very supportive of this purchase. Last month, the broker put a buy rating and $7.50 price target on the company’s shares.

IDP Education Ltd (ASX: IEL)

This heavily shorted language testing and student placement company’s shares are down 23% in 2024 and 37% on a 12-month basis. This has been driven largely by disruption in key markets caused by changes to student visa rules, which is weighing heavily on its performance.

Nevertheless, one of the company’s non-executive directors appears to remain positive on the future and sees this as a buying opportunity.

A change of director’s interests notice shows that Tracey Horton bought 1,300 shares through an on-market trade on 7 June. Horton paid a total of $19,691.65 for the shares, which equates to a price of approximately $15.15 per share.

Goldman Sachs currently has a buy rating and $21.75 price target on its shares. So, this insider could do very well if the broker is on the money with its recommendation.

Lendlease Group (ASX: LLC)

Finally, this property developer’s shares have lost 27% of their value this year.

The company’s independent non-executive director, Elizabeth M. Proust, AO, has taken advantage of this weakness to top up her position.

Ms Proust picked up 20,000 shares on 11 June through an on-market trade. The insider paid an average of $5.675 per share, which represents a total consideration of $113,500. This boosts her holding to a total of 123,061 Lendlease shares.

While none of the major brokers rate Lendlease as a buy, they do see value in its shares. For example, UBS has a neutral rating and $7.10 price target. This is 30% higher than where its shares trade today.

The post Insiders are buying these ASX shares after selloffs appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Brokers name 3 ASX dividend shares to buy
• Here are the top 10 ASX 200 shares today
• Guess which beaten-up ASX 200 stock is being bought up by this multi-billion-dollar fundie
• These are the 10 most shorted ASX 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 positions in and has recommended Chrysos, Goldman Sachs Group, and Idp Education. The Motley Fool Australia has positions in and has recommended Chrysos. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The All Ordinaries Index (ASX: XAO) is up a healthy 0.7% today, but ASX All Ords stock Melbana Energy Ltd (ASX: MAY) isn’t joining in the rally.

Shares in the oil and gas company closed yesterday trading for 6.6 cents. In morning trade on Tuesday, shares were swapping hands for 3.6 cents apiece, down a precipitous 45.4%. The share price has since regained some of those losses, trading for 3.9 cents apiece at the time of writing, down 40.9%.

Here’s what’s putting the ASX All Ords stock under heavy selling pressure.

What did the ASX All Ords stock report?

The Melbana Energy share price is crashing after the company released an update after market close yesterday on its appraisal well Alameda-3.

The ASX All Ords stock holds a 30% interest in and is the operator of Block 9 PSC, an oil project located onshore in Cuba, where the well is situated.

On 9 June, the company commenced a flow test of the Marti reservoir, penetrating the Alameda-3 well.

As you can likely guess by the cascading share price, all did not go well with the latest testing.

Melbana Energy noted that despite good indications of fracturing from wireline logs and high reservoir pressures, “results of the test were not as expected”.

The ASX All Ords stock took two stabs at flowing the well but said that both times it did not achieve the complete removal of drilling mud and downhole fluids from the test string. And oil did not flow to surface.

On the plus side, Melbana reported recovering oil on reverse circulation of the DST string, demonstrating the presence of oil very deep on the structure.

The company has ruled out mechanical blockage and suspects the lack of flow is due to emulsions in the lower portion of the test string. It has now suspended the Marti reservoir section while it awaits the results of the latest data analysis.

Melbana will now conduct tests on the shallower Alameda formation.

What did management say?

Commenting on the flow test results sending the ASX All Ords stock plunging today, Melbana Energy executive chairman, Andrew Purcell, said:

The logs we have obtained in the Marti formation show excellent fracturing and the down hole pressure is very high. This is consistent with what we encountered here last time but, so far, we’ve been unable to get clean flow to surface.

There may have been a reaction between the different fluid system we are using this time (which has delivered excellent well control) and the reservoir so we’re going to pause this test whilst we study the samples and data we’ve obtained and get on to testing the shallower Alameda formation in the meantime.

With today’s intraday losses factored in, the ASX All Ords stock is down 56% over 12 months.

The post Why did this ASX All Ords stock just crash 45%? appeared first on The Motley Fool Australia.

More reading

• Buy ’em now! Brokers name 3 ASX All Ords shares to add to your portfolio
• Insiders are buying these ASX shares after selloffs
• Should investors be bullish about BHP shares with the FY25 outlook?
• ASX healthcare stock surges 11% on ‘incredibly valuable’ FDA news
• Nvidia jumped 27% after its stock split announcement. Can Broadcom beat it?

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 BHP Group Ltd (ASX: BHP) share price has fallen 15.59% since the start of 2024. With the changing economic picture, investors may be wondering whether FY25 can reignite things for the ASX mining share.

In the last few weeks, BHP has attempted to take over the UK miner Anglo American, but those offers were knocked back, and now BHP shares are trading at a near 52-week low.

The price of the resource is usually a key factor in the profitability and success of commodity stocks like BHP. Let’s examine what the outlook is for BHP.

Iron ore price forecast to recover

I believe the iron ore outlook is key for BHP because the iron division normally generates the most profit for the ASX mining share.

June 2024 has seen the iron ore price fall to US$106 per tonne, the lowest in two months and much lower than the start of 2024 when it was above US$140 per tonne.

The recent decline in June has been, according to Trading Economics, due to pessimistic iron ore demand expectations with China. Trading Economics noted Dexin China, a property developer, has been ordered to liquidate by a Hong Kong court just one year after a restructuring was approved. It’s the latest in a string of Chinese developers to be wound up.

Trading Economics said this liquidation “added to doubts over a potential recovery” for the sector amid Chinese consumer weakness and “plunging home demand” significantly denting home sales in China. There has been a 34% year over year plunge in sales from the 100 largest Chinese constructors.

These developments have increased expectations of low iron ore demand. However, the Chinese government has proposed a number of measures to support distressed property developers and help reduce the country’s rising housing inventory.

However, Trading Economics is forecasting that the iron ore price can recover based on its global macroeconomic models and analyst expectations. In 12 months, it expects the iron ore price to reach US$125.97 per tonne, an increase of almost US$20 per tonne.

If that forecast of a higher iron ore price comes true, it could significantly increase BHP’s short-term profitability and help support BHP shares.

Strengthening view on the copper price

If BHP can grow its copper exposure, then copper could become a more important element for the ASX miner in the future. It wanted to buy Anglo American for the copper mines, so it will have to find another source of copper growth.

Analysts at Macquarie recently increased their forecast for the copper price for 2025 by 9% to US$9,575 per tonne. This price would represent a higher price than most of the past decade, according to Statista.

FY25 profit forecast

In terms of BHP’s 2025 annual numbers, the broker UBS has forecast BHP to generate US$55.5 billion of revenue, US$0.5 billion more than what’s forecast for FY24.

UBS has suggested BHP could generate earnings before interest and tax (EBIT) of US$23.6 billion in FY25, which would represent an increase of more than US$7 billion compared to expectations of US$16.1 billion of EBIT in FY24.

The broker has forecast BHP could generate US$13 billion of net profit after tax (NPAT), which would be approximately US$400 million more than FY24’s estimated NPAT of US$12.6 billion.

UBS suggests BHP could pay an annual dividend per share of US$1.54 in FY25, which is US 17 cents more than the projected payout of US$1.37 in FY24.

It seems analysts are expecting FY25 to be a better year for BHP shares than FY24.

The post Should investors be bullish about BHP shares with the FY25 outlook? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison 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.

Race Oncology Ltd (ASX: RAC) shares are roaring higher on Tuesday morning.

In early trade, the ASX healthcare stock is up 11% to $1.94.

Why is this ASX healthcare stock surging?

Investors have been buying the clinical stage biopharmaceutical company’s shares this morning after it received a major boost in the United States.

According to the release, the United States Food and Drug Administration (FDA) has extended Rare Paediatric Disease Designation (RPDD) to RC220 bisantrene for the treatment of childhood (paediatric) subtypes of acute myeloid leukemia (AML).

This isn’t the first time the company has been granted this important designation. RPDD was previously granted by the FDA to RC110 bisantrene in 2018.

The company notes that RPDD is granted for new treatments of serious or life-threatening diseases which affect fewer than 200,000 people in the United States and which primarily affect individuals less than 18 years of age.

Approximately 70% of rare diseases are exclusively paediatric in onset, with 95% of rare diseases having no approved treatments.

What are the advantages?

The ASX healthcare stock explains that RPDD 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.

In addition, the RPDD for paediatric AML may enable Race Oncology to be eligible to receive a PRV that can be redeemed for an accelerated 6-month review of RC220 bisantrene or any other new drug application submitted to the FDA.

Another positive is that granted PRVs may also transferred or sold to other companies for use in the same manner on the secondary market. And these are certainly very valuable.

Management highlights that the reported purchase prices of PRVs to third parties on the open market have averaged more than US$100 million. Two PRVs have been sold in recent times for US$110 million.

‘Incredibly valuable’

Race Oncology’s CEO, Dr Daniel Tillett, was pleased with the news. He said:

US FDA RPDD is incredibly valuable as not only does it offer eligibility for the award of a PRV, but the ability to work with passionate clinicians and regulators to bring help to children and adolescents facing an enormously challenging disease with few effective treatment options.

The ASX healthcare stock’s chief medical officer, Dr Michelle Rashford, adds:

There is a need for new medicines designed to treat these rare childhood cancers which can be devastating for families. The US government has created incentives like the Priority Review Voucher scheme to encourage companies to invest in research and clinical studies in paediatric cancers. To be able to contribute to better treating childhood cancers like paediatric AML by collaboratively working with a dedicated international paediatric cooperative group would be very rewarding.

The post ASX healthcare stock surges 11% on ‘incredibly valuable’ FDA news appeared first on The Motley Fool Australia.

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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.