Tag: Motley Fool

The Zip Co Ltd (ASX: ZIP) share price is in the red.

Again.

Zip shares are down 4.1% in afternoon trade to 91 cents per share.

This follows on a 2.1% loss yesterday, when the buy now, pay later (BNPL) stock released its full-year results for the 12 months ending 30 June (FY22).

And those results were, well, less than stellar.

Despite reporting a record year of revenue of $620 million, up 57% from FY21, the company reported a jaw-dropping $1.1 billion loss from ordinary activities after income. That’s 63% more than the sizeable losses it suffered the prior year.

Remarkably, the Zip share price was up for almost all of the day, with gains of 2.3% on the board just 30 minutes before the closing bell.

Then investors appeared to get cold feet. Or perhaps re-examined the number of zeros in the net loss column. Either way, Zip shares lost 4.7% in the final 30 minutes of trade.

Is the company still overvalued?

Which brings us to UBS analyst Tom Beadle.

Beadle believes that even at today’s 91 cents, the Zip share price may be double what it should be.

According to Beadle (courtesy of The Australian):

In FY23, managing cash burn and demonstrating a clear path to profitability will be crucial for Zip. Whilst Zip have announced a range of initiatives designed to reduce cash burn, quantifying their precise impact remains difficult; in our view material uncertainty remains.

Indeed, as The Motley Fool reported yesterday, Zip’s cost of sales grew by an unenviable 76% in FY22. The company aims to reduce costs in part by ceasing its operations in Singapore and the United Kingdom. Zip also said it will focus on reducing mounting credit losses.

Nonetheless, UBS’ Beadle retains a sell rating on the company, with a 45-cent target for the Zip share price.

Zip share price snapshot

It’s been a rocky year for shareholders of the BNPL company, with the Zip share price down a painful 79% since the opening bell on 4 January. For some context, the All Ordinaries Index (ASX: XAO) is down 7% year-to-date.

The post Here’s why UBS tips the Zip share price to halve appeared first on The Motley Fool Australia.

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More reading

• Zip’s FY22 loss is 165% of its market cap. So why did its shares go up?
• Zip share price lifts despite $1 billion loss for FY22
• Earnings preview: Here are the ASX shares reporting today
• How did the Zip share price respond last time the company reported?
• Looking to buy Zip shares? Here’s what to look for in tomorrow’s results

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 positions in and has recommended ZIPCOLTD FPO. 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.

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By any metric, the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has had an awful year over 2022 thus far. As it stands today, the ANZ share price has lost a nasty 16.92% year to date.

That doesn’t look great against the broader S&P/ASX 200 Index (ASX: XJO), which is also in the red for the year, but by a far tamer 6.2%. So ANZ’s 2022 losses have almost tripled those of the ASX 200. Ouch.

But in one positive for newer investors, in particular, this fall in value has pushed up the ANZ dividend yield to the 6.19% it stands at today. That comes from ANZ’s last two dividend payments.

These were the interim dividend of 72 cents per share, fully franked, that investors were paid on 1 July, and the final dividend of 72 cents per share, also fully franked, that shareholders received last December.

So is this rather large dividend yield really the top offering of the big four ASX banks at present?

Does ANZ really top the ASX bank shares for dividends today?

Well, let’s go through them. ANZ’s dividend certainly looks good against the current offering from the ‘big dog’ of the ASX banks, Commonwealth Bank of Australia (ASX: CBA).

CBA shares are currently offering a trailing yield of 3.91% at the current share price. That’s including the bank’s final dividend hike that was delivered earlier this month to $2.10 per share. Nothing to turn a nose up against, but certainly not in ANZ’s ballpark.

Turning to Westpac Banking Corp (ASX: WBC), we can see that Westpac has a yield of 5.56% on the table today. That’s getting close to ANZ, but not quite a cigar.

Finally, National Australia Bank Ltd (ASX: NAB) has a dividend yield of 4.55% on offer today. Again, that’s solid, but no candle to ANZ.

So it is true that ANZ currently has the highest dividend yield of the big four ASX bank shares today.

As we discussed earlier, this is something of a byproduct of the poor performance of ANZ shares over recent months. But perhaps dividend income-minded investors won’t care too much about that.

The post Are ANZ shares really offering the highest dividend yield of the big four? appeared first on The Motley Fool Australia.

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More reading

• Here are 2 ASX dividend shares that analysts are tipping as buys
• NAB is the ASX 200 bank share I’d buy today
• The CBA share price is down 4% in August. What’s going on?
• Goldman Sachs names 4 reasons the Westpac share price is cheap
• Could this pose a risk to the ANZ share price in the future?

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank Limited. 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 Westpac Banking Corporation. 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 Big River Industries Ltd (ASX: BRI) share price is rocketing today following the release of the company’s full-year results.

At the time of writing, the timber and building manufacturer’s shares are up 31.89% to $2.44.

Big River share price storms higher following record revenue

Big River delivered its FY2022 results for the 12 months ended 30 June 2022. Here are some of the key takeaways:

• Revenue up 45.4% to a record $409.3 million
• Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) up 113.3% to $48 million
• Underlying net profit after tax (NPAT) up 191% to $22.7 million
• Earnings per share (EPS) up 989.1% to 26.03 cents
• Final dividend of 10 cents per share, fully franked, bringing the full year dividend to 15.5 cents per share, up 176.8%

What happened in FY2022?

Big River reported a superb financial performance with robust growth recorded across the entire board.

The group achieved revenue of $409.3 million, an increase of 45% over the previous financial year. This was reflective of a solid construction sector, particularly the detached housing market, that was still benefiting from the homebuilder package introduced during FY2021.

EBITDA pre-significant items leapt by 113% to $48 million. Big River highlighted that growth was experienced in every division and geographic region in which the business operates.

Notably, a combination of strong organic growth, better operating cost leverage and contribution from its recent acquisitions drove the result.

EBITDA pre-significant items margin grew from 8% to 11.7%.

Net Profit after tax pre significant items stood at $22.7 million, an increase of 191% compared to the prior reporting period.

What did management say?

Big River CEO Jim Bindon touched on the outstanding results, saying:

FY22 was a period of substantial growth and success for our company, but one that also presented major challenges for our staff, customers and suppliers alike. Covid-19 related illness put pressure on all staff, while major product shortages needed close and expert management. Significant weather events affected several of our sites, and inflationary pressure impacted everyone in the supply chain.

Despite all these challenges, record revenue, profitability, earnings per share and free cash flow was achieved, which was a testament to all our employees, customers and suppliers.

What’s the outlook for FY2023?

Looking ahead, Big River advised that addressable market volumes are forecasted to grow modestly in FY2023.

The company has an extended pipeline due to project delays, and material and labour shortages. This continues to underpin the near-term outlook.

Like-for-like revenue growth in the first 8 trading weeks of FY2023 is 23.3% higher than the corresponding period.

In addition, freight and supply chain pressure is expected to continue easing throughout the year.

Big River share price snapshot

With today’s strong gains, the Big River share price is up 14% in 2022.

For context, the S&P/ASX 200 Materials (ASX: XMJ) sector is up 0.8% over the same time frame.

Big River commands a market capitalisation of approximately $200.64 million.

The post Guess which little-known ASX share is rocketing 30% on ‘outstanding growth’ appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Friday
• Ramsay share price plunges 4% after suitor withdraws takeover offer
• Australian Finance Group shares rally 6% as company posts $55 million profit
• Polynovo share price plummets 15% despite surging full-year revenue
• TerraCom share price rockets on 900% dividend upgrade

Motley Fool contributor Aaron Teboneras 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.

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The S&P/ASX 200 Index (ASX: XJO) looks like it is on track to end the trading week on a high note so far this Friday. At the time of writing, the ASX 200 is up a pleasing 1.05% at just over 7,120 points. The ASX 200 has now put on a pleasing 2.2% or so since Tuesday.

But let’s dive deeper into these share market gains and take a look at the shares currently topping the ASX 200’s share trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Friday

South32 Ltd (ASX: S32)

First up this Friday is ASX 200 diversified miner South32. So far today, a hefty 11.96 million South32 shares have changed owners. There’s been no news out of South32 today. Saying that, the miner did report its FY22 earnings yesterday, which were well-received by investors at the time.

Today, the company’s shares are down slightly by 0.23% at $4.26 a share. But the company did initially rise this morning. It’s probably a combination of these vents that has led to this elevated trading volume we see.

Tabcorp Holdings Ltd (ASX: TAH)

Next up today, we have ASX 200 gaming company Tabcorp. This Friday has seen a sizable 18.28 million Tabcorp shares change tables at present. Again, nothing out of this company today.

But Tabcorp did report its earnings on Wednesday this week. Like south32, these were welcomed by investors. Tabcorp shares have gained 0.99% so far today to $1.02 a share, putting the company up an impressive 9.9% since Monday. This is the likely cause of the high volumes we are witnessing.

Pilbara Minerals Ltd (ASX: PLS)

Our third, final and most traded ASX 200 share of the day so far goes to ASX lithium share Pilbara minerals. This Friday has seen a whopping 30.66 million Pilbara shares swap hands as it currently stands.

Pilbara shares are up an eye-catching 4.7% so far today to $3.57 a share. As my Fool colleague James touched on earlier, this is despite an absence of news out of the lithium producer.

So these gains, and volumes, might have something to do with a bullish broker note earlier this week.

The post Here are the 3 most heavily traded ASX 200 shares on Friday appeared first on The Motley Fool Australia.

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More reading

• Why Bega Cheese, Jumbo, Pilbara Minerals, and Qantas shares are rising
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• South32 share price gains ground on record FY22 earnings and special dividend
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Top brokers name 3 ASX shares to buy today

Motley Fool contributor Sebastian Bowen 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.

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After copping a pretty ordinary financial report in the morning, Ramsay Health Care Limited (ASX: RHC) shareholders have more to worry about Friday afternoon.

The healthcare shares were put in a trading halt in the morning but were released at 1:32pm after the company updated the ASX on KKR & Co consortium’s takeover proposal.

The letter received overnight indicated the consortium is withdrawing from the $88 per share offer first floated in April.

At the time of writing, Ramsay shares have fallen 4% to $70.02.

How do you handle a problem like Ramsay Santé?

The cancellation of the takeover offer comes after the consortium ran into difficulties performing due diligence on Ramsay’s European subsidiary Ramsay Generale De Sante SA (EPA: GDS).

Ramsay Health owns about 53% of the shares in the listed company commonly known as Ramsay Santé. Ramsay chief Craig McNally is chair of the European arm.

The trouble is Ramsay Santé did not want to open up its books to KKR & Co, because it owns its French rival Elsan.

The stalemate had gone on for the last four months, but now it seems the consortium has run out of patience.

“The Consortium has advised Ramsay that it has elected to no longer seek due diligence access from Ramsay Santé and has advised the board of Ramsay Santé accordingly,” Ramsay stated to the ASX on Friday afternoon.

“Ramsay Santé due diligence was required to progress the indicative proposal and the Consortium has now informed Ramsay that it has withdrawn the indicative proposal.”

Could there be a third offer?

Due to the difficulties with Ramsay Santé, the consortium had already put up an alternative offer where the first 5,000 shares for each shareholder would receive $88. Then for each stock above that the investor would receive $78.20 plus 0.22 Ramsay Santé shares.

Perhaps anticipating the consortium’s rejection of the original $88 offer, on Thursday night the Ramsay board stated the alternative proposal was not acceptable.

“The Ramsay Board has considered the alternative proposal and is unanimously of the view that it is meaningfully inferior to the consortium’s indicative proposal of $88.00 cash per share,” the company stated.

“In forming this view, the Ramsay board had regard to both the lower implied value relative to the allcash proposal, as well as structural challenges, execution complexity and the low liquidity of Ramsay Santé shares.”

So the original proposal has been killed by the buyer and the alternative offer was ruled out by Ramsay.

This might not be the end of the story though.

The healthcare provider announced on Friday afternoon that it would still keep the door open for a different, third, offer.

“Ramsay is prepared to engage with the consortium to determine whether it can put forward an improved binding proposal that is capable of recommendation by the Ramsay board.”

The post Ramsay share price plunges 4% after suitor withdraws takeover offer appeared first on The Motley Fool Australia.

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More reading

• Ramsay shares halted after earnings slashed and takeover letter lands
• Earnings preview: Here are the ASX shares reporting today
• 5 things to watch on the ASX 200 on Friday
• What’s been impacting the Ramsay Health share price this week?
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Tony Yoo 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 Ramsay Health Care Limited. 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 Australian Finance Group Ltd (ASX: AFG) share price is currently up 6.33% today after the company posted a bullish FY22 earnings card this morning.

Shares in the mortgage broking and lending group are currently trading at $2.02 each. They touched a high of $2.05 shortly after the market opened this morning.

Let’s go over the highlights of the ASX financial company‘s report.

What did the company report?

• Fully franked dividend of 9.6 cents per share
• Total revenue up 24.35% year-over-year (YoY) to $928.98 million
• Normalised underlying net profit after tax and amortisation (NPATA) up 12% YoY to $55.8 million
• Balance sheet of net cash and short-term investments of $217 million
• Trail book net assets up 223.52% YoY to $5.5 million.

Australian Finance Group CEO David Bailey attributed its earnings growth primarily to diversification into additional different business lines, including AFG Securities.

This is claimed to have led to a 20% group earnings increase from the corresponding reporting period and buoyed the final dividend amount by 30%. Settlements for AFG securities doubled in FY22, with especially strong performance observed in 2H FY22.

Its direct lending product line experienced the most growth in FY22, with settlements up 102% to $2.7 billion. Still, Bailey notes that aggregation remains the company’s most important business, with its loan book expanding to a record value of $182.2 billion and recording $59.4 billion worth of settlements throughout the year.

The fully franked dividend of 9.6 cents has a record date of 6 September and a payment date of 22 September. Total dividends for FY22 ended at 16.6 cents per share, representing a payout ratio of 80% and a dividend yield of roughly 9%.

What else happened in FY22?

Australian Finance Group mentioned the performance from its strategic investments into Thinktank, Fintelligence, and BrokerEngine, saying they contributed to its earnings and helped the company achieve its strategic priorities of expansion and diversification.

Thinktank contributed $6.1 to the company’s earnings, and Fintelligence contributed $3.6 million in FY22.

Some opportunities these investments allow the company to tap into include the reportedly under-served asset finance market. BrokerEngine’s financial technology will also synergize with its offering to brokers and customers.

The company notes that its efforts in expansion and diversification have been largely successful, with AFG securities contributing 26% of gross profit for FY22, behind its leading aggregation segment at 46%. By comparison, AFG Securities is claimed to have only contributed 4% in FY2015.

What did management say?

Bailey welcomed the FY22 results, saying:

AFG Securities settlements more than doubled in the year, significantly outperforming the strong 36% growth in both white label (distributed on behalf of ADIs) and aggregation settlements.

This outperformance was maintained throughout the year, with settlements in the second half exceeding the first half period.

What’s next?

In its outlook for FY23, Australian Finance Group noted that interest rates were in the process of moving to “more neutral levels” by the Reserve Bank of Australia (RBA).

However, the company added that the big picture was that these rate hikes remained at “historically low levels” and that the broader economy was still performing strongly, noting the low unemployment levels. The company estimates that demand for mortgage and broking services will likely remain high.

Alongside a more neutral backdrop, the company also said it had a solid pipeline of fixed-rate residential mortgages that were due for renewal over the next few years, valued at roughly $46 billion. The impact of these loans is that they will provide the company with future settlements as well as cross-selling opportunities to expand its loan book further.

Australian Finance Group share price snapshot

The Australian Finance Group share price is down 23.96% year to date. Comparatively, the S&P/ASX 200 Financials Index (ASX: XFJ) is doing better. It’s down 4.01% over the same period.

The company’s market capitalisation is around $540 million.

The post Australian Finance Group shares rally 6% as company posts $55 million profit appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Friday
• Ramsay share price plunges 4% after suitor withdraws takeover offer
• Polynovo share price plummets 15% despite surging full-year revenue
• TerraCom share price rockets on 900% dividend upgrade
• Why are Core Lithium shares seeing so much action in August?

Motley Fool contributor Matthew Farley 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.

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The Polynovo Ltd (ASX: PNV) share price is tumbling following the release of the company’s financial year 2022 results.

After opening 3.5% higher at $2.09, the medical device developer’s stock plummeted to a low of $1.715, marking a 15% fall.

It has since posted a slight recovery to trade at $1.72, 14.85% lower than its previous close, at the time of writing.

Polynovo share price plunges as revenue lifts to $41.9m

 Here are the key takeaways from the company’s full-year results:

• Revenue lifted 42.8% on that of the prior corresponding period (pcp) to $41.9 million
• Posted a $1.2 million after-tax loss – an improvement on the pcp’s $4.6 million loss
• Revenue from the company’s NovoSorb Biodegradable Temporising Matrix (BTM) product lifted 47.6% to $37.6 million
• Revenue from the US grew 55.1% to $32.1 million
• Ended the year with $6.1 million in cash, down from $7.7 million at the end of the pcp

Most of the company’s revenue last financial year came from its NovoSorb BTM product. The product is a dermal scaffold for the regeneration of the dermis.

Thus, COVID-19‘s significant impact on hospital trauma, burn, and elective surgery activity took its toll on the company in the first half.

The company’s full year loss also includes the reversal of $4.7 million in share-based payments expense and an unrealised foreign exchange gain of around $500,000.

Excitingly, its monthly revenue reached a record $4 million in January.

What else happened in FY22?

There was plenty of exciting news from the medical devices company last financial year.

The Polynovo share price lifted 1.5% when the company announced it had enrolled its first patient in a Biomedical Advanced Research and Development Authority (BARDA) funded burn study in September.

It also lurched 15% on news of record monthly US sales in October and November.

What did management say?

Polynovo chair David Williams and CEO Swami Raote commented on the company’s results, saying:

The FY22 effects of COVID-19 lockdowns and healthcare staff shortages on hospital trauma, burn and elective surgery is well known. As the year progressed, lockdowns ended, and as we learned to live with COVID-19, sales improved significantly.

Sales growth in each of our direct markets continued throughout the year … Monthly sales have consistently exceeded $3 million since December 2021 and are edging closer to consistently exceeding $4 million. Growth in sales has been driven by organic growth in established accounts together with new customer account acquisition.

The market available to PolyNovo is significant and we will continue to invest cash flows to accelerate capturing this market and growing top line revenue.

What’s next?

The company is currently spinning many plates, with plenty set to come to fruition in the near future.

Firstly, it’s working to optimise its distribution model in Europe after achieving its first sales in Denmark, Cyprus, Poland, Greece, and Turkey last financial year.

Back to North America, it submitted its Canada BTM licence application late in FY22, with approval expected in the second quarter.

It’s also planning to double down on the US and Australia and New Zealand markets, with a focus to expand beyond burns.

On that note, many of the company’s products are undergoing numerous clinical trials and studies to assess their ability to treat various ailments.

Polynovo share price snapshot

The Polynovo share price has been outperforming in 2022 so far despite today’s tumble.

The stock has gained 15% since the start of the year. Though, it has fallen 11% since this time last year.

For context, the All Ordinaries Index (ASX: XAO) has slipped 7% year to date and 5% over the last 12 months.

The post Polynovo share price plummets 15% despite surging full-year revenue appeared first on The Motley Fool Australia.

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More reading

• Why City Chic, Macquarie Telecom, Polynovo, and Smartgroup shares are sinking
• Earnings preview: Here are the ASX shares reporting today
• How did the Polynovo share price respond last time the company reported?
• 3 ASX 300 shares having a cracking session today
• What’s with the Polynovo share price on Wednesday?

Motley Fool contributor Brooke Cooper 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 POLYNOVO FPO. 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.

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The TerraCom Ltd (ASX: TER) share price is going skywards this afternoon, up 13% to $1.11 after the coal miner revealed a nine-fold increase in its dividend.

The company declared a final dividend of 10 cents per share for the 12 months to 30 June 2022 today.

This comprises an ordinary dividend of 7.5 cents per share and a special dividend of 2.5 cents per share. The payment will be unfranked.

The last time TerraCom paid a dividend was in 2019. That was an interim dividend of 1 cent per share unfranked.

Why has the TerraCom dividend gone up so much?

The company has decided to update its dividend policy and distribute more of its profit to shareholders.

TerraCom will adopt a new dividend payout ratio of 60% to 90% of net profit after tax (NPAT).

The company will pay dividends on a quarterly basis and those dividends will be franked.

The ASX mining share will go ex-dividend on 2 September. Shareholders will receive the dividend on 19 September.

TerraCom is reviewing its overall capital management program “with the intention to further improve working capital in the business and tax effective ways to make returns to shareholders”.

The miner said the review “will contemplate numerous value accretive initiatives”.

What did management say?

Non-executive TerraCom chair, Graeme Campbell, said:

On behalf of the Board and Management, I am extremely pleased with the ongoing consistent performance of the Company which has enabled this dividend to be declared and an update to our distribution policy.

We have a strong forward outlook on the coal market and look forward to providing income and capital to our shareholders on a regular basis.

TerraCom is an emerging resources explorer with a large portfolio of operating assets in Australia and South Africa.

The post TerraCom share price rockets on 900% dividend upgrade appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen 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.

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Core Lithium Ltd (ASX: CXO) shares are certainly getting plenty of attention this month.

Just three hours after market open today, more than 9.5 million shares have changed hands, with a value of more than $13.3 million. A figure that’s sure to rise significantly before market close.

At time of writing, Core Lithium shares are down 1.1% at $1.38 apiece.

What’s driving ASX investor interest in August?

The biggest day of trading so far this month saw more than 55 million shares change hands on 16 August. Though that wasn’t the only day that trades topped 50 million this month.

So, why are Core Lithium shares seeing so much action in August?

On a company-specific level, the company kicked off the month well.

On 1 August the explorer reported “world-class high-grade lithium intersections” at its Finniss Lithium Project, located near Darwin in the Northern Territory.

On a broader level, a large part of ASX investor interest in Core Lithium shares looks to be driven by the strong global outlook for lithium.

According to Trading Economics data, lithium carbonate prices in China extended their rally in the final full week of August.

Lithium prices remain right near all-time highs, just off their March 2022 records.

Supplies for the light weight, highly conductive metal remain tight while demand is soaring.

Lithium is a crucial component in EV and grid storage batteries. And as the world looks to decarbonise, EV growth is rocketing. Growth that’s led by China, the world’s most populous nation and number two economy.

In August, the China Passenger Car Association (CPCA) reported a total of 571,000 EV sales for the month of June, up 141% year on year and setting a new monthly record high. CPCA is forecasting an 84% increase in EV sales in China, to 5.5 million vehicles for all of 2022.

Atop record sales in China, August also saw the United States extend tax credits for new EV purchases as part of US$347 billion earmarked for climate and energy spending. News that likely spurred fresh interest in Core Lithium shares.

How have Core Lithium shares been tracking?

While there have been some significant downswings in 2022, the bullish momentum has seen Core Lithium shares charge 119% higher since the opening bell on 4 January. By comparison, the All Ordinaries Index (ASX: XAO) is down 7% year-to-date.

The post Why are Core Lithium shares seeing so much action in August? appeared first on The Motley Fool Australia.

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• Down 16% in a week, what’s next for the Core Lithium share price?
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• Why has the Core Lithium share price rocketed 50% in a month?

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.

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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.

A lot has changed in the past year in the stock market as growth stocks have been crashing hard, with the Nasdaq dropping by 15%. Even the more stable S&P 500 has fallen 6%. Concerns about inflation and a possible recession are weighing on investors.

But despite these fears, many investors are still making potentially costly mistakes by focusing on current trends and hopping on stocks that simply aren’t good buys. Here’s what I mean.

Investors are taking on too much risk

Billionaire investors Warren Buffett and Charlie Munger have compared the markets to a gambling parlor. This could explain why a struggling retailer like Bed Bath & Beyond, which has incurred losses of more than $866 million over the trailing 12 months, can skyrocket more than 45% within a single trading session as it did last week.

Another example of that gambler mentality is the desire to invest in companies that have monkeypox treatments or vaccines. Shares of SIGA Technologies, which makes a monkeypox treatment, have jumped close to 260% in just the past six months. Bavarian Nordic is up 64% during that period as investors are hopeful about its monkeypox vaccine. Meanwhile, the S&P 500 has declined 4% over that stretch.

While some investors are earning quick profits on this short-term trading, buying at the wrong time could lead to significant losses. There’s also the danger of hanging on too long with these types of stocks.

What’s hot today could be a dud next year

If you end up buying a stock based on a short-term trend, the risk is that when the frenzy calms down, you could be left holding the bag, with an investment that doesn’t look nearly as exciting as it once did.

COVID-19 vaccine maker Moderna (NASDAQ: MRNA) is a good example. Last year, its stock price jumped 143% as rising COVID case numbers made the healthcare stock a hot buy. This year, the company expects to generate $21 billion in revenue from its vaccine.

But beyond that, there are big question marks surrounding the business. Moderna’s focus on COVID has resulted in a lack of diversification for the company, and that has made investors wary of the stock. It’s down 40% year to date.

It’s a similar story for rival COVID vaccine maker Novavax, which in 2020 jumped by a whopping 2,700%. But with its COVID vaccine not obtaining Emergency Use Authorization until just last month and the company slashing its sales forecast for 2022 in half, its shares are down 75% this year.

Investors shouldn’t overlook fundamentals

The key takeaway for investors is to focus on long-term trends and a company’s business prospects beyond just the short term. While SIGA Technologies might be a hot buy this year, it could give back many of its gains if monkeypox cases subside and the disease doesn’t derail the global economy the way COVID has over the past few years.

More stable healthcare stocks, such as Merck and AbbVie, have proved to be sound investments and have outperformed the markets this year, with returns of 19% and 4%, respectively. Although they might not generate sky-high returns in the short term, they also won’t jeopardize your savings and put your portfolio at great risk.

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

The post 1 bear market blunder investors are still making appeared first on The Motley Fool Australia.

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David Jagielski has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Moderna Inc. 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.

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

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