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The Insurance Australia Group Ltd (ASX: IAG) share price appeared to be recovering in February, rising from $4.24 at market close on 31 January to $4.92 by the end of the day on 23 February — an impressive 16% gain.

But as has occurred many times since the coronavirus crash, the trajectory of this ASX financials share suddenly changed gears. The IAG share price has since tumbled by just over 10%, trading at $4.43 at the time of writing. By comparison, the S&P/ASX 200 Financials Index (ASX: XFJ) has gained 5.42% over the same period.

So, what’s up with IAG shares?

Well, the IAG share price just can’t seem to get beyond $5.50 these days. It has been rangebound since mid-2020 when it dropped below $5.50 during the coronavirus slide. Since then, IAG shares have risen and fallen between the low $4 range — the lowest being $4.17 on 9 March this year — and back up close to $5.50 on several occasions. Just when it’s looking like a sustained recovery, as it did in early February, the IAG share price reverses course. For shareholders, it’s been a bit like circling the runway — for almost two years — hoping for a break in the clouds.

What’s news lately with IAG?

Well, as we reported at the time, IAG had a largely disappointing half-year result in February. This was despite announcing an earnings upgrade for FY22.

And you know all that rain and flooding we’ve been having on the east coast? Well, that sort of thing is generally never good for insurance shares. In a recent update, IAG said it had received more than 24,000 claims across southeast Queensland and New South Wales, and this was expected to increase.

But as my Fool colleague Aaron reported last week, IAG reassured investors that it has extensive reinsurance protection in place.

Current estimates of the net claims cost from the storm and flooding event were projected to be approximately $74 million. Pleasingly, this is lower than the $95 million forecast disclosed in early March due to development on previous claims. As such, IAG has utilised roughly $95 million of the $236 million of aggregate cover following the weather-related event.

Is the IAG share price a buy?

As my Fool colleague Zach reported recently, analyst sentiment on IAG is actually fairly positive.

JP Morgan rates IAG a buy with a share price target of — you guessed it — $5.50. In a recent note, the broker said:

IAG has a strong position in the Australian and NZ personal lines market, but has suffered in recent times from concerns around COVID-19 Business Interruption losses and concerns on market share losses in personal line.

Short- to medium-term margin pressures have proved challenging for IAG, including higher reinsurance costs, lower yields, higher natural perils and reducing reserve releases.

Our PT [price target] is $5.50… We maintain an element of caution in setting our price target, reflecting uncertainty as to how personal lines insurers may trade coming as economies emerge from COVID-19 induced lockdowns, and mobility increases.

The post The IAG share price has lost 10% since February. Is it an opportunity? appeared first on The Motley Fool Australia.

More reading

• How did the IAG share price compare to its sector in the March quarter?
• How did the IAG share price stack up in the March quarter?
• The IAG share price has dumped 5% in 2 weeks. What’s happening?
• Why did the IAG share price underperform the ASX 200 by 11% in March?
• Owns IAG (ASX:IAG) shares? Here’s your outlook for April

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 owns and has recommended Insurance Australia Group Limited. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) has given back most of its intraday gains and is fighting to stay in positive territory. At the time of writing, the benchmark index is up 0.1% to 7,572.6 points.

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

Alliance Aviation Services Ltd (ASX: AQZ)

The Alliance Aviation share price is up 3% to $3.87. This follows the announcement of a further material increase in E190 flying activities pursuant to its agreement with Qantas Airways Limited (ASX QAN). The airline giant has exercised four more leasing options, bringing the total to 18 aircraft. Qantas is leasing these aircraft and crew on three-year terms from Alliance.

Life360 Inc (ASX: 360)

The Life360 share price is up 3% to $5.54. This morning Bell Potter retained its buy rating and $10.00 price target on this location technology company’s shares. Ahead of its first quarter update, the broker said: “We expect another quarter of at least 50% y-o-y growth in AMR despite Q1 traditionally not being a strong quarter.”

Ramsay Health Care Limited (ASX: RHC)

The Ramsay Health Care share price has jumped 24% to $80.02. This follows the receipt of a takeover approach. According to the release, a consortium led by KKR has tabled a non-binding $88 cash per share offer to acquire the private hospital operator. This will be reduced by any dividends paid. Ramsay has granted the consortium due diligence access.

Whitehaven Coal Ltd (ASX: WHC)

The Whitehaven Coal share price is up 3% to $4.80. Investors have been buying this coal miner’s shares after it released its quarterly update. For the third quarter, Whitehaven Coal reported a record average coal price of $315 per tonne. This is up from $101 in the prior corresponding period and $204 during the first half of FY 2022.

The post Why Alliance Aviation, Life360, Ramsay Health Care, and Whitehaven Coal are racing higher appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Ramsay rockets and Rio Tinto disappoints
• Coal hard cash: Here’s why the Whitehaven share price just hit a multi-year high
• Ramsay Health Care share price rockets 28% higher on takeover bid
• These 2 blue-chip ASX shares are opportunities: expert
• Ramsay Health Care share price on watch amid $14.8bn takeover offer

Motley Fool contributor James Mickleboro owns Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Alliance Aviation Services Ltd. and Life360, Inc. The Motley Fool Australia owns and has recommended Alliance Aviation Services Ltd. 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 Bruce Jackson.

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The Pilbara Minerals Ltd (ASX: PLS) share price has surged more than 100% in a year, but some brokers predict it could go higher.

The lithium miner’s share price has rocketed 118% between market close on 20 April 2021 and 20 April 2022. However, in today’s trade, Pilbara shares have slipped 2.75% and are currently trading at $2.83.

Let’s take a look at the outlook for Pilbara Minerals.

Outperform rating

Macquarie has retained an outperform rating on the company’s shares with a price target of $4. This is 41% more than the current share price.

The broker is optimistic about Pilbara due to high lithium prices and the company’s production targets. Lithium is a critical component of batteries for electric vehicles (EV).

However, the price target of $4 is slightly less than Macquarie’s recent prediction of $4.30. Macquarie dropped its price target following Pilbara Minerals’ quarterly update falling below expectations.

The company mines lithium from the Pilgangoora Lithium Tantalum Project in Western Australia.

Shipments for the March quarter finished at 58,383 dry metric tonnes (dmt) after a port delay. A 20,000 dmt cargo scheduled for late March instead left Port Hedland on 7 April.

Meanwhile, Citi analysts have upgraded the Pilbara Minerals share price to a “buy” with a $3.60 price target. This equates to a 27% upside on the share price at the time of writing. Citi is optimistic lithium prices could go higher. The broker believes it could take two years for the lithium market to balance, as my Foolish colleague James reported.

Pilbara Minerals price snapshot

The Pilbara Minerals share price has gained 118% in the past 12 months but lost 11% year to date. In the past week, the company’s shares have dropped about 2%.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned around 8% over the past year.

Pilbara has a market capitalisation of about $8.4 billion based on the current share price.

The post Macquarie is tipping another 40% upside for the Pilbara Minerals share price. Here’s why appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• What are the 10 biggest ASX shares in the lithium space
• Top brokers name 3 ASX shares to buy next week
• These were the worst performing ASX 200 shares last week
• Brokers name 3 ASX shares to buy today

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 Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) is giving investors a mid-week boost so far this Wednesday, and is powering towards the all-time high of 7,632.8 points that we saw in August last year. At the time of writing, the ASX 200 has gained another 0.21% at just under 7,600 points.

So let’s dig deeper into these gains and check out the ASX 200 shares currently topping the share market’s volume charts, according to investing.com.

The 3 most-traded ASX 200 shares by volume this Wednesday

Telstra Corporation Ltd (ASX: TLS)

Telco Telstra is our first ASX 200 share off the rank today. This famous telecommunications company has had a sizeable 12.57 million of its shares traded on the markets so far. There has been no major news or announcements out of Telstra today. Nor have the company’s shares produced much movement. The Telstra share price is flat at $4.03 at the time of writing.

In saying that, the telco did go as high as $4.06 a share earlier today. Perhaps it is this share price fluctuation, together with the company’s ongoing share buyback program, that is responsible for the high volume we are seeing.

Pilbara Minerals Ltd (ASX: PLS)

From TLS to PLS! ASX 200 lithium producer Pilbara Minerals is next up today. As it stands, a notable 13.79 million Pilbara shares have already swapped hands this Wednesday. There has been no official news out of Pilbara today either. However, this lithium stock has had a rather nasty share price fall over today’s trading. The company is currently at $2.84 a share, down by 2.41%. This is probably the cause of these elevated share volumes.

AVZ Minerals Ltd (ASX: AVZ)

Another ASX 200 lithium stock in AVZ Minerals rounds out our list today. AVZ has watched as 15.26 million of its shares have found a new home thus far. Again, there is no obvious smoking gun here.

Not only is there no major news or announcements out of AVZ, but the AVZ share price is running fairly flat so far this Wednesday. At the time of writing, it is sitting at $1.19, exactly flat on where it closed at yesterday. We have seen this company go as high as $1.22 a share and as low as $1.18 over today’s trading, so maybe this bouncing around is behind the volume we are witnessing.

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

More reading

• What are the 10 biggest ASX shares in the lithium space
• ASX 200 midday update: Ramsay rockets and Rio Tinto disappoints
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX shares today
• ASX 200 midday update: AMP asset sale talks, Syrah rockets

Motley Fool contributor Sebastian Bowen owns Telstra Corporation 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 owns and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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A number of ASX-listed lithium players have powered ahead in recent times. This comes as investors have been taking advantage of the hype surrounding the lithium revolution.

Indeed, a lot of attention has been turned to the incredible rise in the spot price for lithium.

Over the past year alone, lithium carbonate has rocketed by more than 435% in value.

The battery making ingredient is expected to be adopted across a number of industries, notably the transitioning to electric vehicles.

Lithium is mainly sourced from either spodumene or brine. Australia is home to the majority of the hard rock (spodumene) mines, while brine production is concentrated mainly in South America, particularly Chile and Argentina.

Below, we take a look at which are the top 10 lithium companies on the ASX by market capitalisation.

Who are the ASX’s biggest lithium companies?

According to the ASX, Australia’s largest company that’s involved in the lithium space is Rio Tinto Limited (ASX: RIO).

The mining giant boasts a market capitalisation of $44.46 billion and is one of the biggest companies on the ASX.

Next up, is none other than Mineral Resources Limited (ASX: MIN). The company had an offer price of just 90 cents per share when it floated in 2006. Since then, it has surged to $61.48 at the time of writing, representing an astonishing gain of 5,800%.

Mineral Resources commands a market capitalisation of around $11.62 billion.

Third on the list is Pilbara Minerals Ltd (ASX: PLS) which is valued at $8.48 billion.

As you can see, the top two spots are taken up by companies that are predominately involved with the mining and export of iron ore. Pilbara Minerals on the other hand is the leading ASX-listed pure-play lithium company. It owns 100% of the world’s largest, independent hard-rock lithium operation in the resource-rich Pilbara region.

The following three places on the biggest mining companies list are taken up by Allkem Ltd (ASX: AKE), AVZ Minerals Ltd (ASX: AVZ), and Liontown Resources Ltd (ASX: LTR).

They preside a market capitalisation of $8.48 billion, $4.27 billion, and $3.68 billion, respectively.

The last four spots are covered by Lake Resources NL (ASX: LKE), Sayona Mining Ltd (ASX: SYA), Core Lithium Ltd (ASX: CXO), and De Grey Mining Ltd (ASX: DEG).

The above companies have a market capitalisation of $2.88 billion, $2.76 billion, $2.56 billion, and $1.92 billion, respectively.

Foolish takeaway

In summary, selecting 9 out of 10 of these companies from 12 months ago would have increased your wealth.

Depending on which company you bought into, you could have achieved a gain of up to 800% on your investment. The latter is based on buying Sayona Mining shares which has been the best lithium company amongst the list.

The only company to produce a negative return is Rio Tinto, down 0.3% from this time last year. However, when factoring in the dividend, you would be slightly ahead.

The post What are the 10 biggest ASX shares in the lithium space appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Ramsay rockets and Rio Tinto disappoints
• Rio Tinto share price falls on weak Q1 update
• How does the Fortescue dividend compare to its sector?
• Here are the top 10 ASX shares today
• Can the Rio Tinto share price break its all-time high in 2022?

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 Bruce Jackson.

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The Coles Group Limited (ASX: COL) share price is in the green today after the company launched a new carbon-neutral beef product.

Coles shares are swapping hands at $18.64, up 1.64%. In comparison, the Woolworths Group Limited (ASX: WOW) share price is 0.88% higher. Both companies are outperforming the S&P/ASX 200 Index (ASX: XJO) which is up 0.29% at the time of writing.

Let’s take a look at what Coles announced today.

New beef range

Coles launched a new carbon-neutral beef range known as Coles Finest Certified Carbon Neutral Beef.

This includes seven premium quality beef cuts, ranging from eye fillet to porterhouse steaks. The beef range is available in Coles Victoria shops this week and will be rolled out across the country in the next 12 months.

The beef is certified as meeting the requirements of the federal government’s Climate Active Carbon Neutral Standard.

Commenting on the news, Coles CEO Steven Cain said:

When we announced our sustainability strategy just over a year ago, we said we’d work with all our stakeholders to achieve our Together to Zero emissions ambitions and to be Australia’s most sustainable supermarket

Coles Finest Certified Carbon Neutral Beef is a testament to the hard work of our beef producers and their commitment to sustainable practices, and we’re thrilled that they’re taking this important step with us.

Coles said it has been working with beef farmers in Victoria and New South Wales to reduce their carbon output. This has led to emissions that are 19% less than the national average.

In other company news, Coles has recently been named as an ASX dividend share to buy now. Morgans is predicting Coles to provide fully franked dividends of 61 per share in FY2022. In FY2023, the broker can see Coles delivering a 63 cent dividend. Morgans has a $19.70 price target on Coles shares, a 5.7% upside on the current share price.

Coles share price snapshot

The Coles share price has gained nearly 20% in the past 12 months while it is up nearly 4% this year to date.

In contrast, the benchmark ASX index has returned about 8% in the past year.

Coles has a market capitalisation of about $24.9 billion based on the current share price.

The post Why is the Coles share price in the green today? appeared first on The Motley Fool Australia.

More reading

• Analysts name 2 ASX dividend shares to buy now
• 2 strong ASX 200 dividend shares analysts love
• Why is the Coles share price slipping today?
• Top ASX dividend shares to buy in April 2022
• ASX market beater? Here’s how Coles shares performed during March

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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A disappointing first-quarter result from Netflix Inc (NASDAQ: NFLX) has sent the share price off a cliff in after-hours.

Following the closing bell, shares in the world’s largest streaming platform fell unceremoniously. The response to Netflix’s first-quarter result played out in the destruction of US$40 billion of market capitalisation as the stock crashed 25.7% to US$258.90.

The main culprit behind the negative reception appears to be a key metric that left investors shocked.

Is the growth story coming undone for Netflix?

Unfortunately for the Netflix share price, the latest quarterly result left the market wondering whether the ‘N’ in “FAANG” stocks has lost its bite.

Standing out like two sore thumbs were the revenue miss and, more notably, the net subscriber miss. Firstly, analysts had expected US$7.95 billion in revenue for the streaming giant but were given US$7.87 billion.

However, it was the 200,000 net subscriber reduction signalling alarm bells in after-hours. Prior to the result, analysts were forecasting an increase of 2.51 million subscribers during the quarter. Obviously, the stark contrast has created concerns among investors.

$NFLX pic.twitter.com/bL2R10MHg8

— Alex Morris (TSOH Investment Research) (@TSOH_Investing) April 19, 2022

https://platform.twitter.com/widgets.js

The fall in net subscribers has attracted plenty of attention, being the end of a decade-long stint for subscriber growth at Netflix. As such, the unwelcomed milestone has prompted a dramatic correction in the Netflix share price.

To its credit, the company had no trouble admitting the streaming industry is becoming a competitive space. What was once Netflix and a few smaller rivals has exploded into countless offerings; as traditional media adopts what has now become a relatively established technology.

What else is playing on the Netflix share price?

Netflix highlighted that the near-term outlook is unlikely to see much of an improvement.

For example, Q2 FY22 forecast shows revenue growth slowing again to 9.7% year on year — hitting US$8.05 billion. Meanwhile, net subscriber count is set for an even uglier fate, with expectations of a further 2 million exodus.

If the Netflix share price opens at its after-hours level tonight, shares will be down ~57% so far this year.

The post Here’s why the Netflix share price is plunging 25% in after-hours trading appeared first on The Motley Fool Australia.

More reading

• Netflix investors could be in for a shocker this week
• Why Netflix could be a buy in the coming weeks
• 3 reasons to buy Netflix, and 1 reason to sell

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. owns and has recommended Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in Betmakers Technology Group Ltd (ASX: BET) were placed in a trading halt by the company before the market open today pending an announcement.

The move follows media reports that News Corporation (ASX: NWS) has joined a consortium that intends to launch a new online sports betting company in Australia.

According to the Wall Street Journal, owned by News Corp, unnamed sources familiar with the matter say the consortium intends to use Betmakers technology to power the new business.

Before the news broke, the Betmakers share price rose by almost 5% yesterday to finish the day at 65 cents. Betmakers will remain in a trading halt until either the announcement is made or Friday’s market open.

Just in time for Spring carnival racing

The report said a Las Vegas digital sports gambling investment company Tekkorp Digital (NASDAQ: TEKKW) and Australian industry executive Matthew Tripp are working with News Corp to establish the new business. It has a working name of BetR.

The consortium is apparently preparing to announce the new company this week. They hope to launch the product in time for the Australian Spring horse racing season, which starts in late August.

Betmakers share price summary

As my Fool colleague James reported yesterday, Betmakers is currently among the top 10 most shorted shares on the ASX. Investors appear to be concerned over its valuation and cash burn.

The Betmakers share price is down 22% year to date and 48% over the past 12 months.

The post Betmakers share price halted amid reports of major News Corp deal appeared first on The Motley Fool Australia.

More reading

• The Betmakers share price is surging 6% on Tuesday. Could this be why?
• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares
• Why is the Betmakers (ASX:BET) share price having such a lousy week?

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. owns and has recommended Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Big River Gold Ltd (ASX: BRV) share price is skyrocketing today after the company announced an all-cash takeover offer from multinational mining company Aura Minerals Inc (TSE: ORA).

Big River Gold is a minerals explorer whose main focus is its 100%-owned Borborema Gold Project in Brazil. The mine has a resource of 2.43Moz of gold.

Aura is offering to buy Big River Gold for 36 cents per share. That’s a 33% premium on yesterday’s closing price of 27 cents. ASX gold investors have wasted no time bidding up the company’s shares this morning to cash in on the arrangement. While it’s not a done deal yet, all Big River Gold directors and two major shareholders representing almost 40% of the vote have declared they’ll be voting yes to the buyout.

At the time of writing, the ASX gold share is trading at 34.5 cents, up 27.78%.

‘Vote yes’, says Big River Gold management

So first, here’s the nitty-gritty. Big River Gold has executed a binding scheme implementation deed with Aura proposing that Aura subsidiary Aura BidCo will acquire 100% of Big River Gold by way of a scheme of arrangement between the ASX gold share and its shareholders.

Big River Gold’s independent board committee is recommending shareholders vote in favour of the deal unless a superior offer is made, subject to an independent expert confirming it’s in the best interests of investors.

The key highlights are as follows:

• The offer of 36 cents per share represents a premium of 30% to the 30 trading day VWAP [volume weighted average price] of 27.7 cents per share; 42.3% to the 60 trading day VWAP of 25.3 cents per share; and 44% to the 90 trading day VWAP of 25 cents per share
• The scheme consideration values Big River’s diluted equity at approximately $91.7 million
• Each Big River Gold director intends to vote in favour of the deal
• The deal is subject to various conditions, including approval from ASIC and shareholders

Major shareholders give the thumbs up

Two major investors in the ASX gold share have indicated their intention to vote in favour of the buyout.

Canadian investment company Dundee Resources Limited (voting power 19.3%) plans to vote yes and will likely receive unlisted shares in Aura BidCo in lieu of the cash consideration.

Australian private investment company Copulos Group (voting power 18.8%) has signed a voting intention statement saying it will vote in favour of the takeover, subject to certain conditions.

The scheme meetings are expected to be held in early to mid-July, with implementation to follow in July or August.

If the scheme proceeds, Big River Gold will become a subsidiary of Aura. It will be delisted from the ASX and held under a joint venture between Aura and Dundee.

Big River Gold has appointed NextLevelCorporate as its financial advisor and MinterEllison as its legal
advisor. Shareholders will receive a scheme booklet in June and will likely vote on the takeover in July.

Big River Gold share price recap

The ASX gold share has a 52-week high price of 42 cents per share. It was swapping hands at that level back in May last year. The share price has drifted down over the past 12 months by almost 18%.

The post This ASX gold share is surging 27% on takeover news appeared first on The Motley Fool Australia.

More reading

• Why has the Newcrest share price gained 11% in a month?
• Why are ASX 200 travel shares taking off on Wednesday?
• Why are Webjet shares still among the most shorted on the ASX
• Here’s why the Soul Patts share price is getting whacked today
• Faults and financials: Why is the AGL share price getting zapped 6% today?

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 Bruce Jackson.

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The Newcrest Mining Ltd (ASX: NCM) share price has surged in the last month, nearing its 52-week high of $29.27.

Since 20 March, the gold miner’s shares have gained around 10.8%, making it one of the best performers across the sector. In comparison, the share price of fellow miner Northern Star Resources Ltd (ASX: NST) increased by 5.8% across the same timeframe.

At the time of writing, Newcrest shares are taking a slight breather to swap hands at $28.77, down 0.24%.

What’s driving the Newcrest share price higher?

It seems the acceleration in the price of gold has boosted investor sentiment. Traditionally, investors flock to the yellow metal as a safe-haven asset when there is uncertainty in the market.

While the world is slowly moving past COVID-19, the war between Russia and Ukraine has sparked a gold rush.

Last month, the price of gold soared above the US$2,000 barrier but has since fallen a touch under. At the time of writing, gold is fetching US$1,946 an ounce.

Compared to 20 March, the precious metal had been priced at around US$1,920. This represents an increase of about 1.3% over the 30-day period.

Accordingly, Newcrest shares have also risen from $25.97 a month ago to today’s price of $28.77.

It’s worth noting that the price of gold spiked to an all-time high of US$2,072.90 on 7 August 2020. Newcrest shares closed at $33.27 on the day.

You may be wondering why the company’s share price is nowhere near the level it was in 2020, given the price of gold is almost the same.

This is because of other macroenvironmental factors, such as the United States Federal Reserve’s intent on lifting interest rates this year. It noted that inflation accelerated to 6.9% in the US, the highest rate in nearly four decades.

Following its lead, the Reserve Bank of Australia signalled its move with two expected rate hikes for 2022.

Rising interest rates can drag down the price of precious metals and it appears investors are mixed on these impacts for the moment.

What do the brokers think?

A number of brokers rated the Newcrest share price with different price points in late March.

The team at UBS cut its outlook on the company’s shares to “neutral” from “buy”. However, the broker raised its 12-month price target by 2.3% to $27.10.

Based on the current share price, this implies a potential downside of 6% for investors.

On the other hand, Morgan Stanley analysts reduced their rating on Newcrest shares by 1% to $33.70. They believe the company’s shares still have some room to bounce higher.

This implies a potential upside of 17% from where Newcrest shares trade today.

The post Why has the Newcrest share price gained 11% in a month? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX mining companies by market cap
• How is the Newcrest share price tracking in 2022?
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• Yield curve inversion is bad news for ASX shares except for this sector

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 Bruce Jackson.

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