Tag: Motley Fool

Key points

• The ASX 200 is struggling through a sell-off in 2022
• The market’s whims are putting some valuable stocks in the bargain bin
• T. Rowe Price’s Randal Jenneke is stocking up on shares with low prices and strong fundamentals

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The S&P/ASX 200 Index (ASX: XJO) is suffering through a major sell-off in 2022. It has fallen 6.7% since the end of 2021.

Fortunately, as all good investors know, such downturns can provide major opportunities.

As T. Rowe Price portfolio manager and head of Australian equities, Randal Jenneke says, sell-offs create a lot of “collateral”.

Jenneke continues:

The market tends to struggle to differentiate between what justifiably should be sold off because the valuations got way too stretched versus businesses where, actually, they’re better positioned, or the valuations aren’t as rich as others’, or the fundamentals continue to be very strong.

The tricky part is to know where to look. Luckily, this professional investor thinks he has figured it out. Jenneke flags these 2 ASX 200 faves as major buying opportunities.

These valuable ASX 200 shares are going for bargain prices

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The first stock Jenneke has bolstered his portfolios with is COVID-winner Domino’s Pizza.

The Domino’s Pizza share price has fallen 15.5% over the past 30 days. It finished today’s session at $103.33, which is 38% lower than its 52-week high of $167.15.

Jenneke said the stock’s valuation got stretched during 2021, leading him to sell down his shares in the ASX 200 pizza maker. However, after its significant tumble, it’s back on his buy list.

“This is a very profitable business, incredibly strong growth profile, going into new markets, winning lots of market share,” he said.

“Right now, the share price [is] down … we think the market has gone too far.

“I see that is a very good opportunity right now.”

Xero Limited (ASX: XRO)

It’s a similar story for ASX 200 tech favourite, Xero. Its share price has slumped by 25% over the past month. In fact, it suffered through a further tumble of 5% today.

At the market close today, the Xero share price was $109.64, putting it squarely in Jenneke’s sights.

“Xero is the number 2 cloud accounting software player globally. Outside of the US, you could quasi call it the number 1,” said Jenneke.

“We think [it has] enormous growth still to come. And if you look at, you know, how attractive it’s become – again, it’s fallen 25% in the last month – so we’ve taken the opportunity to reweight into that company.”

The post These 2 ASX 200 shares have tumbled into the buy zone: Expert appeared first on The Motley Fool Australia.

More reading

• With Afterpay shares no longer listed, is WAAAX officially dead?
• The Xero (ASX:XRO) share price is trailing the ASX 200 by a whopping 18% so far in 2022. What’s next?
• These 2 impressive ASX shares are buys in February 2022: experts
• 3 fantastic ASX shares to buy this month
• Top broker says Domino’s (ASX:DMP) share price has 32% upside

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. owns and has recommended Xero. The Motley Fool Australia owns and has recommended Xero. The Motley Fool Australia has recommended Dominos Pizza Enterprises 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 Fortescue Metals Group Limited (ASX: FMG) share price continued its positive run on Thursday.

The iron ore giant’s share rose 3% to $21.13, bringing its year to date gain to approximately 10%.

Can the Fortescue share price keep rising?

Unfortunately for shareholders, one leading broker believes the Fortescue share price has significant downside risk from current levels.

According to a recent note out of Goldman Sachs, its analysts have a sell rating and $13.50 price target on its shares.

Based on the current Fortescue share price, this implies potential downside of 36% for investors over the next 12 months.

Why is the broker bearish on Fortescue?

There are a number of reasons that Goldman Sachs is bearish on Fortescue. One is its valuation, which it believes is significantly stretched in comparison to its larger peers.

Another reason is the Fortescue Future Industries business, which the broker appears to believe the market is too excited about.

In fact, its analysts believe this business will drag on the company’s finances in the coming years and force it to make cuts to its dividend payout ratio.

Goldman commented: “FMG is targeting a 10% allocation of NPAT to Fortescue Future Industries (FFI) renewable energy projects (green hydrogen, solar, wind, etc) but only when a project is investment ready. Other possible renewable projects FMG has spoken about are further solar investments and also wind investments in the Pilbara to decarbonize the mining fleet, and other green hydrogen projects with a focus on offshore water hydro & wind/solar resources.”

“We think decarbonising the Pilbara could cost FMG over US$7bn and requires +US$50/t carbon or a green premia to be NPV positive. FMG has outlined that the Pilbara decarbonisation project/assets would logically sit within FFI (although ultimately under a Power Purchasing Agreement (PPA) which would still be reflected on FMG’s balance sheet). In order to fund FFI projects, we think FMG will need to reduce their dividend payout ratio from 80% to 50% from 2022 onwards.”

It is for this reason, together with its forecast for softening iron ore prices over the coming years, that Goldman is forecasting dividends of just 51 US cents per share in FY 2023 and FY 2024 and then 34 US cents per share in FY 2025 and FY 2026.

Based on the current Fortescue share price, this will mean yields of 3.4% and then just 2.2%. These are certainly not the generous yields that investors have become accustomed to over the last couple of years.

The post Why this broker thinks the Fortescue (ASX:FMG) dividend will come under significant pressure appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to sell today
• ASX 200 (ASX:XJO) midday update: Amcor slides, BHP and Fortescue storm higher
• Fortescue (ASX:FMG) Future Industries to buy stake in Sparc Hydrogen
• Fortescue (ASX:FMG) Future Industries hires new tech boss
• 2 ASX shares riding the wave of green energy and ethical investing

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Key points

• The ASX 200 has been incredibly volatile over 2022 so far
• ASX shares even entered into a technical correction at one point
• With many investors spooked, let’s see how the great Warren Buffett invests in times like these…

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As most investors would be all too aware of, the S&P/ASX 200 Index (ASX: XJO) has had an incredibly volatile start to 2022. Since the start of the year, the index remains down a nasty 6.86% as of today’s pricing. However, at one point, the ASX 200 was down more than 10% from its last high that we saw back in August last year. That means it was officially a technical correction. Indeed, between 4 January and 27 January, the ASX 200 lost close to 10% alone.

When we have market volatility like this, not to mention the dreaded ‘correction’ term, it understandably causes some anxiety for many investors. No one enjoys watching the value of their share portfolio lose value in such a dramatic fashion. Especially over just a few weeks. Many investors use these opportunities to buy more shares, but many others do the opposite, sell out and try and wait for the bottom to buy back in.

So what’s the best way to handle a market correction or crash? Should we buy or sell? To answer those questions, let’s turn to the ‘expert of experts’ when it comes to investing, the legendary Warren Buffett. Mr Buffett is chair and CEO of Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B). As well as its largest shareholder. His decades long stewardship of this investing conglomerate has netted shareholders some incredible gains. For some context, one Berkshire Hathaway Class A share cost US$7,100 in June of 1990. Today, those same shares are worth US$479,500.

Does Warren Buffett buy or sell in market crashes?

Luckily for us, Buffett has given investors many tips about when to buy and sell shares over the years. Let’s look at a few sources by our Fool colleagues over in the US.

So for starters, Buffett calls periods of market panic (perhaps like we’ve just witnessed), opportunities. He once said that “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble”. That should give you a strong start in understanding how Buffett views these things.

One of his most famous quotes is “be fearful when others are greedy, and greedy when others are fearful”. Again, he is saying that it might be time to get the chequebook out when there is a lot of fear in a market.

Here’s another famous quote from Buffett – “If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.”

This quote expands on that sentiment. Buffett once told investors the following:

The most common cause of low prices is pessimism – sometimes pervasive, sometimes specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It’s optimism that is the enemy of the rational buyer.

So we can say with relative certainty that Warren Buffett is not one to lean on the buying side when there are periods of fear in the market, such as a correction or crash. But that doesn’t mean every share on the market automatically becomes a screaming bargain. The company has to be right too.

Our final quote illustrates this well: “Anyone can pick a winner in a bull market. Picking out winners in a declining market is where true greatness is found”.

The post Should you buy or sell in a market crash? Here’s what Warren Buffett says appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts this Thursday
• The Vanguard Australian Shares ETF (ASX:VAS) is about to get a major 2022 makeover. Here’s what is changing…
• ASX 200 (ASX:XJO) midday update: Westpac higher on Q1 update, tech shares sink
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX shares 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 recommended Berkshire Hathaway (B shares). 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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Key points

• Sydney Airport shareholders voted in favour of the acquisition scheme
• The aviation hub will now be privately held
• The consortium values the asset at $23.6 billion

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Sydney Airport (ASX: SYD) shares will shortly be leaving their long-term home on the ASX.

Sydney Airport shares first listed on the exchange in April 2002. Now, subject to final approval from the New South Wales Supreme Court, Sydney Airport shares will be removed from trade as of 9 February.

How did Sydney Airport shareholders vote?

In today’s vote on the company’s scheme resolution, taken at 11am AEDT, 96.03% of votes were cast in favour of proceeding at the General Company Scheme Meeting.

Additionally, the airport reported that 79.29% of the total number of shareholders voting at the meeting were in favour.

Due to ongoing uncertainty from the COVID-19 pandemic, the meeting took place virtually via Sydney Airport’s online meeting platform.

David Gonski, chairman of the board of directors of Sydney Airport, convened the meeting. Noting the board’s prior approval of the takeover offer, Gonski said, “After careful consideration… the Sydney Airport board took the view that the cash consideration of $8.75 per security does fairly reflect the fundamental long-term value of the airport.”

Sydney Airport shareholders today strongly agreed.

A bit of background

If the NSW courts approve the takeover, as is widely expected, all of Sydney Airport’s 2.70 billion outstanding shares will be taken over by the Sydney Aviation Alliance – a consortium of superannuation funds.

The $8.75 per share offer values the airport at $23.6 billion.

So who will own Sydney Airport moving forward?

As my Fool colleague Brooke Cooper explained earlier this week, Sydney Airport will be purchased in part by the consortium’s leader IFM Investors – owned by 23 pension funds.

Global Infrastructure Partners ­– on behalf of its managed funds and clients – is also expected to have a tight hold on the consortium.

Super funds AustralianSuper, QSuper, and UniSuper will also hold interests ranging from 7.5% to 18%.

How have Sydney Airport shares been performing?

Sydney Airport shares trended steadily higher since leaping to $7.78 per share on 6 July after the initial takeover bid, at the time $8.25 per share, hit the news.

Over the past 12 months, the Sydney Airport share price has gained an impressive 46%, despite a lack of domestic or international air travel.

By comparison, the S&P/ASX 200 Index (ASX: XJO) has gained 4% since this time last year.

The post Now departing: Farewell, Sydney Airport (ASX:SYD) shares appeared first on The Motley Fool Australia.

More reading

• Own Sydney Airport (ASX:SYD) shares? The takeover goes to a shareholder vote this week. Here’s what you need to know
• These 3 ASX 200 shares are topping the volume charts on Tuesday
• Here are the 3 most heavily traded ASX 200 shares this Monday
• Own Sydney Airport (ASX:SYD) shares? Here’s how the company is tracking in the skies
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

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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On Wednesday, we looked at three ASX shares that brokers have given buy ratings to this week. Unfortunately, not all shares are in favour with brokers right now.

Three ASX shares that have just been given sell ratings by brokers are listed below. Here’s why they are bearish on them:

Commonwealth Bank of Australia (ASX: CBA)

According to a note out of Morgans, its analysts have retained their reduce rating and $74.00 price target on this banking giant’s shares ahead of its first half results. Morgans continues to believe that CBA’s shares are overvalued at the current level and don’t deserve to trade at such a premium to the rest of the big four banks. As for its result, the broker expects cash earnings of $4.320 billion and a fully franked interim dividend of $1.74 per share. The CBA share price was trading at $93.44 on Thursday.

Fortescue Metals Group Limited (ASX: FMG)

A note out of UBS reveals that its analysts have retained their sell rating but lifted their price target on this iron ore giant’s shares to $16.70. The broker has lifted its price target to reflect stronger than expected iron ore prices. However, this isn’t enough for a change of rating, with the broker continuing to believe Fortescue’s shares are expensive at the current level. The Fortescue share price was fetching $21.13 today.

Western Areas Ltd (ASX: WSA)

Analysts at Morgan Stanley have retained their underweight rating and $2.95 price target on this nickel producer’s shares. This follows the release of the company’s quarterly update which fell short of the broker’s expectations. In light of this, Morgan Stanley sees no reason to make any changes to its recommendation at this point. The Western Areas share price was trading at $3.43 this afternoon.

The post Top brokers name 3 ASX shares to sell today appeared first on The Motley Fool Australia.

More reading

• Why these brokers think that the CBA (ASX:CBA) share price is a sell
• How are ASX bank shares responding to the RBA’s interest rate call?
• ASX 200 (ASX:XJO) midday update: Amcor slides, BHP and Fortescue storm higher
• 3 reasons Goldman says the CBA (ASX:CBA) share price is a sell
• Fortescue (ASX:FMG) Future Industries to buy stake in Sparc Hydrogen

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 Bruce Jackson.

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Key points

• There are more than 10,000 cryptos in virtual circulation
• It’s important for altcoins to have real life utility
• Smart Contracts are continuing to gain traction

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Crypto investors certainly have no shortage of choice these days.

With new altcoins launching almost every day, far outpacing the numbers that fail and are removed from virtual circulation, there are now more than 10,000 cryptos to potentially invest in.

But outside of the big names, like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), many investors struggle to identify tokens with growth potential.

With that in mind, The Motley Fool turned to Josh Gilbert, crypto analyst at multi-asset investment platform eToro, for his take.

Below we look at 5 altcoins, all currently within the top-21 cryptos by market cap, that have the potential to outperform in the year ahead.

A word of caution

Before discussing his views on 5 promising altcoins for 2022, Gilbert reminded us that as a broker, eToro can’t offer financial advice.

He also had these words of caution for our readers:

It’s important to remember that crypto is a volatile asset class. Anyone considering investing should research the ideas behind the crypto asset they are looking at, and the potential uses it could have. Investors must look beyond headline numbers, understand what they are investing in, and not invest more than they can afford to lose.

Wise words.

With that out of the way, Gilbert said that while there’s no way of knowing with certainty which cryptos could boom in the coming months, “these 5 coins are assets that have potential”.

Five cryptos with the potential to outperform

The first altcoin Gilbert pointed to is Solana (CRYPTO: SOL):

Solana is one of the fastest blockchains in the world. The Solana Network has gained traction in the NFT space, where users can mint, buy and sell NFTs [non-fungible tokens] via the network. SOL soared in 2021, but has seen a dramatic correction in 2022, down 57% from its high.

Why is 2022 looking potentially strong for Solana?

“As Smart Contract platforms continue to gain traction, 2022 could be a key year for Solana,” Gilbert said.

With a market valuation of US$34.8 billion, Solana is the 7th biggest crypto. Down 9% over the past 24 hours, Solana is up 14% since this time last week, according to data from CoinMarketCap.

The next crypto with strong potential is Polygon (CRYPTO: MATIC). Gilbert explained that, “Polygon is a protocol and framework built with the aim of building and connecting Ethereum-compatible blockchain networks.”

Why is this one worth keeping an eye on?

According to Gilbert:

Its token, MATIC, has gained a lot of traction in the DeFi [decentralised finance] space for its low transaction costs and seems to be addressing common blockchain issues such as slow speeds and high costs whilst maintaining high levels of security.

Polygon is the 14th biggest crypto with a market valuation of US$12.2 billion. It’s down 1% today and up 3% over the past 7 days.

The third altcoin with strong potential is Chainlink (CRYPTO: LINK):

Chainlink is a blockchain layer used to universally connect smart contracts. Secure interaction between complex smart contracts and external data feeds, payment methods and events are supported. The crypto asset is built on Ethereum and is an ERC-20 token.

Gilbert told us Chainlink has good potential because, “LINK is looking to revolutionise traditional finance through DeFi. It has use cases from decentralised exchanges, insurance, stablecoins and even money markets.”

Next up he highlighted Polkadot (CRYPTO: DOT). He said:

Polkadot is a blockchain network designed to support various interconnected, application-specific sub-chains called parachains. In addition, the crypto asset is looking to enable bridges that will allow the Polkadot network to interact with other blockchains like Ethereum and Bitcoin. This will also allow tokens to be swapped without a central exchange.

Why could Polkadot be an outperforming crypto in the year ahead?

“Combining blockchains will be essential in 2022 as decentralised finance gains further traction,” Gilbert said.

Polkadot is the 10th biggest crypto with a market valuation of US$20.1 billion. Polkadot is down 9% today and up 6% since this time last week.

Rounding out the list of cryptos with strong potential is Decentraland (CRYPTO: MANA):

Decentraland is a decentralised virtual reality blockchain platform that allows users to purchase, build and monetise virtual reality applications. The MANA coin surged in value through 2021, as talks of the ‘Metaverse’ accelerated. However, the crypto asset has since retreated 55% from its all-time high.

Why is Decentraland potentially well set to shine in 2022?

“With the Metaverse still only taking shape, it has a lot of potential in 2022,” Gilbert said.

Why crypto investors should research utility

With more than 10,000 altcoins to choose from, we asked what crypto investors should be looking at, atop doing their own thorough research.

Gilbert said the 5 cryptos named above, “have already established themselves in the crypto ecosystem. With cryptoassets, the most significant focus has to be utility, and these 5 altcoins have this in abundance.”

We also asked what types of ‘moats’ or barriers to entry these 5 cryptos might have to prevent rival altcoins from stealing their lunch.

According to Gilbert:

These altcoins are some of the biggest and most well-known altcoins, therefore, they can innovate and evolve when competition arises. In addition, they have the industry’s top developers, which is key to any crypto project. However, these talents can come at a premium and are scarce. 

On top of this, the altcoins mentioned have vast volumes of transactions flowing through their networks, mostly as a result of having loyal customers that trust their networks. DOT, LINK, MATIC, SOL and MANA are all currently in the top 16 cryptoassets for volume on Messari.

There’s no getting away from these cryptos’ price correlation to Bitcoin though. At least, not yet.

Gilbert told us:

Currently, Bitcoin has a crypto market dominance of around 43%, which consequently means most altcoins have a high correlation. If Bitcoin’s price sinks, you’re likely to see altcoins suffer and vice versa.

Ultimately, Bitcoin acts as the primary driver of market sentiment.

The post Why these five cryptos could leave Bitcoin in the dust in 2022 appeared first on The Motley Fool Australia.

More reading

• What are Stablecoins and how do they differ from other cryptocurrencies?
• Here’s why the leading cryptocurrencies are ticking higher
• Bitcoin has crashed 45%: but its fundamentals remain the same
• Why investing in Bitcoin today is a much trickier environment: expert
• ASX shares have had a shaky start to 2022. Here’s what investors are planning: survey

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Bitcoin and Ethereum. The Motley Fool Australia owns and recommends Bitcoin and Ethereum. 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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Key points

• The QBE share price is surging 8% this week
• The company has joined the UN-convened Net-Zero Insurance Alliance this week
• Brokers at Morgans named it one of the best financial shares to buy in February

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The QBE Insurance Group Ltd (ASX: QBE) share price is rocketing ahead this week.

The company’s shares have soared 8% since market close on 28 January. In today’s trading, the QBE share price is up by 2.56% to $12.03. In contrast, the S&P/ASX 200 Index (ASX: XJO) is falling 0.39% today.

QBE Insurance was established in 1886 in Queensland but has now expanded to employ 11,000 workers in more than 25 countries worldwide.

Let’s take a look at what might be impacting the company this week.

What’s happening at QBE?

The QBE share price is not only up this week — it’s surged 43% in the past year. This week, QBE was named by Morgans as one of the best financial shares to buy in February.

The broker has given QBE an “add” rating with a $14.32 price target on its share. That’s 19% more than the current share price.

In other news this week, the company has become a member of the United Nations-convened Net Zero Insurance Alliance.

QBE has committed to transitioning its investment portfolio to net-zero by 2050.

In a news update from the company, QBE said:

As part of the UN-convened net zero insurance alliance, we’ll work with the insurance industry to help define the methodology needed to assess the carbon intensity of underwriting portfolios and setting science-based intermediate targets.

We commit to the gradual transition of our underwriting portfolio to net zero greenhouse gas emissions by 2050, as we continue to also support our customers’ transition to a net-zero economy.

Broker JP Morgan recently named QBE as part of a “Super 7” list, suggesting it could deliver returns of up to 30% this year.

Finally, QBE’s European operations have recently launched a sustainable energies unit. Its European operations are part of the wider QBE Insurance Group.

The new unit will help QBE’s customers transition to lower-carbon energy.

QBE share price snap shot

The QBE share price has climbed nearly 6% this year to date. In the last week alone, it’s gained around 9%.

In contrast, the broader ASX 200 has returned just over 3% in the past 52 weeks.

QBE has a market capitalisation of $17.7 billion based on its current share price.

The post Why is the QBE (ASX:QBE) share price in the green this week? appeared first on The Motley Fool Australia.

More reading

• Morgans names the best ASX financial shares to buy in February
• ASX 200 shares offer 12% upside after sell-off: JP Morgan
• Leading broker tips the QBE (ASX:QBE) share price to ‘advance’ in 2022
• Own QBE (ASX:QBE) shares? Macquarie just upgraded ‘outperform’. Here’s why
• Top broker names 2 ASX 200 dividend shares to buy

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 S&P/ASX 200 Index (ASX: XJO) is on course to record a decline. In late trade, the benchmark index is down 0.2% to 7,072 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are sinking:

Cettire Ltd (ASX: CTT)

The Cettire share price has crashed over 22% to $2.34 following the release of its first half results. Although the global luxury online retailer delivered a 192% jump in gross revenue to $154.1 million, this was underpinned by a huge increase in marketing costs. As a result, Cettire swung from a $2.3 million profit to an $8.3 million loss. Investors appear concerned by the scalability of its platform.

Novonix Ltd (ASX: NVX)

The Novonix share price has tumbled 14% to $6.59. A number of richly valued shares have come under pressure on Thursday. In addition, on Wednesday Morgans suggested that the Novonix share price had peaked for the time being. It retained its neutral rating and cut its price target to $6.97.

Serko Ltd (ASX: SKO)

The Serko share price has fallen 7% to $4.55. This travel technology company’s shares have come under pressure today after it warned of difficult trading conditions due to the Omicron variant. This has led to Serko downgrading its revenue guidance to between NZ$18 million and NZ$20.5 million. Management was previously forecasting revenue of NZ$21 million and NZ$25 million.

Zip Co Ltd (ASX: Z1P)

The Zip share price is down 9% to $2.92. This appears to have been driven by broad weakness in the tech sector on Thursday following a very disappointing result from social media giant Meta (Facebook). The Meta share price was down a whopping 23% during after hours trade on Wall Street.

The post Why Cettire, Novonix, Serko, and Zip shares are sinking today appeared first on The Motley Fool Australia.

More reading

• Is Zip (ASX:Z1P) the Titanic of ASX tech shares? It just keeps sinking
• Is Zip’s (ASX:Z1P) potential acquisition of Sezzle the right strategy?
• Here’s why the Serko (ASX:SKO) share price is sinking 5% today
• Why the Cettire (ASX:CTT) share price is crashing despite 192% revenue growth
• What this broker is saying about the Novonix (ASX:NVX) share price

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. owns and has recommended Cettire Limited, Serko Ltd, and ZIPCOLTD FPO. The Motley Fool Australia has recommended Cettire Limited and Serko 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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Key points

• The Hastings share price is up 7% today and 25% in a week
• The miner has received a loan to construct its flagship site
• It estimates to have spent $1.3 million in exploration during the latest quarter

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The Hastings Technology Metals Ltd (ASX: HAS) share price is having an impressive week.

The Australian rare earths exploration and development company has seen its shares rise by 25% since the closing bell on January 27. The increase comes amid releasing a landslide of corporate and activity news.

The majority of the news relates to the miner’s long-term goal of becoming a global frontrunner in the production of neodymium and praseodymium concentrate (NdPr). The minerals are essential ingredients in the production of permanent magnets used in electric vehicles, medical devices, wind turbines, and other devices.

At the time of writing, the Hastings share price is up 7% at 30 cents.

Let’s take a look at what’s been happening with this particular ASX mining share…

What has sent the Hastings share price skyward?

Most recently, Hastings announced it would receive a now-approved $140 million loan from the Northern Australia Infrastructure Facility (NAIF) to construct its flagship site, the Yangibana Rare Earths Project.

The site is located in the Gascoyne region of Western Australia. According to Hastings, it “contains one of the most highly valued NdPr deposits in the world with NdPr:TREO ratio of up to 52%”.

The loan, which is part of the $300-400 million in total debt financing required for the site, comes with a 12.5-year tenor and is subject to pre-completion conditions.

Early works are underway with equipment already on site, and transport access already cleared. Plant construction is expected to commence in September and is scheduled to take approximately 27 months.

What happened during the quarter?

On Friday, the miner released its activities report for the latest quarter.

On the subject of Yangibana construction works, Hastings announced it had received approval from the Department of Agriculture, Water and the Environment (DAWE) to construct the site’s downstream rare earths processing plant.

The miner spent an estimated “$1.3 million on exploration during the quarter, substantially on resource drilling”. Director fees and salaries totalled $276,000.

Hastings remains confident in the globally-rising prices of NdPr oxide. The price went up by 40% to US$134.22 during the quarter and Hastings expects it to remain strong.

Looking at the business’s financials, the miner reported $96 million in cash and equivalents as of 31 December 2021.

Since 31 December, the Hastings share price has increased by 11%.

Hastings share price snapshot

In the past 6 months, the Hastings share price has increased by 36%.

It hit a 52-week high price of 32 cents just last month. This occurred a few days before it announced it had received environmental approval from the Western Australia EPA, progressing its Yangibana site development.

To compare, it saw a 52-week low of 15 cents in June.

The company has a market capitalisation of $521 million and 1.74 billion shares issued.

The post Why has the Hastings Technology (ASX:HAS) share price soared 25% in a week? appeared first on The Motley Fool Australia.

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Motley Fool contributor Alice de Bruin 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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Key Points

• Zip shares touch 52-week low of $2.78 on back of negative sentiment surrounding the industry
• Rising inflation costs, COVID-19 variants and geopolitical tensions are causing fear across markets
• Zip scheduled to report its results late this month

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What a wild year it has been for the Zip Co Ltd (ASX: Z1P) share price.

From reaching an all-time high of $14.53 a little less than 12 months ago to bottoming out to a 52-week low of $2.78 last week. To save you doing the math, that represents a fall of more than 80% if you invested at the peak.

Although the buy-now pay-later (BNPL) company’s shares have staged a mini comeback, they are still 25% down compared to pre-pandemic levels.

You may be wondering if Zip shares are going to keep tumbling or have they finally hit support.

Why have investors fell out of love with Zip shares?

At the time of writing, the Zip share price is sinking by 8.7% to $2.94 following negative sentiment across the tech industry.

Early this morning, Meta Platforms Inc (NASDAQ: FB), also known as Facebook released its fourth-quarter results to investors.

The tech giant shocked the market with missed revenue and earnings projections due to rising inflation costs. This caused investors to dump the stock by 22.89% in the after-hours of trading on the Nasdaq.

While the slump is related to inflation in the United States solely, Australia has been experiencing its own inflationary issues.

The Reserve Bank of Australia signalled two rate hikes for 2022 in an effort to slow down the rising price of goods. Supply and demand imbalances due to COVID-19 along with the reopening of the economy have led inflation to spike.

What this means is that consumers are less likely to spend on discretionary items when interest rates are picking up. The cost of debt such as credit cards as well as personal loans will require extra payments, affecting consumer spending habits.

Unfortunately for Zip, this is the heart of its business model in the BNPL sector. And what’s more is that the company has confirmed its interest in buying fellow rival Sezzle Inc (ASX: SZL).

In addition, mobile payment company Block Inc CDI (ASX: SQ2) share price also tanked by 10% at close on the Nasdaq.

The company signalled inflation, COVID-19 variants, and geopolitical tensions between Russia and Ukraine as causes.

Nonetheless, this has had an adverse effect on shares in the S&P/ASX All Technology Index (ASX: XTX). This includes former market darling Altium Ltd (ASX: ALU), and Appen Ltd (ASX: APX), along with other popular shares.

All eyes will be on Zip’s financial results when the company reports later this month.

Zip share price summary

Over the past twelve months, the Zip share price is down 62%, with year to date down more than 30%.

Based on the current Zip share price, the company has a market capitalisation of around $1.74 billion.

The post Is Zip (ASX:Z1P) the titanic of ASX tech shares? It just keeps sinking appeared first on The Motley Fool Australia.

More reading

• Is Zip’s (ASX:Z1P) potential acquisition of Sezzle the right strategy?
• Why did these tech shares lead the ASX 200 today?
• How much value would buying Sezzle add to the Zip (ASX:Z1P) share price?
• These are the 10 most shorted ASX shares
• ASX 200 (ASX:XJO) midday update: Ansell crushed, ResMed upgraded

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 Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Meta Platforms, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has recommended Meta Platforms, Inc. 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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