Tag: Motley Fool

Key points

• Rio Tinto is building its exposure to lithium. Can it help the Rio Tinto share price?
• Rincon is a large undeveloped lithium brine project in Argentina
• Jadar is one of the world’s biggest greenfield projects, based in Europe

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The Rio Tinto Limited (ASX: RIO) share price has jumped 25% over the last two months amid a partial recovery of the iron ore price.

The mining giant pointed out that China is transitioning from tightening to easing policies after a slowdown in the last quarter of 2021, with mild pro-growth measures in place to support property, infrastructure and consumption. Rio Tinto expects China to continue to finetune its policies to balance multiple priorities.

Right now, iron ore makes up a large percentage of Rio Tinto’s earnings. However, can lithium play a bigger part in the company’s future?

Lithium plans

The mining giant is working on growing its exposure to lithium.

Rio Tinto acknowledges that the market fundamentals for battery grade lithium carbonate are strong, with lithium demand forecast to grow between 25% to 35% per annum over the next decade with a significant supply demand deficit expected from the second half of this decade.

Its latest move was announced in December. It has entered into a binding agreement to buy the Rincon lithium project in Argentina for $825 million.

Rincon is one of the largest undeveloped lithium brine projects in the world, located in the heart of the lithium triangle of Salta Province. Rio Tinto noted that the project will have a long life, capable of producing battery grade lithium carbonate. It has the potential to have one of the lowest carbon footprints in the industry.

Lithium carbonate is an important material used in large scale batteries for electric vehicles and storing renewable energy. Lithium could be helpful in the long-term for the Rio Tinto share price. Huge demand for lithium has already sent the lithium price soaring in 2021.

Work is going to be undertaken to determine the development strategy and timing, as well as go through a number of other steps needed to make progress on the Argentine project. This transaction is expected to be completed in the first half of 2022.

Jadar

Rincon is not the only lithium project that Rio Tinto is working on.

The Jadar project in Serbia is one of the world’s largest greenfield lithium projects. Jadar is a lithium-borates project. This project will produce battery grade lithium carbonate.

Rio Tinto has explained that this project could be particularly important for the European lithium market. It could position the ASX miner as the largest source of lithium supply in Europe for at least the next 15 years. It could supply enough lithium to power over one million electric vehicles per year.

On top of lithium, Jadar will produce borates, which are used in solar panels and wind turbines.

The initial plan was to ramp-up to full production in 2029. The mine is expected to produce around 58,000 tonnes of lithium carbonate, 160,000 tonnes of boric acid and 255,000 tonnes of sodium sulphate annually. This would make Rio Tinto one of the top ten lithium producers in the world.

However, there has been a hitch for Rio Tinto. As acknowledged in July 2021, Jadar remains subject to receiving all relevant approvals, permits and licences and ongoing engagement with local communities, the Serbian Government and civil society.

There have been protests in Serbia about the potential environmental impacts of Rio Tinto’s mining activities. This has caused delays to the approval of the ‘exploitation field licence’. First saleable production is now expected to be no earlier than 2027. It was previously 2026.

Analysts thoughts on the Rio Tinto share price

Brokers think that high lithium prices are going persist as demand outstrips supply.

Ord Minnett thinks that lithium could make up over 5% of Rio Tinto’s overall earnings by the end of the decade.

However, the iron ore price continues to be the biggest factor for the Rio Tinto share price. Ord Minnett currently rates Rio Tinto as a ‘hold’, but with a price target of $102.

UBS rates the Rio Tinto share price as a sell, with a price target of just $80 because of expectations that the iron ore price could drop.

The post Can lithium cause the Rio Tinto (ASX:RIO) share price to charge higher? appeared first on The Motley Fool Australia.

More reading

• Why were Rio Tinto (ASX:RIO) and BHP (ASX:BHP) shares in the green today?
• Top brokers name 3 ASX shares to sell today
• What are brokers saying about the Rio Tinto (ASX:RIO) 2022 production update?
• Why the Rio Tinto (ASX:RIO) share price will be in focus today
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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

• Nuix has had a tough first half of FY 2022
• Revenue is expected to be down slightly year on year due to weakness in Europe
• Operating earnings have been smashed from higher costs

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The Nuix Ltd (ASX: NXL) share price is under significant pressure again on Friday.

At the time of writing, the investigative analytics and intelligence software provider’s shares are down 11% to a new low of $1.83.

Why is the Nuix share price sinking again?

Investors have been selling down the Nuix share price this morning following the release of a trading update for the first half of FY 2022.

According to the release, Nuix is expecting to post a decline in revenue and operating earnings during the first half.

In respect to revenue, the company is guiding to revenue of $82 million to $85 million for the six months ended 31 December. This will be a 0.35% to 3.9% reduction on the $85.3 million recorded a year earlier.

This is expected to underpin annualised contract value (ACV) of $161 million to $164 million, compared to ACV of $161.8 million during the prior corresponding period.

Management advised that this reflects a stronger performance in North America and APAC which has been offset by a weaker performance in EMEA. And while its ACV is relatively flat, the company highlights that it continues to see a marked shift away from module-style licences to consumption licences.

Operating earnings more than halve

As for its earnings, Nuix expects to post pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) of $13 million to $15 million. This is down more than 50% from $31.6 million a year earlier. Finally, on the bottom line, Nuix is guiding to a net loss after tax of $2 million to $3.5 million.

Management advised that this earnings weakness has been driven by materially higher costs, such as non-operational legal costs. In addition, the company is reinvesting in sustainable revenue generation. This includes building sales and distribution capability and increasing levels of investment in the product development pipeline.

Following today’s decline, the Nuix share price is now down a massive 83% over the last 12 months.

The post Nuix (ASX:NXL) share price crashes 11% amid another disappointing update appeared first on The Motley Fool Australia.

More reading

• 5 worst ASX 200 tech shares of 2021
• Insiders have been buying Nuix (ASX:NXL) and this ASX share

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 recommended Nuix Pty Ltd. 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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If you’re looking for some dividend shares to buy in January, then you may want to look at the ones listed below.

Here’s why analysts rate them as buys:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The first ASX dividend share to consider buying is the Charter Hall Social Infrastructure REIT.

As its name implies, this property company has a focus on social infrastructure properties. These are properties such as government facilities, healthcare buildings, and childcare centres.

This is a great part of the market to be in, with these properties in high demand from end users. This underpinned 100% occupancy and a weighted average lease expiry (WALE) in excess of 15 years in FY 2021. And with approximately three-quarters of its tenancies on fixed rent reviews, the company’s future rental growth looks very positive.

Goldman Sachs is a fan of the Charter Hall Social Infrastructure REIT and has a conviction buy rating and $4.13 price target on its shares. In respect to dividends, Goldman is forecasting dividends per share of 17.1 cents in FY 2022 and 17.5 cents in FY 2023. Based on its current share price of $3.78, implies yields of 4.5% and 4.6%, respectively.

National Australia Bank Ltd (ASX: NAB)

Another ASX dividend share that could be in the buy zone right now is NAB.

It has been tipped as a buy by the team at Bell Potter. It likes the bank due to its strong position in business and commercial banking, which gives some protection from the margin crushing competition for home loans.

The broker currently has a buy rating and $32.00 price target on the bank’s shares. Its analysts are forecasting further earnings growth from NAB in the coming years, underpinning increasing dividend payments.

For example, the broker has pencilled in dividends per share of 132.5 cents in FY 2022 and then 134.5 cents in FY 2023. Based on the current NAB share price of $28.70, this equates to fully franked yields of 4.6% and 4.7%, respectively.

The post 2 buy-rated ASX dividend shares with generous yields appeared first on The Motley Fool Australia.

More reading

• NAB (ASX:NAB) share price target raised at Morgan Stanley. So, is it a buy?
• Is the NAB (ASX:NAB) share price an undervalued smart buy for dividends?
• Is the NAB (ASX:NAB) share price an ASX buy or sell for 2022?
• Brokers name 2 ASX 200 dividend shares to buy
• Analysts name 2 ASX dividend shares to buy in January

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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Due to recent weakness in the tech sector, a number of quality shares have pulled back materially from their highs. This has potentially created a buying opportunity for investors.

Two such shares are listed below. Here’s what you need to know about these buy-rated tech shares:

Nitro Software Ltd (ASX: NTO)

The first ASX tech share for investors look at is Nitro Software. It is the document productivity company behind the Nitro Productivity Suite. This suite provides integrated PDF productivity and eSignature tools to businesses great and small globally. This includes over two-thirds of the Fortune 500.

Bell Potter is bullish on Nitro Software. Particularly given the recent acquisition Connective NV for US$81 million, which the broker described as game-changing.

It commented: “The rationale for the acquisition is it will accelerate and enhance Nitro’s eSign, eID (electronic identity) and document workflow capabilities. It will also position Nitro to become the third global player in the enterprise eSign market along with DocuSign and Adobe.”

Bell Potter has a buy rating and $4.50 price target on the company’s shares. This suggest that the Nitro Software share price could double from the current level of $2.17.

PointsBet Holdings Ltd (ASX: PBH)

Another ASX tech share that is rated highly is PointsBet. It is a growing sports betting operator and iGaming provider that offers innovative sports and racing betting products and services via a scalable cloud-based platform.

PointsBet currently operates in the ANZ and North American markets. The latter is being supported by its deal with US sports broadcaster NBCUniversal. This deal is putting the PointsBet brand in front of millions of sports fans across the United States, which is driving strong customer and revenue growth in the country.

And while its marketing spend has been greater than many were expecting due to fierce competition, Goldman Sachs believes it will bear fruit in the future.

It commented: “Overall we remain positive on PBH, with our thesis underpinned by i) PBH’s leverage to the burgeoning US Sports Betting and iGaming market, which we forecast to be a >US$50 bn TAM opportunity at maturity, ii) our view that PBH remains well-placed to capitalise given its in-house tech stack, iii) upside risk to long-run sustainable margins in Aus and the US, and iv) scalability benefits ahead from NBCUniversal leads and broader coverage from state roll outs.”

Goldman currently has a buy rating and $12.79 price target on the company’s shares. This implies 100% upside from the current PointsBet share price of $6.38.

The post 2 buy-rated ASX tech shares with 100% upside in 2022 appeared first on The Motley Fool Australia.

More reading

• Here’s why the PointsBet (ASX:PBH) share price stormed 5% higher today
• 2 beaten down ASX tech shares tipped as buys
• PointsBet (ASX:PBH) share price falls on mixed broker note
• 2 exciting small cap shares named as buys
• Why BrainChip, PointsBet, PolyNovo, and Syrah shares are pushing higher

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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Nitro Software Limited and Pointsbet Holdings 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 two ASX dividend shares in this article are ones with long records of dividend growth
• Investment conglomerate Soul Pattinson has been increasing its dividend annually for more than two decades
• Gas infrastructure giant APA has been growing its distribution for many years and continues to invest for growth

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Income-seeking investors may want to put some high-quality ASX dividend shares on the watchlist.

These are businesses with decent yields and long track records of dividend growth for investors. Recent share price declines may have made them more attractive.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Pattinson is the business with the longest running dividend growth record. The annual dividend increases stretch back more than 20 years.

There are a few key positions that have generated a lot of growth and cashflow for the investment conglomerate. Those three key positions are TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW) and New Hope Corporation Limited (ASX: NHC).

However, it has a number of other assets and investments that are helping such as Round Oak, Tuas Ltd (ASX: TUA), Apex Healthcare and Pengana Capital Group Ltd (ASX: PCG).

Soul Pattinson continues to invest in new opportunities. Agriculture has been a recent focus of the investment team. The merger with the old listed investment company (LIC) Milton gives the portfolio more diversification and additional liquidity for future investments.

The ASX dividend share said that with its new large caps investments from Milton, it plans to partially sell them down over time to fund further investments in private markets, global equities, property, structure yield and ‘real assets’.

At the current Soul Pattinson share price, it has a trailing grossed-up dividend yield of 3.1%.

APA Group (ASX: APA)

APA is the owner of a very large amount of gas pipeline infrastructure across Australia. Its pipeline actually spans 15,000km. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA supplies half of the nation’s natural gas usage.

The ASX dividend share has been looking for acquisition opportunities in both Australia and the USA. It sees a number of growth areas with renewable energy generation, electricity transmission and hydrogen.

It has grown its distribution every year for a decade and a half. In FY22 it’s expecting to increase the distribution again by another 4% to 53 cents per unit. That translates to an expected forward distribution yield of 5.4%.

APA management says that its portfolio and organic growth pipeline gives it confidence about the capacity for growth. Its organic growth pipeline now exceeds $1.3 billion.

It has its first hydrogen project is underway which is targeted at enabling the conversion of a section of the Parmelia Gas Pipeline in Western Australia into Australia’s first 100% hydrogen-ready transmission pipeline. If successful, it would create a “significant opportunity” for the development of a hydrogen hub in the Kwinana Industrial precinct near Perth.

The post Dividend investors should put these 2 top ASX shares on the watchlist appeared first on The Motley Fool Australia.

More reading

• What kinds of dividends will APA Group (ASX:APA) pay out in 2022?
• 2 strong ASX shares profiting from the e-commerce boom
• 2 top ASX shares to buy according to WAM
• What happened to the Brickworks (ASX:BKW) share price 2021?
• These 2 ASX real estate shares could be the best way to invest in property

Motley Fool contributor Tristan Harrison owns Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns and has recommended APA Group, Brickworks, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended TPG Telecom 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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If you’re a fan of growth shares, then you may want to look closely at the two shares listed below.

Here’s why these could be growth shares to buy:

Altium Limited (ASX: ALU)

The first growth share for investors to consider buying is Altium. It is an electronic design software provider behind the Altium 365 and Altium Designer platforms. These platforms are the leaders in their field and aiming to dominate their market. A testament to their quality is that they are used by companies such as Tesla, BAE Systems, Amazon, Facebook, and Dell.

This is a great market to lead. With the Internet of Things (IoT) and AI markets underpinning an explosion of electronic devices globally, demand for electronic design software is expected to continue to grow at a strong rate for a long time to come. This bodes well for Altium’s growth in the future.

The team at Jefferies is very positive on Altium. It currently has a buy rating and $48.83 price target on the company’s shares. This compares to the latest Altium share price of $39.09.

Life360 Inc (ASX: 360)

Another ASX growth share that could be in the buy zone is app maker Life360.

It operates in the digital consumer subscription services market with a focus on products and services for digitally native families. This is with its hugely popular Life360 app and recent acquisitions of items tracking company Tile and wearables company Jiobit.

The team at Bell Potter is very positive on the company. This is due to its Life360’s freemium model and its massive opportunity to convert its 30m+ user base into paying subscribers. The latter is expected to be boosted by the aforementioned acquisitions and value added services such as roadside assist.

Overall, the broker believes the company is well placed to disrupt the safety and security market and achieve strong top line growth for many years. As a result, its analysts have a buy rating and $15.00 price target on its shares. This compares very favourably to the latest Life360 share price of $8.53.

The post 2 explosive ASX growth shares analysts love right now appeared first on The Motley Fool Australia.

More reading

• Analysts name 2 fantastic ASX shares to buy right now
• Here are 4 ASX shares insiders are putting their money behind
• Here are the tech shares leading the ASX 200 on Tuesday
• Leading brokers name 3 ASX shares to buy today
• Why did the Altium (ASX:ALU) share price gain 33% in a year?

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

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Key points

• The CSL share price has been falling in the last few weeks
• It recently announced the major acquisition of Vifor Pharma
• Brokers like the acquisition and currently rate the business as a buy

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The CSL Limited (ASX: CSL) share price has been dropping recently. Over the last two months it has declined around 14%.

CSL isn’t exactly a household name. It’s a leading global biotech company. It develops and delivers innovative biotherapies and influenza vaccines that save lives, and help people with life-threatening medical conditions live full lives.

The business has delivered capital growth. Over the past five years the CSL share price has risen 140%.

But how does the next year or two look for the business?

What’s impacting the CSL share price?

Plenty of ASX growth shares have fallen in recent weeks, so it’s not just CSL. Names like Xero Limited (ASX: XRO) and Afterpay Ltd (ASX: APT) have both dropped more than 20% recently.

For CSL, the big news over the last month or so has been the proposed acquisition of Vifor Pharma for A$16.4 billion.

What does Vifor do? It has an “outstanding team and a leading portfolio of products” with renal disease and iron deficiency. CSL also said that Vifor has a proven strategy of partnering and business development and licensing.

This portfolio of products will complement CSL’s existing therapeutic focus areas including haematology, thrombosis, cardiovascular and transplant, with a high-quality pipeline.

But it’s not just about diversification. Management think that CSL can help grow the Vifor Pharma business. CSL’s global reach, R&D capabilities and resources will help the delivery of the Swiss company’s products to patients.

The offer has already been unanimously recommended by Vifor Pharma’s board of directors. Vifor Pharma’s largest shareholder, Patinex, also likes the offer.

In terms of adding to profit, CSL expects it will add low to mid-teens to underlying net profit after tax (NPATA) per share in the first full year of ownership, including the full run rate of cost synergies.

What do brokers think of the deal?

Morgans likes the deal and thinks it adds value to CSL, whilst giving adding defensive earnings with more growth avenues.

Citi also thinks that the Vifor Pharma acquisition increases the value of CSL.

After the announcement of the acquisition both of these brokers increased their price targets for CSL by more than $10 per share.

Morgans now has a price target of $334.70 on the CSL, which suggests upside of more than 20%. Meanwhile, Citi has a price target of $340 on the company, implying an increase of around 25%.

Profit expectations

When CSL announced the acquisition, it confirmed that its FY22 net profit after tax (NPAT) guidance was for an approximate range between US$2.15 billion to US$2.25 billion.

Citi’s projections put the CSL share price at 40x FY22’s estimated earnings and 31x FY23’s estimated earnings. The broker has a buy rating on the biotech business.

Morgans thinks that CSL shares are valued at 41x FY22’s estimated earnings and 35x FY23’s estimated earnings. It also rates the company as a buy.

The post Has the CSL (ASX:CSL) share price dropped back into the buy zone? appeared first on The Motley Fool Australia.

More reading

• 2 killer ASX shares to buy for a volatile 2022
• How is the CSL (ASX: CSL) share price performing in the age of Omicron?
• Leading fund manager says these blue-chip ASX shares are buys right now
• 2 outstanding ASX 200 shares to buy this month according to analysts
• Why did the CSL (ASX:CSL) share price have such a lousy year in 2021?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited, CSL Ltd., and Xero. The Motley Fool Australia owns and has recommended Afterpay Limited and Xero. 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 Thursday, the S&P/ASX 200 Index (ASX: XJO) fought hard and was able to record a small gain. The benchmark index rose 0.15% to 7,342.4 points.

Will the market be able to build on this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set to end the week in a disappointing fashion. According to the latest SPI futures, the ASX 200 is expected to open the day 20 points or 0.3% lower this morning. This is despite it being a solid night of trade on Wall Street, which late on sees the Dow Jones up 0.5%, the S&P 500 up 0.5%, and the Nasdaq pushing 0.65% higher.

BHP shareholders approve unification

The BHP Group Ltd (ASX: BHP) share price will be on watch today after the mining giant’s shareholders voted in favour of scrapping its dual listing. At the meeting, over 97% of shareholders voted for a sole listing on the Australian share market. This will see BHP become the largest company on the ASX 200.

Oil prices mixed

Energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) will be on watch today following a mixed night for oil prices. According to Bloomberg, the WTI crude oil price is down 0.35% to US$86.66 a barrel and the Brent crude oil price is up slightly to US$88.48 a barrel. Oil prices softened after traders took profit following some strong gains.

Gold price falls

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a subdued finish to the week after the gold price edged lower. According to CNBC, the spot gold price is down 0.15% to US$1,840.70 an ounce. Traders appear undecided where gold is going next ahead of a key meeting of the US Federal Reserve next week.

Northern Star rated as a buy

The Northern Star Resources Ltd (ASX: NST) share price may have surged 11% higher yesterday but Goldman Sachs still sees significant upside potential. This morning the broker retained its buy rating and lifted its price target to $12.40. Goldman likes the gold miner due to its high-returning organic growth across all production hubs.

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

More reading

• Why were Rio Tinto (ASX:RIO) and BHP (ASX:BHP) shares in the green today?
• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares this Thursday
• Why Allkem, Beacon Lighting, Northern Star, and Virtus Health shares are charging higher
• Newcrest (ASX:NCM) share price regains some shine as inflation worries mount

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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The GQG Partners Inc (ASX: GQG) share price has been a disappointing performer since landing on the ASX boards following the completion of its IPO in October.

For example, although the fund manager’s shares rose 2% to $1.86 on Thursday, it is still down 7% from its listing price of $2.00.

Is the GQG share price weakness a buying opportunity?

The team at Goldman Sachs believe the weakness in the GQG share price since its listing is a buying opportunity.

According to a note, the broker has initiated coverage on the fund manager with a buy rating and $2.45 price target.

Based on the current GQG share price, this implies potential upside of 32% over the next 12 months.

What did Goldman say?

Goldman advised that it is bullish on the GQG share price for a number of reasons. This includes its positive outlook and attractive valuation.

The broker commented: “Our investment case is underpinned by: Solid investment performance, lowest quartile fee offering among global peers, and strong distribution. Coupled with a scalable business model, this has contributed to robust financial outcomes.”

“We see strong alignment between shareholders and staff, and note that i) GQG’s co-founders have the majority of their net wealth invested in GQG and its investment strategies, and ii) over time, the company aims for every one of its employees to be both an equity holder in GQG and have exposure to at least one of GQG’s investment strategies,” it added.

As for its valuation, Goldman sees scope for its shares to rerate to higher multiples.

It explained: “To reflect the weaker organic growth recently, we consider trough levels of NTM EV/EBITDA multiples of its comparable stocks (c.10.4x). If GQG’s one-year performance improves and it is therefore able to maintain its very strong organic growth, we think it could trade up towards the average of NTM EV/EBITDA multiples (13.1x). Applying the midpoint of the above multiples (ie. 11.8x) to our 12m fwd EBITDA forecast and using our GS AUDUSD forecast (0.72), we set our 12m TP at A$2.45 and initiate at Buy.”

The post Goldman Sachs names GQG Partners (ASX:GQG) shares as a buy with 32% upside appeared first on The Motley Fool Australia.

More reading

• AnteoTech (ASX:ADO) share price gains 42% in a week amid RAT race
• ANZ (ASX:ANZ) share price raised to ‘buy’ at Morgan Stanley
• Andromeda (ASX:ADN) share price rocketed 14% today. Here’s why
• Why were Rio Tinto (ASX:RIO) and BHP (ASX:BHP) shares in the green today?
• Here’s why the PointsBet (ASX:PBH) share price stormed 5% higher today

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

• The AnteoTech share price soared again today, taking its gains over the past week to 42%
• Demand for rapid antigen tests is increasing
• The company’s CEO is hitting media headlines this week

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The AnteoTech Ltd (ASX: ADO) share price has been skyrocketing amid momentum for COVID-19 rapid antigen tests.

Shares in the company soared 7.25% on Thursday to close at 37 cents apiece. That’s a 42% gain on last Thursday’s closing price.

Let’s take a look at what may be impacting AnteoTech shares.

What is happening at AnteoTech?

The AnteoTech share price is surging amid the rising demand for rapid antigen tests in Australia. In fact, the company has been hitting media headlines in recent days as it seeks approval for local production.

CEO Derek Thomson told the Courier Mail he has been seeking permission to manufacture the tests for nearly two years. He said:

We could supply millions now, it’s a good volume and it would certainly make a dent in the Queensland need at the moment.

The company has been producing rapid antigen tests in the European market including Spain while it waits for approval from Australia’s Therapeutic Goods Administration.

My Foolish colleague James noted on Friday the company plans to ramp up local production in the near future, and sales in 2022 could rocket due to RAT shortages. The AnteoTech share price jumped on the news.

Speaking on the pending TGA approval, Thomson told the Courier Mail:

We’re supplying them some more information, we’ve continued to do that and we believe that we’re in the final stages of our of our processing.

We would have liked it to go quicker but we understand that they have a responsibility and we’re working with them as best we possibly can.

Thomson also appeared on the Today Show on Thursday morning, where he said he believes the company will get through the TGA approval process “soon”.

Rapid antigen tests have been dominating media headlines in recent weeks, with other Australian companies also awaiting approval on the tests.

Among these are Lumos Diagnostics Holdings Ltd (ASX: LDX) and unlisted Brisbane-based diagnostics developer Ellume.

AnteoTech share price snapshot

The AnteoTech share price has returned 221% in the past year. This year to date, it has gained around 21%, while it has soared almost 95% in the past month.

Meanwhile, the S&P/ASX 200 index (ASX: XJO)’s has returned 8.45% in the past year.

The post AnteoTech (ASX:ADO) share price gains 42% in a week amid RAT race appeared first on The Motley Fool Australia.

More reading

• Why AnteoTech, BrainChip, City Chic, and ResMed shares are charging higher
• Lumos diagnostics (ASX:LDX) share price climbs amid RAT mania
• AnteoTech (ASX:ADO) share price surges amid ambition to join scramble for RATs
• Why Anteotech, Brainchip, RAIZ, and Santos shares are pushing higher
• Are AnteoTech (ASX:ADO) rapid COVID tests available in Australia?

Motley Fool contributor Monica O’Shea 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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