Tag: Motley Fool

Key points

• The Novonix share price has plunged almost 10% today
• That’s despite no major news from the company
• What could be behind this lithium battery share’s misfortune?

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The S&P/ASX 200 Index (ASX: XJO) is having a pretty dreary old day on the ASX boards today thus far. As it stands at the time of writing, the ASX 200 is down by 0.97% at 7,337.1 points. But that’s nothing compared to the Novonix Ltd (ASX: NVX) share price. Novonix shares are currently down a nasty 9.7% at $9.22 a share after falling pretty consistently all day.

So why is this ASX 200 battery materials share giving back so much value today?

Well, unfortunately, it’s not entirely clear why. There have been no major news or announcements out of the company today. Or indeed since the 10 January announcement that Novonix would be initiating the process of a secondary listing on the US markets. The tech-focused Nasdaq exchange, to be specific.

At the time, this news caused quite a stir with investors, who promptly sent the shares up a healthy 7%. Novonix made the move in order to “to expand its reach to investors in the United States” and North America.

But that was then and this news is unlikely to still be influencing the Novoxnix share price. So what might be going on with this company today?

Why have Novonix shares fallen off a cliff today?

Well, it’s possible that today’s move is just the latest in the very common bouts of volatility this company has long endured. For instance, we saw a spike in Novonix shares on Monday. On that day, the shares rose close to 10% between market open and noon, only to give it all back, and then some, by the end of the trading day.

It’s not uncommon to witness this kind of volatility in companies that have enjoyed massive share price runs, and Novonix falls into this catagory. Remember, Novonix is a company that rocketed close to 650% in 2021. It remains up more than 400% over the past 12 months, and 255% over the past 6.

We also saw Novonix shares take a 30% haircut back in early December that occurred over just a few trading days, despite no obvious trigger or catalyst. Today’s moves might just be some additional volatility playing out.

Another savage selloff with some US growth shares overnight probably didn’t help either. Last night saw the NASDAQ-100 (INDEXNASDAQ: NDX) take a 2.57% dive, which would have done nothing to boost investor sentiment for the popular battery and lithium shares on the ASX. That might explain why we are seeing other players in Novonix’s space, such as Pilbara Minerals Ltd (ASX: PLS), taking large hits today.

At the current Novonix share price, this ASX 200 company has a market capitalisation of $4.48 billion.

The post The Novonix (ASX:NVX) share price just tanked 10%. What’s going on? appeared first on The Motley Fool Australia.

More reading

• Are the worst-performing ASX 200 shares turnaround opportunities?
• Could BrainChip (ASX:BRN) crack into the ASX 200? Here’s what it takes
• ASX 200 (ASX:XJO) midday update: BHP’s update, Megaport sinks, HUB24 impresses
• ASX retail shares on watch amid potential cuts to COVID-19 isolation requirements
• 5 things to watch on the ASX 200 on Wednesday

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

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The S&P/ASX 200 Index (ASX: XJO) is out of form on Wednesday and has dropped deep into the red. In afternoon trade, the benchmark index is down 0.7% to 7,354.5 points.

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

Allkem Ltd (ASX: AKE)

The Allkem share price is down 7% to $10.77. This may have been driven by a broker note out of Ord Minnett this morning. According to the note, the broker has downgraded the lithium miner’s shares to an accumulate rating from buy with a $12.50 price target. It made the move on valuation grounds.

Megaport Ltd (ASX: MP1)

The Megaport share price has tumbled 16% to $15.30. This follows the release of the leading elastic interconnection services provider’s second quarter update. According to the release, Megaport posted a quarter on quarter monthly recurring revenue (MRR) increase of just $0.6 million to $9.2 million. This led to an 8% increase in second quarter revenue to $26.6 million. Investors appear to have been expecting much stronger growth given the lofty multiples its shares trade on.

Redbubble Ltd (ASX: RBL)

The Redbubble share price has continued its slide and is down a further 8% to $2.14. Investors have been selling down the ecommerce company’s shares after brokers responded negatively to its recent trading update. One of those brokers is Morgan Stanley. It downgraded Redbubble’s shares to an equal weight rating and cut the price target on them from $6.50 to $2.65.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price is down 9% to $8.32. This is despite there being no news out of the online furniture and homewares retailer. However, given disappointing updates from other ecommerce companies recently, investors appear to believe Temple & Webster could be struggling in FY 2022.

The post Why Allkem, Megaport, Redbubble, and Temple & Webster’s shares are falling appeared first on The Motley Fool Australia.

More reading

• Analysts name 3 hot ASX lithium shares to buy now
• ASX 200 (ASX:XJO) midday update: BHP’s update, Megaport sinks, HUB24 impresses
• Is the Allkem (ASX:AKE) share price going to keep charging higher?
• Why the Megaport (ASX:MP1) share price is crashing 12% today
• Why AVZ, Kogan, Panoramic, and Redbubble shares are sinking

Motley Fool contributor James Mickleboro owns Orocobre Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended MEGAPORT FPO and Temple & Webster Group Ltd. The Motley Fool Australia has recommended MEGAPORT FPO and Temple & Webster 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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Key points

• NiCo Resources debuted on the ASX at midday AEDT Wednesday
• The NiCo Resources share price is currently 36.5 cents – 82.5% higher than its offer price
• The company is a spin out of Metals X, taking over its Central Musgrave Project nickel and cobalt prospects

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NiCo Resources Limited (ASX: NC1) has finished its initial public offering (IPO), launching onto the market this afternoon to the delight of investors.

In the wake of its debut, the NiCo Resources share price has surged a massive 82.5% higher than the offer price in its prospectus.

At the time of writing, the company’s stock is swapping hands for 36.5 cents apiece. That’s well up on its offer price of 20 cents.

Let’s take a look at the company and what went down during its IPO.

What does NICO Resources do?

NiCo Resources is a spin-out of Metals X Limited (ASX: MLX), taking on its former parent company’s nickel assets.

The ASX newbie has walked away from Metals X with the Central Musgrave Project – made up of around 2,000 square kilometres of prospective exploration tenure, including the Wingellina Project, the Claude Hills nickel deposit, and the Mt Davies exploration prospects.

The project’s tenements host mineral resources of more than 200 million tonnes. They contain 1.95 million tonnes of nickel and 150 thousand tonnes of cobalt.

It also has a probable ore reserve of 164.8 million tonnes containing 1.56 million tonnes of nickel and 123,000 tonnes of cobalt.

NiCo Resources share price surges 82% on ASX IPO

Not all ASX IPOs turn out as well as NiCo Resources’ has. The company’s stock has soared a massive 82.5% higher than its offer price within a few hours of its debut.

The company floated at midday AEDT and reached an intraday high of 37.5 cents – representing an 87.5% gain.

NiCo Resources’ IPO saw it offering 60 million shares at 20 cents apiece. That raised $12 million – the pinnacle of its prospectus’ expected range.

The funds will go towards advancing the Wingellina nickel-cobalt-scandium project to development as well as various exploration programs determining how to exploit potential high-grade zones of nickel, cobalt, and scandium.

It will also help fund one review of mineral processing routes to maximise the Central Musgrave Project’s minerals’ value and another of historical data to find information or programmes needed to undertake a feasibility study update.

Following NiCo Resources’ IPO, the company’s CEO Rod Corps and chair Warren Hallam are expected to hold respective stakes of 25% and 29.17%.

Additionally, Metals X will hold 18.33% of the company’s outstanding shares. NiCo Resources’ IPO is expected to include a distribution to eligible Metals X shareholders.

Following the IPO, NiCo Resources expects to have 91 million shares on offer – giving it an assumed market capitalisation of around $18.2 million based on its offer price.

However, at its current share price, it has an assumed valuation of approximately $31.5 million.  

The post NiCo Resources (ASX:NC1) launches 82% following IPO appeared first on The Motley Fool Australia.

More reading

• These 3 companies are set to IPO on the ASX next week

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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 Lynas share price has dropped following its latest quarter update
• This is despite the miner reporting record sales revenue for the quarter
• Lynas is known for producing the battery material commonly used in electric cars

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The Lynas Rare Earths Ltd (ASX: LYC) share price is slipping today despite the miner announcing record sales revenue in its latest quarterly report.

After a morning of ups and downs, the Lynas share price has sunk further in afternoon trade and is currently 1.35%, trading at $10.94.

Lynas is the largest producer of separated rare earth minerals outside of China. This includes neodymium and praseodymium (NdPr) — the combined material needed to power clean energy batteries such as electric vehicles.

Resources produced at its Western Australian Mt Weld mine are processed offshore at its Malaysian plant.

Let’s take a closer look at the miner’s results for the period ending 31 December 2021.

Record sales revenue for Lynas

This morning, Lynas released its company results for the December 2021 quarter, reporting inflated production and a record sales revenue of $202.7 million. This compares to $121.6 million in sales revenue for the same trading period in FY21.

The miner reported high consumer appetite and enthusiastic market conditions, which it anticipated would continue into the next quarter.

NdPr was in steady demand, with the market price hitting US$100/kg in November for the first time in 10 years. Production of the material reached 1,359 tonnes.

While the Chinese domestic price for NdPr was slightly higher, customers were prioritising “security of supply rather than price” in this current climate, according to the company.

Total rare earth oxide (REO) production was 4,209 tonnes.

The company reported it had completed its mining campaign 4-1 drilling during the quarter, and its chemical assay results were now pending.

Lynas added that coronavirus-related challenges were “inevitable”, but it had risen to the challenge during the quarter.

With shipping delays and disruptions doubling the transportation time on its Fremantle to Kuantan, Malaysia route, the company chartered a ship to ensure consistency of supply instead of using regular commercial options.

Lynas will continue to combine these two shipping options in the future.

In addition, its employees in both Malaysia and Australia had achieved a high vaccination status, with almost half of Malaysian employees receiving third doses.

What’s next for Lynas?

Looking forward, the company is pursuing its Lynas 2025 project.

The miner is building a rare earths processing facility in Kalgoorlie, Western Australia. This will be used to process the material produced from its Mt Weld mine.

The WA Environmental Protection Authority (EPA) issued an assessment report in October regarding the project. The approval is now awaiting determination.

The company has also ticked off several project milestones including the start of site recruitment and the arrival of essential equipment (such as kilns, filters and steel tanks).

Environmental regulator approval for its Malaysian permanent disposal facility (PDF) for Water Leach Purification (WLP) has also been attained, with further environmental, social and radiological impact assessments currently underway.

Lynas share price snapshot

The Lynas share price has seen a stellar 147% increase in the last 12 months.

Exactly a year ago, the Lynas share price was at its lowest point, at $4.48 apiece.

The Lynas share price hit a 52-week-high of $11.24 on January 13, after releasing its commitment to protect human rights and prevent modern slavery within its operations.

The miner has a market capitalisation of more than $10 billion and a price-to-earnings ratio (P/E) of 61.73.

The post The Lynas (ASX:LYC) share price is slipping today despite record sales results appeared first on The Motley Fool Australia.

More reading

• Why is the Lynas Rare Earths (ASX:LYC) share price up 20% in a month?
• Here’s why leading brokers name the Lynas (ASX:LYC) share price as a buy
• These were the best performing ASX 200 shares last week
• Here are the 5 best performing ASX 200 mining and resource shares of 2021
• Why did the Lynas Rare Earths (ASX:LYC) share price surge 155% in 2021

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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) has followed the lead of US markets and is tumbling lower. At the time of writing, the benchmark index is down 0.65% to 7,361.1 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are pushing higher:

BrainChip Holdings Ltd (ASX: BRN)

The BrainChip share price is up 7% to $1.99. This morning the artificial intelligence technology company announced that it has been granted a new patent. The patent protects BrainChip’s neuromorphic processor configured to perform convolutions on digital input data that has been converted into spikes.

Harvey Norman Holdings Limited (ASX: HVN)

The Harvey Norman share price is up 4% to $5.25. This appears to have been driven by a broker note out of Credit Suisse this morning. According to the note, the broker has upgraded the retailer’s shares to an outperform rating with a $5.62 price target. Credit Suisse made the move in response to some positive industry updates.

HUB24 Ltd (ASX: HUB)

The HUB24 share price is up 2.5% to $27.49. This follows the release of its second quarter update. According to the release, HUB24 achieved record second quarter platform net inflows of $3.6 billion. This led to an increase in its total funds under administration (FUA) to $68.3 billion, which is up 118% compared to the prior corresponding period. HUB24’s strong quarter was driven by a combination of organic growth and flows from the Xplore acquisition.

Lake Resources N.L. (ASX: LKE)

The Lake Resources share price is up 3% to 98 cents. Investors have been buying the lithium developer’s shares following the release of an update on its Kachi Lithium Project in Argentina. According to the release, Lake has increased its base case production plans to 50,000 tonnes per annum of lithium carbonate. This is almost double its previous plans.

The post Why BrainChip, Harvey Norman, HUB24, and Lake Resources shares are pushing higher appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
• Analysts name 3 hot ASX lithium shares to buy now
• Could Brainchip (ASX:BRN) crack into the ASX 200? Here’s what it takes
• ASX 200 (ASX:XJO) midday update: BHP’s update, Megaport sinks, HUB24 impresses
• HUB24 (ASX:HUB) share price gains attention on record platform net inflows

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 Hub24 Ltd. The Motley Fool Australia owns and has recommended Harvey Norman Holdings Ltd. The Motley Fool Australia has recommended Hub24 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

• Crown shares are now trading back up near 52-week highs after rebounding last year
• JP Morgan has weighed in and reckons there is exciting times ahead for Crown
• The broker values the company at $15 per share and reckons Star Entertainment might get involved in the takeover debate once again
• The Crown share price has climbed more than 22% in the last year.

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Shares in gaming and entertainment giant Crown Resorts Ltd (ASX: CWN) are edging lower today and now trade less than 1% in the red at $12.52.

The Crown share price has made a gradual recovery from its single year lows back in August, having emerged relatively unscathed from a series of scandals last year.

Crown is now trading up near its 52-week highs once more, having marched its way up the steps from its lows.

Now the team at JP Morgan has stepped into the ring and weighed in on the Crown investment debate as well. Here’s what the leading broker had to say about the outlook for Crown investors.

What’s JPM saying about the Crown saga?

The broker released a report entitled “Fourth Round Bell: off the ropes to talk about knockout price”, outlining its view on the bid to purchase Crown’s assets.

The bidder, as it turns out, is the asset management and private equity giant Blackstone, which recently revised its offer to $13.10 per share up from $12.50 last year.

Previously Crown’s board was unwilling to engage in any takeover or buyout proposals, however, the question on its willingness to participate in talks has now been removed according to JP Morgan.

Analysts at the firm say that “rigur remains” behind its $15 price target, however, “given the value of the real estate has always been of a highest & best use nature, there remains plenty of value to unlock”.

The firm also says that Crown has “fewer skeletons in the closet than feared” seeing as Blackstone was granted “non-public due diligence”.

Moreover, seeing the bidder increase its offer by circa 5% alleviates the fear of any lingering surprises. With this newfound momentum, JPM reckons that Crown’s prior hesitance on engaging has now changed, and now believes The Star Entertainment Group Ltd (ASX SGR) “is still likely to get involved”.

As previously reported by The Motley Fool, all eyes will be on Star in the coming periods following the withdrawal of its competing offer last year.

What else did the broker say?

Aside from this, JPM commented on Crown’s recent investor day that outlined the investment opportunity in its Barangaroo complex.

The broker says that “the opportunity & roadmap to move forward with regulators presented near-term earnings upgrades for re-opening”.

Regarding valuation, the broker opted to assess Crown’s worth based on an op-co/prop-co structure. This is simply a way to value a company by dividing it into two parts.

The first concerns operating assets and operating lines in the business (op-co); whereas the second part involves income generating assets like real estate and infrastructure (prop-co).

On its $15 per share valuation, JPM says “we believe the most suitable way to assess CWN’s value is via op-co/prop-co structure. Our valuation is based on: 1) 35% of FY23E EBITDA to derive rent payment & a cap rate of 5%, valuation of $5.5bn & 2) Core operating business less rent on a 10x FY23E EV/EBITDA multiple; valuation of $5.1bn. Retain Overweight; PT A$15.00”.

As such, JP Morgan remains overweight on Crown, seeing as Barangaroo is a “long-term growth driver”, and due to the “potential realisation of fundamental value within the real estate property value of [Crown’s] assets and its core operating business”.

The Crown share price has climbed more than 22% in the last year after rallying 13% this past month. Since we began the new year, shares have spiked 5% and lead the broad indices.

The post What’s JP Morgan saying about the Crown Casino (ASX:CWN) saga? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• Why BrainChip, Crown, Objective, and South32 shares are racing higher
• Here’s why the Crown (ASX:CWN) share price jumped 9% today
• ASX 200 (ASX:XJO) midday update: Crown jumps, miners rally, Sonic sinks
• Crown (ASX:CWN) share price on watch after Blackstone ups takeover bid

The author has no positions 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Appen Ltd (ASX: APX)

According to a note out of Citi, its analysts have retained their buy rating but cut their price target on this artificial intelligence data services company’s shares to $14.80. Citi notes that Appen has not provided the market with a trading update, which it believes could be interpreted as a sign that the company has achieved its guidance in FY 2021. In light of this, it suspects that market consensus estimates could be too low. The Appen share price is trading at $10.18 this afternoon.

Harvey Norman Holdings Limited (ASX: HVN)

A note out of Credit Suisse reveals that its analysts have upgraded this retail giant’s shares to an outperform rating with a $5.62 price target. This broker believes Harvey Norman is benefitting from strong demand for household goods following recent industry updates. In light of this, it has updated its estimates and believes this makes its shares good value at the current levels. The Harvey Norman share price is fetching $5.25 today.

JB Hi-Fi Limited (ASX: JBH)

Analysts at Morgans have retained their add rating and lifted their price target on this retailer’s shares to $57.00. The broker notes that JB Hi-Fi’s half year trading update was significantly better than it was expecting. This has led to Morgans upgrading its sales and earnings estimates for the full year. Overall its analysts believe the combination of a strong market position, heightened customer demand, and good cost control make its shares inexpensive at current multiples. The JB Hi-Fi share price is trading at $49.63.

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

More reading

• ASX 200 (ASX:XJO) midday update: BHP’s update, Megaport sinks, HUB24 impresses
• Why is the Appen (ASX:APX) share price underperforming its ASX 200 tech peers?
• 2 ASX dividend shares with large yields and consistent payouts
• Here are the top 10 ASX shares today
• Here are the tech shares leading the ASX 200 on Tuesday

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 Appen Ltd. The Motley Fool Australia owns and has recommended Appen Ltd and Harvey Norman 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

• BlackRock’s CEO and chair says the energy transition will bring “the greatest investment opportunity of our lifetime”
• However, BlackRock – which holds stakes in many of the ASX 200’s biggest carbon emitters – won’t be selling out of oil and gas as it believes fossil fuels are needed to reach net zero
• The view has been criticised by climate activists who say it flies in the face of climate science

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The boss of BlackRock Inc (NYSE: BLK) – which manages more than US$10 trillion of assets – has vowed the fund manager doesn’t plan on selling out of ASX 200 oil and gas companies.

BlackRock has 6% holdings in S&P/ASX 200 Index (ASX: XJO) gas and oil giants Woodside Petroleum Limited (ASX: WPL) and Santos Ltd (AS:X STO).

It also holds stakes in 2 of Australia’s 4 biggest emitters, Origin Energy Ltd (ASX: ORG) and AGL Energy Limited (ASX: AGL). (Also noteworthy: Woodside comes in as Australia’s ninth biggest emitter, having put out 9.2 million tonnes of carbon in 2019-2020.)

While BlackRock is bullish on decarbonisation, its CEO and chair Larry Fink has ruled out dropping shares due to environmental impacts, instead saying companies need to “pass through shades of brown to shades of green”.

Let’s take a closer look at why the world’s largest fund manager is holding onto its carbon-intensive investments.

Why the $10 trillion fund manager holds the ASX 200’s biggest emitters

In Fink’s recently published 2022 letter to CEOs, he commented capitalism is not “woke” and BlackRock “does not pursue divestment from oil and gas companies as a policy”.

Fink also said the fund believes the fossil fuels will play an important role in decarbonisation, saying:

We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients…

[T]o ensure continuity of affordable energy supplies during the transition, traditional fossil fuels like natural gas will play an important role both for power generation and heating in certain regions, as well as for the production of hydrogen.

That will likely be music to the ears of shareholders of ASX 200 energy companies, which are being bolstered lately alongside oil prices.

However, the CEO’s viewpoint has been criticised by climate activists.

Reclaim Finance campaigner Lara Cuvelier was quoted by CNBC as saying Fink’s “opportunistic argument” for including fossil fuels in the energy transition is disputed by climate science. Cuvelier continued:  

Given BlackRock’s enormous fossil fuel interests, perhaps this truth is just too inconvenient to stomach.

Still, Fink believes the energy transition will create the “greatest investment opportunity of our lifetime” but “divesting from entire sectors – or simply passing carbon-intensive assets from public markets to private markets – will not get the world to net zero”.

Additionally, Fink hinted at one area ASX investors on the hunt for unicorns might want to keep their eyes on, and it’s not what might be expected. He commented:

The next 1,000 unicorns won’t be search engines or social media companies, they’ll be sustainable, scalable innovators – startups that help the world decarbonize and make the energy transition affordable for all consumers.

The post Here’s why BlackRock plans to keep these carbon intensive ASX 200 shares appeared first on The Motley Fool Australia.

More reading

• Woodside (ASX:WPL) share price on watch following sell-down of onshore LNG asset
• 5 things to watch on the ASX 200 on Wednesday
• Own Santos (ASX:STO) shares? Top broker thinks it ‘can pay higher dividends’
• Woodside (ASX:WPL) share price struggles amid hydrogen project update
• What will AGL (ASX:AGL)’s 2022 dividend yield look like?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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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Shares in mining and resources company Minotaur Exploration Ltd (ASX: MEP) are inching higher in afternoon trade and are now swapping hands at 23.5 cents apiece.

Investors have responded well to Minotaur’s quarterly cash flow and activities update for the period ended 31 December 2021. In the report, the company also covered details of the proposed merger with Andromeda Metals Ltd (ASX: ADN). Here are more details.

Why’s the Minotaur Exploration share price edging higher?

The company advised that it held cash of $2.29 million following an exploration expenditure of $2.2 million at the end of the quarter.

Minotaur’s cash position took a backward step at the end of December, resulting in a 46% decline in cash and cash equivalents from $4.24 million in the previous quarter.

Factoring in all available sources of liquidity, Minotaur estimates it has $5.81 billion in total available funding for future operating activities. This gives the company an estimated 2.69 quarters of runway at its current burn rate.

Minotaur also gave an update on the proposed takeover offer from Andromeda Metals that first surfaced in November 2021.

Back then Andromeda lodged a scrip for scrip takeover offer by a subsequent bid implementation agreement. Minotaur then put the proposal to shareholders via a bidder’s and target’s statement in December.

The company says that as of 18 January, Andromeda had “received acceptances for 59% of Minotaur’s issued shares”.

Minotaur’s board also unanimously recommended shareholders accept the offer, which Andromeda stated is due to close on 31 January 2022, per the release.

Not only that, but the takeover is “conditional, primarily, on Minotaur’s shareholders approving the separation of Minotaur’s non-kaolin assets and their transfer to subsidiary Demetallica Ltd, with Demetallica to be formally demerged from Minotaur”.

Demetallica will prepare for an initial public offering (IPO) and ASX listing in April 2022 according to the company’s announcement.

Under this arrangement, Minotaur’s roughly 3,300 shareholders will receive around 1,000 new shares in Demetallica for each 20,000 Minotaur shares held, subject to that approval at a meeting on 20 January 2022.

Aside from this update, Minotaur also rehashed the seven market-sensitive updates it released in December, that’s seen its share price climb more than 20% in the last month.

Minotaur Resources share price snapshot

In the last 12 months, the Minotaur share price has climbed over 38% after rallying 20% in the past month.

This year to date it has jumped out of the blocks as well, spiking over 17% since January 1.

Each of these returns has outpaced the benchmark S&P/ASX 200 Index (ASX: XJO)’s return within the last 12 months.

The post Minotaur Resources (ASX:MEP) share price spikes on Andromeda, quarterly update appeared first on The Motley Fool Australia.

More reading

• Why is the Andromeda Metals (ASX:ADN) share price leaping another 18% today?
• Why has the Andromeda (ASX:ADN) share price rocketed 26% in a month?

The author has no positions 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 Qantas share price is in the green today
• The airline will be flying Sydney to Dallas in February
• Brokers have recently rated Qantas a buy

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Qantas Airways Ltd (ASX: QAN) may have hit turbulence in the first month of the year, but some new routes may help the airline fly higher soon.

The Qantas share price is up just 1.2% this year to date. However, it has risen nearly 6% in the past month.

Let’s take a look at what could impact the airline in the coming month.

What is happening at Qantas

The Qantas share price has been up and down like a yo-yo in January. The share price gained 2.4% on Monday but fell 1.95% on Tuesday. As Motley Fool Australia reported, travel shares were all down yesterday amid news Australia had been taken off the safe travel list for Europe.

But there could be brighter days ahead for the airline. Qantas will be resuming its long haul flights to Dallas Fort Worth in the US on February 16, Executive Traveller reported yesterday. The 15-hour flight was suspended in early 2020 due to the COVID-19 pandemic. The flight will be scheduled three times a week on Wednesdays, Fridays and Sundays.

Another flight route set to resume is the Perth to London long haul flight. This daily service is earmarked for resumption on March 27.

On January 4, the airline resumed flights between Sydney and Johannesburg in South Africa. The company’s share price increased 2.79% on the day.

Qantas has also received positive broker outlooks in recent days. Morgan Stanley rated the airline as a buy last week and sees earnings increasing under normal conditions.

The company gave the share price a $7 price target. That’s 38% more than current share price of $5.06 at the time of writing. JP Morgan also recently gave Qantas an outperform rating with a $6.30 price target.

Australia’s international borders also could weigh on the Qantas share price in the coming months. For now, Australia’s borders are only open to vaccinated citizens, permanent residents, and eligible visa holders.

Immigration Minister Alex Hawke announced last night that 43,000 international students have arrived in Australia since 1 December. He also revealed temporary graduate visa holders will be allowed into the country from 18 February.

Qantas share price recap

The Qantas share price is up 6.07% in the past month, but it is down 1.55% in the past week. In the last year, it has climbed by 3.89%.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned roughly 9% in the past year.

The company has a market capitalisation of about $9.6 billion based on its current share price.

The post What could help the Qantas (ASX:QAN) share price could take flight soon? appeared first on The Motley Fool Australia.

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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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