Tag: Motley Fool

Key points

• BHP has announced its plan to trial battery-electric locomotives in its Western Australian iron ore operations
• Swapping all the company’s trains to battery-powered counterparts could reduce its Western Australian iron ore operation’s diesel-related emissions by 30%
• Right now, the BHP share price is $46.63

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If you own BHP Group Ltd (ASX: BHP) shares, you might be excited to learn that the company is continuing its push to drop its emissions. In its latest scheme, it’s looking into utilising battery-powered trains.

The iron ore giant – which could soon become the largest company on the ASX – has announced its intent to trial electric locomotives in Western Australia’s Pilbara region.

At the time of writing, the BHP share price is $46.63, 1.04% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently up 0.16%.

Let’s take a closer look at the futuristic trials the company plans to undertake.

BHP pushes towards battery-powered haulage trains

Owners of BHP shares, rejoice! The company has boarded the electric train, or at least, it’s planning to.

The iron ore giant has announced it will purchase 4 battery-electric locomotives. They are expected to be delivered in late 2023.

BHP will test the trains’ performance and emissions reduction capabilities in delivering iron ore from its Pilbara mines to the Port Hedland export facility.

To put the mammoth task into perspective, a full BHP iron ore train in Western Australia is typically made up of 4 diesel-electric locomotives pulling around 270 cars weighed down with 38,000 tonnes of iron ore.  

By swapping its 180-locomotive strong iron ore fleet to electric trains, the company could reduce its Western Australian iron ore operations’ diesel-related emissions by around 30% annually.

Two of the locomotives will come from Progress Rail – A Caterpillar Inc (NYSE: CAT) company and BHP’s current provider.

The other two will come from Wabtec ­(NYSE: WAB) – creator of the world’s first 100% battery-electric heavy-haul locomotive.

BHP procurement officer, James Agar commented on the planned trials, saying:

By working with two global leaders in Progress Rail and Wabtec, we can broaden the scope of our trials and be better informed as we prepare for the planned replacement of our diesel-powered iron ore rail fleet. This is a good first step with significant potential.

The trials will also test to see if the trains can pick up energy on downhill slopes. They may be able to store that energy to power empty trains on their way back to mines.

If BHP’s plan sounds familiar, it might be because Rio Tinto Limited (ASX: RIO) announced a similar proposal earlier this month.

BHP share price snapshot

2022 has so far been brilliant for the BHP share price.

The iron ore giant’s stock is up 10% year to date. Though, it’s only 2% higher than it was this time last year.

The post Own BHP (ASX:BHP) shares? Here’s why the iron ore giant is pushing for battery-powered trains appeared first on The Motley Fool Australia.

More reading

• Leading fund manager says these blue-chip ASX shares are buys right now
• 2 buy-rated ASX dividend shares
• These are the 10 most shorted ASX shares
• Is the iron ore price set to slide?
• Does the BHP London share price perform the same as the company’s ASX:BHP listing?

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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The BrainChip Holdings Ltd (ASX: BRN) share price has been a remarkably strong performer on Tuesday.

In afternoon trade, the artificial intelligence technology company’s shares are up 20% to $1.78.

Why is the BrainChip share price shooting higher?

Investors have been bidding the BrainChip share price higher today despite there being no announcements released to the market.

However, it is worth noting that the company issued a press release overnight. While this release wasn’t deemed material enough to be released as an ASX announcement, it has managed to catapult the BrainChip share price higher and added a cool $500 million to its market capitalisation.

The latter now stands at ~$3 billion, which means the company is larger than the likes of Iress Ltd (ASX: IRE), Link Administration Holdings Ltd (ASX: LNK), and Zip Co Ltd (ASX: Z1P) despite recording revenue of less than US$800,000 during the first half.

What was announced?

According to the press release, BrainChip has begun taking orders for the first commercially available Mini PCIe board leveraging its Akida advanced neural networking processor. It notes that this rounds out its suite of AKD1000 offerings.

The release explains that the AKD1000-powered Mini PCIe boards can be plugged into a developer’s existing system to unlock capabilities for a wide array of edge AI applications. These include Smart City, Smart Health, Smart Home, and Smart Transportation.

BrainChip advised that it will also offer the full PCIe design layout files and the bill of materials (BOM) to system integrators and developers to enable them to build their own boards and implement AKD1000 chips in volume as a stand-alone embedded accelerator or as a co-processor.

BrainChip CEO, Sean Hehir, commented: “I am excited that people will finally be able to enjoy a world where AI meets the Internet of Things. We have been working on developing our Akida technology for more than a decade and with the full commercial availability of our AKD1000, we are ready to fully execute on our vision.  Other technologies are simply not capable of the autonomous, incremental learning at ultra-low power consumption that BrainChip’s solutions can provide. Getting these chips into as many hands as possible is how the next generation of AI becomes reality.”

Given the company’s $3 billion valuation, expectations are incredibly high for BrainChip and its technology.

Whether it can compete effectively against behemoths such as Intel and Nvidia remains to be seen. But as they have multi billion dollar budgets to invest in research and development (R&D) each year, BrainChip may have an uphill battle on its hands.

In 2020 Intel spent US$13.56 billion on R&D and in FY 2021 Nvidia spent US$3.9 billion on R&D. Whereas BrainChip spent just $4.4 million on R&D during the first half of FY 2021.

Food for thought for investors as the BrainChip market capitalisation hits $3 billion.

The post BrainChip (ASX:BRN) share price up 20% and hits $3bn market capitalisation appeared first on The Motley Fool Australia.

More reading

• Why Allkem, BrainChip, Data#3, and JB Hi-Fi shares are charging higher
• The BrainChip (ASX:BRN) share price has rocketed 100% in a month. Is this AI tech company worth its valuation?
• Why AnteoTech, BrainChip, City Chic, and ResMed shares are charging higher
• Why the BrainChip (ASX:BRN) share price is rocketing 21% to a new record high
• Why BrainChip, Crown, Objective, and South32 shares are racing 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 Link Administration Holdings Ltd and ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• Back in 1996 Apple was put back on track by the return of its founder, Steve Jobs.
• One ASX software share is taking similar action after merging with another one of its founder’s companies
• A portfolio manager has shared his prediction for at least a 65% upside in the medium term

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There is one ASX share currently walking a similar path to what Apple Inc (NASDAQ: AAPL) did before it became a US$2.83 trillion icon.

For those of you unfamiliar with the Apple of 1996, it was the year the late and great Steve Jobs made a return to the US tech company. At that time, the business was a far cry from the iconic electronic consumer device maker that is known for being today. Instead, the company was in turmoil after Jobs left years earlier.

After struggling for years in Jobs’ absence, the Apple board struck a deal to merge with the computer company Jobs had created after leaving Apple known as NeXT. Following this, the visionary brilliance of Jobs went on to shine — and the rest is history.

However, it is an ASX share that is resembling a modern-day equivalent of Apple.

Which ASX share is using Apple’s 1996 playbook?

While the name Matthew Sandblom may not be as recognisable as Steve Jobs, his return to 3P Learning Ltd (ASX: 3PL) is reminiscent.

Sandblom originally founded the teaching software company back in 2003 with Shane Hill and Tim Power. From its inception, the educational product provider took off with its Mathletics offering, landing deals across Australia and internationally.

Unfortunately, momentum unraveled following the departure of the company’s original founders. In 2014 3P Learning made its debut on the ASX. Since then, profitability has been patchy despite a steady top-line throughout the years.

This lack of direction for the company’s educational products and growth was reflected in the share price. Between 2018 and 2020, the 3P Learning share price fell approximately 50%.

In an attempt to avoid an opportunistic takeover from competitors, Sandblom took action and merged his second education venture — Blake Elearning — with 3P Learning. In the process, the original founder has resumed the position as chair. Additionally, Sandblom is now 3P Learning’s largest shareholder with a 49% holding in the company.

Taking a leaf out of Jobs’ book, Sandblom has shaken things up since his reunion with 3P. For example, around $9 million worth of synergies have been realised and co-founder Shane Hill has rejoined the business.

Already, the entrepreneur has mapped out a more ambitious future for this ASX share. The merged company is targeting a less price-sensitive market through direct-to-consumer (parents). On top of that, the company plans to overhaul Mathletics with updates — preparing the educational product for market share growth.

A fundies price forecast on this Apple-like hopeful

In an article published on Livewire, Schroders portfolio manager Ray David took a stab at what 3P Learning could be worth in the medium term.

While the company is projecting revenue of $92.3 million to $97.2 million in FY22, David sees the potential for 3P to be pulling $130 million to $150 million in the medium term. This is based on the company landing a few countrywide deals for its software.

From there, the fundie applies an earnings before interest and tax (EBIT) margin of 25%. On an EBIT multiple of 20 times this would place this ASX share between $2.40 to $2.80 apiece. For reference, the current 3P Learning share price is $1.70 — suggesting a potential upside of ~65%.

The post Watch this ASX share now doing what Apple did in 1996 appeared first on The Motley Fool Australia.

More reading

• Woodside (ASX:WPL) share price struggles amid Hydrogen project update
• Top 10 lithium stocks in LIT, the world’s first lithium ETF
• Why is EML payments (ASX:EML) share price having a rollercoaster start to the year?
• Why Allkem, BrainChip, Data#3, and JB Hi-Fi shares are charging higher
• Is it a buy? Why Morgan Stanley is bullish on the Adbri (ASX:ABC) share price

Motley Fool contributor Mitchell Lawler owns Apple. 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 Apple. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

Long-term demand for lithium is likely to be strong. This stems largely from the electric-vehicle (EV) revolution, led by Tesla (NASDAQ: TSLA), and the increasing popularity of energy-storage products. Lithium is a key component of lithium-ion batteries, which are the most common type of batteries for EVs and are also used in energy-storage products.

Let’s take a look at the Lithium & Battery Tech ETF (NYSEMKT: LIT), which became the world’s first lithium-focused exchange-traded fund (ETF) when it launched in 2010. You might decide that one or more of this fund’s holdings are worth at least putting on your watch list or that you want to buy the ETF itself. 

The Lithium & Battery Tech ETF: Long-term performance and the basics 

This ETF began trading in July 2010. Since its inception, it’s gained 204% through Jan. 14, 2022. This performance lags that of the broader market, as the S&P 500 index returned 448% over this period. However, over the five-year period, this ETF has handily outperformed the S&P 500, as the below chart shows.

The Lithium & Battery Tech ETF is an index fund that’s designed to track the performance of the Solactive Global Lithium Index, which consists of stocks involved in the full lithium cycle, from mining and refining the metal through battery production. It had 41 holdings as of Jan. 13. The fund has an expense ratio of 0.75%, which is a little high for an index fund, in general, but in line with thematic index-based ETFs. 

Shares of companies based in China accounted for about 45% of the fund’s total value, as of Jan. 13. The United States follows right after with a 22% weighting.

This ETF is not a pure play. Many of the companies in its portfolio are involved in some operations that have nothing to do with the lithium life cycle.

The Lithium & Battery Tech ETF: Top 10 stock holdings

Holding No.	Company	Market Cap	Country	Projected Annualized EPS Growth Over Next 5 Years**	Weight (% of Portfolio)	1-Year / 5-Year Returns
1	Albemarle (NYSE: ALB)	$27.3 billion	U.S.	29.8%	11.00%	29.2% / 167%
2	Tesla	$1.1 trillion	U.S.	79.3%	5.92%	24.2% / 2,110%
3	TDK (OTC: TTDKY)	$15.0 billion	Japan	23.2%	5.83%	(28.8%) / 85.6%
4	EVE Energy*	212.99 billion Chinese yuan (CNY) = approximately $33.5 billion	China	N/A	4.86%	26% / 611%
5	Contemporary Amperex Technology* (often called CATL)	1.346 trillion CNY = approx. $212 billion	China	57.1%	4.85%	56.5% /  N/A
6	BYD (OTC: BYDDY)	$98.9 billion	China	11%	4.60%	(6.5%) / 518%
7	Panasonic (OTC: PCRFY)	$27.0 billion	Japan	26%	4.51%	(6.2%) / 22.3%
8	Samsung SDI*	42.817 trillion South Korean won (KRW) = approx. $36.0 billion	S. Korea	51.3%	4.50%	(13.6%) / 460%
9	Yunnan Energy New Material*	229.616 billion CNY = $36.1 billion	China	69.1%	4.42%	93.7% / 1,554%
10	LG Chem*	52.77 trillion KRW = approx. $44.3 billion	S. Korea	6.9%	4.34%	(29.1%) / N/A
Overall LIT ETF	N/A	$5.5 billion (assets under management)	N/A	N/A	100%	20.9% / 242%
N/A	S&P 500	N/A	N/A	N/A	N/A	24.6% / 125%

Data sources: LIT ETF, Yahoo! Finance, and YCharts. *Not traded on a U.S. exchange; market caps for these stocks calculated by writer using current exchange rates. **Analyst consensus estimates. EPS = earnings per share. Bolded returns = outperformed the S&P 500. Data to Jan. 14, 2022.

Below is a brief description of the ETF’s top-six holdings.

Albemarle (No. 1) is one of the world’s largest lithium miners. Its primary lithium sources are brine in Chile and Nevada and hard rock (via a joint venture) in Australia. In the third quarter of 2021, its lithium business accounted for about 43% of total revenue, while its bromine and catalysts businesses contributed 33% and 23%, respectively.

What other lithium miners are in this ETF? China’s Ganfeng Lithium (No. 12), Chile’s SQM (14), Australia’s Pilbara Minerals (18), the U.S.’s Livent (22), Canada’s Lithium Americas (27), Canada’s Standard Lithium (35), Australia’s Ioneer (36), and Australia’s Piedmont Lithium (37). Ganfeng, SQM, and Livent are larger, well-established lithium producers. The others are junior miners, mostly in the development stage. Some are more speculative than others. 

Tesla, No. 2, is best known for pioneering premium electric cars. It also has a residential solar-energy business and an energy-storage business targeting a variety of markets. The company and its partner Panasonic produce lithium-ion batteries at its Gigafactory in Nevada.

TDK (No. 3) is an electronics-component manufacturer that has four business segments: passive components, sensor-application products, magnetic-application products, and energy-application products. In its fiscal year ending March 2021, its energy-application business accounted for 50% of its total sales. One of this business’ two main products is lithium-ion batteries for PCs and smartphones, including Apple‘s iPhone.  

EVE Energy and Contemporary Amperex Technology (CATL) round out the fund’s top five holdings. Both make lithium batteries. CATL is the world’s largest maker of electric-car batteries, according to The New York Times.

I had originally planned to stop at No. 5, but couldn’t resist including one more — BYD — because it’s worth putting on your watch list. Investing legend Warren Buffett would surely agree, as his Berkshire Hathaway owns a big stake in the company. BYD is one of the world’s largest manufacturers of EVs and sold the most electric cars in China in 2021. It also makes other products, including rechargeable batteries for various applications. 

A decent way to invest in the lithium life cycle with a big caveat

The Lithium & Battery Tech ETF looks like a decent way for investors to get exposure to the lithium life cycle from mining through the production of lithium-ion batteries. Keep in mind the downside of ETFs is the same as their advantage: diversification. 

The “big caveat” mentioned in the subheading? The ETF’s heavy concentration in Chinese stocks means it’s only a good fit for investors comfortable with relatively high volatility and risk. China is an emerging market (or developing country), which increases its economic and currency risk relative to the U.S. and other developed nations. Moreover, trade issues are a concern, as U.S.-China trade relations have been particularly contentious in recent years.

In my view, Albemarle is the best lithium stock for most investors. It’s well-established and even pays a modest dividend, currently yielding about 0.7%. (I’m not including Tesla as a “lithium stock,” as it’s much better classified as an EV stock.) 

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

The post Top 10 lithium stocks in LIT, the world’s first lithium ETF appeared first on The Motley Fool Australia.

More reading

• Watch this ASX share now doing what Apple did in 1996
• Woodside (ASX:WPL) share price struggles amid Hydrogen project update
• Why is EML payments (ASX:EML) share price having a rollercoaster start to the year?
• Why Allkem, BrainChip, Data#3, and JB Hi-Fi shares are charging higher
• Is it a buy? Why Morgan Stanley is bullish on the Adbri (ASX:ABC) share price

Beth McKenna has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple and 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.

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

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Key points

• Woodside released an update on its H20K hydrogen plant today
• The company says it has signed a contract for FEED engineering services at the site
• Woodside hopes to have an investment decision by 2022 and first liquid hydrogen by 2025
• Shares in the hydrocarbons giant are edging higher today less than 1% in the green.

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Shares in hydrocarbons giant Woodside Petroleum Limited (ASX: WPL) are struggling today, trading 0.28% in the red at $25.17.

Investors are showing a muted reaction to an update released out of Woodside’s camp today covering its H2OK liquid hydrogen production facility proposed for operation in Oklahoma.

Whilst the update isn’t price-sensitive at all, the Woodside share price has regained momentum these past few weeks. So let’s take a look at what was announced.

Woodside awards contract for FEED engineering

Woodside advised today that it has entered front-end engineering design (FEED) on a hydrogen project for the first time. The move comes after it awarded a contract in late December for FEED engineering services to Kellogg, Brown & Root LLC for its proposed H2OK project.

Phase 1 of the project involves construction of a 290-megawatt (MW) facility, producing up to 90 tonnes per day (tpd) of “liquid hydrogen through electrolysis, targeting the heavy transport sector”.

Woodside says the location offers the capacity to expand production up to 550 MW and 180 tpd, and that the “FEED phase” is a significant project development milestone.

Advancing the project past this point activates a series of milestone triggers that further mature the project scope, cost and schedule to make a final investment decision, per the release.

The company says it is targeting a final investment decision on H2OK in 2H 2022 and is aiming to produce the first liquid hydrogen in 2025.

The FEED update follows a suite of series of updates outlining Woodside’s expansion into the US, where it has recently signed collaborations with Hyzon Motors and green energy technology player Heliogen.

Aside from that, the price of Brent Crude oil spot and futures – where more than 90% of oil is priced from – has climbed more than 11% since the beginning of 2022.

Oil is now trading back above 3-year highs and is at multi-year highs when separating out the 2018 rally, a fact that bodes in well for the Woodside share price.

Management commentary

Speaking on the announcement, Woodside CEO Meg O’Neill said:

We are excited about the H2OK opportunity, given H2OK’s strategic location close to national highways and
the supply chain infrastructure of major companies already looking for reliable, affordable and lower carbon
sources of energy. Coupled with our recently announced target to invest US$5 billion in new energy products and lower carbon services by 2030, this FEED entry supports Woodside’s strategy to thrive through the energy transition.

The Woodside share price has started the year strongly, having climbed more than 15% in that time and rallying 8% in the last week alone.

The post Woodside (ASX:WPL) share price struggles amid Hydrogen project update appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Is this driving Santos (ASX:STO) and Woodside (ASX:WPL) shares higher on Monday?
• ASX 200 (ASX:XJO) midday update: Wesfarmers’ update, energy shares rise
• 5 things to watch on the ASX 200 on Monday
• Is the Woodside (ASX:WPL) share price set for an “explosive performance” this year?

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 EML Payments share price is zigzagging so far in 2022

• ASX 200 buy now, pay later shares are following a similar pattern

• The company’s share price is in the green after a shocking 2021

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The EML Payments Ltd (ASX: EML) share price has been up and down since the start of the year.

The company’s shares are currently swapping hands at $3.245, up less than 1% since 31 December. However, the EML Payments share price fell to $3.09 on 6 January before bouncing back to $3.29 on 12 January.

Let’s take a look at what’s been happening with the company lately.

Tech volatility

EML Payments’ shares have had a rocky ride so far in January. Between market close on 4 January and 6 January, the company’s shares dropped 6.65%.

Then, between market close on 6 and 12 January, they rebounded 6.47% before dropping another 3.43% between 12 and 14 January. Since then, EML Payment shares have gained 2.52%.

The company’s share price has followed a similar pattern to the S&P/ASX All Technology Index (ASX: XTX) as well as fellow buy now, pay later shares, including Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P).

In fact, the shape of the curves for these shares look almost identical in January.

Technology shares have been responding to the movements of the NASDAQ-100 Technology Sector Index in the United States. Speculation of interest rate rises in the US led to a tech sell-off in early January.

It triggered ASX 200 tech shares to follow a similar trend. The Afterpay share price was hammered along with that of EML Payments. But since then, ASX technology shares, including EML Payments, have recovered in line with their US counterparts.

Two non-price sensitive news announcements on EML Payments have also been released in recent days. Firstly, the company has partnered with international fintech company REPX to provide a payment product for European soccer fans.

Secondly, the company’s Nuapay business has partnered with payment platform Cocoon on a technology solution to save processing fees on automotive purchases.

Not all EML Payments’ international ventures have fared so smoothly, however. The EML Payments share price fell 23% in the past year on the back of regulatory concerns from the Central Bank of Ireland (CBI).

However, news in November that the CBI would permit the business to sign new customers and launch new programs helped the share price to recover towards the end of the year.

EML Payments share price snap shot

The EML Payments share price suffered a 12% drop in the past 12 months. By comparison, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 12% in the same time period.

In the past month, the company’s shares are up 7.24%, climbing 1.24% in the last week alone.

The company commands a market capitalisation of roughly $1.2 billion at its current share price.

The post Why is EML payments (ASX:EML) share price having a rollercoaster start to the year? appeared first on The Motley Fool Australia.

More reading

• Here’s why the EML (ASX:EML) share price could be a big opportunity
• 2021 was a year to forget for the EML (ASX:EML) share price. Here’s why
• 2 ASX growth shares rated as buys in January 2022
• ASX 200 (ASX:XJO) midday update: Big four banks fall, Bega Cheese jumps again

The author 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, EML Payments, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Afterpay Limited and EML Payments. 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) is on course to record a small gain. At the time of writing, the benchmark index is up 0.1% to 7,423.4 points.

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

Allkem Ltd (ASX: AKE)

The Allkem share price is up 4% to $11.80. This follows the release of the lithium miner’s second quarter update. According to the release, thanks to strong production and high prices, Allkem reported quarterly group revenue of approximately US$107 million and a group gross operating cash margin of US$70 million.

BrainChip Holdings Ltd (ASX: BRN)

The BrainChip share price has jumped 20% to $1.78. Investors have been buying this artificial intelligence technology company’s shares after it revealed that it has begun taking orders for the first commercially available Mini PCIe board leveraging its Akida neural networking processor.

Data#3 Limited (ASX: DTL)

The Data#3 share price is up 14% to $6.63 following the release of its half year trading update. The leading IT services and solutions provider revealed that it expects its first half profit before tax to be slightly ahead of the top end of its $15 million to $18 million guidance range. This is expected to lead to earnings per share growth of 30% during the first half.

JB Hi-Fi Limited (ASX: JBH)

The JB Hi-Fi share price is up 7% to $50.03. This follows the release of a better than expected trading update from the retail giant. JB Hi-Fi recorded modest sales growth during the second quarter, which led to sales falling just 1.6% during the first half despite cycling a very strong prior period. On the bottom line, its first half net profit of $287.9 million was down 9.4% year on year but 12.4% ahead of the consensus estimate.

The post Why Allkem, BrainChip, Data#3, and JB Hi-Fi shares are charging higher appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Rio Tinto’s Q4 update, JB Hi-Fi rockets, Kogan sinks
• Why the Data#3 (ASX:DTL) share price is rocketing 11% today?
• Why ASX lithium shares could send heads spinning this earnings season
• JB Hi-Fi (ASX:JBH) share price shoots 7% higher on ‘strong sales’
• Why is the Allkem (ASX:AKE) share price rising again today?

Motley Fool contributor James Mickleboro owns Orocobre Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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

• Last year was a difficult one for Adbri shareholders who saw considerable downside
• Yet, Morgan Stanley is bullish on the direction of Adbri and advocate it as a buy
• The broker values Adbri shares at $3.30, which are less than 1% down on the day.

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Shares in construction materials company Adbri Ltd (ASX: ABC) are inching lower today and now trade less than 1% in the red at $2.98.

Last year was a difficult one for Adbri shareholders, who witnessed the company’s share price glide down off a closing high of $3.84 in August.

Why then is the team at Morgan Stanley bullish on the direction of Adbri and advocate it as a buy in 2022? Let’s take a look.

Is Adbri a buy in 2022?

According to analysts at leading broker Morgan Stanley, that could be the case. The broker reaffirmed its bullish stance and recommended it as a buy in a note sent out to investors today.

Morgan Stanley notes Adbri has extended its lime contract with Alcoa, which it feels adds further weight to the company’s growth prospects in 2022.

Under the revised agreement, Adbri will continue supplying a portion of contracted volumes for the next 12 months. Previously, the contract was expected to cease all supply in January this year.

The broker also highlights that the extension is worth around $25 million to $35 million in revenue, which comes in at approximately 2% of its revenue modelling for FY22.

Morgan Stanley reckons the renewed contract is confirmation that its “overweight thesis for Adbri is playing out”, helping it to remain bullish on the stock.

The firm also reckons the macro-economic environment is set for Adbri as well, given the turbulence to global supply and manufacturing chains that has ensued since COVID-19 started.

Analysts at the firm note that it expects “domestic manufacturers, such as Adbri, to benefit from tightness in import supply chains” given its pricing power and location within the construction materials value chain.

Meanwhile, Macquarie and Morgans are both bullish as well, whereas Credit Suisse has it as a sell right now. In notes sent out to clients last month, each broker values the company at $4.05, $3.80 and $2.90 per share respectively.

Adbri share price summary

In the last 12 months, the Adbri share price has slipped 1% in the red. It has started the year off well however, climbing almost 6% since January 1 after allying 6% in the last month.

Given its struggles last year, Adbri has lagged the benchmark S&P/ASX 200 Index (ASX: XJO)’s return in the last year.

The post Is it a buy? Why Morgan Stanley is bullish on the Adbri (ASX:ABC) share price appeared first on The Motley Fool Australia.

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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 benchmark index has started the year well after a choppy period these past few months
• The team at RBC Capital Markets reckon these three ASX shares are poised to deliver upside in 2022
• Analysts at the firm recently upgraded each company to outperform in updates today

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The S&P/ASX 200 Index (ASX: XJO) has started the day up and is now trading 0.24% in the green at 7,435 points.

With the new year now well underway, the team at RBC Capital Markets has tipped these 3 ASX shares to outperform in 2022. Interestingly, each company has exposure to COVID-19 testing in some way.

The broker believes this could benefit their clinical diagnostics segments. Let’s take a look.

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare came into the new year trading down, falling from closing highs of $46.70 on 30 December.

This drop has occurred in tandem with the broader S&P/ASX 200 Health Care Index (ASX: XHJ) which has plunged almost 7% since 2022.

Hence, in the absence of any price-sensitive information from the company, weakness in the sector appears to be impacting Sonic Healthcare’s share price.

Shares in the $19 billion company by market cap outperformed last year, benefitting from the earnings surprise in the company’s Q1 FY22 trading update.

However, support fell away in December with government policy shifting away from Sonic’s COVID-19 test offerings in favour of rapid antigen testing (RAT). This was a development analysts at Credit Suisse recently highlighted.

Despite these potential headwinds, RBC Capital Markets disagrees and is bullish on the direction of Sonic’s share price.

The broker initiated coverage of Sonic Healthcare with a ‘buy’ today and values the company at $47 per share, implying an upside potential of 15% at the time of writing.

The team at Morgan Stanley agrees with RBC and also raised its price target by around 4% to a valuation of $48.10 today.

Healius Ltd (ASX: HLS)

Shares in healthcare player Healius also took a beating during the transition into the new year. The company’s share price has plunged more than 15% since 29 December.

Healius was boosted by the demand for COVID-19 testing during the last 2 years. The company recently noted it was completing more than 40,000 tests a day. This helped it recognise a 179% year on year gain in after-tax profits.

However, as with Sonic Healthcare, new language from the government in pushing RATs is weighing on the outlook for Healius’ shares.

As such, the Helius share price has come off a high of $5.52 last year and is now trading sideways so far on Tuesday. At the time of writing, it is $4.705, a gain of 0.53% on yesterday’s close.

Nevertheless, the team at RBC Capital Markets has initiated coverage on the ASX share with a ‘sector perform’ recommendation. It values the company at $5 a share.

At the time of writing, this implies an approximate 6.2% upside potential should the broker’s forecast be correct.

Analysts at fellow brokers Morgan Stanley and Jefferies concur with this sentiment. Both raised their price targets — Morgan Stanley by 4% to $5.10 and Jefferies by 2.5% to $6.40 respectively.

Australian Clinical Labs Ltd (ASX: ACL)

Shares in Australian Clinical Labs gained considerable momentum in December and the pulse of investor buying has continued into 2022.

Over the last month, shares have climbed almost 14%, even after falling from an all-time closing high of $6.20 on the first trading day of 2022.

Underpinning ACL’s share price performance is the guidance upgrade released to the market last month. Management now forecasts net profit after tax (NPAT) of between $116.3-$128 million. That’s a 35-36% upward revision on previous guidance.

It now also expects revenue to rise by another 13-14% on top of previous estimates. It’s looking at $497-$517 million at the top versus its previous guidance of $437-$455 million.

Management notes the uptick in sales is underscored by strong COVID-19 testing demand.

Despite the move towards RAT, the company is optimistic around its COVID-19 testing, anticipating “heightened volumes of COVID-19 testing to continue during the remainder of FY22 due to the impact of new variants and outbreaks”.

RBC Capital Markets agrees and has given the company a $6.50 per share valuation, indicating its bullish stance.

At the time of writing, this price target signifies a 15% upside potential. Goldman Sachs also recently rated Australian Clinical Labs as a buy with a $6.60 price target.

The post Top broker just rated these 3 ASX shares as buys appeared first on The Motley Fool Australia.

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The author Zach Bristow 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 Australian Clinical Labs Limited and Sonic Healthcare 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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Key points

• The Beforepay share price is rebounding after tumbling 44% on its IPO yesterday
• Beforepay is a fintech pay-on-demand company offering users salary advances
• Right now, its stock is still trading at $2.11 – 38% lower than its prospectus’ offer price

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The Beforepay Group Ltd (ASX: B4P) share price seems to be getting back on the horse after crashing 44% on its float.

The pay-on-demand company debuted on the ASX at 11 am yesterday after offering its shares for $3.41 under its prospectus. Unfortunately, after finalising its initial public offering (IPO), its stock tumbled to close yesterday’s session at $1.905.

However, Tuesday seems to be a brighter day. At the time of writing, the Beforepay share price is $2.11, 11.02% higher than its previous close.

Let’s take a look at the ASX newbie’s rollercoaster start to its time on the market.

But first, what is Beforepay?

Beforepay is a financial tech company providing those who use it with advances on their salary.

According to Beforepay chair and former Westpac Banking Corp (ASX: WBC) managing director and CEO, Brian Hartzer, the company is filling a gap for on-demand access to credit.

Hartzer says that the company’s technology provides a “suite of budgeting tools”, delivered through formats including smartphone and online applications, custom budgeting tools, and a “pay-cycle detection algorithm”.

Additionally, between its launch in August 2020 and October 2021, Beforepay had a 25.3% compound monthly growth in active users and advanced $170.5 million of pay.

On its debut, the company released an operating update on its December quarter wherein it provided $77 million of pay advances – up 361% on the prior comparable period.

On top of that, its default rates had more than halved, reaching 3% in the quarter.

What sent the Beforepay share price tumbling after its IPO?

It’s hard to say what made the market turn its nose up at Beforepay’s stock’s float.

As part of its IPO, the company raised $35 million and was left with 46.4 million shares.

That saw it with an expected market capitalisation of $158 million. However, come yesterday’s close, the Beforepay share price saw the company with a valuation of around $88 million.

The proceeds of the offer will help the company acquire more customers, grow its Cash Outs, refine its products and models, explore overseas opportunities, and pay for the costs of the offer.

The post Beforepay (ASX:B4P) share price recovers 11% after disastrous IPO appeared first on The Motley Fool Australia.

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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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