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Australian Foundation Investment Co.Ltd. (ASX: AFI), also known as AFIC, is one of the most popular investments for young Aussie investors.

What is AFIC?

This business is a listed investment company (LIC). It is actually one of the oldest LICs on the ASX – the LIC was listed in 1928.

The purpose of a LIC is to find and invest in assets on behalf of their shareholders. Essentially, people can delegate their investment decisions to the LIC.

AFIC enables people to easily invest indirectly into a portfolio of (mostly) ASX shares. It offers a diversified portfolio which has a target of between 60 to 80 meaningful positions across a range of industries that are selected for their ability to perform through economic cycles and generate returns over the long-term.

How popular is the LIC?

According to reporting by the Australian Financial Review, online broker Pearlier has revealed that AFIC is one of the most popular investments for millennials. It was the 12^th most held investment among its mostly younger Aussie investors.

Not only was AFIC popular, but Argo Investments Limited (ASX: ARG) was 15^th. That may imply that young investors appreciate the long-term focus and structure of LICs.

Pearler co-founder Nick Nicolaides said:

There’s definitely appreciation for how and where these companies came from. They did not come from a bona fide capitalist approach to funds management. They were born out of a need to effectively manage money for a member base.

According to Pearler, LIC investments with its members were approximately 15% of the $200 million in customer holdings, which was a similar size to directly held ASX shares. ETFs made up most of the rest of the investments.

What are some factors that make AFIC a popular investment?

It was noted in the AFR reporting that investors may like the low costs offered by AFIC.

AFIC itself boasts that it has very low costs. The LIC says “low management costs and no performance fees let you enjoy the benefit of your investment.” The management cost is 0.14% per annum.

Dividends are another feature of the LIC. AFIC aims to provide shareholders with long-term returns and dividends that grow faster than the rate of inflation.

For its November 2021 update, the LIC revealed that its net asset per share growth plus dividends (including franking) return over the last five years has been an average of 12.4% per annum, outperforming the ASX benchmark’s return of 11.6% per annum over the same time period.

What shares are in the LIC portfolio?

AFIC updates the market monthly about the different businesses in the portfolio.

The biggest five positions in the portfolio at the end of December 2021 included: Commonwealth Bank of Australia (ASX: CBA), CSL Limited (ASX: CSL), BHP Group Ltd (ASX: BHP), Macquarie Group Ltd (ASX: MQG) and Wesfarmers Ltd (ASX: WES).

Some of the other businesses in the top 25 include: Telstra Corporation Ltd (ASX: TLS), Goodman Group (ASX: GMG), Reece Ltd (ASX: REH), ARB Corporation Limited (ASX: ARB), Sonic Healthcare Ltd (ASX: SHL) and ResMed Inc (ASX: RMD).

In recent years, AFIC has started investing in international shares as well. Whilst the combined global portfolio was only worth $47.6 million at 30 June 2021, it included names like Alphabet, Microsoft, Chipotle, McDonald’s and Nike.

The post Why are AFIC (ASX:AFI) shares so popular among young investors? appeared first on The Motley Fool Australia.

More reading

• How did the AFIC (ASX:AFI) share price manage to outperform in 2021?
• Index killer? Here’s how AFIC (ASX:AFI) shares stack up to the ASX 200
• Invested in AFIC (ASX:AFI) shares? Here’s what to watch in 2022

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 CSL Ltd. The Motley Fool Australia owns and has recommended Telstra Corporation Limited and Wesfarmers Limited. The Motley Fool Australia has recommended ARB Corporation Limited, Macquarie Group Limited, ResMed Inc., 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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The Vulcan Energy Resources Ltd (ASX: VUL) share price is edging into positive territory today. This comes after the company announced it has teamed up with one of the largest leading chlor-alkali producers in Europe.

At the time of writing, the clean lithium developer’s shares are fetching $10.20 apiece, up 0.99%. Despite today’s slight gain, its shares have fallen 12% in the past month.

Vulcan advances Zero Carbon Lithium project

The Vulcan Energy share price is climbing after the company advised it has signed a memorandum of understanding (MoU) and a term sheet with chemicals producer Nobian.

This will see the companies assess the feasibility of a joint project for the development, construction, and operation of the Central lithium plant in Frankfurt, Germany.

Nobian has extensive electrolysis operational experience which it uses in the production of essential chemicals for important industries. These include sectors ranging from construction and cleaning to pharmaceuticals and water treatment.

The collaboration will be a three-step phased project, with a joint progress decision at the end of the second phase.

The first phase will be a joint definitive feasibility study (DFS) for the Central lithium plant.

The second phase will be the operation of Vulcan’s electrolysis demonstration plant at Nobian’s existing site in Frankfurt.

Finally, the third phase will see the commercial scale-up of the Central lithium plant along with chlorine and hydrogen offtake agreements.

Vulcan is aiming to become the world’s first lithium producer with net-zero greenhouse gas emissions. Its Zero Carbon Lithium project is seeking to produce a lithium-hydroxide chemical product for the European electric vehicle battery market.

Commenting on the news which appears to be positively affecting the Vulcan Energy share price, managing director Francis Wedin said:

Our partnership with Nobian is consistent with our strategy to capitalise on the synergies that are available to us with existing chemical producers, due to our location in Germany, the largest chemical producing country in Europe.

Nobian’s experience will contribute to de-risking our planned scale-up and build-out, towards our goal of starting production from our Zero Carbon Lithium project in 2024.

Vulcan Energy share price snapshot

Over the last 12 months, the Vulcan Energy share price has jumped by more than 100%. The company’s shares reached an all-time high of $16.65 in September, before moving on a downward channel.

Based on today’s price, Vulcan commands a market capitalisation of around $1.35 billion with approximately 131.61 million shares on issue.

The post Here’s why the Vulcan Energy (ASX:VUL) share price is climbing today appeared first on The Motley Fool Australia.

More reading

• How the Vulcan (ASX:VUL) share price almost quadrupled in 2021
• The 5 best ASX lithium stocks of 2021
• Here’s why the Vulcan (ASX:VUL) share price is charging 6% higher today
• Broker tips Vulcan (ASX:VUL) share price to double in 2022
• The Vulcan Energy (ASX:VUL) share price is down 12% this week. What’s happening?

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

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The James Hardie Industries (ASX: JHX) share price is in the red on Tuesday after rumours that its ousted CEO could be gearing up for a legal battle hit headlines.

The company’s former boss was shown the door last week after the company found that his treatment of employees, while not discriminatory, went against its code of conduct.  

After spending most of this morning in the green, the James Hardie share price has currently slipped to $50.08. That’s 0.18% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently down 0.6%.

Let’s take a look at the latest in the building product company’s leadership debacle.

James Hardie share price slumps amid legal challenge rumours

According to reporting by The Australian, Truong seems to be readying himself to challenge James Hardie with a legal battle, which he expects will amount to a settlement.

That could help Truong recover some of the valuable incentives taken off the table on his termination.

According to the company, he is only eligible to statutory entitlements after being shown the door.

The company claimed its former boss engaged in bullying behaviour, with many employees feeling threatened and intimidated.

On Monday, reports emerged stating that Truong had issued a response to his termination, saying it “blindsided” him and denied the company’s version of events.

Interestingly, a now-former James Hardie director, Dr Moe Nozari, resigned yesterday effective immediately.

Nozari previously sat on the company’s Nominating and Governance Committee. The committee evaluates board members and senior management, among other responsibilities.

In Truong’s wake, James Hardie director Harold Wiens has been appointed to the role of interim CEO while the board looks for its next boss.

After all the commotion, the James Hardie share price is far from the green this week.

Over the last 7 days, the company’s stock has slipped 10.5% lower. Though, it’s still 40% higher than it was this time last year.

The post James Hardie (ASX:JHX) share price slips amid Jack Truong battle heating up appeared first on The Motley Fool Australia.

More reading

• James Hardie (ASX:JHX) management shakeup continues. Here’s what you should know
• Why API, James Hardie, Magellan, and St Barbara shares are dropping
• ASX 200 (ASX:XJO): Woolworths withdraws API proposal, tech shares rebound
• James Hardie (ASX:JHX) share price on watch after CEO kicked out

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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At lunch on Tuesday, the S&P/ASX 200 Index (ASX: XJO) has followed the lead of US markets and is tumbling lower. The benchmark index is currently down 0.5% to 7,409.4 points.

Here’s what is happening on the ASX 200 today:

PolyNovo shares rocket

The PolyNovo Ltd (ASX: PNV) share price is rocketing higher today after the release of a first half sales update. According to the release, the medical device company expects to report first half group sales growth of 45% year on year to A$16.28 million excluding Barda revenue and 43% to A$18.04 million including Barda revenue. A strong performance in the US underpinned this growth.

Inghams update disappoints

Investors have been selling down the Inghams Group Ltd (ASX: ING) share price today after the release of a disappointing trading update. The poultry producer revealed that COVID-19 and elevated feed costs are impacting its performance. Management also warned that it is not currently possible to predict how long this disruption will continue.

Ramsay shares higher on NHS agreement

The Ramsay Health Care Limited (ASX: RHC) share price is pushing higher on Tuesday. This follows news that the private hospital operator has signed a new volume-based agreement with NHS England (NHSE). The deal will see the company make its services available to the NHSE and its patients to meet the ongoing demands resulting from the COVID-19 pandemic.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Tuesday has been the PolyNovo share price with a massive 20% gain following its sales update. Going the other way, the Inghams share price is the worst performer on the ASX 200 today. The poultry company’s shares are down 7% at lunch following the release of its trading update.

The post ASX 200 (ASX:XJO) midday update: PolyNovo rockets, Inghams sinks appeared first on The Motley Fool Australia.

More reading

• Here’s why the PolyNovo (ASX:PNV) share price is jumping 13% today
• Inghams (ASX:ING) share price sinks as Omicron bites
• 2 high-yielding ASX 200 dividend shares to boost income
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX shares 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. owns and has recommended POLYNOVO FPO. The Motley Fool Australia has recommended Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The PointsBet Holdings Ltd (ASX: PBH) share price pushed into positive territory on Tuesday. This comes after the company announced it has teamed up with the NHL Alumni Association (NHLAA).

At the time of writing, the sports betting company’s share price is swapping hands for $6.43, up 3.54%.

PointsBet Canada appointed sports betting partner

The PointsBet share price is on the move today following the company’s newest partnership.

According to this morning’s release, PointsBet advised that its subsidiary, PointsBet Canada has become the exclusive sports betting partner of the NHLAA in Canada and also an official partner of the association in the United States.

The multi-year deal enables PointsBet Canada with marketing and licensing rights to the NHLAA and NHL alumni across North America.

Established in 1999, the NHLAA is an organisation that helps the lives of all former NHL players and their families. This is done through providing financial assistance, mental and emotional wellness support, physical care, post-playing career transition, and family aid.

Today, the NHLAA has become the largest membership of retired professional hockey players in the world.

PointsBet Canada chief commercial officer, Nic Sulsky commented:

The NHL Alumni Association has always been at the top of our list as PointsBet entered Canada.

Saturday night hockey is an institution from coast-to-coast-to-coast. Being able to partner with the likes of Paul Coffey, Nicklas Lidstrom, Mike Vernon, and the countless other NHL Alumni that skated across our screens will allow us to deliver the authentically Canadian gaming experience that we want to bring sports fans.

In addition to the news, PointsBet also gave an update following authorisation from the New York State Gaming Commission (NYSGC).

The company noted that its subsidiary, PointsBet New York has commenced pre-registration of New York residents. It’s expected that sportsbook operations will be launched in New York by the end of January, following NYSGC’s final approvals.

About the PointsBet share price

The PointsBet share price has had a disappointing 12 months, registering losses of almost 50% for its shareholders. Notably, the company’s shares reached a 52-week low of $5.87 yesterday, after falling 18% in a month.

Based on the current share price, PointsBet has a market capitalisation of roughly $1.68 billion.

The post Why is the PointsBet (ASX:PBH) share price winning today? appeared first on The Motley Fool Australia.

More reading

• These were the worst performing ASX 200 shares last week
• Why is the Pointsbet (ASX:PBH) share price on a losing streak today?
• Are these 2 impressive ASX shares buys in January 2022?
• ASX 200 (ASX:XJO) midday update: Big four banks fall, Bega Cheese jumps again
• 3 ASX growth shares could be strong buys

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended 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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Shares in lithium developer Liontown Resources Ltd (ASX: LTR) are caged up today, currently in a company requested trading halt.

Before Liontown shares were put on ice just prior to the market open, they closed yesterday’s session less than 1% up at $1.55.

The trading halt follows a company announcement yesterday advising it had awarded a key infrastructure contract at its Kathleen Valley Lithium Project in WA.

Let’s take a closer look at how it’s gone down for Liontown so far this week.

What’s up with the Liontown share price today?

According to the ASX, Liontown requested that its securities be placed in a trading halt from the start of trading today.

The halt was granted in lieu of an announcement from Liontown regarding an “offtake arrangement”, and is necessary “to ensure the company can manage its continuous disclosure obligations”.

Liontown requested the pause in trading remain in place until the announcement has been made or the until the start of trading on Thursday, 13 January 2022.

The ASX awarded the company’s request and, as such, the Liontown share price has been in limbo ever since, as investors patiently await the update.

Separately, shares in Liontown were largely agnostic to an announcement made by the company yesterday regarding its flagship Kathleen Valley Lithium Project.

Liontown advised it has awarded a key contract to Metso-Outotec (HEL: MOCORP) for the design, fabrication, and delivery of a Semi-Autogenous Grinding (SAG) Mill at the Kathleen Valley site.

The company says that Metso-Outotec is a “class-leading processing equipment supplier with multiple comparable mill installations in operation across the world”.

According to the release, the contract has a value of approximately $10 million and is in accordance with definitive feasibility study (DFS) estimates.

Checking over the particulars, the agreement specifically covers “the design, fabrication and delivery of a 7.9m diameter and 4.4m effective grinding length 5.5MW SAG Mill. This is inclusive of all lining, lubrication, cooling, electrical and mechanical drive systems necessary for installation and commissioning”.

The SAG Mill will accommodate base production of 2.5 million tonnes per annum (Mtpa) plus the planned expansion to 4Mtpa in year 6 of the Kathleen Valley’s mine plan.

Liontown’s Managing Director and CEO Tony Ottaviano said the SAG Mill contract “is the first of the long-lead items to be ordered and represents an important milestone for the Kathleen Valley Project”.

As it stands, there has been no movement out of Liontown’s camp regarding the offtake announcement and shares remain on ice until further notice.

Liontown share price snapshot

In the past 12 months, the Liontown share price has soared more than 311%, well outpacing the benchmark S&P/ASX 200 Index (ASX: XJO)’s return in that time.

However, things have cooled off in 2022 so far with shares falling more than 6% into the red this year after sliding 5% in the last month alone.

The post Here’s why the Liontown (ASX:LTR) share price is caged today appeared first on The Motley Fool Australia.

More reading

• Why AGL, Genetic Signatures, Liontown, and Novonix shares are charging higher
• Here are the 5 best performing ASX 200 mining and resource shares of 2021
• These are the 5 best performing ASX shares of 2021
• The 5 best ASX lithium stocks of 2021
• New year’s resolution: Why are ASX lithium shares having such a stellar day?

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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The Flight Centre Travel Group Ltd (ASX: FLT) share price went on a rollercoaster ride throughout 2021. Its shares reached a post-COVID high of $25.28 in October before sharply pulling back by almost 30% to today’s prices.

It appears that investors have mixed feelings about the value of Flight Centre shares in the current climate.

At the time of writing, Flight Centre shares are down 0.22% at $18.29 apiece.

What happened to Flight Centre in 2021?

The volatility in the Flight Centre share price last year was driven by new COVID-19 variants, resulting in a staggered recovery across travel markets.

Extended lockdowns and restrictions caused by the Delta variant impacted the company’s operations up until late August. The company spent the first half of the year in hibernation mode as vaccination programs began rolling out. In response, Flight Centre shares were trading around the $15 mark.

However, clearer visibility surrounding the resumption of travel led to Flight Centre shares accelerating above the $20 barrier in September and October. This was due to COVID-19 vaccination targets being met nationally, which provided passengers with more freedoms to travel outside Australia.

The company noted a return to leisure and corporate profitability. Corporate transaction numbers were at 50% of pre-COVID levels, representing around 40% of Flight Centre’s total transaction value (TTV).

A surge in cases overseas in November saw Flight Centre shares nosedive by 20% to roughly $16. Then the emergence of the Omicron variant on the world stage brought further troubles for the Flight Centre share price.

With seemingly no end in sight, investors will be wondering how the company is tracking financially for FY22. It is worth noting the business is a much leaner and more efficient cost base model compared to pre-COVID.

All eyes will be on Flight Centre’s FY22 half-year results which are expected to be released on 24 February.

Is the Flight Centre share price attractively valued?

A couple of brokers weighed in on the Flight Centre share price during the final months of 2021.

Multinational investment bank Citi raised its 12-month price target by 8.1% to $18.31 for Flight Centre shares. This is relatively in line with the current share price.

On the other hand, Goldman Sachs cut its assessment on the Flight Centre share price by 1.4% to $20.40. Its analysts believe there is still some value left in the travel agent over the next 12 months.

A recap on Flight Centre shares

It’s been a challenging year for Flight Centre shareholders, despite gaining around 20% over the past 12 months of trading.

While hitting a low of $16.27 in December, the company’s shares have staged a small rebound. There is currently a support level around the $17.50 mark for Flight Centre shares.

The post Why did the Flight Centre (ASX:FLT) share price have such a volatile year in 2021? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Buying ASX shares in 2022? Here’s what you need to know: expert
• 5 best ASX 200 travel shares of 2021
• 2 ASX travel shares that flew higher than Flight Centre (ASX:FLT) in 2021
• Why didn’t Flight Centre (ASX:FLT) shares enjoy any Christmas cheer in December?

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

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The price of uranium could be about to take off and ASX stocks producing the energy commodity might be set to benefit, according to a major broker.

Macquarie’s equities division has reportedly flagged political unrest in Kazakhstan as a potential driver of uranium spot prices. That’s because the Central Asian country produces around 40% of the world’s uranium.

The broker is said to have reiterated its outperform rating on the Boss Energy Ltd (ASX: BOE) and Paladin Energy Ltd (ASX: PDN) share prices as a result of the now-eased tensions.

Let’s take a closer look at what Macquarie is expecting from ASX uranium shares.

Why is Macquarie bullish on ASX uranium shares?

According to reporting by The Australian, after spot prices of uranium surged 7% to US$46.35 per pound over the last week, the top broker is concerned about the market’s reliance on a few global jurisdictions.

More than 2 thirds of the globe’s uranium is produced in Kazakhstan, Australia, and Canada.

However, a recent conflict in the former Soviet state, which its president is calling an attempted coup d’etat reports ABC News, has piqued the interest of Macquarie Equities.

The broker reportedly believes the unrest emphasised the need to diversify the world’s uranium production, which could drive prices higher. The Australian quoted it as saying:

Given the low level of utility contracting currently, we believe that a price rally would induce contracting for surety of supply which would result in an increase of contracting driving up uranium prices in the near to medium term.

In the longer term, we expect price support new supply requires incentive pricing above US$55/lb.

Right now, the share price of ASX uranium producer Paladin Energy is up 0.27%, trading at 94 cents. Meanwhile, the Boss Energy share price is $2.42, 2.5% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) has slipped 0.51%. At the same time, the All Ordinaries Index (ASX: XAO) is down 0.44%.

The post Here’s why ASX uranium shares could be in for a boost appeared first on The Motley Fool Australia.

More reading

• These were the 5 best performing ASX uranium shares of 2021
• Why are ASX uranium shares charging higher today?
• These 3 ASX 200 shares are topping the volume charts this Tuesday
• Here’s why Bell Potter is tipping 52% upside for the Boss Energy (ASX:BOE) share price

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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Brainchip Holdings Ltd (ASX: BRN) shares have emerged from a trading pause and are shooting higher on Tuesday.

In morning trade, the artificial intelligence technology company’s shares are up 10% to a record high of $1.13.

This means that BrainChip’s shares are now up 66% since closing at 68 cents on New Year’s Eve.

Why have BrainChip shares become such hot property?

Investors have been bidding BrainChip shares higher in response to a number of positive developments.

In fact, the rise was so strong it led to the company receiving a speeding ticket on Monday. The ASX Ltd (ASX: ASX) sent the company a price query, highlighting the “change in the price of BRN’s securities from a close of $0.885 on 6 January 2022 to a high of $1.035 today.”

This morning BrainChip’s shares were briefly paused while it responded to the query.

What was the response?

BrainChip advised that there was no information concerning it that has not been announced to the market which, if known by some in the market, could explain the rise in its share price.

However, it did provide an explanation for why it believes investors may have been buying shares.

The company notes that last week it appointed a new non-executive director and then on Monday it issued a press release which revealed that Information Systems Laboratories is using BrainChip technology in an artificial Intelligence-based radar research project for the Air Force Research Laboratory. Though, it believes the latter is immaterial in nature at this stage and there are no ongoing commercial arrangements in place.

Finally, it highlighted that there has been an increase in editorial tech media coverage regarding the artificial intelligence market in various segments where it operates. It notes that this coverage has grown since the completion of its chip, which management feels “could be a factor regarding increasing market confidence in our technology.”

The coverage above includes, as we highlighted here last week, Mercedes using BrainChip’s Akida chip in its Vision EQXX concept car. The chip is being used in the electric car to power the car giant’s “Hey Mercedes” smart assistant feature.

All in all, this could make BrainChip shares one to watch in 2022. Though, with a market capitalisation approaching $2 billion, expectations are sky high.

The post Why have BrainChip (ASX:BRN) shares become such hot property? appeared first on The Motley Fool Australia.

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• Why Afterpay, BrainChip, Medibank, and WiseTech shares are racing higher
• Why Anteotech, Brainchip, RAIZ, and Santos shares are pushing higher
• The Brainchip (ASX:BRN) share price soared another 19% today. What’s going on?
• Why Brainchip, Pilbara Minerals, Straker, and Whitehaven Coal shares are pushing higher
• Why is the BrainChip (ASX:BRN) share price leaping 7% on the first trading day of the year?

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 Allkem Ltd (ASX: AKE) share price has started the year off with a bang. Previously known as Orocobre, Allkem was formed after the merger between Orocobre and Galaxy Resources. It has gained 26.7% over the past month, amid a suite of price-sensitive updates and broker upgrades.

The momentum from the end of 2021 has also continued into the new year. Since the onset of 2022, shares have climbed 7.5% and touched new 52-week highs last week.

Underpinning the upside in Allkem shares are hot-running lithium markets spurred on by heightened demand for electric vehicles. Allkem’s position in the lithium value chain ensures it is a price taker, whose share price will fluctuate with volatility in these markets, say the experts.

JP Morgan also upgraded its baseline lithium forecasts for 2022/23 back in December, bumping up estimates by 30-70% depending on various scenarios. Let’s take a closer look.

What’s driving momentum in the Allkem share price?

The Allkem share price spiked in linear fashion in December. This came as the company released the feasibility study and maiden ore reserve estimate for its James Bay lithium project in Canada.

Allkem advised it had developed a sustainable, high-value hard rock lithium operation using “renewable hydropower” at the site.

The developments enable Allkem to widen its footprint in the North American and European markets for electric vehicles.

These updates also bump up the net present value (NPV) for the site by 2.5x compared to a preliminary economic assessment finished back in March 2021.

As such, Allkem says construction will start at James Bay towards the end of 2022. It hopes to have first commissioning in situ by Q1 2024.

The Allkem share price spiked more than 12% and touched $10.30 apiece in the days following the announcement, and the momentum hasn’t slowed since.

What are brokers saying?

With lithium markets poised to continue their extended run in the green according to several experts, the analyst teams at a number of leading brokers are constructive on the Allkem share price.

UBS thinks Allkem is a buy and values the company at $10.75 per share. The broker opines that Allkem is well positioned to benefit from any continued upside in lithium prices. That is due to it being the owner of a plant that can produce up to 6% lithium oxide from 2 million tonnes of mined ore.

JP Morgan is equally as bullish on the company but reckons Allkem’s earnings multiples are heading into the “expensive” category.

Still, the broker remains optimistic about Allkem “as it builds out its project pipeline with production to quadruple from FY21 levels over the decade”.

The investment case is backed by a period of forecasted dividend growth and return on assets of 20% in FY23/24.

Meanwhile, Macquarie also reckons Allkem is a buy, recently lifting its price target by 13% to $13.60.

In the past month Allkem shares have gained almost 27%. Checking the trade depth on the company we see it has good fountain of momentum behind it, seeing as its 4-week average trading volume has crept up considerably to almost 4 million shares at the open today.

The post Why has the Allkem (ASX:AKE) share price surged 27% in a month? appeared first on The Motley Fool Australia.

More reading

• Brokers name 3 ASX shares to buy today
• Here are the 5 best performing ASX 200 mining and resource shares of 2021
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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 recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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