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Much has been made of the rise of the exchange-traded fund (ETF) over 2021 thus far. Especially since this year has seen the ASX ETF sector swell to a record size in terms of funds under management (FUM). But it wasn’t that long ago that there was no such thing as an ASX ETF. Yes, the first ASX ETF only launched in 2001. So what did investors who wanted broad, diversified market exposure do before that? Well, one solution was investing in Listed Investment Companies (LICs) like the Australian Foundation Investment Co. Ltd (ASX: AFI).

ETFs and LICs

LICs were about the closest thing to an ETF you could get before there were actual ETFs. A LIC is a company and not a trust, as an ETF is. But it still invests in other underlying shares for the benefit of its shareholders, as an ETF does. AFIC is one of the oldest LICs on the ASX, having first opened its doors way back in 1928, a good ten years or so before the onset of the Second World War.

But nowadays, investors wanting broad diversification in a single company or fund are spoilt for choice. And many investors would rather just own the market and get the market’s return through an ETF rather than trying their luck with a LIC.

But is this attitude a good one to have? Let’s check out how AFIC shares have performed against the S&P/ASX 200 Index (ASX: XJO) over the past 6 months. We’ll use the iShares Core S&P/ASX 200 ETF (ASX: IOZ) as a benchmark, since it is the most popular ASX ETF covering the ASX 200 Index.

So IOZ units have returned approximately 3.28% over the past 6 months, including dividend distributions. How does AFIC compare?

Well, the AFIC share price alone is up 8.95% over the same period, including the 1.2% jump we see today. Including the 14 cents per share final dividend investors received in August, and we get a return of more than 10%.

So AFIC has clearly trounced the ASX 200 over the past 6 months.

How do AFIC shares measure up to the ASX 200?

But let’s zoom out. Over the past year, the ASX 200 ETF has returned roughly 15.36%, including dividend distributions. AFIC, in contrast, has delivered a 19.5% return over the same period, also including dividends.

Over five years, IOZ units have averaged an annual return of 9.96%. AFIC again bests it with a 13.8% average.

So how has AFIC managed to outperform its own index so consistently? Well, by not holding the same shares in the same proportions as the index. For example, AFIC tells us that its top 5 holdings as of 30 November were:

1. Commonwealth Bank of Australia (ASX: CBA) with an 8% portfolio weighting
2. CSL Limited (ASX: CLS) with a 7.3% weighting
3. BHP Group Ltd (ASX: BHP) with a 6% weighting
4. Macquarie Group Ltd (ASX: MQG) with a 4.7% weighting
5. Wesfarmers Ltd (ASX: WES) with a 4.6% weighting

In contrast, here are the current top five holdings and their weightings in the ASX 200:

1. Commonwealth Bank with an 8.05% weighting
2. CSL with a 6.2% weighting
3. BHP with a 5.83% weighting
4. National Australia Bank Ltd. (ASX: NAB) with a 4.47% weighting
5. Westpac Banking Corp (ASX: WBC) with a 3.66% weighting

So as you can see, these two portfolios do differ quite significantly, with AFIC clearly giving the big four ASX 200 bank shares a wider berth than the index itself.

This differentiation from the index has evidently worked in AFIC favour over the last few years. But who knows what the next few hold.

At the current AFIC share price of $8.41, this ASX LIC has a market capitalisation of $10.31 billion, with a dividend yield of 2.85%.

The post Index killer? Here’s how AFIC (ASX:AFI) shares stack up to the ASX 200 appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Medibank and NIB rise, Bega sinks
• Are these 2 strong ASX 200 shares buys?
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts on Wednesday

Motley Fool contributor Sebastian Bowen owns National Australia Bank Limited. 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 Wesfarmers Limited. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. 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 the end of today’s session, Spark Infrastructure Group (ASX: SKI) shares will be no more. Or, at least, they will no longer exist on the ASX. That’s because Pika Bidco has officially taken over the company.

The final Spark Infrastructure share price will be $2.87, where it has been frozen for weeks.

Let’s look back at how the electricity-focused investment company found itself in its current position.

Spark Infrastructure shares to delist tonight

Spark Infrastructure’s shares haven’t traded since 29 November after they were suspended ahead of the takeover.

Spark’s acquirer is run by a consortium of investment firms. It’s made up of global investment firm Kohlberg Kravis Roberts & Co L.P. and Canada’s Ontario Teachers’ Pension Plan Board and Public Sector Pension Investment Board.

The acquisition of all Spark shares will see the company’s shareholders receiving around $2.76 per security they owned as of 10 December. They also received a 6.25 cent per share dividend in September.

That brings the value of the takeover to $2.95 per share, giving Spark Infrastructure an enterprise value of $10.1 billion.

The purchasers first put forward their interest in acquiring Spark in July. In October, a scheme booklet was passed around. In November, Spark Infrastructure shareholders voted in favour of the takeover.

Following the ‘yes’ vote, S&P Dow Jones Indices removed the company from the S&P/ASX 200 Index (ASX: XJO). Sandfire Resources Ltd (ASX: SFR) replaced the company on the index.

That brings us to today, when the market will wave goodbye to the energy investment business.

Spark Infrastructure has holdings in many recognisable power companies, including SA Power Networks, TransGrid, Powercor, and CitiPower.

It also operates its own Spark Renewables business, which focuses on wind, solar, hydrogen, and energy storage projects.

Fortunately, the Spark Infrastructure share price had a good run in its final months. It gained 36% over 2021.

The post What’s happened to Spark Infrastructure (ASX:SKI) shares? appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts on Friday
• These 3 ASX 200 shares are topping the volume charts on Wednesday

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 the ASX cannabis sector have had another difficult time in December, as most majors come in well behind the benchmark.

Investors are still crowding out of positions in ASX cannabis stocks at a fairly sturdy pace since our last update. Meanwhile, the S&P/ASX 200 Health Care index (XHJ) has been overly volatile throughout December, but is up strongly this past week.

Nevertheless, most of the ASX cannabis industry remains down as the broader healthcare industry churns along. Moreover, commentary on the sector is light, and a quick read of the charts show just a few names sprouting through the green to fawn their leaves this Christmas.

Now with a less visible walkway out of the grips of COVID-19, markets are again behaving wildly and investors are reshuffling positions once more to stay sheltered in the event of a storm.

Add in language from the US Federal Reserve and the Reserve Bank of Australia (RBA) in tapering their bond-buying programs faster than expected, thus signalling potential rate hikes in 2022.

Let’s take a look at what’s in store in 2022 for some of this month’s top performers coming into the new year.

Incannex Healthcare Ltd (ASX: IHL)

Shares in medicinal ASX cannabis company Incannex Healthcare pared some of the strong gains earned in November, but have held the fort this month.

Investors held onto their long positions as shares remained buoyant across the month so far, dipping slightly amid weakness in the broader sector.

For instance, the market wasn’t too phased with an update on Incannex’s Nasdaq listing from earlier this month. In that release, the company advised it is in a position to conduct its offering of American Depositary Receipts (ADIs) in January 2022.

The deadline comes after a lengthy and intense period endured by the company to address comments raised by the SEC and other headwinds.

CEO and Managing Director of Incannex Healthcare, Mr Joel Latham said: “We are grateful to our team for their work on the registration process and now look forward to marketing the Offering and listing on Nasdaq in January when institutional investors are back on deck after the relatively short winter holiday period in the northern hemisphere. It’s been a momentous year for Incannex with six research and development programs that continue to progress rapidly”

The number of securities to be sold and the price per ADS under any offering have not yet been determined. However, Incannex has applied to list its ADSs on Nasdaq under the ticker symbol “IXHL”, which has been granted to Incannex by Nasdaq.

Aside from that, the company recently advised that it has completed dosing of participants in the phase 2, proof-of-concept clinical trial investigating novel cannabinoid combination product, IHL-42X, for the treatment of obstructive sleep apnoea (OSA).

OSA remains a significantly unmet medical need and can lead to a variety of cardiovascular complications, with no FDA approved pharmacotherapies.

All participants in the phase 2 trial have now completed the treatment periods and the data is being analyzed by Novotech, the contract research organization engaged by Incannex to manage the study and resulting data. Delivery of the final clinical study report is anticipated in Q1 2022.

Cronos Australia Ltd (ASX: CAU)

Shares in medicinal cannabinoid player Cronos continue charging higher and have now climbed from 17 cents in November to trade at 20.3 cents today.

Cronos is flat for the month so far, however, the company did announce a key update in December that is likely to be of importance in 2022.

Mid-December the company announced that it had completed its merger with CDA Healh Pty Ltd following the successful satisfaction of all conditions precedent.

Pursuant to the merger, four directors of Cronos have handed in their resignations and subsequently, new directors have been appointed, namely Guy Headley, Dr Benjamin Jansen, Kurt Schmidt and Dr Marcia Walker.

As part of the transaction, the company has today issued a total of 403,552,399 ordinary shares and paid $5 million in cash to CDA shareholders in consideration for the purchase of 100% of the shares in CDA Health.

As a result, CDA Health is now a wholly-owned subsidiary of Cronos Australia and the former shareholders of CDA Health collectively own approximately 73.6% of the issued capital of Cronos Australia (on an undiluted basis).

The merged group is poised to deliver proforma FY21 revenue of $23.1 million – up from $4.6 million in FY20 – whilst only increasing its expense base by around $3 million to $10.2 million.

However, cost of goods sold is also expected to blow out to over $15 million from just $2.578 million in FY20, according to financials released by the company just prior to the merger.

Creso Pharma Ltd (ASX: CPH)

Shares in Creso Pharma have actually been on the down lately, however, the company has been embroiled in a set of peculiar updates that has investors intrigued about what’s in store for the ASX cannabis player in 2022.

Just a month ago Creso’s chairman, Adam Blumenthal, also a director of EverBlu Capital, was under investigation from ASIC and that it had been involved due to “common directorships”.

Nevertheless, when all of the news broke, Creso’s share price fell from a 6 month high of around 15 cents and has continued south ever since. At the time of writing, it is fetching 7.9 cents on the trade quote.

However, the company has moved along relatively unfazed, and subsequently provided a positive update early in December.

Creso advised that its’ recently acquired Canadian psychedelics business, Halucenex Life Sciences, secured an upgrade to its dealer licence with the Canadian Health regulator.

As such, the company is now permitted to grow its own psilocybin, enabling it to expand its research into the compound as a treatment for various complex disease segments.

Phase II clinical trial to test the efficacy of psilocybin on treatment resistant PTSD is expected to commence Q2 CY2022. This could be a key inflection point for investors to consider at that time next year.

Aside from this, the wider ASX cannabis sector has been more than a mixed bag once again this month. The market is becoming less visibly clear as we roll on into 2022 with surging case numbers and choppy investor behaviour.

The post What’s the outlook for ASX Cannabis shares in 2022? appeared first on The Motley Fool Australia.

More reading

• What’s dragging the Incannex (ASX:IHL) share price 5% lower today?
• These were the top performing ASX cannabis shares in November
• Here’s why the Creso Pharma (ASX:CPH) share price is surging 6% today
• These were the 5 best performing ASX healthcare shares in November
• Why is the Creso Pharma (ASX:CPH) share price frozen today?

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 Carnaby Resources Ltd (ASX: CNB) share price has more than doubled in just a week.

The copper miner’s share price has soared from 29 cents at last Thursday’s close to 62 cents at the time of writing, up 113.8%. Earlier today it rose as high as 70 cents before retreating.

Let’s look into what might be impacting a surge in investor confidence in the explorer.

Digging in December

The Carnaby Resources share price has exploded twice over the past week. The first major bounce came on Friday on the back of a “spectacular” copper find.

The exploration company told the market its drilling program at the Nil Desperandum prospect intersected a 24m zone of semi-massive copper sulphide mineralisation.

The discovery at the Greater Duchess copper-gold project in Queensland is the largest copper find from the company to date.

This announcement led to shares skyrocketing 55%, up from 29 cents to 45 cents at Friday’s close.

The second eruption of the Carnaby Resources share price took place on Wednesday after the company emerged from a trading halt.

The shares were temporarily put on ice while the company re-released two exploration statements from December 13 and December 17.

Both these statements confirmed significant copper mineralisation at the Greater Duchess copper-gold project.

While the news in these re-releases didn’t change, they provided more detail on the drill holes. This may have provided investors with more confidence in the previously announced results from the company.

After emerging from the trading halt on Wednesday, the shares surged from 44 cents apiece to 62 cents at the close. That’s a 41% gain.

Carnaby Resources share price recap

The Carnaby Resources share price has skyrocketed by around 85% in the past 12 months and 55% year to date.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned more than 11% over the past year.

The company’s shares have gained 135% in the past month.

The company has a market capitalisation of roughly $73.2 billion based on its current share price.

The post Here’s why the Carnaby Resources (ASX:CNB) share price has exploded 114% in a week appeared first on The Motley Fool Australia.

More reading

• Carnaby Resources (ASX:CNB) share price explodes 46% on ‘spectacular’ copper find
• Carnaby (ASX:CNB) share price rockets 33% on lithium update

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 Thursday, the S&P/ASX 200 Index (ASX: XJO) is on course to record another small gain. The benchmark index is currently up 0.25% to 7,382.8 points.

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

Health insurance premium increases

Medibank Private Ltd (ASX: MPL) and NIB Holdings Limited (ASX: NHF) shares are trading higher after announcing their health insurance premium increases for 2022. Both health insurers have received approval from the Federal Minister for Health to increase their health insurance premiums by an average of 2.66% and 3.1%, respectively. This is the lowest increase in two decades. However, both companies intend to defer their increases for a few months from 1 April.

Centuria Capital’s acquisitions

The Centuria Capital Group (ASX: CNI) share price is charging higher today after announcing a series of acquisitions. According to the release, the company has acquired more than $466 million of Australia and New Zealand based healthcare properties within the past two months. This includes a geographically dispersed New Zealand portfolio of 38 aged care assets for NZ$291million (A$276million).

Rio Tinto shares remain a buy

The Rio Tinto Limited (ASX: RIO) share price is trading slightly lower today. This is despite Citi responding positively to its acquisition of the Rincon Lithium project in Argentina for US$825 million. In response, the broker has retained its buy rating and $115.00 price target on the mining giant’s shares. It believes this “confirms RIO’s ambition to be a serious player in lithium/battery materials.”

Best and worst ASX 200 performers

The best performer on the ASX 200 on Thursday has been the Evolution Mining Ltd (ASX: EVN) share price with a 3.5% gain. A number of gold miners are pushing higher today after the gold price rose overnight. The worst performer has been the Bega Cheese Ltd (ASX: BGA) share price with a 10% decline. Its shares are falling following the release of underwhelming FY 2022 guidance.

The post ASX 200 (ASX:XJO) midday update: Medibank and NIB rise, Bega sinks appeared first on The Motley Fool Australia.

More reading

• Is Rio Tinto (ASX:RIO) paying too much for the Rincon lithium project?
• Here’s why the NIB (ASX:NHF) share price is pushing higher today
• Why the Bega (ASX:BGA) share price is sinking 9% today
• Are these 2 strong ASX 200 shares buys?
• 5 things to watch on the ASX 200 on Thursday

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 recommended NIB Holdings 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 Global Lithium Resources Ltd (ASX: GL1) share price has been a strong performer on Thursday.

In late morning trade, the lithium explorer’s shares are up 12.5% to 71 cents.

This latest gain means the Global Lithium share price is now up 153% in 2021.

Why is the Global Lithium share price shooting higher?

The catalyst for the rise in the Global Lithium share price today has been release of a promising announcement.

According to the release, the company has entered into an agreement to acquire an 80% interest in the exploration and future mining rights in the Manna Lithium Project from Breaker Resources NL (ASX: BRB).

The two parties have agreed a total consideration of $33 million. This comprises $13 million upfront consideration and up to $20 million deferred consideration. The latter will be payable upon certain milestones relating to the mineral resource and future production.

The Manna Lithium Project

The release notes that the Manna Lithium Project is an outcropping spodumene and lepidolite bearing pegmatite exploration project located approximately 100km east of Kalgoorlie, Western Australia.

The Project has an area of influence of 750m x 130m in the main outcrop with individual pegmatite dykes up to 18 meters wide. Furthermore, recent drilling over an anomalous area of 350 metres to the south of these pegmatite dykes has confirmed the discovery of a new zone of spodumene-rich pegmatites.

Global Lithium’s Chairman, Warrick Hazeldine, was pleased with the acquisition.

He said: “This is a strategic acquisition for Global Lithium and follows a rigorous assessment on pathways to grow our asset base for the benefit of all shareholders. It delivers on our objective of growing the Company’s business through complementary acquisitions and diversifying through the acquisition of Manna will deliver the Company another high-quality project located in an infrastructure rich, Tier-1 jurisdiction.”

“The early exploration work at Manna is highly encouraging and Global Lithium looks forward to partnering with Breaker Resources on a substantial exploration and drilling program at Manna in 2022 to capitalise on the global demand for quality lithium assets,” he added.

The post Why the Global Lithium (ASX:GL1) share price is surging 12% higher today appeared first on The Motley Fool Australia.

More reading

• Here’s why the Global Lithium (ASX:GL1) share price leapt today
• Here’s why the Global Lithium (ASX:GL1) share price is falling 7% today

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

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During December 2021, The Northern Star Resources Ltd (ASX: NST) share price has been under $9. It has actually dropped more than 10% since the middle of November 2021.

Northern Star is one of the biggest gold miners on the ASX, with a market capitalisation of around $11 billion according to the ASX.

Is the gold price affecting the Northern Star share price?

Resource company profits are highly impacted by the price of that commodity. It costs a mining company almost the same to extract the resource month to month, but how much money it can potentially make for the resource can change quite a bit.

If the commodity price rises, then a lot of it can turn straight into profit. However, the same can also be possible in the reverse when prices fall.

The gold price can move with just as much volatility as the iron ore price, lithium price or any other resource.

On 15 November 2021, the gold price was US$1,862 per ounce according to Goldprice.org. However, by 2 December 2021 it had fallen 5% to US$1,769 per ounce. That’s the time that the Northern Star share price fell to the lowest point this month.

Both the Northern Star share price and gold price have been rising since 2 December 2021 – the ASX miner has gone up 8%.

What next?

Northern Star has made a few different announcements recently.

At the start of the month, it announced it had agreed to convertible funding with Osisko Mining, including the exclusive right to negotiate a 50:50 joint venture at the Windfall gold project in Quebec, Canada. The C$154 million (A$169 million) loan can be converted into project equity.

This Canadian project is reportedly well advanced regarding studies, drilling and underground development. It’s expected to commence production in 2024. Northern Star said this partnership provides a de-risked entry to a high-quality gold province.

In November, Northern Star also announced it was buying Newmont Corporation’s Australian power business for US$95 million. The 110MW Parkeston Power Station and associated infrastructure primarily provides electricity to Kalgoorlie Consolidated Gold Mines (KCGM). Northern Star has bought half of KCGM. Parkeston also supplies electricity to the Kalgoorlie area through its connection to the South-West Interconnected System.

There were three areas that the company sees synergies and value. The first was infrastructure and power security and control to support the requirements of KCGM. Next, is lower power costs at KCGM. Finally, it provides further options for Northern Star to implement renewable energy.

Is the Northern Star share price good value?

UBS currently rates Northern Star as a buy, with a price target of $11.20. The broker is expecting the gold price to fall back to US$1,600 per ounce over the next 12 months.

The post Why has the Northern Star (ASX:NST) share price been heading south over the past month? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Monday
• Here are the top 10 ASX shares today
• Why is the Northern Star (ASX:NST) share price surging 6% today?

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

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The Corporate Travel Management Ltd (ASX: CTD) share price is pushing higher during mid-morning trade. This comes after the corporate travel specialist provided an update on its capital raising efforts today.

At the time of writing, Corporate Travel Management shares are 1.59% higher at $21.75 apiece.

What did the company announce?

According to the release, Corporate Travel Management has opened up a share purchase plan (SPP) following a successful placement.

Last week, the company revealed it had received overwhelming support to raise $75 million via an institutional placement. The Corporate Travel Management share price fell on the news.

About 3.6 million shares will be issued at a price of $21.00 per share. This represents a 5.8% discount to the last traded price of $22.29 before the announcement on 14 December.

The company decided to allow its remaining shareholders to participate in a $25 million SPP based on the same terms.

Eligible investors will be able to apply for up to a maximum amount of $15,000 worth of new shares.

The closing date for the SPP will fall on 20 January 2022, and the results will be announced on 25 January.

The funds raised under the placement will be used to support the acquisition of Australian-based travel distribution company Helloworld Travel Ltd (ASX: HLO).

This consists of $100 million in cash and $75 million in shares. The latter will be escrowed for 12 months from the date of completion.

Management believes the acquisition will be highly complementary to its existing Australian and New Zealand corporate travel management operations.

About the Corporate Travel Management share price

Over the past 12 months, the Corporate Travel Management share price has rallied around 24% higher.

On valuation grounds, Corporate Travel Management presides a market capitalisation of roughly $3.06 billion, with approximately 140.43 million shares outstanding.

The post Why is the Corporate Travel Management (ASX:CTD) share price rising today? appeared first on The Motley Fool Australia.

More reading

• How high will ASX travel shares fly in 2022?
• Why Afterpay, Corporate Travel, Dubber, and EML shares are falling
• ASX 200 (ASX:XJO) midday update: BNPL shares sold off, Corporate Travel returns
• Corporate Travel Management (ASX:CTD) share price drops after raising $75m
• 5 things to watch on the ASX 200 on Friday

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 Helloworld Limited. The Motley Fool Australia owns and has recommended Helloworld Limited. The Motley Fool Australia has recommended Corporate Travel Management 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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During December 2021, The Northern Star Resources Ltd (ASX: NST) share price has been under $9. It has actually dropped more than 10% since the middle of November 2021.

Northern Star is one of the biggest gold miners on the ASX, with a market capitalisation of around $11 billion according to the ASX.

Is the gold price affecting the Northern Star share price?

Resource company profits are highly impacted by the price of that commodity. It costs a mining company almost the same to extract the resource month to month, but how much money it can potentially make for the resource can change quite a bit.

If the commodity price rises, then a lot of it can turn straight into profit. However, the same can also be possible in the reverse when prices fall.

The gold price can move with just as much volatility as the iron ore price, lithium price or any other resource.

On 15 November 2021, the gold price was US$1,862 per ounce according to Goldprice.org. However, by 2 December 2021 it had fallen 5% to US$1,769 per ounce. That’s the time that the Northern Star share price fell to the lowest point this month.

Both the Northern Star share price and gold price have been rising since 2 December 2021 – the ASX miner has gone up 8%.

What next?

Northern Star has made a few different announcements recently.

At the start of the month, it announced it had agreed to convertible funding with Osisko Mining, including the exclusive right to negotiate a 50:50 joint venture at the Windfall gold project in Quebec, Canada. The C$154 million (A$169 million) loan can be converted into project equity.

This Canadian project is reportedly well advanced regarding studies, drilling and underground development. It’s expected to commence production in 2024. Northern Star said this partnership provides a de-risked entry to a high-quality gold province.

In November, Northern Star also announced it was buying Newmont Corporation’s Australian power business for US$95 million. The 110MW Parkeston Power Station and associated infrastructure primarily provides electricity to Kalgoorlie Consolidated Gold Mines (KCGM). Northern Star has bought half of KCGM. Parkeston also supplies electricity to the Kalgoorlie area through its connection to the South-West Interconnected System.

There were three areas that the company sees synergies and value. The first was infrastructure and power security and control to support the requirements of KCGM. Next, is lower power costs at KCGM. Finally, it provides further options for Northern Star to implement renewable energy.

Is the Northern Star share price good value?

UBS currently rates Northern Star as a buy, with a price target of $11.20. The broker is expecting the gold price to fall back to US$1,600 per ounce over the next 12 months.

The post Why has the Northern Star (ASX:NST) share price been heading south over the past month? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Monday
• Here are the top 10 ASX shares today
• Why is the Northern Star (ASX:NST) share price surging 6% today?

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

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The Corporate Travel Management Ltd (ASX: CTD) share price is pushing higher during mid-morning trade. This comes after the corporate travel specialist provided an update on its capital raising efforts today.

At the time of writing, Corporate Travel Management shares are 1.59% higher at $21.75 apiece.

What did the company announce?

According to the release, Corporate Travel Management has opened up a share purchase plan (SPP) following a successful placement.

Last week, the company revealed it had received overwhelming support to raise $75 million via an institutional placement. The Corporate Travel Management share price fell on the news.

About 3.6 million shares will be issued at a price of $21.00 per share. This represents a 5.8% discount to the last traded price of $22.29 before the announcement on 14 December.

The company decided to allow its remaining shareholders to participate in a $25 million SPP based on the same terms.

Eligible investors will be able to apply for up to a maximum amount of $15,000 worth of new shares.

The closing date for the SPP will fall on 20 January 2022, and the results will be announced on 25 January.

The funds raised under the placement will be used to support the acquisition of Australian-based travel distribution company Helloworld Travel Ltd (ASX: HLO).

This consists of $100 million in cash and $75 million in shares. The latter will be escrowed for 12 months from the date of completion.

Management believes the acquisition will be highly complementary to its existing Australian and New Zealand corporate travel management operations.

About the Corporate Travel Management share price

Over the past 12 months, the Corporate Travel Management share price has rallied around 24% higher.

On valuation grounds, Corporate Travel Management presides a market capitalisation of roughly $3.06 billion, with approximately 140.43 million shares outstanding.

The post Why is the Corporate Travel Management (ASX:CTD) share price rising today? appeared first on The Motley Fool Australia.

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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 Helloworld Limited. The Motley Fool Australia owns and has recommended Helloworld Limited. The Motley Fool Australia has recommended Corporate Travel Management 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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