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It has been a rough week for the Vulcan Energy Resources Ltd (ASX: VUL) share price, falling around 12% to its current $10.54 price point.

In early trade today, the net-zero lithium aspirant is trading 0.85% lower. Meanwhile, the company remains a considerable 57% away from its 52-week high.

An ASX filing earlier in the week is the latest development for the Vulcan Energy share price. Let’s take a closer look at the details.

Rinehart partially cashes out during Vulcan attack

The past two months have been tumultuous for Vulcan Energy and its directors. Following a scathing report from short-seller J Capital, the ASX-listed company has been busily operating in damage control mode. However, this finally came to an end on 15 December with a settlement between Vulcan and J Capital.

Momentarily the dust had settled for the clean energy company until the latest ASX filing, which might have drawn the attention of investors. The filing in question is a ‘change in substantial holding’ notice regarding the holdings of mining magnate Gina Rinehart.

According to the filing, Rinehart decided to partake in the Vulcan Energy share price sell-off. Over the course of three days between 8 November and 10 November, the billionaire sold 930,000 Vulcan shares. Based on the prices of each sale, the total value sold was $10.2 million.

This might be sounding the alarm bells for some Vulcan Energy investors. Though it’s worth mentioning Rinehart still retains more than 7 million shares worth roughly $78 million.

Vulcan Energy share price snapshot

It’s hard to paint 2021 as a bad year for the Vulcan Energy share price. Probably because in quantifiable terms it wasn’t. Since the start of the year, shares in the lithium hopeful have skyrocketed 283%.

In fact, if the company were in the S&P/ASX 200 Index (ASX: XJO) it would be the fourth-best performing share in the last year.

The post The Vulcan Energy (ASX:VUL) share price is down 12% this week. What’s happening? appeared first on The Motley Fool Australia.

More reading

• Vulcan (ASX:VUL) share price storms higher after receiving short seller apology
• Why Blackmores, Mesoblast, Vulcan, and Zip shares are sinking
• Why the Vulcan (ASX:VUL) share price is jumping again on Friday
• Why Hipages, IGO, Talga, and Vulcan shares are storming higher
• Vulcan Energy (ASX:VUL) share price shoots 12% higher on Volkswagen deal

Motley Fool contributor Mitchell Lawler 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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While the Australian tech sector may pale in comparison to the US tech sector, that doesn’t mean there aren’t any high quality options for investors to choose from.

Two highly rated ASX 200 tech shares are listed below. Here’s why they could be in the buy zone:

Life360 Inc (ASX: 360)

The first ASX 200 tech share to look at is Life360. It is the growing technology company behind the eponymous Life360 mobile app. This increasingly popular app offers families useful features such as communications, driver safety, and location sharing.

During the third quarter of FY 2022, Life360 continued its stellar growth. It revealed the addition of a further 1.5 million monthly active users (MAU) to 33.8 million, which underpinned a 48% year on year increase in Annualised Monthly Revenue (AMR) (excluding acquisitions) to US$120.1 million.

Speaking of which, the company has recently acquired wearables company Jiobit and items tracking company Tile. Both these companies have large addressable markets and provide Life360 with significant cross and upselling opportunities.

Bell Potter is a big fan and has a buy rating and $16.25 price target on its shares.

Megaport Ltd (ASX: MP1)

Another ASX 200 tech share to look at is Megaport. It is the global leading provider of elastic interconnection services. Using Software Defined Networking (SDN), Megaport’s global platform enables customers to rapidly connect their network to other services across the Megaport Network.

They can then be directly controlled by users via mobile devices, their computer, or Megaport’s open API. At the last count, Megaport was connecting more than 2,300 customers in over 760 enabled data centres globally. And with more and more infrastructure shifting to the cloud, Megaport looks well-placed to grow its customer numbers strongly over the 2020s.

The team at Macquarie is bullish on the company’s prospects. So much so, the broker recently put an outperform rating and $24.00 price target on its shares. Macquarie believes the company is well-placed to grow ahead of consensus expectations.

The post 2 exciting ASX 200 tech shares to buy appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares to buy and hold for 10 years+
• Could 2022 be the year ASX 200 tech shares get some love?
• 3 excellent ASX growth shares analysts are excited about
• This top fund manager just called these leading ASX shares a buy
• Top broker names the best ASX tech shares to buy in 2022

Motley Fool contributor James Mickleboro owns Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Life360, Inc. and MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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 amount of Polynovo Ltd (ASX: PNV) shares in the hands of short sellers has dropped recently.

Over the week ending 13 December, Polynovo shares had a 7.5% short interest.

However, in The Motley Fool Australia’s latest weekly short selling breakdown, the company’s short interest had dropped to 7.2%.

At the time of writing, the Polynovo share price is $1.51, 0.2% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is up 0.4% this morning.

Let’s take a look at what the company’s falling short interest might mean for its long-term investors.

What does Polynovo’s short interest mean for its shares?

The amount of Polynovo’s stock held by short sellers has dipped, and it could spell good news for growth investors.

Short sellers aim to profit from a falling share price. Thus, less short selling activity probably means there’s greater confidence in the Polynovo share price among some circles.

Perhaps, the rise in apparent confidence is down to its recent performance.

Over the last 30 days, the company’s share price has gained 6.6%, boosted by good news released earlier this month.

Polynovo announced it achieved record sales for July and November on 14 December.

It is also recruiting more sales staff in the United States and its search for a new CEO is progressing well.

Additionally, experts are increasingly bullish on the company’s stock.

Macquarie recently upgraded its rating for Polynovo’s shares to ‘outperform’, slapping them with a $2.85 price target. That represents an 88% upside on the company’s current share price.

As my Foolish colleague, James Mickleboro, recently reported, the broker believes Polynovo’s NovoSorb product will be a major catalyst to its growth.

However, the company still sits among the 10 most shorted shares on the ASX. Potentially, due to the stock’s performance through 2021.

Since the start of this year, the Polynovo share price has fallen 61%. It’s likely many eyes will be on it in the new year in hopes it can correct its tumble.

The post Short interest in Polynovo (ASX:PNV) shares is easing. What does this mean? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• How might the Polynovo (ASX:PNV) share price perform in 2022?
• Why Charter Hall, Nearmap, PolyNovo, and Virtus Health are racing higher
• Here’s why the Polynovo (ASX:PNV) share price is rocketing 12% today
• PolyNovo (ASX:PNV) share price tipped to double in value

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. owns and has recommended POLYNOVO 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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Questions about the $2 billion-plus bet on the Rincon lithium project appear to be weighing on the Rio Tinto Limited (ASX: RIO) share price.

Shares in Australia’s largest ASX iron ore producer tumbled more than 2% yesterday to $99.35 on the news. They are down a further 0.16% in early trading today.

In contrast, the BHP Group Ltd (ASX: BHP) share price dipped less than 1% yesterday and the Fortescue Metals Group Limited (ASX: FMG) slipped 1.8%.

Rio Tinto paying top dollar for Rincon

These doubts could hang around for a while yet as Rio Tinto is really making a double bet on the Argentinian lithium brine project.

At least one broker noted the full price that Rio Tinto is paying for Rincon. JP Morgan said the acquisition looked “relatively expensive”, reported The Australian.

In other words, for Rio Tinto to make a return on Rincon, it needs the lithium price to stay higher for longer.

Second bet on new extraction tech

The good news is that several experts believe supply of the battery ingredient will struggle to keep pace with demand.

But Rio Tinto’s investment also represents a bet on a yet-to-be proven new extraction technology.

The miner is banking on using a technology that will allow lithium to be extracted straight from brine. Current processes use the sun to dry out the brine into salt.

Rio Tinto believes its new process can significantly increase lithium recoveries when compared to solar evaporation ponds.

How much is Rio Tinto paying for Rincon?

The miner will pay US$825 million ($1.1 billion) for Rincon, which is owned by Sentient Equity Partners.

The price tag jumps to US$1.6 billion ($2.2 billion) when you add in the expected capital investment Rio Tinto needs to pump into the project.

Rincon is located in the so-called “lithium triangle” – an area in South America that is believed to be rich in the resource.

Need to diversify

Rio Tinto is aggressively diversifying to other commodities outside of iron ore. It identified lithium as a major opportunity that will give it leverage to the decarbonising world, and to improve its green credentials. This also explains why Fortescue is betting big on green hydrogen.

Rincon, along with its Jadar lithium project in Serbia, will allow Rio Tinto to produce 110,000 tonnes of lithium carbonate a year, reported The Australian.

This represents around 4% of projected global output, if you assume that Rio Tinto will meet all its production milestones.

Rincon is expected to produce 50,000 tonnes of lithium carbonate a year. But this could double as Rincon has secured the rights from local authorities to use more water to increase output.

The post Is Rio Tinto (ASX:RIO) paying too much for the Rincon lithium project? appeared first on The Motley Fool Australia.

More reading

• Why Brickworks, Charter Hall, Magellan, and Rio Tinto shares are falling
• ASX 200 (ASX:XJO) midday update: Rio Tinto’s lithium acquisition, Pilbara Minerals jumps
• Rio Tinto (ASX:RIO) share price slumps amid $1.15b lithium acquisition
• Reshuffle: Why is the Rio Tinto (ASX:RIO) share price sliding today?
• Analysts say these ASX shares are buys

Motley Fool contributor Brendon Lau owns shares in BHP Billiton Limited, Fortescue Metals Group Limited, and Rio Tinto Ltd. 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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It has been a very disappointing morning of trade for the FAR Ltd (ASX: FAR) share price on Thursday.

At the time of writing, the energy explorer’s shares are down a whopping 51% to a new record low of 36 cents.

This means the FAR share price is now down approximately 72% since the start of the year.

Why is the FAR share price crashing?

Investors have been heading to the exits in their droves this morning after the company’s search for oil ended in failure.

According to the release, the company has been drilling the Bambo-1ST1 well offshore The Gambia. However, after drilling to a depth of 3317 metres, no live oil columns were found to be present.

And while the company suggested that its drilling results indicate that there is potential for oil to be found in the area, many shareholders are not sticking around to find out if that is the case.

Management commentary

FAR’s Managing Director, Cath Norman, remains upbeat on the company’s prospects despite this major setback.

Ms. Norman said, “Although no moveable oil was interpreted, FAR is encouraged to have encountered good oil shows and potential reservoirs in the Bambo-1 well and Bambo-1ST1 side-track.”

“The project has provided significant geological information, including new play types, that reaffirms the potential of further hydrocarbon prospects in the A2 and A5 blocks in the Gambia. Bambo-1 and the side-track have confirmed that all of the requisite petroleum system elements are present in the area and the technical team is already busy integrating the new data and high-grading future prospects.”

“FAR looks forward to working with its co-venturer Petronas and the Government of The Gambia on the next steps in realising the exploration potential in country,” she concluded.

The post Here’s why the FAR (ASX:FAR) share price is sinking 51% to an all-time low appeared first on The Motley Fool Australia.

More reading

• Is Rio Tinto (ASX:RIO) paying too much for the Rincon lithium project?
• Is Cardano a smart cryptocurrency to buy now?
• Why the Booktopia (ASX:BKG) share price just crashed 10% to a record low
• 2 ASX healthcare shares set to explode 70% in 2022: expert
• Why Tesla stock perked up 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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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.

In recent years, the cryptocurrency space has become quite crowded. Gone are the days when just a few digital assets dominated the headlines. There are now over 8,000 different crypto assets, and new tokens join the fray all the time. Of course, the crypto market itself has already created tremendous wealth, rising 240% in the last year alone. But given the sheer volume — not to mention the hysteria around meme tokens like Shiba Inu and Dogecoin — it can be challenging to separate the good from the bad.

That being said, Cardano (CRYPTO: ADA) stands out from the pack. Not because of its functionality — at least, not yet — but because of its experienced developer team and strong growth strategy. Does that mean Cardano is worth buying? Let’s take a closer look.

The value proposition

In 2015, ex-Ethereum founder Charles Hoskinson started the Cardano project along with former colleague Jeremy Wood. Two years later, the Cardano blockchain (powered by the ADA token) made its debut, featuring the first peer-reviewed consensus protocol: a type of proof of stake (PoS) known as Ouroboros.

Compared to Ethereum, which relies on energy-intensive proof-of-work consensus, Cardano’s PoS consensus makes it more eco-friendly and sustainable. Moreover, rather than rushing to implement new features, the developer team has based each decision on academic research, dividing the Cardano project into five stages that address its foundation, decentralization, smart contracts, scalability, and governance.

The project is currently in phase three, and smart contract functionality was added to the blockchain in September 2021. If you’re new to cryptocurrency, smart contracts are just computer programs that run under predefined conditions, and they form the heart of decentralized applications (dApps), including decentralized finance (DeFi) applications. Of course, this functionality is new, meaning Cardano’s ecosystem of dApps is quite limited compared to other blockchains like Ethereum and Solana. But that should change in the future.

There’s also another point to consider. Cardano has been clocked at 257 transactions per second (TPS) — that makes the platform much faster than the likes of Ethereum, which can handle roughly 30 TPS. But it pales in comparison to Visa‘s theoretical limit of 24,000 TPS. If Cardano is to achieve widespread adoption, it needs to be faster (i.e., more scalable).

Phase four will solve that problem with the implementation of Ouroboros Hydra, an upgraded version of the consensus protocol. Specifically, Hydra will enable multiple side chains to be added to the main blockchain, thereby distributing the network load more efficiently. Hydra is still in development, but simulations have clocked side chains at 1,000 TPS, and with 1,000 side chains, Cardano could theoretically support 1 million TPS in the future.

The investment thesis

Cardano is certainly a more speculative bet than other cryptocurrencies, and that’s saying something. However, its academically driven developer team is executing a smart growth strategy. Assuming Cardano makes good on its promise of tremendous scalability, the platform could be quite popular with dApps builders and DeFi investors a few years from now.

On that note, increased adoption of services on the Cardano blockchain would translate into more transaction fees, meaning more demand for the underlying ADA token. That should drive its price up over time. Likewise, owning ADA tokens makes you a stakeholder in the network. You could start your own stake pool to help verify transactions and secure the blockchain, or you could simply lend your tokens to an existing stake pool — either way, you’d earn rewards.

Of course, all of this is contingent upon Cardano achieving the necessary scalability, and upon adoption by both dApp developers and consumers. But with 4,000 projects currently in the works, I don’t think it’s a stretch to imagine Cardano as a thriving ecosystem a few years down the road. That’s why this cryptocurrency looks like a smart long-term investment. 

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

The post Is Cardano a smart cryptocurrency to buy now? appeared first on The Motley Fool Australia.

More reading

• Australia’s first physical crypto gift cards are now on sale for Christmas
• What crypto investors should know about these ‘Ethereum killers’
• Bitcoin, Ethereum, and Cardano continue to recover from late-week selloffs
• Why Cardano, Polkadot, and Solana all popped on Tuesday
• Crypto market crash: The latest on Solana, Cardano, Ripple, and Terra

Trevor Jennewine owns Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Ethereum and Visa. 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.

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

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The Booktopia Group Ltd (ASX: BKG) share price is having a day to forget.

In morning trade, the online book retailer’s shares are down 10% to a record low of $1.45.

This means the Booktopia share price is now trading 37% lower than its December 2020 IPO listing price of $2.30.

Why is the Booktopia share price crashing lower today?

The weakness in the Booktopia share price this morning has been driven by a disappointing trading update.

According to the release, while its sales have remained solid during the first half, its costs have jumped and are weighing heavily on its profits.

For example, based on trading so far in December, Booktopia is expecting to achieve first half revenue of more than $127 million. This represents a 13% increase on the revenue of $112.6 million reported in the prior corresponding period.

However, due to additional labour costs incurred managing Sydney’s COVID lockdowns, the ongoing set-up costs of a second distribution facility, and the recruitment of a number of new executives, Booktopia’s EBITDA is expected to be between $4 million and $4.5 million during the half.

The low end of the range is a 50% reduction on the EBITDA of $8 million it recorded in the prior corresponding period.

Management commentary

Booktopia’s Founder and CEO, Tony Nash, commented: “The first half has presented a number of challenges and I am very proud of the way our team responded to ensure we were able to limit the impact, particularly on our customers. Trading conditions and customer demand over the last two months will give us strong momentum as we move into the second half and the 2022 academic sales season.”

“The Group has strong confidence, based on current levels of demand, that the large number of customers acquired throughout 2020 and 2021 will continue to purchase through Booktopia’s online platforms, and our investments in new stock and distribution infrastructure will deliver value for the Group. We are committed to continuing the growth of the business and making investments in our team and facilities to ensure we can meet the growth targets we have set ourselves,” he concluded.

The post Why the Booktopia (ASX:BKG) share price just crashed 10% to a record low appeared first on The Motley Fool Australia.

More reading

• What happened with the Booktopia (ASX:BKG) share price today?
• Analysts are tipping huge gains for these small cap ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Booktopia Group Limited. 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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With COVID-19 Omicron surging around the globe, ASX healthcare shares are back in the spotlight.

While most don’t deal with the pandemic directly, there are many health and biotechnology companies on the ASX that are plugging away quietly trying to come up with solutions to save lives or improve the quality of them.

Wilsons senior analyst Dr Shane Storey, who is a specialist in health stocks, recently picked out some ASX healthcare shares that he reckons have excellent upside.

Here are 2 with the biggest potential:

The ASX healthcare share that could rocket 86% in the new year

Immutep Ltd (ASX: IMM) is a company developing cancer immunotherapy solutions.

Its shares, like many of its biotech peers, have been wildly up and down this year.

But as of Thursday morning, they were going for 49 cents, while Wilsons has set a price target of 91 cents per share.

That’s a massive 86% upside.

Immutep’s technology uses what’s called the LAG3 immune control mechanism for one of its solutions.

“Immuno-oncology has dramatically changed how we treat cancer and the survival outlook for patients with late-stage and metastatic disease,” Storey posted on Livewire.

“LAG3 is the most advanced novel immune checkpoint target, which could see its first targeted drug approval in 1Q ’22.”

Kiwi business ready to stamp into the US market

New Zealand ASX healthcare share Aroa Biosurgery Ltd (ASX: ARX) deals in the area of soft tissue regeneration.

Wilsons has a price target of $1.75 for each of its shares. This is a 72% upside compared to the Thursday morning price of $1.02.

Myriad is Aroa’s flagship product that can be used for soft tissue reconstruction in cases like carcinoma tumor excision, traumatic wound, and fistula.

A team of more than 20 sales staff has now been formed to market the solution in the US, according to Storey.

“The growth expected from the Myriad franchise is supported by the newly added Morcells product approved in April 2021, to complement the Myriad Matrix sheet product,” he said. 

“We have already seen excellent traction with Morcells and expect it to continue to contribute positively to Aroa’s gross margin given it is a product manufactured from the ‘scrap’ or waste matrix sheeting.”

He added that the products offered by Aroa are currently rare in the inpatient wound market, and this gives them a great chance for adoption.

Aroa also has a skin substitute product named Symphony, due to be launched in the first quarter of the new year.

“We anticipate Aroa can offer Symphony at a 40% to 50% discount to existing biologic skin substitutes, which typically retail at US$6,000 to US$10,000 per device.”

The post 2 ASX healthcare shares set to explode 70% in 2022: expert appeared first on The Motley Fool Australia.

More reading

• Here’s why the Immutep (ASX:IMM) share price is up today
• Immutep (ASX:IMM) share price slips amid trial safety update

Motley Fool contributor Tony Yoo 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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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.

What happened

Tesla (NASDAQ: TSLA) stock has been on a downslide as CEO Elon Musk slowly worked on unloading the 10% of his shares he publicly said he was aiming for. The stock is down 13.5% over the past month. But shares perked back up Wednesday morning after Musk said in an interview that he has sold all that he intends to for now. As of 10:25 a.m. ET, Tesla shares were up 4.6%. 

So what

Musk was on The Babylon Bee podcast last night where the normally satirical site shifted its format for a straightforward interview. Musk talked about his stock sales, taxes, and why he moved Tesla’s headquarters from California to Texas earlier this month. Musk has now sold 13.5 million Tesla shares, and says he’s close enough to his goal to sell what he needed to pay his hefty tax bill. Musk had said last weekend that he would be paying $11 billion in taxes this year. 

Tesla stock today is likely reacting some to the fact that in the course of selling shares to cover his tax bill, Musk also exercised options to buy about 16.4 million more shares. That leaves him with more shares than when he initially discussed selling 10% of his holdings, according to data compiled by MarketWatch. 

Now what

Musk also discussed moving the company’s headquarters to Texas, slamming California in the process. That move to Tesla’s Austin gigafactory became official on Dec. 1. He said, “The state of California is doing everything it can to encourage people to leave,” calling the state “the land of overregulation, over-litigation, [and] overtaxation.”  

While Musk may have been entertaining in the interview, it’s his actions that investors are most focused on. And now that he has sold all the shares he intends to for now, investors are giving Tesla stock a bump up today. 

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

The post Why Tesla stock perked up today appeared first on The Motley Fool Australia.

More reading

• Aussie investors now hold more Tesla than Woolworths (ASX:WOW)
• Why Tesla stock jumped on Tuesday
• Why are Aussies going mad for this $0 revenue company?
• Why Tesla stock is down sharply today
• Dogecoin jumps more than 20% in minutes on renewed Elon Musk backing

Howard Smith 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.

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

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The NIB Holdings Limited (ASX: NHF) share price is pushing higher on Thursday morning.

In early trade, the private health insurer’s shares are up over 1% to $7.02.

Why is the NIB share price pushing higher?

The catalyst for the rise in the NIB share price this morning has been the release of an update on its premium increases for next year.

According to the release, the company has received approval from the Federal Minister for Health to increase health insurance premiums by an average of 2.66%. This is the company’s lowest premium change in two decades.

However, just because the premium increase has been approved, doesn’t necessarily mean the company will actually increase them immediately on 1 April.

NIB’s Managing Director, Mark Fitzgibbon, revealed that the company is considering deferring premium increases in recognition of the ongoing impact of COVID-19 on its members.

He said: “It’s possible the increase could be deferred for likely three months depending upon developments, especially in relation to our claims experience and risk equalisation commitment. We’ll provide details on what this looks like for our members in the new year.”

Nobody likes premium increases but…

And while Mr Fitzgibbon acknowledged that consumers never welcome premium increases, he stressed that they are necessary to keep pace with the rising cost of healthcare treatment.

Mr Fitzgibbon commented: “We’ve worked hard to keep our price changes to a record low while still allowing us to fund medical treatment for our members when and where they need it. We’re also investing more in our members’ future health by leveraging data science and technology to deliver more personalised healthcare through unique products, digital health services and health management programs.”

The Managing Director also highlighted that the company’s average premiums are still lower than average. Following the 2022 premium increase, NIB’s annual average premium per single equivalent unit is estimated to be $2,484. This compares to the industry average of $2,657.

Incidentally, this morning Medibank Private Ltd (ASX: MPL) one-upped NIB by announcing that it will defer its premium increases for five months from 1 April. After which, its premiums will increase by an average of 3.1%, which is its lowest increase in 21 years.

The post Here’s why the NIB (ASX:NHF) share price is pushing higher today appeared first on The Motley Fool Australia.

More reading

• Why Tesla stock perked up today
• Syrah (ASX:SYR) share price rockets 32% higher on Tesla deal
• Why the Bega (ASX:BGA) share price is sinking 9% today
• Aussie investors now hold more Tesla than Woolworths (ASX:WOW)
• Woodside (ASX:WPL) just signed a key hydrogen export MOU. What does this mean for its shares?

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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