Tag: Motley Fool

The European Lithium Ltd (ASX: EUR) share price is surging during early afternoon trade on Wednesday. This comes after the company announced it has agreed to pursue a cooperation and offtake partnership with an international commodities merchant.

At the time of writing, the lithium miner’s shares are up a sizeable 9.52% to 11.5 cents. It’s worth noting, however, that despite the strong gains, its shares are still down 14.8% in a month.

Why is European Lithium shooting for the stars?

Investors are driving up the European Lithium share price following upbeat sentiment on the company’s potential commercial opportunities.

According to its release, European Lithium advised it has signed a multi-tiered non-binding memorandum of agreement (MOA) with Traxys.

This sets up the future supply of lithium hydroxide (LiOH) from European Lithium’s Wolfsberg Project in Austria.

Under the terms, Traxys will retain exclusivity until the end of the first quarter of 2022. This will allow it to finalise the offtake agreement with the miner.

Traxys will also provide support in securing working capital and other project financing facilities for the development of the Wolfsberg Project. So far, the physical commodity trader and merchant has introduced European Lithium to financial institutions in relation to project finance. This has led to the opening of direct communications between European Lithium and the potential lenders.

Furthermore, discussions are being scheduled regarding a potential investment by Traxys for the commercialisation of the Wolfsberg Project.

European Lithium chair Tony Sage said:

Finalising an offtake agreement is another key milestone for the Company and will add to recent developments at the Wolfsberg Project. In the current high lithium price environment, partnering with Traxys and leveraging their expertise will achieve the best result for shareholders while the company retains flexibility.

About the European Lithium share price

In the past 12 months, the European Lithium share price has boasted a gain of around 140% from continued positive investor sentiment. The company’s share price charged higher in early November following a resource re-estimation of the Wolfsberg Project.

Based on today’s price, European Lithium has a market capitalisation of around $124.25 million, with roughly 1.08 billion shares outstanding.

The post Why the European Lithium (ASX:EUR) share price is rocketing 9% appeared first on The Motley Fool Australia.

More reading

• What happened to the European Lithium (ASX:EUR) share price today?
• European Lithium (ASX:EUR) share price sinks after listing in US

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.

from The Motley Fool Australia https://ift.tt/3pksY0g

The Pilbara Minerals Ltd (ASX: PLS) share price is staging a comeback from the fall it experienced yesterday. However, the reason behind the rebound is not company-specific. Instead, sentiment appears to have been rejuvenated sector-wide today.

At the time of writing, shares in the lithium producer are up 8% to $2.71. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is trading 0.24% lower to 7,337.4 points.

So, what could be driving this discrepancy between the overall market and the Pilbara Minerals share price today?

A bright future for Pilbara Minerals share price

This morning it was revealed that the analyst team over at Macquarie is seeing a considerable opportunity for ASX-listed lithium miners.

Even more promising, the broker expects the trend to be more than a fad. The analysts expect a positive environment for at least four years as electric vehicle adoption supports record lithium prices.

While Macquarie named a number of companies that it believes are set to benefit from this trend, Pilbara Minerals was labelled its top pick among ASX lithium shares.

Furthermore, the broker maintained its outperform rating and increased its price target on the Pilbara Minerals share price by 32% to $3.70. This would suggest a further ~36% upside in the company’s shares if it were to reach Macquarie’s new price target.

Mining giant shows taste for lithium

In the midst of the rebounding sentiment for Pilbara Minerals today, another newsworthy item involving lithium has been handed out. This morning Rio Tinto Limited (ASX: RIO) revealed its intention to acquire an Argentinian lithium mine for US$825 million.

Although the news does not directly involve Pilbara Minerals, it shows that the lithium opportunity is on the radar of mining giants. Additionally, investors might be perceiving the news as an indicator for possibly more merger and acquisition opportunities within the lithium mining sector.

The Pilbara Minerals share price is up an astonishing 208% since the beginning of 2021.

The post Here’s why the Pilbara Minerals (ASX:PLS) share price is bouncing back 8% today appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Rio Tinto’s lithium acquisition, Pilbara Minerals jumps
• Macquarie names the best ASX lithium shares to buy in 2022
• Here are the 3 most heavily traded ASX 200 shares this Tuesday
• Why Afterpay, Humm, Namoi Cotton, and Pilbara Minerals shares are falling
• Why is the Pilbara Minerals (ASX:PLS) share price crashing 10% lower today?

Motley Fool contributor Mitchell Lawler owns Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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.

from The Motley Fool Australia https://ift.tt/32qbPt6

The S&P/ASX 200 Index (ASX: XJO) is having a pretty flat day so far this Wednesday. At the time of writing, the ASX 200 is down by 0.27% at 7,336 points. But one ASX exchange-traded fund (ETF) is bucking that pessimism. That’s the BetaShares Crypto Innovators ETF (ASX: CRYP).

CRYP units are instead enjoying a very healthy day on the ASX boards today. This ETF is currently up by 1.8% at $7.92 per unit. So how is this cryptocurrency-based ETF outperforming the broader market today? Well, to answer that, let’s check out what this ETF actually invests in.

What’s behind the CRYP ETF’s strong performance today?

CRYP is one of the newer ETFs on the ASX boards. It only listed in early November but unfortunately for investors, it hasn’t been an easy ASX debut. The ETF is now down close to 30% from the pricing it was commanding on its first few days of trading. This ETF doesn’t invest in cryptocurrencies like Bitcoin (CRYPTO: BTC) directly. Rather, it holds companies that BetaShares estimate provide “exposure to global companies at the forefront of the dynamic crypto economy”.

Its current top holdings include Coinbase Global Inc (NASDAQ: COIN) with a 10.5% ETF weighting, MicroStrategy Incorporated (NASDAQ: MSTR) with a 10.2% weighting, and Silvergate Capital Corp (NYSE: SI) with a 9.3% weighting. Other significant shares include Marathon Digital Holdings Inc (NASDAQ: MARA), Riot Blockchain Inc (NASDAQ: RIOT), and Voyager Digital Ltd (TSE: VOYG).

So following a sharp rise in cryptocurrency prices over the past 24 hours or so, many of these companies had very strong days of trading on the US markets last night (our time). For example, Coinbase shares were up 4.05%. MicroStrategy rose 3.86%, while Silvergate shares were up 8.65%. Marathon, Riot and Voyager all rose by more than 5%.

So this is likely the primary diver of the CRYP ETF’s gains so far this Wednesday. When an ETF’s heaviest underlying holdings all have such a strong session, it increases the value of the entire ETF’s portfolio and, by extension, its unit price. That’s likely what we have seen play out so far today.

The BetaShares Crypto Innovators ETF charges a management fee of 0.67% per annum.

The post Why is the BetaShares Crypto Innovators ETF (ASX: CRYP) share price leaping higher today? appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Rio Tinto’s lithium acquisition, Pilbara Minerals jumps
• Why the Bitcoin price was bouncing back today
• Invested in Wesfarmers (ASX:WES) shares? Here’s what to watch in 2022
• Australia’s first physical crypto gift cards are now on sale for Christmas
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Sebastian Bowen owns Bitcoin and Coinbase Global, Inc. 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.

from The Motley Fool Australia https://ift.tt/3JcZHMY

Shares in Australian listed investment company WAM Capital Limited (ASX: WAM) are inching higher today and now trade less than 1% higher at $2.23 apiece.

Investors are responding positively to an announcement out of WAM’s corner that a long-drawn and highly competitive acquisition has passed through to the final stages of approval today.

What’s the situation?

The Directors of PM Capital Asian Opportunities Fund Limited (PAF) now recommend that PAF shareholders should accept WAM Capital’s takeover bid before it expires, in the absence of a superior proposal.

For reference, WAM’s takeover bid is due to close on 14 January 2022, unless it is otherwise extended.

It was previously announced on 13 December, that a scheme for WAM Capital to acquire all of the shares in the PAF was not passed by PAF shareholders at the scheme’s meeting.

In addition, on 17 December 2021, PM Capital’s Global Opportunities Fund Limited (PGF) announced its decision not to pursue an alternative approach to acquiring shares in PAF at this time, and that it may never pursue an alternative approach.

PAF Shareholders accepting the WAM takeover offer will receive 1 WAM Share for every 1.99 PAF shares. As of 21 December 2021, the closing price of WAM shares was $2.215, implying an offer value of $1.113 per PAF share.

The takeover offer price of $2.22 represents a premium of 6.8% to PAF’s net tax assets (NTA) per share of $1.0450 as at Friday 17 December 2021.

Independent valuation of PAF’s business components shows it has a NTA of $57.5 million on the low end and $62.4 million on the high end. This values PAF’s share price at $1 to $1.09 according to that analysis from Lonergan Edwards & Associates Limited.

In comparison, WAM was valued at having $181.90 in NTA after tax (excluding deferred tax assets) in the same opinion.

It is also a 15% premium to PAF’s closing price of $0.97 on 14 September 2021, being the day before the announcement of the PGF Scheme.

What’s the outcome?

Even though the takeover bid surpasses the valuation range for PAF’s shares on a 100% controlling interest, it will still result in a NTA per share dilution for those shareholders receiving WAM shares as consideration.

WAM will issue new shares no later than 4 days to eligible shareholders after the processing of valid acceptance.

The release acknowledges that the contest for the acquisition of PAF shares between WAM Capital and PGF has been the subject of considerable market attention in 2021.

As such, PAF reckons that if another party were to emerge with a competing proposal, it would have likely done so by now. This, combined with PAF Directors requesting that WAM improve its offers on numerous occasions, but to no avail, means that PAF “considers the prospect of a superior proposal emerging for your PAF Shares is now unlikely”.

One other factor is that PAF shareholders who accept the WAM Capital offer will not receive the WAM Capital FY21 final dividend.

Nevertheless, the independent auditor’s opinion concluded that the WAM Capital offer provides PAF shareholders with improved share market liquidity, as the value of WAM Capital shares traded on the ASX materially exceeds that for PAF.

This is in combination with PAF’s board recommending its shareholders to unanimously vote in favour of the takeover, given the reasons stated above. Shareholders have until mid-January 2022 to do so.

The post Green light? WAM Capital (ASX:WAM) share price lifts as PM Capital board says just do it appeared first on The Motley Fool Australia.

More reading

• Invested in WAM Capital (ASX:WAM) shares? Here’s what to watch in 2022
• WAM (ASX:WAM) share price higher on PM Capital fund takeover news
• You want an ASX share to hold for 4 years? Here are 2!
• Own WAM Capital (ASX:WAM) shares? Here’s what the company has planned for 2022

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.

from The Motley Fool Australia https://ift.tt/3qkhSYH

The Link Administration Holdings Ltd (ASX: LNK) share price has been put in the freezer this morning as the company prepares to announce potentially exciting news.

The company has provided one clue to the market; the upcoming announcement relates to “a proposal for a potential control transaction”.

Right now, the Link share price is halted at its previous close of $4.79.

Let’s take a look at what the fund administration services provider has been up to lately.

Why’s the Link share price halted today?

The Link share price has been halted and might stay that way until tomorrow.

That is, unless the company releases its much-anticipated news today or extends its trading halt.

The market’s unaccustomed to seeing the Link share price halted. The last time it was frozen was in December 2020, before the company announced it had received its second takeover proposal in as many months.

Interestingly, Link is once more the subject of simultaneous takeover offers. Though, this time it has three to choose from.

Investment fund Carlyle Asia Partners put forward a $5.38 per share bid for the company in early November.

Carlyle was given access to Link’s virtual dataroom, Q&A process, and its executive leadership team later that month.

Days after the first takeover offer was posed, Link received an offer to sell its banking and credit management business to a syndicate led by Pepper European Servicing Limited.

The syndicate was granted exclusive due diligence for the banking and credit management business until 17 December.

The company has since received another offer for its banking and credit management business from LC Financial Holdings.

The latest offer would see Link receive approximately $102 million (at today’s AUD/Euro exchange rate) for the business. LC Financial Holdings has also been granted due diligence.

Since Carlyle posted its most recent takeover offer, the Link share price has gained 10%. Though, it is still 0.2% lower than it was at the start of 2021.

It likely goes without saying that plenty of eyes will be on the stock over the course of today in wait of more news.

The post Why is the Link (ASX:LNK) share price frozen on Wednesday? appeared first on The Motley Fool Australia.

More reading

• 4 best-performing ASX tech shares in November
• 5 things to watch on the ASX 200 on Tuesday

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 Link Administration Holdings Ltd. 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.

from The Motley Fool Australia https://ift.tt/3mqugVJ

The Westpac Banking Corp (ASX: WBC) share price has had a difficult two months.

Since the start of November, the banking giant’s shares have fallen 18%.

This compares unfavourably to a small gain by the S&P/ASX 200 Index (ASX: XJO) over the same period.

Why is the Westpac share price underperforming?

Investors have been selling down the Westpac share price over the last couple of months due to its full year results.

Although Australia’s oldest bank delivered strong profit growth, its margin outlook spooked the market. This is being caused by aggressive competition in the home loans market, which is weighing on margins.

In addition to this, doubts over the company’s ability to reduce its cost base to $8 billion in FY 2024 have been weighing on the Westpac share price.

Is this a buying opportunity?

While there are a number of brokers out there that are positive, such as Morgans (as discussed here), not everyone sees the weakness in the Westpac share price as a buying opportunity.

The team at Bell Potter, for example, appear to believe investors should sit tight for the time being.

Following its annual general meeting last week, its analysts reiterated their hold rating and $22.00 price target on the bank’s shares.

Bell Potter commented: “It seems it was another year of transformation prior to getting back to sustainable profit growth. While profit increased mainly due to an easing off in COVID-19 issues, there is still a lot of work to be done in driving change – specifically in terms of Fix, Simplify and Perform.”

“We note much of the year has already been spent on Fix (risk management, customer remediation and putting to bed regulatory investigations) and Simplify programs (business exits, closed products and streamlined fees), while Perform is now the main attraction (strengthen franchise, improve returns and lower costs). However, these changes still soak up time and money,” it added.

All in all, the broker appears to believe investors should wait to see how these initiatives go before considering an investment.

The post Here’s what Bell Potter thinks of the Westpac (ASX:WBC) share price appeared first on The Motley Fool Australia.

More reading

• The final Westpac (ASX:WBC) dividend is being paid today. Here’s what you need to know
• 5 things to watch on the ASX 200 on Tuesday
• Westpac (ASX:WBC) share price falls despite asset sale announcement
• Top brokers name 3 ASX shares to buy next week
• Is it a buy? Here’s what Macquarie is saying about the Westpac (ASX:WBC) share price

Motley Fool contributor James Mickleboro owns Westpac Banking Corporation. 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 Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3H0Ka12

The Neuren Pharmaceuticals Ltd (ASX: NEU) share price has more than doubled in less than a month.

The biopharmaceutical company’s share price has gained 102%, shooting from $1.80 at the end of last month to $3.64 at the time of writing. Even with the company’s share price down almost 6% today, it’s an impressive gain.

Let’s delve into what might be driving investor confidence in the company in December.

A merry December

Investors seem to be reacting to promising phase three clinical trial results on a new drug.

The massive surge in the company’s share price started on December 7 when the company announced promising top-line results from a drug trial undertaken in the US.

Neuren reported it is making significant progress on the use of its lead compound trofinetide to treat young women with Rett Syndrome.

Rett Syndrome is a neurological disorder caused by mutations on the X chromosome on a gene called MECP2. It is often misdiagnosed as autism and is identified in one of every 10,000 to 15,000 female births in the US.

The company’s partner Acadia Pharmaceuticals (NASDAQ: ACAD) is conducting and funding the trials and plans to meet with the US Food and Drug Administration to progress a new drug application in 2022.

Neuren told investors it could earn AU$111 million in revenue over 2022 and 2023 for its Rett syndrome treatment. In the US alone, the company sees sales potential of US$500 million.

Further, the company is eligible for double-digit percentage royalties on net sales if trofinetide is approved and launched in the US.

This was the only significant price-sensitive news the company released to the market during December.

However, Neuren is also working on phase two trials of the drug candidate NNZ-2591. This drug has the potential to treat multiple neurodevelopmental disorders. In fact, the company sees the the target market for this drug candidate to be five times the Rett Syndrome opportunity.

For perspective, the S&P/ASX 200 Health Care (ASX :XHJ) sector is down 2.76% since the start of the month.

Neuren Pharmaceuticals share price recap

The Neuren Pharmaceuticals share price has surged 181% in the past 12 months and up 178% year to date.

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

In the past week, the company’s shares have shed just over 6%.

The company has a market capitalisation of about $450 million based on its current share price.

The post The Neuren Pharmaceuticals (ASX:NEU) share price has soared 102% so far this month. Here’s why appeared first on The Motley Fool Australia.

More reading

• 3 ASX shares giving the gift of gains heading into Christmas
• Neuren Pharmaceuticals (ASX:NEU) share price rockets 100% on study results

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.

from The Motley Fool Australia https://ift.tt/3J7hNQB

At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) has given back its early gains and is now trading lower. The benchmark index is currently down 0.2% to 7,340.3 points.

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

Rio Tinto acquires lithium operation

The Rio Tinto Limited (ASX: RIO) share price is trading lower today despite announcing an acquisition. The mining giant intends to pay US$825 million or A$1.15 billion on the Argentina-based Rincon lithium project. The release notes that it is a large brine project with the potential to be one of the lowest carbon operations in the industry.

Pilbara Minerals shares surge higher

The Pilbara Minerals Ltd (ASX: PLS) share price is surging higher today following the release of a bullish broker note out of Macquarie Group Ltd (ASX: MQG). Its analysts suspect that lithium prices could remain at sky high levels for the next four years. As a result, they have upgraded their earnings forecasts and price target on Pilbara Minerals’ shares accordingly. Macquarie now has an outperform rating and $3.70 price target on its shares.

Charter Hall tumbles

The Charter Hall Group (ASX: CHC) share price is tumbling today after announcing the acquisition of a 50% interest in Paradice Investment Management (PIM). Charter Hall will pay $207 million for the stake. This comprises 70% in shares and 30% in cash. PIM is a fund manager with around $18.2 billion in funds under management.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Wednesday has been the Pilbara Minerals share price with a 7%. Macquarie’s bullish note appears to be behind this. The worst performer has been the Charter Hall share price with a 5% decline. Investors don’t appear keen on its new acquisition.

The post ASX 200 (ASX:XJO) midday update: Rio Tinto’s lithium acquisition, Pilbara Minerals jumps appeared first on The Motley Fool Australia.

More reading

• Should Appen (ASX:APX) shareholders worry about Amazon in 2022?
• Invested in Wesfarmers (ASX:WES) shares? Here’s what to watch in 2022
• Charter Hall (ASX:CHC) share price sinks 6% on acquisition news
• Macquarie names the best ASX lithium shares to buy in 2022
• Rio Tinto (ASX:RIO) share price slumps amid $1.15b lithium acquisition

from The Motley Fool Australia https://ift.tt/3ehvbDs

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

The price of Bitcoin (CRYPTO: BTC) was bouncing back on Tuesday, hovering around $48,700 as of this writing. That’s about a 5.1% increase over the past 24 hours, according to CoinDesk. Normal volatility could be the explanation, but there have been some interesting developments over the past 24 hours that could be contributing to today’s gains. 

So what

Block CEO Jack Dorsey is in the news this morning after saying that Bitcoin will eventually replace the US dollar. The dollar is widely considered to be the world’s reserve currency, and many countries have actually dollarized their economies, replacing local currency with American greenbacks. Therefore, saying that Bitcoin can replace the dollar is a bold statement.

However, anyone can make a bold statement, and Dorsey has long been known to be an ardent Bitcoin supporter. It will be interesting to see whether he will be proved correct in the future. But, generally, if demand for Bitcoin continues to grow, the price could increase in future days and months, as it is doing today.

One possible driver for demand could be an exchange-traded fund (ETF) based on the spot price of Bitcoin. On 8 December, WisdomTree Investments submitted amended paperwork to the Securities and Exchange Commission in the hope its WisdomTree Bitcoin Trust can gain approval. If it does, this is one potential catalyst for Bitcoin’s price.

Year-to-date returns for Bitcoin and the S&P 500. Bitcoin price data by YCharts

Now what

As the price of Bitcoin has gone up, some previously dormant Bitcoin wallets have started awakening, making investors wonder what’s going on. According to online crypto community Whale Alert, a Bitcoin address with 321 bitcoins just activated after sitting dormant since 2013. That’s a relatively small amount of bitcoins, but dormant accounts suddenly coming back to life has been an ongoing trend. It causes some to wonder whether these Bitcoin holders are finally firing up the ol’ wallets so they can cash out after record prices in 2021.

Unfortunately, there’s a lot of things that investors can’t be sure of today. We don’t know whether drivers (like ETF approval) will materialize. And we don’t know whether these old wallets intend to sell, which would hurt demand. It’s a good reminder that there are a lot of moving parts when it comes to cryptocurrencies like Bitcoin, which is why it’s healthy to try to see things from both sides before making decisions like investing or selling.

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

The post Why the Bitcoin price was bouncing back today appeared first on The Motley Fool Australia.

More reading

• These 5 ASX shares grew revenue by more than 70% in the last year
• Australia’s first physical crypto gift cards are now on sale for Christmas
• Why is the Zip (ASX:Z1P) share price outperforming Afterpay today?
• 2 reasons why Bitcoin is down today
• Bitcoin (CRYPTO:BTC) price dips again. Could it be set for a bounce?

Jon Quast owns Bitcoin and Block, Inc. The Motley Fool Australia’s parent company The Motley Fool Holdings Inc. owns and recommends Bitcoin and Block, Inc. The Motley Fool has a disclosure policy.

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

from The Motley Fool Australia https://ift.tt/3yLsnbi

There are many investment opportunities in the Australian share market. Though, not many ASX shares with a meaningful market capitalisation can say their revenue grew by more than 70% compared to the previous year.

Usually, achieving low double-digit percentages of revenue growth is impressive. However, a number of companies have enjoyed substantially greater increases in revenue from FY20 to FY21. While this isn’t necessarily an all-encompassing barometer to measure the quality of a company, it does give some colour to a company’s ability to expand.

Another important consideration is the company’s earnings growth. If revenue growth is primarily driven by high expenditure on customer acquisition, there is always the risk that earnings could dry up once the marketing tap is turned off — that’s an article for another day.

Without further ado, let’s look at five ASX shares that grew like crazy in the past year.

ASX shares with fast-growing revenue

Fortescue Metals Group Limited (ASX: FMG)

The iron ore mining giant has taken a tumble since posting its FY21 results back in August. However, that doesn’t take away from the fact that Fortescue Metals grew its revenue by 73.8% from the previous corresponding period. A dramatic surge in iron ore prices helped the company achieve a substantially greater revenue of US$22.284 billion over the year.

This ASX share is currently valued at a price-to-earnings (P/E) ratio of 5.9 times. Despite the revenue growth, the Fortescue Metals share price is down 20% year to date (YTD).

Afterpay Ltd (ASX: APT)

We have all come to know the buy now, pay later (BNPL) payment option and some of the high flying companies in the sector. Sitting atop the industry in Australia is the now synonymous Afterpay, as it looks to be acquired by Block Inc (NYSE: SQ) (formerly Square). Afterpay managed to grow its top-line figure by 75.4% to $836.05 million in FY21.

Due to its current unprofitability, Afterpay does not have a positive P/E ratio. It has been a disappointing year for the Afterpay share price, with shares down 26% YTD.

Mineral Resources Limited (ASX: MIN)

Like Fortescue, this ASX mining share benefitted from an increase in commodity prices in FY21. Mineral Resources revenue increased 75.7% compared to the previous corresponding period to $3.734 billion. Unlike Fortescue, this company’s increased revenue was partly due to the surge in demand for lithium.

The bumper year also delivered record profits for Mineral Resources. As a result, the company currently trades on a P/E ratio of ~7.7 times. Additionally, it appears the miner’s exposure to lithium has insulated it from the weakening iron ore price — shares in the company are up 35% YTD.

Temple & Webster Group Ltd (ASX: TPW)

Switching gears from miners to online homewares and furniture retailing, this ASX share took full advantage of a shift in shopping behaviours as a result of COVID-19. In turn, Temple and Webster’s revenue soared 85% to $326.34 million in FY21.

The company is currently trading on a P/E ratio of 89 times. However, investors have been putting selling pressure on the e-commerce business since August. Consequently, the Temple and Webster share price is down 12% YTD.

Pointsbet Holdings Ltd (ASX: PBH)

We’ve left the ASX share with the highest year-on-year revenue growth for last. Pointsbet is a sports betting company offering a wagering platform with a range of unique betting options. In FY21, the company put its foot on the gas in terms of revenue growth — growing a remarkable 158.9% to $194.66 million.

Despite being the fastest-growing on the top line, the Pointsbet share price has been the worst performing of those on this list this year. Shares have fallen 39% since the beginning of 2021.

The post These 5 ASX shares grew revenue by more than 70% in the last year appeared first on The Motley Fool Australia.

More reading

• Macquarie names the best ASX lithium shares to buy in 2022
• $4.5 million brawl over Afterpay (ASX:APT) options settled
• Forget Christmas! Could these ASX retail shares be set for a Boxing Day bonanza?
• Invested in Afterpay (ASX:APT) shares? Here’s what to watch in 2022
• Why Afterpay, Humm, Namoi Cotton, and Pilbara Minerals shares are falling

Motley Fool contributor Mitchell Lawler owns AFTERPAY T FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended AFTERPAY T FPO, Block, Inc., Pointsbet Holdings Ltd, and Temple & Webster Group Ltd. The Motley Fool Australia owns and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Pointsbet Holdings Ltd and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3qe18SY