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The S&P/ASX 200 Index (ASX: XJO) is following the lead of US markets and heading higher. At the time of writing, the index is up 0.6%. ASX 200 travel shares are up much more.

The Qantas Airways Limited (ASX: QAN) share price is up 4.2%; the Webjet Limited (ASX: WEB) share price is up 3.9%; and shares in Flight Centre Travel Group Ltd (ASX: FLT) have gained 5% since this morning’s opening bell.

What’s happening with the travel industry?

ASX 200 travel shares have proven particularly vulnerable to any fresh news relating to COVID-19 for obvious reasons. When international and domestic borders are closed to contain the virus, their business evaporates.

For that reason, shares such as Qantas, Webjet and Flight Centre took some of the hardest hits when the coronavirus went global in February and March 2020. These same shares then posted some of the biggest gains on the early vaccine announcement in November last year.

And this pattern has continued to play out since.

Positive news on the virus front tends to see ASX 200 travel shares rally, while negative news tends to see them fall harder than the broader index.

When news of the Omicron COVID variant broke, all major global share markets sold off. And travel shares were again the biggest losers.

Now the first glimmer of hope is arising that Omicron may not be the viral Bogeyman the world first feared.

Anthony Fauci, director of the US National Institute of Allergy and Infectious Diseases, is one of the most influential people on the planet when it comes to the ongoing pandemic. And over the weekend, Fauci told CNN: “Thus far it does not look like there’s a great degree of severity to it, but we’ve really got to be careful before we make any determinations that it is less severe or doesn’t really cause any severe illness.”

Despite his added note of caution, the Nasdaq closed up 0.9% yesterday (overnight Aussie time), buoyed by travel shares such as United Airlines Holdings Inc (NASDAQ: UAL). United closed up 8.3% yesterday.

Today, we’re seeing a similar pattern playing out on the ASX 200 with travel shares leading the charge.

How have these ASX travel shares performed in 2021?

All 3 of the ASX 200 travel shares listed above are in the green in 2021.

The Qantas share price has gained 5.3%, Webjet shares are up 7.8%, and the Flight Centre share price is up 13.4%.

The post Here’s why ASX 200 travel shares are taking off today appeared first on The Motley Fool Australia.

More reading

• Qantas (ASX:QAN) share price lifts as airline expands freight capacity
• Flight Centre (ASX:FLT) shares have a 13% short interest. What does this mean?
• These are the 10 most shorted ASX shares
• Why has the Webjet (ASX:WEB) share price had such a lousy start to December?
• Winning shares for 2022: the companies experts are backing revealed at Sohn

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

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The Bank of Queensland Limited (ASX: BOQ) share price has been a strong performer today.

In afternoon trade, the regional bank’s shares are up 5.5% to $8.02.

Why is the Bank of Queensland share price pushing higher?

The Bank of Queensland share price is rising today after investors responded positively to the release of a trading update ahead of its annual general meeting.

According to the release, the regional bank’s growth momentum has continued throughout the first quarter of FY 2022. It reported strong application volumes across both the housing and business lending portfolios.

And while the bank has revised its net interest margin guidance lower, this didn’t appear to come as a surprise to the market following recent updates from the big four banks.

Furthermore, management is aiming to offset this margin weakness with a 1% reduction in expenses in FY 2022 through additional productivity benefits. All in all, this means that its full year guidance of at least 2% positive jaws (income growth exceeding expense growth) remains in place.

What was the reaction?

Analysts at Goldman Sachs have responded positively to the update. As a result, the broker has reiterated its buy rating and lifted its price target slightly to $9.67.

Based on the current Bank of Queensland share price, this implies potential upside of ~20% for investors.

In addition, Goldman is forecasting a fully franked ~44 cents per share dividend in FY 2022. This implies a 5.5% yield, bringing the total return on offer to ~26%.

Goldman commented: “Our recently revised FY22E revenue growth on pro-forma FY21A had been 1.2% and costs of -0.4%. This compares to their updated implied revenue growth guidance of +1% (i.e. at least 2% positive jaws guidance) and expenses of -1%. Therefore, with costs run-rating mildly better than we had expected, we make minor revisions to our FY22/FY23/FY24E EPS of +0.5%/+0.4/+0.1% and our TP moves to A$9.67 from A$9.66.”

“Overall we maintain our Buy recommendation on BOQ, which we believe has more offsets to these mortgage NIM pressures in the form of i) BOQ’s more rate sensitive deposit book, and ii) the continued delivery of ME Bank synergies,” it concluded.

The post Why the Bank of Queensland (ASX:BOQ) share price is racing 5% higher today appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Zip update impresses, BOQ rises
• Bank of Queensland (ASX:BOQ) share price on watch amid FY22 guidance update
• Why the Bank of Queensland (ASX:BOQ) share price hit reverse in November?
• Should Bank of Queensland (ASX:BOQ) shares be on your Christmas list? Here’s what top brokers think
• What’s JP Morgan saying about ASX 200 bank 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 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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Betashares Crypto Innovators ETF (ASX: CRYP) is a newcomer to the ASX.

When CRYP hit the boards on 4 November, the exchange traded fund (ETF) broke all the records for a managed investment fund on its first day of ASX trading, finishing with net buys of $39.7 million.

While the early days delivered some handsome gains to investors, CRYP has struggled over the past week.

Why is CRYP down 15% this past week?

At this morning’s opening bell, the ETF was down 18% over the past week. With today’s intraday gain of 4.14%, the CRYP share price still remains 16% in the red.

So what’s going on?

Part of the answer lies in the falling price of the world’s top cryptocurrency.

Bitcoin (CRYPTO: BTC) sold off alongside other risk assets this past week, and remains down 13% over the past 7 days. One Bitcoin is currently worth US$50,501 (AU$72,141), according to data from CoinMarketCap.

Bitcoin is up 3% in the past 24 hours, however, likely tying into the lift in the CRYP share price today.

The other part of the puzzle lies in the fact that the ETF doesn’t invest directly in Bitcoin or indeed in any altcoins.

Instead, the ETF works to track the performance of an index of companies deeply involved in crypto activities.

CRYP currently has 32 holdings. Its top 5 holdings as of this morning are:

1. Silvergate Capital Corp (12.3%)
2. Marathon Digital Holdings Inc (10.3%)
3. Coinbase Global Inc (10.2%)
4. Galaxy Digital Holdings Ltd (9.9%)
5. Microstrategy Incorporated (9.5%)

A quick review of the above companies’ share price performance over the past week reveals they’re all deeply in the red, down anywhere from 15% to as much as 20%.

So, now we know why CRYP was down 18% at market open this morning, and remains down 16% over the past week.

But what can ASX investors expect in the year ahead from the ETF.

What’s next for the crypto ETF?

The performance of CRYP, as we looked at above, is linked to the performance of the crypto-related companies that the ETF invests in. And the performance of those companies, in turn, is closely tied to the performance of Bitcoin and the wider world of altcoins.

So what’s ahead for 2022?

For some insight into that question, we turn to Josh Gilbert, crypto analyst at multi-asset investment platform eToro.

According to Gilbert:

2021 was a remarkable year for cryptoassets, from the retail surge in Q1 with new all-time highs to market corrections and new all-time highs in Q4. Global adoption of cryptoassets is accelerating at an extraordinary pace and we can expect this trend to continue well into 2022.

Looking ahead to what could spur Bitcoin and other cryptocurrencies onwards in 2022, Gilbert added:

DeFi [decentralised finance] is anticipated to play a more significant role than we’ve ever seen before, with the continued growth from NFTs [non-fungible tokens], the metaverse and Web 3.0. Although some of these trends may take a while to reach their full potential, 2022 will certainly act as a sounding board for their acceleration.

DeFi, among other things, can deliver smart contracts via cryptocurrency blockchains.

The growth of smart contracts, Gilbert said, “could help to facilitate more innovative shipping and logistics processes, and merchants could have the ability to sell to customers in more countries with less friction”.

Gilbert also drew a parallel to the past 2 bull runs for Bitcoin and other cryptocurrencies, saying the current bull market looks to have some legs left in 2022. Which would offer some steady tailwinds for the CRYP share price.

According to Gilbert:

In 2013 and 2017 we saw crypto bull markets and have now experienced this again in 2021. Nevertheless, I don’t think we’ve yet to see the dramatic price action we saw during these periods. If history is anything to go by, this could mean that we haven’t quite seen the peak for crypto yet and 2022 could be a key year.

In a nod to the historic volatility of cryptocurrencies, Gilbert added, “In the same breath, investors should remember that we may then experience a ‘crypto winter’.”

The post Betashares CRYPTO ETF (ASX:CRYP) drops 16% in the past week. What’s next? appeared first on The Motley Fool Australia.

More reading

• This crypto will outperform both Bitcoin and Ethereum in 2022: expert
• Why Ethereum, Dogecoin, and Solana Fell This Morning
• Crypto investors missing millions after 2 Aussie exchanges collapse
• Bitcoin (CRYPTO:BTC) price crash dashes crypto’s safe haven status
• Could interest-paying crypto accounts be coming to a CBA (ASX:CBA) branch near you?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. 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 Cochlear Limited (ASX: COH) share price is back on form on Tuesday.

In afternoon trade, the hearing solutions company’s shares are up 1% to $213.25.

This means the Cochlear share price is now up 12% in 2021.

Where next for the Cochlear share price?

Unfortunately, one leading broker is calling time on the Cochlear share price gains.

According to a recent note out of Goldman Sachs, its analysts have retained their sell rating and $197.00 price target on the company’s shares.

Based on the current Cochlear share price, this implies potential downside of almost 8% for its shares over the next 12 months.

What did the broker say?

While Goldman Sachs expects trading conditions to improve given the vaccine rollout, it does have concerns that demand could take longer to recover. This is due to a combination of cochlear implant surgeries being highly elective and potential hesitancy from older patients.

Goldman said: “Although improving vaccination rates against a challenging comparator should set up COH for a relatively stronger period, implant surgeries are highly elective. Although COH is a high-quality operator, leveraged to a recovery in procedure volumes, it is possible there is some persistent hesitancy amongst a proportion of its target market in DMs (aged 70+).”

In addition, although the broker is a fan of the company, it doesn’t see enough value in the Cochlear share price to change its recommendation to something more positive at this point.

“Whilst there are many reasons to like the stock, at current valuation, we continue to see better value elsewhere across our coverage (COH 29.7x 2022E EV/EBITDA for +3% FY19-22E NPAT CAGR). We are Sell-rated on COH with a 12m TP of A$197 based on our target NTM EV/EBITDA multiple of 26.2x,” Goldman explained.

The post Why this top broker says the Cochlear (ASX:COH) share price is heading lower appeared first on The Motley Fool Australia.

More reading

• With restrictions easing, is the Cochlear (ASX:COH) share price a buy?
• 3 ASX 200 shares with major competitive advantages
• Macquarie warns the next ASX market downturn could come as soon as February
• Is the Cochlear (ASX:COH) share price heading back under $200?

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

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The Emerald Resources NL (ASX: EMR) share price is climbing higher today after breaking a 6-session long trading halt with news of a major acquisition.

The gold miner has offered to take over its unlisted Australian peer, Bullseye Mining Limited, for an all-scrip offer valuing it at $117 million. The offer has been accepted by the Bullseye board.

At the time of writing, the Emerald Resources share price is $1.08. That’s 1.41% higher than it was before it was frozen last Monday.

Let’s take a closer look at today’s exciting news from the gold explorer, developer, and producer.

Emerald Resources puts forward takeover bid

The Emerald Resources share price is sparkling in green on Tuesday after the company announced it’s planning on acquiring 1,200 square kilometres of gold prospect licences through a takeover.

Bullseye Mining holds 3 projects in Western Australia’s goldfields. One of these – the North Laverton Gold Project – covers the entire Dingo Range Greenstone Belt.

More than 100 million ounces of gold has been produced or discovered in the areas surrounding the project.

Bullseye also owns the Southern Cross Gold Project and the Aurora Gold Project.

The ASX-listed company has offered Bullseye shareholders 1 Emerald Resources share for every 3.43 Bullseye shares held. That will give Bullseye shareholders around 18% of the resulting entity on a non-diluted basis.

The $117 million valuation — around 30 cents per Bullseye share – is based on Emerald Resources’ 30-day volume-weighted average price leading up to 26 November 2021.

Emerald Resources purchased a 19.45% stake in Bullseye prior to its takeover bid on the same terms as the offer.

The takeover is still subject to 90% of Bullseye shareholders voting in favour. However, the company’s directors have each indicated they intend to vote in favour of the acquisition in respect to their own holdings.

What did management say?

Emerald Resources’ chair Simon Lee commented on the proposed acquisition:

The combination [of the companies] will create a gold exploration and production company with a diversified asset base, strong balance sheet, solid and recurring revenue, with significant cost savings and operational synergies.

The Bullseye mining team have done a highly commendable job in consolidating the entire Dingo Range greenstone belt and identifying and developing resources. We see the strong probability of expanding these resources through the inclusion of results from the completed 35,000 metres of drilling and infill and extensional drilling campaign planned for 2022.

Bullseye chair Peter J Burns also commented, saying the bid offers an attractive value proposition:

This transaction brings many benefits to Bullseye shareholders, including significantly de-risking project financing and project development/implementation risks…

[The takeover will provide] exposure to Emerald’s strong cash producing Okvau Gold mine and also provides Bullseye shareholders with liquidity to their investment via the ASX.

Emerald Resources share price snapshot

This year is proving to be a good one for the Emerald Resources share price.

The company’s stock has gained around 27% year to date. It is also 9% higher than it was this time last month.

The post Emerald Resources (ASX:EMR) share price lifts on $117 million acquisition appeared first on The Motley Fool Australia.

More reading

• Why is the Emerald Resources (ASX:EMR) share price still in the deep freeze today?

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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As we’ve discussed many times, the S&P/ASX 200 Index (ASX: XJO) didn’t have the best of months in November. The ASX 200 ended up losing around 0.91% over the month, going from 7,323.7 points to 7,256. But how did the Woodside Petroleum Limited (ASX: WPL) share price fare?

Well, it’s safe to say it wasn’t a happy month for the ASX 200’s largest oil company either.

The Woodside share price was $23.26 at market close on 29 October. Fast forward a month and this energy company finished November at $21.43 a share. That’s a decline of 7.87%.

Woodside share price anything but black gold in November

So why did Woodside end up having such a bad time of it last month, underperforming the broader market so dramatically?

Well, we had a number of developments out of the company that might have lent a hand to this poor performance.

Firstly, we got an update on Woodside’s upcoming merger of sorts with BHP Group Ltd (ASX: BHP). As announced a few months ago, BHP is in the process of offloading its oil/energy assets to Woodside. This will involve Woodside acquiring the ownership of BHP’s petroleum portfolio in exchange for new Woodside shares.

On 22 November, both companies announced they had have signed a binding share sale agreement for the sale. This did little to inspire the Woodside share price at the time.

Omicron and an oil flood…

Secondly, US President Joe Biden announced a release of 50 million barrels of crude oil from the United States Strategic Petroleum Reserve during the month just gone.

This was in response to the price increases we had seen in crude oil over September and October. It was intended to add additional supply to the global oil market. Under the laws of supply and demand, more supply usually results in lower prices. This is, of course, bad news for oil companies like Woodside — even if it might result in cheaper petrol at the bowser. 

Not too long after, we also saw a crash in the global oil price that seemed to be sparked by the emergence of the Omicron COVID-19 variant. As my Fool colleague James covered at the time, oil had its “worst day of the year so far” on 28 November, with WTI crude oil price sinking by 13.05% to US$68.15 a barrel that day.

So as you can see, none of these factors did the Woodside share price any good. This ASX energy share’s poor November can likely be blamed on a combination of these factors.

It’s not all bad news for Woodside shareholders though. Over the past 5 trading days, Woodside shares have added a healthy 2.22%, including the 0.46% rise so far today to $21.62 a share.

At this share price, Woodside has a market capitalisation of $20.96 billion, with a dividend yield of 2.61%.

The post Why did the Woodside (ASX:WPL) share price go backward in November? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Own Woodside (ASX:WPL) shares? Why this expert is watching LNG demand in Asia
• 5 things to watch on the ASX 200 on Monday
• Analysts say these are the ASX resources shares to buy now for big returns
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Sebastian Bowen 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 Starpharma Holdings Ltd (ASX: SPL) share price is soaring following the company announcement of a partnership agreement.

At the time of writing, the dendrimer product developer’s shares are up 6.11% to $1.215 apiece. It’s worth noting that in the past week alone, the company’s share price has leapt by almost 17%.

Let’s take a look at what Starpharma updated the ASX with.

Starpharma partners with Roche Group

Investors appear excited by the company’s latest announcement, sending the Starpharma share price to a 2-month high.

According to its release, Starpharma advised it has entered into an exploratory DEP Research Agreement with Genentech.

Founded in 1976, Genentech is an American biotechnology company that became a subsidiary of the Roche Group in March 2009. Genentech develops medicines for people with serious and life-threatening diseases, such as cancer and progressive multiple sclerosis.

The partnership will see an initial focus on evaluating DEP (dendrimer-based) drug chemical compounds.

A leader in dendrimer-based drug delivery, Starpharma’s proprietary drug delivery platform technology, DEP, is used to improve pharmaceuticals. This reduces toxicities and enhances performance across a wide range of drug classes.

Starpharma’s DEP technology has shown promising results so far, producing four clinical-stage products.

The company already has a number of existing DEP agreements with several leading international pharmaceutical companies. These include AstraZeneca, Merck & Co., Chase Sun, and several other undisclosed partnerships.

Starpharma share price summary

At the beginning of 2021, Starpharma shares rocketed to an all-time high of $2.52 in mid-February. However, the sharp rise was followed by a fall with the company’s shares quickly crashing down the following month.

Since then, the Starpharma shares have continued their downward trend, hitting a 52-week low of $1 in November.

Overall, the Starpharma share price is down by almost 5% in the past 12 months and is more than 20% lower in 2021.

The company presides a market capitalisation of roughly $496 million, with approximately 406.68 million shares on its books.

The post Starpharma (ASX:SPL) share price shoots 6% higher on Roche agreement appeared first on The Motley Fool Australia.

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• The Starpharma (ASX: SPL) share price surges on Vietnam launch
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• Why is the Starpharma (ASX:SPL) share price trading at 52-week lows?

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 shares of and has recommended Starpharma Holdings Limited. The Motley Fool Australia has recommended Starpharma 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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A little under 11 years ago, a modest website went live.

With the unlikely domain name of fool.com.au it was to be the first significant international expansion of The Motley Fool in a decade.

I was lucky enough be to Fool #2 — through some felicitous coincidence, I’d emailed our CEO on spec having heard the company was looking toward ‘international expansion’ at some point, and I contributed my first article to the website soon after.

We spent most of that first year trying to explain how a serious company could be called ‘The Motley Fool’, and sharing our message of individual investor empowerment.

Then at the end of 2011, we launched our very first premium investment advice service: Motley Fool Share Advisor.

The first recommendation was sent to our members on this very day a decade ago — the date we reckon is best considered Share Advisor’s birthday.

And so, on Sunday, we celebrated Share Advisor’s tenth birthday — a decade of doing our very best to bring quality investment advice — share recommendations, education and commentary — to our members.

December 5 2011, feels like a lifetime ago.

And only yesterday.

I’m proud that we’ve made it to this milestone.

I’m proud of the people who’ve worked on the service over the years.

I took over in the middle of 2012, so I can’t take all the credit for the last decade, but in any case I’m a huge proponent of Sir Isaac Newton’s observation, “If I have seen further, it is by standing on the shoulders of giants”.

I have worked with some wonderful people, directly on the service, and in the wider Motley Fool Australia investment team.

We have been wonderfully supported by the non-investors in our company who help people find us, help people get the best from us, and help us do our best work.

I am deeply indebted to our US investors, from whom I learned about investing as a member, before joining the team.

And to the investors, business people and writers from whom we’ve all learned over the years.

Which is all a little inward looking, right?

What about our members?

We are so incredibly humbled that so many Australian investors have chosen to use our services. It’s a deep trust that we take very seriously, and we continually strive to earn and keep.

I also want to thank the 173 members who have been with us, continuously, since that very first recommendation.

I like to hope it’s because we’re doing something right. But it’s also thanks to that trust they placed in us, even when markets — or individual company results — were unkind.

They stuck with us, which I deeply appreciate. Thank you to those 173 members — and to all of you who’ve renewed your membership when it fell due — and to those who are in your first year of membership with us.

I hope we’ve helped you become better investors.

I hope you feel better equipped to make your investment decisions, and to ride the waves of market volatility. And to keep the principles of diversification and portfolio construction close at hand.

I want to finish with some numbers.

We’ve made 121 ASX recommendations.

Our biggest ASX winner is Corporate Travel Management Ltd (ASX: CTD) (I own shares) which we recommended on August 23, 2012, and which are up an exact 1,000% at the time of writing! (1,000.18% to be exactly exact!).

My biggest loser is iSentia Group Ltd (ASX: ISD), currently down 97.48%, which was recommended on November 26, 2015. Yep. That one hurts.

We’ve made 49 ASX recommendations which have lost money (some have since been sold, others are still current recommendations, and we’re hopeful of better returns in future!)

72 have made money (similarly, many are still current recommendations.)

Encouragingly, while our worst loser is down that ugly 98%, we’ve made 33 ASX recommendations that have at least doubled — many of those have tripled and more.

Overall?

The average of all of our ASX recommendations, over that decade, is a gain of 73.2%.

If we’d invested in the S&P/ASX All Ordinaries Index (ASX: XAO), instead of our recommendations, on each recommendation date, the average gain would have been 44.4%.

Both numbers assume dividends are reinvested, by the way, and don’t include brokerage, taxes, or franking credits.

That’s some pretty good outperformance, so far, that I’m pretty proud of.

(The industry standard for funds is to annualise both figures. That’s harder for our service, because one recommendation is a decade old and one is just a week old. (Annualising a one week result would turn a 1% gain into a 52% annualised gain, or a 2% loss into a 104% loss, for example!)

Still, as our founding General Manager Bruce Jackson has always said, it’s our members’ scorecards, not ours, that matter.

To which I’ll add: It’s the future that counts, not the past.

What will the future look like?

I wish I knew.

But that’d take all the fun out of it.

What I know is that we’ll continue doing our utmost to help our members.

We’ll redouble our efforts to deserve their trust.

I hope I’m writing a similar piece in 2031, reflecting on the success Share Advisor has enjoyed in its second decade.

And I hope even more Australians will be able to say we’ve been instrumental in helping them achieve their financial goals.

As Amazon founder Jeff Bezos says, it’s always Day One.

What matters is the returns of our members from today. And of those members who join Share Advisor today, tomorrow and hereafter.

So thank you for the part many of you have played in our journey so far.

And here’s to the next 10 years. And the 10 after that.

Fool on!

The post An auspicious day… appeared first on The Motley Fool Australia.

More reading

• Starpharma (ASX:SPL) share price shoots 6% higher on Roche agreement
• Is the BlueBet (ASX:BBT) share price a serious bargain after losing 23% in a month? Here’s what Motley Fool analyst Trevor Muchedzi says
• Why this broker is tipping 58% upside for Bluescope (ASX:BSL) shares
• Neuren Pharmaceuticals (ASX:NEU) share price rockets 100% on study results
• Oil Search (ASX:OSH) shareholders give green light for Santos merger

Motley Fool contributor Scott Phillips owns shares of Corporate Travel Management 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 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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The BlueBet Holdings Ltd (ASX: BBT) share price has had a shocking month on the ASX despite the company’s silence. But does the 23% tumble put it squarely in the buy zone?

The Motley Fool Australia analyst Trevor Muchedzi sat down with our chief investment officer Scott Phillips last week to talk about the betting services company’s outlook.

Those interested can find their entire conversation below or keep reading for a breakdown of their major talking points.

Additionally, Phillips chats with one of our analysts weekly, publishing their conversations on The Motley Fool Australia’s YouTube channel every Wednesday.

At the time of writing, the BlueBet share price is up 7.78% for the day at $1.45.

The strength of the BlueBet share price

BlueBet is a small betting company within the Australian market. According to the ASX, it has a market capitalistion of around $270 million.

Muchedzi also notes it holds a market share of around 1.3%. But what’s got the analyst excited about the company is its international expansion plans.

The company has begun its break into the United States’ relatively new gambling market, with a unique approach to doing so.

Las Vegas has always been a gambling hot spot. However, the United States didn’t legalise sports betting in all states until 2018. Muchedzi comments:

It’s not often where we see Australian companies having an edge over US companies, especially in their home market, but because we’ve been in the sports betting industry for far longer than US companies we do have Australian companies that have got an edge in that particular market.

However, the US doesn’t allow betting across state lines. That means a betting company needs to be separately licensed in every US state they operate in.

While many betting companies are jumping in to take a share of the US’ larger markets, BlueBet is targeting what Muchedzi calls second-tier markets. These are smaller markets with less competition. Muchedzi states:

You’ve got traditional gambling companies that are operating in those markets and, for the last 50 or 100 years, these were brick and mortar type of gambling companies.

What BlueBet is wanting to do is to go into those markets and then partner with those gambling companies that already have got licenses to provide sports betting…

[It plans to] provide the technology behind online sports betting.

According to Muchedzi, that tech is hard for traditional gambling companies to get their hands on.

The way-around posed by BlueBet has another benefit too. It allows the company a slice of the market without paying for customer acquisition.

However, BlueBet still faces numerous challenges.

BlueBet’s weaknesses

Muchedzi noted a number of factors that might negatively impact the BlueBet share price in the future.

Firstly, the company is still small. While it has a history of execution in Australia, the US is a different kettle of fish.

Secondly, it’s operating in a highly regulated environment. The gambling sector – particularly that of the US – comes with many risks, one being potential litigation. Muchedzi states:

If they’re involved in any form of litigation, that will … result in in some significant costs for BlueBet, and for all their partners.

Finally, the US market brings an immense amount of competition. However, it’s also extremely localised.

Right now, BlueBet has failed to secure a partnership in one of its targeted states. Though, it’s wiggled its way into another.

It is now looking to break into its 3 remaining target states, but the company doesn’t have a lot of control over its ability to enter individual states, potentially making its execution plan risky.

So, all that considered, is BlueBet a buy?

Here’s what Muchedzi had to say about the Bluebet share price:

The investment story is very simple. The US market is, really, a new market and it’s enormous. It’s expected to really grow to something like between $20 to $30 billion dollars in terms of revenue over the next three years…

Also, I really like their sportsbook-as-a-service offering. It’s really like a software type of business model where they don’t have to invest significantly in terms of customer acquisition…

If they get it right, if they get into these transactions, they are really, really compelling, so it’s an investment opportunity that I think is worth looking into…

[But] we have to pay attention to the risks… [L]et’s see how they’re executing over the next few quarters.

The opinions expressed in this article were as at 1 December 2021 and may change over time.

The post Is the BlueBet (ASX:BBT) share price a serious bargain after losing 23% in a month? Here’s what Motley Fool analyst Trevor Muchedzi says appeared first on The Motley Fool Australia.

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

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Shares in Australian steel giant Bluescope Steel Ltd (ASX: BSL) are rangebound on Tuesday, trading up just 0.14% at $20.96 at the time of writing.

It’s been an interesting couple of months for Bluescope shareholders who’ve watched prices zigzag to trade roughly flat in that time.

With steel prices coming off a period of weakness, recently reversing course after bottoming in December, there may be some welcomed relief for ASX steel producers. 

Despite volatility in the spot markets for steel, the team at one leading investment bank has been overweight on Bluescope shares since January 2019 — and hasn’t budged since. Let’s take a closer look.

What’s the go with Bluescope shares lately?

It was a difficult time for Bluescope investors in November. Shares closed the month relatively flat after testing the $22 mark on several occasions but failing to break it each time.

A bottom-heavy steel market that softened steel prices, plus weakening demand for steel out of China, has played havoc on steel producers in 2021.

This comes after steel surpassed multi-year highs and rewarded producers with record free cash flow and tidy profit margins in 2020-2021.

However, with the price volatility, Blusecope hasn’t had the opportunity to reclaim losses sustained earlier in the year.

So why’s JP Morgan bullish on Bluescope shares?

The team at JP Morgan rate Bluescope overweight based on its attractive valuation metrics, strong balance sheet, strong focus on shareholder returns, and asset quality.

It values Bluescope at $33 per share – well ahead of many other analysts. At the time of writing, this implies an upside potential of 58%.

Aside from this, the broker is attracted to Bluescope’s dominant market position in Australia, along with the “consistent cash flow from the North Star assets”.

“Over time”, JP Morgan says, “we expect the company to grow domestic volumes in Australia, which should improve margins, while the North Star expansion also offers potential growth”.

Regarding its view on the dynamics of steel pricing, it notes prices for hot-rolled coil steel (HRC) in the US and East Asia are still “very strong” and remain elevated on a year to date basis.

In addition, US steel capacity utilisation is still high and supported by robust demand, the broker says.

Regarding its outlook for steel, it notes that “forward curves point to lower prices in 2022/23, although Chinese steel exports are sequentially lower and could provide some upside price pressure if they continue to trend lower”.

The broker also sheds some colour on its expectations for the company, stating it forecasts “an FY22 EBIT [earnings before interest and taxes] of $4.2 billion, which is 14% above consensus”.

It reiterated its overweight rating on the back of “valuation support, solid FCF yield estimates of 24% in FY23, strong balance sheet with a net cash position and capital management prospects (buyback program likely to be topped up)”.

It’s been more than a volatile 12 months for Bluescope shareholders. Shares have gained almost 19% in that time, rallying just over 19% this year to date as well.

In the past month, the Bluescope Steel share price has been catching bids and has gained around 200 basis points.

The post Why this broker is tipping 58% upside for Bluescope (ASX:BSL) shares appeared first on The Motley Fool Australia.

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

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