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The Betashares Crypto Innovators ETF (ASX: CRYP) commenced trading on the ASX on 4 November.

While it’s not the only new exchange traded fund (ETF) to debut on the ASX this year, CRYP made quite a splash as it was the first ETF to offer ASX investors exposure to the wild world of crypto related assets.

Now CRYP doesn’t invest directly into Bitcoin (CRYTPO: BTC), Ethereum (CRYPTO: ETH), or indeed any other altcoins.

Instead, it offers investors indirect exposure by investing in a basket of up to 50 assets (currently 32) composed of global companies closely linked to the “crypto economy”.

It’s top 5 holdings as of this morning are:

1. Silvergate Capital Corp (12.8%)
2. Marathon Digital Holdings Inc (10.6%)
3. Galaxy Digital Holdings Ltd (10.2%)
4. Coinbase Global Inc (10.2%)
5. Microstrategy Incorporated (9.1%)

Investors can buy and sell shares in CRYP just like any other ASX listed shares. Do take note of BetaShares’ caution on their website, “CRYP should be considered very high risk.”

So, how has the ETF been tracking since its launch?

How did ASX investors respond to CRYP on its first day?

Investors were clearly eager to get into the action on the CRYP’s first day of trading.

Within 15 minutes of the opening bell, the ETF saw $8 million worth of trades. The crypto ETF ended the day with net buys of $39.7 million, breaking the record for first-day volume for a new fund, set by the Hyperion Global Growth Companies (ASX: HYGG) fund in March this year.

How has the ETF performed since launching?

In its first 4 days of trading, the CRYP share price gained 10.6%. In a sign of the ongoing volatility in cryptocurrencies and the companies that are correlated to them, the ETF then lost 9.1% over the next 2 days, closing at $1.24 per share on 11 November.

It’s been up and down since then, with more down than up leaving CRYP 8% below where it commenced trading on 4 November.

The post Here’s how Betashares Crypto ETF (ASX:CRYP) has been performing since its ASX listing appeared first on The Motley Fool Australia.

More reading

• Here’s what happened with Bitcoin’s record-breaking November
• Why has the Betashares Crypto Innovators ETF (ASX:CRYP) lost 12% in 10 days?
• Are there more crypto ETFs coming to the ASX in the future?
• Why was the new BetaShares Crypto Innovators ETF (ASX:CRYP) down 5% on Thursday?
• Here’s why the Betashares Crypto Innovators ETF (ASX:CRYP) share price is surging 7% today

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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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.

There’s nothing more difficult to figure out as an investor than a market that can’t decide which direction to move. On Wednesday, market participants seemed more sanguine about the potential impact of the COVID-19 omicron variant on the prospects for future macroeconomic growth, especially in light of testimony from Treasury Secretary Janet Yellen and Fed Chairman Jerome Powell. The Nasdaq Composite (NASDAQINDEX: ^IXIC) was a solid winner, rising about 1.5% by midday Wednesday before pulling back slightly in the early afternoon.

Helping to lift the Nasdaq were a couple of stocks that reached all-time highs on Wednesday. Apple (NASDAQ: AAPL) continued to defy the law of large numbers by boosting its multitrillion-dollar market capitalization still further on the day, while the much smaller Lam Research (NASDAQ: LRCX) set a new high-water mark of its own. Below, we’ll look more closely at what moved Apple and Lam Research on Wednesday and whether their soaring stocks could have still further to climb in the weeks and months ahead.

Apple looks healthier than ever

Shares of Apple were up almost 3% early Wednesday afternoon, sending the iPhone maker’s market capitalization toward $2.8 trillion. Investors continue to be impressed by the way that the company has managed to grow, with ongoing evolutions of popular product lines and newer rollouts that are starting to gain traction.

Apple seems to enjoy a special status among investors. On one hand, the company is fully participating in the digital revolution, with its 5G-capable smartphones leading to a renewed interest in upgrading that has pulled forward considerable revenue entering into the holiday season. A report from China suggesting strong demand for the latest iPhone models gave shareholders a new sense of optimism that Apple can grow even in what has sometimes been a hostile market.

On the other hand, when the stock market does poorly and punishes tech stocks more broadly, Apple nevertheless has held up well. In Tuesday’s market rout, for instance, Apple posted gains.

It’s apparent, therefore, that many see the tech giant as a relatively defensive play in comparison to smaller companies with less of an ability to weather any potential headwinds coming down the road. That could help Apple do well regardless of the overall market environment.

Chipping away at old records

Elsewhere, Lam Research was higher by more than 3%. That sent the stock price for the semiconductor company above $700 per share and set an all-time record.

Investors have given a lot of attention to semiconductor stocks, but the companies that help chipmakers by providing the necessary equipment for fabrication haven’t gotten quite as much exposure. Lam’s business involves coming up with wafer fabrication equipment that accommodates the increasingly demanding requirements of its semiconductor company customers.

With chipmakers dealing with semiconductor shortages, there’s been a huge effort in the industry to expand quickly. Expansion requires the equipment to make chips effectively, and that’s helped to boost Lam’s growth as well. Moreover, those favorable trends are seen lasting longer than in past business cycles, and that could give Lam a longer runway for expansion.

When markets get choppy, it’s always useful to look at the stocks that are holding up the best. Both Lam and Apple have done well in good times and bad, and that makes them interesting candidates for investors looking for security and growth potential in their stocks. 

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

The post These 2 Nasdaq stocks are setting record highs today appeared first on The Motley Fool Australia.

More reading

• Why is the Vanguard MSCI Index International Shares ETF (ASX:VGS) off to such a great start in November?

Dan Caplinger owns shares of Apple. 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 Apple. 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 Liontown Resources Limited (ASX: LTR) share price has returned from its trading halt and is tumbling lower.

At the time of writing, the lithium developer’s shares are down 13.5% to $1.66.

Why is the Liontown Resources share price sinking?

The Liontown Resources share price has come under pressure this morning after completing its massive $450 million underwritten institutional placement.

According to the release, the company will place approximately 272.7 million new fully paid ordinary shares with new and existing investors at an offer price of $1.65 per new share. This represents a 14.1% discount to the Liontown Resources share price prior to its trading halt.

Management advised that the placement received strong demand from high-quality domestic and offshore institutions, which it feels provides a strong endorsement of Liontown’s world-class Kathleen Valley Lithium Project.

Liontown Resources will now push ahead with a share purchase plan at the same price as the placement. This aims to raise a further $40 million, bringing the total gross proceeds ~$490 million.

Why is the company raising funds?

The proceeds from the equity raising will be used primarily for developing the Kathleen Valley Lithium Project.

The company’s recently completed Definitive Feasibility Study (DFS) for the Project outlined an initial $473 million development, processing 2.5Mtpa and delivering ~500ktpa of 6% spodumene concentrate to global markets. It then outlines a plan to ramp up to 4Mtpa and ~700ktpa in year six.

Liontown Town’s Managing Director and CEO, Tony Ottaviano, said: “The strong demand from both domestic and offshore institutions for this landmark equity raising is testament to the world-class nature of the Kathleen Valley Project and represents a strong endorsement of our development pathway.”

“The Placement was well supported by existing Liontown shareholders and will also see new investors join the register. The introduction of these high-quality institutions together with the support shown by current shareholders has ensured that we emerge well capitalised with certainty of funding for the Stage 1 capital cost of the initial 2.5 Mtpa development at Kathleen Valley,“ he added.

The post Why the Liontown Resources (ASX:LTR) share price is sinking 13% today appeared first on The Motley Fool Australia.

More reading

• Why is the Liontown Resources (ASX:LTR) share price frozen today?
• Liontown (ASX:LTR) share price struggles despite premium lithium update
• Here are the top 10 ASX shares today
• ASX 200 lithium shares in focus amid China supply shortage
• Top brokers name 3 ASX shares to buy next week

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

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The Afterpay Ltd (ASX: APT) share price is under pressure today following the company’s latest update.

In early trade, shares in the buy now, pay later (BNPL) business are down 5.32% to $100.83. The strain on Afterpay’s shares follows a 6.6% fall in the value of US payments giant Square Inc (NYSE: SQ) overnight.

Only yesterday, my colleague Sebastian recapped the hoops left for the two companies to jump through before being united. Well, Afterpay’s update this morning indicates it has hit a snag along its path to acquisition completion.

What is pulling the Afterpay share price down today?

Afterpay investors are mimicking the disappointing performance of Square last night, following the company’s announcement of a name change to Block. While the US giant’s price slump might have been related to its new branding, Afterpay has its own update today.

The Aussie BNPL company has provided an update on the takeover scheme of arrangement and upcoming scheme meeting. According to its release, Afterpay has now satisfied all regulatory conditions. However, the 2 companies are still waiting on approval from the Bank of Spain.

Both Afterpay and Square expect to eventually meet the Bank of Spain condition. However, Square is estimating the condition will be satisfied in mid-January 2022. Because of this, the Aussie company has opted to delay the scheme meeting, which was set for 6 December.

At this stage, it looks likely the meeting will be put back until the new year. Furthermore, the company will approach the NSW Supreme Court to approve new materials containing the updated scheme meeting details.

The Afterpay share price has weakened on the news today. It is difficult to decipher whether this is directly due to the regulatory delay or because of the fall in Square shares overnight.

What has been completed?

In terms of progress, it’s not all bad news. So far, the proposed takeover has ticked a number of boxes. Importantly, there has been regulatory approval from the Australian Foreign Investment Review Board, New Zealand Overseas Investment Office, and Spain FDI Authority.

Additionally, the proposed deal has obtained the approval of Square shareholders. Likewise, the new Square shares to be issued have also received the thumbs up. Essentially, the last piece of the puzzle is satisfying the Bank of Spain condition.

The Afterpay share price has fallen 12.2% since the Square takeover was announced on 2 August.

The post Afterpay (ASX:APT) share price slides amid Square takeover delay appeared first on The Motley Fool Australia.

More reading

• Invested in ASX BNPL shares? These were the top 5 performers in November
• Is the Afterpay (ASX:APT) Square takeover a done deal?
• Could the Afterpay (ASX:APT) share price be about to get a boost?
• What is the difference between buying Square and Afterpay (ASX:APT) shares?
• How Afterpay (ASX:APT) is using AI in its push for BNPL domination

Motley Fool contributor Mitchell Lawler owns shares of AFTERPAY T FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T 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 Crown Resorts Ltd (ASX: CWN) share price is edging higher this morning after the company announced it’s allowing a prospective suitor non-exclusive due diligence despite its ungenerous bid.

Private equity firm Blackstone placed a $12.50 per share bid for Crown last month. The casino operator is giving Blackstone a look inside in hopes doing so will convince it to increase its offer.

The Crown share price has been up and down all morning but is currently $11. That’s 0.55% lower than its previous close.

Let’s take a closer look at what’s driving it on Thursday.

Crown share price falls on takeover news

The Crown share price is likely responding to news the company is letting Blackstone conduct due diligence after its third takeover offer.

This time, Blackstone is valuing the company at approximately $8.5 billion.

It’s a major step upwards from its previous offers. The fund put forward a bid of $11.85 per Crown share in March and one of $12.35 in May.

Today, Crown stated it had carefully considered the $12.50 per share offer, receiving feedback from shareholders and regulators before deciding it wasn’t great value.

However, it has offered Blackstone access to non-public information so it can revise its proposal to “adequately [reflect] the value of Crown”.

As of yesterday’s close, Blackstone’s bid represents a 14% premium on the Crown share price.

Additionally, reports fellow ASX-listed casino operator Star Entertainment Group Ltd (ASX: SGR) is preparing to make a move on its embattled peer emerged last night.

According to The Australian, Star has tapped Barrenjoey Capital Partners as an adviser, spurring some to think it might be about to pose its second takeover bid for Crown.  

Previously, Star proposed an all-scrip merger wherein Crown shareholders would receive 2.68 Star shares for each Crown security they held.

The competitor’s bid also included an alternative option that would see it paying $12.50 per share for up to 25% of Crown’s stock.

Right now, the Crown share price is around 11% higher than it was at the start of 2021.

The post Crown (ASX:CWN) share price lifts as company opens door to Blackstone. But what about Star? appeared first on The Motley Fool Australia.

More reading

• Here’s why this fund manager sold its Star Entertainment (ASX:SGR) shares
• These were the best performing ASX 200 shares last week
• Here are the top 10 ASX shares today
• Why Crown, Mineral Resources, Sonic, and Treasury Wine are charging higher
• ASX 200 (ASX:XJO) midday update: Crown jumps, WiseTech tumbles

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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The Immutep Ltd (ASX: IMM) share price is in the red this morning, down 1.05% at the time of writing to 47 cents.

The biotech company is developing LAG-3 related immunotherapy treatments for patients with cancer and autoimmune disease.

Below, we take a look at the latest clinical study update from the ASX medical share.

What study update was announced?

The Immutep share price is falling after the company reported good safety results from the first 5 patients in its INSIGHT-003 study.

INSIGHT-003, according to the release, is an investigator-initiated study conducted by the Institute of Clinical Cancer Research IKF at Krankenhaus Nordwest in Frankfurt, Germany.

The study is evaluating the triple combination therapy of eftilagimod alpha (efti) given alongside chemotherapy and anti-PD-1 therapy.

Immutep said it had not observed any additional safety signals in the study from the first 5 patients given the triple therapy.

However, the news does not appear to have excited investors, judging by the Immutep share price this morning.

Commenting on the results, lead investigator Salah-Eddin Al-Batran of the Institute of Clinical Cancer Research IKF said:

The INSIGHT-003 study has commenced well. We are very pleased with the safety of the triple combination so far and all patients are still participating in the study. This is important as it is the first time patients have received a triple combination therapy with efti. Patient recruitment is advancing in line with our projections.

INSIGHT-003 expects to recruit up to 20 patients with a range of solid tumours. The trial is meant to assess the safety, tolerability, and initial efficacy of the triple combination treatment.

Additionally, Immutep intends to release further results from the ongoing study in 2022 — results shareholders will be watching closely.

Immutep share price snapshot

The Immutep share price is up 69% over the past year, and 12% this year to date. By comparison, the All Ordinaries Index (ASX: XAO) is up around 10% over both those timeframes.

Over the past month, Immutep shares are down around 20%.

The post Immutep (ASX:IMM) share price slips amid trial safety update appeared first on The Motley Fool Australia.

More reading

• Why Afterpay, Immutep, Pushpay, and Vulcan shares are falling
• Immutep (ASX:IMM) share price slides 20% despite latest trial 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.

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The Li-S Energy Ltd (ASX: LIS) share price is accelerating during Thursday morning trade. This comes after the lithium-sulphur battery company excited investors with a positive update to the ASX.

At the time of writing, Li-S Energy shares are swapping hands for $1.85, up 3.64%.

Li-S Energy progress commercial opportunity

In today’s statement, Li-S Energy advises it has signed a Memorandum of Agreement (MoA) with Insitu Pacific (Insitu). The latter is a wholly-owned subsidiary of global behemoth, Boeing Co (NYSE: BA).

Under the MoA, both parties will work together in developing Li-S Energy’s battery technology into Insitu’s uncrewed aircraft systems (UAS).

The batteries will undergo a number of tests to check they meet certain specifications before being put into production. This relates to adopting the same size, weight and power constraints as Insitu’s UAS, and using the same payload space and connectors.

From there, a joint flight-testing campaign will take place at Insitu’s test range in Queensland to demonstrate the improved performance.

If successful, this will place Insitu in a favourable position for contending numerous global small tactical UAS opportunities. In turn, this highlights a strong potential revenue stream for Li-S Energy.

Li-S Energy CEO Dr Lee Finniear commented:

We are very pleased to be working with one of most recognised names in the aviation industry. As the market for UAVs continues to accelerate with new applications and capabilities, battery weight and energy density has become one of the most critical factors for UAV performance.

We are looking forward to working with Insitu Pacific to demonstrate the benefits of Li-S Energy batteries in these applications.

About the Li-S Energy share price

Since the company’s debut on the ASX boards at 85 cents, the Li-S Energy share price has doubled. The company’s shares hit an all-time high of $3.05 on the day of listing (28 September 2021).

Based on today’s price, Li-S Energy has a market capitalisation of roughly $268 million, with approximately 150 million shares on issue.

The post Li-S Energy (ASX:LIS) share price climbs on partnership news with Boeing appeared first on The Motley Fool Australia.

More reading

• Here’s why this fund manager thinks PPK (ASX:PPK) is a great buying opportunity
• The Li-S Energy (ASX:LIS) share price is still running low. What’s happening?

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

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If you’re looking for a few new additions to your portfolio in December, then look no further.

Analysts at Morgans have picked out a number of ASX shares that they class as their best ideas for the month.

The first two I looked at can be found here. Whereas below are two more that the broker rates highly in December:

Transurban Group (ASX: TCL)

Morgans is a big fan of this toll road operator. The broker notes that the company’s high quality toll road portfolio gives investors exposure to trends such as “regional population and employment growth and urbanisation.” Its analysts currently have an add rating and $14.79 price target on Transurban’s shares.

Morgans commented: “We think TCL will continue to be attractive to investors given its market cap weighting (important for passive index tracking flows), the high quality of its assets, management team, balance sheet, and growth prospects. Watch for rapid recovery in DPS alongside traffic recovery and WestConnex acquisition prospects. A negative overhang is the contaminated soil disposal issues related to its West Gate Tunnel Project.

Woodside Petroleum Limited (ASX: WPL)

If you’re looking for exposure to the energy sector then Morgans has a couple of options on its best ideas list. One of those is Woodside, which it believes will benefit greatly from the transformative merger with the petroleum assets of BHP Group Ltd (ASX: BHP). Morgans has an add rating and $29.95 price target on Woodside’s shares.

Its analysts explained: “We believe WPL has benefited from being in the right place, at the right time. With: 1) BHP/WPL having an existing relationship, 2) BHP eager to boost its ESG profile, and 3) WPL being a quality operator (safe hands which is important for BHP). From an economic standpoint we think WPL is clearly getting the better of the deal, with synergies not baked into deal metrics and BHP willing to accept a discount. The deal is transformative, lifting WPL into being a top 10 global E&P with +2 billion barrels of 2P reserves, with EBITDA of US$4.7bnpa and growth options.”

The post 2 more of Morgans’ best ASX share ideas for December appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Woodside (ASX:WPL) share price ends higher on Wednesday after energy giant vows to fight Pluto legal challenge
• ASX shares to buy for the Omicron COVID outbreak
• 5 things to watch on the ASX 200 on Wednesday
• Why is the Woodside (ASX:WPL) share price climbing 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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The market may be trading lower today but that hasn’t stopped the Australian Pharmaceutical Industries Ltd (ASX: API) share price from rocketing higher.

In morning trade, the pharmacy chain operator and distributor’s shares are up 16% to $1.74.

Why is the API share price rocketing higher?

Investors have been driving the API share price higher after a bidding war for the Priceline owner broke out between two of Australia’s biggest retailers.

This morning Woolworths Group Ltd (ASX: WOW) announced that it has submitted a non-binding transaction proposal to acquire API by way of a scheme of arrangement.

According to the release, Woolworths has offered $1.75 cash per share, valuing API’s equity at $872 million. But more importantly, this offer represents a significant 20 cents per share or 12.9% increase over the offer tabled by Wesfarmers Ltd (ASX: WES) last month.

The release also notes that the offer is a 52.8% premium to the undisturbed API share price on 9 July.

Why does Woolworths want to acquire API?

Woolworths’ CEO, Brad Banducci, believes there is a compelling strategic rationale to acquire API.

He notes that: “Health and wellness is a large, fast-growing category and API would be a fantastic addition to our food and everyday needs ecosystem.”

“The combination of the two businesses is expected to lead to material shared benefits and synergies, much of which will be reinvested back into strengthening and growing API and its pharmacy partners,” Mr Banducci added.

What’s next?

According to a separate release from API, the company’s Board believe the Woolworths proposal is more favourable to API shareholders than the Wesfarmers scheme. It also feels it is reasonably likely to be a superior proposal, as defined in the Wesfarmers scheme implementation deed.

As a result, the API Board has decided to allow Woolworths to undertake confirmatory due diligence to facilitate a binding offer.

However, the company has warned that there is no certainty that a deal will ultimately be agreed. As such, shareholders do not need to take any action at this stage.

API also highlights that the Wesfarmers scheme includes a matching right in favour of Wesfarmers, which is exercisable before API enters into any binding agreement in respect of a competing proposal. All eyes will be on Wesfarmers in the coming days.

The API share price is up 38% in 2021 following today’s gain.

The post API (ASX:API) share price rockets 16% higher after Woolworths launches takeover approach appeared first on The Motley Fool Australia.

More reading

• Why the Wesfarmers (ASX:WES) share price lost momentum in November
• Woolworths (ASX:WOW) share price falls after outbidding Wesfarmers for API
• Why did the Woolworths (ASX:WOW) share price tumble today?
• Here’s why ASX retail shares are in the spotlight on Tuesday
• How does the Wesfarmers (ASX:WES) share price typically perform in the lead up to Christmas?

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 owns shares of and has recommended Wesfarmers 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 Wesfarmers Ltd (ASX: WES) share price lost momentum during November 2021.

In the first half of November, Wesfarmers shares rose by more than 5%. Indeed, between mid-October and mid-November the Wesfarmers shares had actually risen by 11%.

But the second half November saw the diversified retailer erase those gains over he second half of the month. It ended November 2021 essentially flat from where it was at the start of the month.

What’s going on with the Wesfarmers share price?

It’s the buyers and sellers of the month that decade how the share price performs.

There were a few interesting events that occurred last month.

On 8 November 2021, Wesfarmers announced that it had entered into a scheme implementation deed with Australian Pharmaceutical Industries Ltd (ASX: API) for a cash consideration of $1.55 per share. Wesfarmers currently owns a 19.3% shareholding of API.

The API board had unanimously recommended that API shareholders vote in favour of the scheme, though only if there wasn’t a superior proposal.

Wesfarmers believes it has opportunities to invest and strengthen the competitive position of API and its community pharmacy partners by expanding ranges, improving supply chain capabilities and enhancing the online experience for customers. Wesfarmers thinks API can form the start of a health and beauty division.

The Wesfarmers share price will be in focus this week as Woolworths Group Ltd (ASX: WOW) has come in with a higher bid for the pharmacy business of $1.75 per API share, which is 12.9% higher than the Wesfarmers bid. Woolworths also said it’s willing to explore potential alternative control transaction structure options such as a takeover bid with a minimum acceptance condition of 50.1% and/or other transaction structure that would be subject to receiving 50.1% of API shareholder support.

Broker thoughts on the Wesfarmers share price

Sometimes, investors may take into account what some of the leading brokers think about a business.

In mid-November, Citi released a note that still rated Wesfarmers as a sell because the broker thought that the Wesfarmers share price was too expensive. It thought that the takeover would add to the value of the overall business though.

Let’s look at the earnings valuation from Citi on Wesfarrmers. The broker thinks the Wesfarmers share price is valued at 27x FY22’s estimated earnings.

Latest trading update

When Wesfarmers held its AGM, it gave a trading update which said its retail businesses have been effective in managing the disruptions in the global supply chains and are well positioned with inventory for the Christmas trading period.

In Bunnings, sales were “robust” keeping in mind the lockdowns. Sales growth from commercial customers has been strong which, when combined with elevated online sales, have partially offset the impact of lower consumer sales growth.

Kmart and Target sales were impacted by store closures, but Catch sales have benefited from the shift to online during the lockdowns.

Officeworks sales have benefited from the strong demand to support customers working and learning from home, but the shift in sales mix to technology and furniture products meant margins are being impacted.

The post Why the Wesfarmers (ASX:WES) share price lost momentum in November appeared first on The Motley Fool Australia.

More reading

• Woolworths (ASX:WOW) share price falls after outbidding Wesfarmers for API
• Here’s why ASX retail shares are in the spotlight on Tuesday
• How does the Wesfarmers (ASX:WES) share price typically perform in the lead up to Christmas?
• This sector could be a $50 trillion investment opportunity: expert
• Wesfarmers (ASX:WES) plans for e-commerce to fuel Bunnings growth

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers 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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