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The S&P/ASX 200 Index (ASX: XJO) has just completed a very strong week. The benchmark index rose 1.8% over the five days to finish the week at 7,456.9 points.

Unfortunately, not all shares climbed with the market. Here’s why these were the worst performers on the ASX 200 last week:

Virgin Money UK (ASX: VUK)

The Virgin Money share price was the worst performer on the ASX 200 last week with a 13.7% decline. Investors were selling the UK-based bank’s shares following the release of its full year update. Virgin Money advised that it expects to report a 546% increase in underlying profit before tax to 801 million pounds. However, disappointing the market, the bank revealed that it will incur 275 million pounds in restructuring costs over the next three years. This was approximately double what the market was expecting.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The Domino’s share price was a close second with a decline of just under 13.7% last week. The catalyst for this was the pizza chain operator’s trading update at its annual general meeting. That update revealed a severe deterioration in the performance of the Domino’s Japan business once COVID restrictions lifted in the country. As a result, management warned that it can no longer forecast whether FY 2022 Japan sales and earnings would surpass those recorded in FY 2021.

Westpac Banking Corp (ASX: WBC)

The Westpac share price was a very disappointing performer last week, recording a sizeable 12.2% decline. Investors were selling the banking giant’s shares following the release of its full year results. Although Australia’s oldest bank doubled its cash earnings in FY 2021, this was still a touch short of expectations. In addition, a smaller than expected share buyback and a weak net interest margin outlook weighed on sentiment. It was largely because of the latter that Goldman Sachs downgraded the bank’s shares to a neutral rating with a $25.60 price target.

Beach Energy Ltd (ASX: BPT)

The Beach Energy share price was out of form and tumbled 8.2% last week. The catalyst for this was the surprise announcement of the departure of its Chief Executive. Beach advised that managing director and CEO Matt Kay had tendered his resignation to the company’s board. The release explains that Kay is leaving to pursue other professional opportunities.

The post These were the worst performing ASX 200 shares last week appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares this Friday
• Targets slashed: Why these top brokers aren’t so rosy on the Domino’s (ASX:DMP) share price
• Why is the Virgin Money UK (ASX:VUK) share price down 11% today?
• Why Afterpay, Clinuvel, Inghams, and Virgin Money UK shares are tumbling

Motley Fool contributor James Mickleboro owns shares of 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 Dominos Pizza Enterprises 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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This weekend could be a good time to consider whether there are ASX shares that are good value and capable of producing long-term profit growth.

Plenty of businesses are volatile, which means that they could be attractive options if the market is underestimating their prospects.

But these two investments could potentially be compelling ideas:

Reject Shop Ltd (ASX: TRS)

Reject Shop is one of the largest discount retailers in Australia. It’s currently rated as a buy by the broker Morgan Stanley, with a price target of $10. That suggests the broker thinks that the Reject Shop share price could rise by around 40% in the 12 months after the rating.

The broker thinks that, whilst COVID-19 lockdowns have been a drag on performance, Reject Shop can increase its performance over the rest of FY22 and into FY23.

Morgan Stanley also referenced the company’s FY21 result which showed improvement in several areas.

The ASX share managed to materially increase its profit margins during FY21. Whilst sales declined by 5.1% to $778.7 million due to COVID-19, underlying earnings before interest and tax (EBIT) grew by 110% to $9.4 million, whilst underlying net profit rose 134% to $6.4 million.

A significant part of the result came from the 84 basis points improvement to the cost of doing business (CODB) margin, despite the reduction in sales. The savings of $22.5 million comprised $13.7 million in store expenses and $8.8 million saving in administration expenses.

Store labour reduced to 13.9% of sales, down from 14.5% in the prior corresponding period, driven by simplification and standardisation of in-store processes.

In FY22, the business aims to grow comparable store sales, open new stores and continue to optimise the business. Higher costs due to the global supply are expected to impact the gross profit margin. In the first two months of FY22, it opened a new store in Bendigo and closed another. It’s expecting to open another 20 stores in FY22, whilst closing five unprofitable or underperforming stores.

According to Morgan Stanley, the Reject Shop share price is valued at 16x FY23’s estimated earnings.

iShares S&P 500 ETF (ASX: IVV)

This exchange-traded fund (ETF) tracks the S&P 500, which is a long-time favourite of legendary investor Warren Buffett because of the (typically) low costs and the underlying diversification.

When it comes to costs, this ASX share is one of the cheapest ETFs on the ASX, with an annual management fee of just 0.04%. That means that investors lose almost none of the returns each year to fees, which should mean a bigger portfolio in the future than if the fees had been higher.

There are several ways that this ETF can help with diversification. It is meant to have 500 positions, so that’s quite a lot of businesses.

In terms of the different sector exposures, there are five industries with a weighting of more than 10%, which could suggest a fair balance between the different sectors: information technology (27.9%), health care (12.97%), consumer discretionary (12.97%), financials (11.31%) and communication (10.7%).

In the portfolio are many of the world’s biggest businesses including: Microsoft, Apple, Amazon, Tesla, Alphabet, Meta Platforms/Facebook, Nvidia, Berkshire Hathaway and JPMorgan Chase.

Past performance is not an indicator of future results. But, over the last three years, the ETF has produced an average return per annum of 18.7%.

The post 2 leading ASX shares to consider this weekend appeared first on The Motley Fool Australia.

More reading

• Reject Shop (ASX:TRS) share price slips amid CEO’s supply warnings

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended iShares Trust – iShares Core S&P 500 ETF. 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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There have been more developments relating to Evergrande, as well as the Chinese real estate sector as a whole.

Kaisa Group Holdings Ltd is a business that is listed in the Hong Kong. It has already seen its share price fall by around 70% over the last six months.

But, according to reporting by international media like the BBC, Kaisa Group is another Chinese developer that has missed a payment. Kaisa Group reportedly said it was “facing unprecedented pressure on its finances due to a challenging property market” as well as downgrades by rating agencies. This means it is harder for the business to get more loans.

Kaisa Group shares, and three of its units, were halted on Friday. One of its businesses missed making a payment on a wealth management product. However, the company didn’t explain why it went into a suspension.

Latest on Evergrande

It was also reported that Evergrande is still trying to deal with its huge US$300 billion of debt.

What Evergrande has done this week is that, according to the BBC, it sold its UK-based electric motor making business called Protean. It paid US$58 million for this business in 2019, so it still has almost US$300 billion of debt.

Over the next couple of days, Evergrande is meant to pay US$82.5 million of interest payments.

In the middle of next week, the company’s 30-day ‘grace period’ is going to expire on other interest payments that it already owes.

One of the company’s plans had been to sell a substantial part of its property services business for US$2.6 billion, but it wasn’t able to make a deal for that asset (yet).

What could this mean for the iron ore price

China is the world’s largest buyer of iron ore. The Chinese real estate sector is a huge user of Australian iron ore through all of the steel that is used.

The BBC reported that the total debt of all the property developers is over US$5 trillion. Developers including Fantasia, Sinic and China Properties Group have already defaulted on payments that they should have made. That adds to Evergrande and Kaisa Group facing problems.

If there is less demand for iron ore, then the worry is that it could lead to lower iron ore prices, even though iron ore has already fallen by over 50% since earlier in the year.

The broker UBS is quite bearish on iron ore, with miners like Rio Tinto Limited (ASX: RIO), BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) expected to see lower profits in FY22.

UBS is expecting iron ore to fall to US$85 per tonne of iron in FY22 and then to US$80 per tonne in FY23. That’s why it currently rates Rio Tinto as a sell, Fortescue as a sell and BHP as a hold. The only reason BHP is a hold is because of its other commodities which are mostly seeing higher prices at the moment.

The post Evergrande latest, plus another Chinese developer just missed a payment appeared first on The Motley Fool Australia.

More reading

• Why did the Rio Tinto (ASX:RIO) share price go backwards in October?
• Down 33% in 3 months: Is the BHP (ASX:BHP) share price an opportunity?
• Does the BHP (ASX:BHP) share price really have an 11% dividend yield right now?
• 2 top ASX 200 shares that might be buys today
• Why did the Fortescue (ASX:FMG) share price have such a lousy month in October?

Motley Fool contributor Tristan Harrison owns shares of Fortescue Metals 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 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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To cap off the week, National Australia Bank Ltd (ASX: NAB) shares finished 0.8% higher on Friday. This followed comments from a senior executive at NAB on how Australia should combat the risk of cryptocurrencies to the financial system.

Coincidentally, or not, it comes at a time when some of the more well-known cryptos are surpassing, or at least nearing, all-time highs. For instance, Bitcoin (CRYPTO: BTC) is currently worth approximately $83,800 and Ethereum (CRYPTO: ETH) is now around $6,100.

Perhaps the most mind-blowing number is that the global crypto market is now worth $3.69 trillion. To put this into perspective, that is more than two times Australia’s annual gross domestic product. As such, some fears are beginning to build that the sheer size of the crypto market could be a concern.

Let’s have a look at what one exec suggests Australia should do.

NAB shares a desire of taking the Aussie dollar digital

If you own NAB shares and invest in cryptocurrencies, the latest comments from NAB’s head of digital innovation and sustainability, Lisa Wade, might be of interest to you.

Speaking at a webinar held by Blockchain Australia, Wade revealed her take on the climate of digital currencies. The comments voiced concern for what the new currencies could do to the financial system.

Namely, the risk of excessive leverage and under-collateralisation in digital asset markets. In fact, Wade shared unease about the risk of crypto being the instigator of the next financial crisis.

To tackle this potential issue head-on, Wade suggested the government and Reserve Bank create and issue its own central bank digital currency (CBDC). By doing so, Australia might then have a chance of keeping up with the fast-changing digital currency space.

Having a really solid CBDC and global infrastructure is really important, so large transactions can happen, and we can get to institutional quality because the functionality and programmability [of digital money] is so incredible for de-risking assets and investments.

Lisa Wade, NAB

More is being done on this front, with the RBA putting together a report on the potential for a CBDC. Currently, this potential Aussie digital currency is known as Project Atom, and both the Commonwealth Bank of Australia (ASX: CBA) and NAB have a share in its conception.

The post Own NAB shares? Here’s the bank’s proposal to stop crypto mania getting ‘really ugly’ appeared first on The Motley Fool Australia.

More reading

• What these three experts are saying about the CBA crypto service
• The Ethereum (CRYPTO: ETH) price just hit all-time highs after a strong October
• The first crypto ETF (ASX:CRYP) has just hit the boards. Here’s what you should know
• Why did the Bitcoin (CRYPTO:BTC) price have such a great month in October?
• CBA (ASX:CBA) just became the first Aussie bank to offer Bitcoin and crypto services

Motley Fool contributor Mitchell Lawler owns shares of Bitcoin, Commonwealth Bank of Australia, and Ethereum. 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 Woolworths Group Ltd (ASX: WOW) share price moved in circles for the month of October, down around 2%. While its shares have rebounded in the last few days, the retail conglomerate has faced a challenging time lately.

At Friday’s closing bell, Woolworths shares finished the day 1.38% higher to $39.63.

What’s happened to Woolworths shares?

During October, Woolworths focused on navigating its way around COVID-19 as major disruptions to supply chain and stores were caused. This particularly came from its two biggest client bases, New South Wales and Victoria.

Prolonged lockdown restrictions dampened investor sentiment, sending Woolworths shares in a horizontal channel.

Interestingly, this is despite the company successfully completing its $2 billion off-market share buyback. The program saw strong demand which had to be significantly scaled down to minimise disadvantage to shareholders with smallholdings.

In addition, Woolworths provided its first quarter trading update for the FY22 period on 27 October.

Most key metrics across the portfolio increased as the company looked at ways to create a simpler operating model. The only declining segment came from its Big W business due to store closures and trading restrictions.

The company noted that sales in Australian Food have slowed down in October as restrictions are eased. The performance of Big W rests on the trading conditions of the Christmas holiday period.

Following the mixed trading update, investors headed for the exits, with Woolworths shares slumping 3.24% to $39.16 on the day.

Broker updates

Since announcing the results, a number of brokers weighed in on the Woolworths share price.

Multinational investment bank, JPMorgan raised its price target by 1% to $43 for the retail conglomerate’s shares. Credit Suisse followed suit, adding 1.4% to a bearish outlook of $31.84.

However, Swiss-based agency, UBS decided to cut Woolworths shares by 7.5% to $37 apiece. The broker also downgraded its assessment to a “sell” rating from “neutral”. This implies a downside of around 7% when measured against the current value of Woolworths shares.

Woolworths share price snapshot

It’s been a sound 12 months for Woolworths shares, posting a gain of 15%, while year-to-date is around the same.

The company has proved its resilience against COVID-19, reaching an all-time high of $42.66 in mid-August.

Based on today’s price, Woolworths commands a market capitalisation of roughly $47.93 billion and has approximately 1.21 billion shares outstanding.

The post What happened to the Woolworths (ASX:WOW) share price in October? appeared first on The Motley Fool Australia.

More reading

• Here’s why the Woolworths (ASX:WOW) share price is down 5% in a week
• Is the Woolworths (ASX:WOW) share price a buy in November 2021?
• Top brokers name 3 ASX shares to sell today
• Why A2 Milk, Codan, EOS, and Woolworths shares are sinking
• ASX 200 (ASX:XJO) midday update: A2 Milk crashes, Woolworths tumbles

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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With the S&P/ASX 200 Index (ASX: XJO) currently up a healthy 11.56% year to date in 2021 so far, and up an even healthier 20.46% over the past 12 months, capital preservation is probably not at the forefront of most investors’ minds right now. Why preserve your capital when you may miss out on these exciting gains, one might ask. But capital preservation is at the forefront of investment group Janus Henderson Group’s (ASX: JHG) thinking right now.

Indeed, the British-based investment group tries to put capital preservation at the top of its priority list. That’s whether we sit in a temperate investing climate or a tempestuous one. That’s according to the perspective of Jay Sivapalan, Head of Australian Fixed Interest at Janus Henderson.

Janus reveals its investing ‘North Stars’

Mr Sivapalan states that Janus Henderson’s perspective for market volatility has been guided by “our investing North Stars”. These include:

• Expectations of a gradual ‘normalising’ in cash rates around the globe lifting risk-free yields

• Holding inflation protection when it’s cheap

• Recognising that income producing assets will remain in high demand during a period of low risk-free rates (spread sectors, including credit)

• Investing with a cautious mindset

• Aiming to fully participate in the cyclical growth uplift

On the prospects for future inflation (which consideration of is paramount in the fixed interest space), Mr Sivapalan states the following:

We still see a role for some modest inflation protection given cyclical pressures from challenged global supply chains and the wider opening up of the economy from late 2021. This is despite breakeven inflation rates moving into the bottom end of the RBA’s 2-3% target band…

We have also invested opportunistically in higher yielding sector securities, but have avoided investing in global high yield and emerging market corporate debt which can be more sensitive to interest rate moves.

Of course, the macro risks in the fixed interest and bond markets differ considerably from those that share market investors face. But these comments still give investors some valuable insights into how professional investors might be positioning for higher inflation and future interest rate hikes.

Janus Henderson share price snapshot

According to its latest quarterly update, Janus Henderson now has US$419.3 billion in assets under management. The company’s share price is up an impressive 51% year to date in 2021 so far. As well as more than 76% over the past 12 months. At the current Janus Henderson share price of $63.97, this company has a market capitalisation of $12.8 billion.

The post Here’s why Janus Henderson (ASX:JHG) is currently focused on preserving investor capital appeared first on The Motley Fool Australia.

More reading

• Santos (ASX:STO) slips amid CSIRO carbon capture partnership
• Forget rising interest rates. Here are the top concerns keeping ASX investors awake
• 70% in a month: What’s put a rocket under the Lithium Energy (ASX:LEL) share price?
• Wesfarmers (ASX:WES) share price lifts as rival drops out of race for API
• Here are the top 10 ASX shares today

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 Santos Ltd (ASX: STO) share price appears to have succumbed to the weakness in oil prices overnight. It seems the uninspiring conclusion to the oil and gas company’s week could not be snapped by its latest announcement involving the CSIRO.

The Santos share price finished the ASX session on Friday down slightly to $6.83. It is down 1.79% for the week.

However, the company’s partnership with Australia’s national science agency, the CSIRO will last long beyond this week. For that reason, it might be worth taking a look at what the partnership entails.

Doubling down on carbon capture and storage

Despite copping some flak for an appearance at the COP26 climate summit, ASX-listed Santos is pushing forward with its carbon capture and storage ambitions.

Santos is one of Australia’s largest oil and gas companies. Today it announced it has entered into a partnership with the CSIRO to develop what is hoped could become the lowest cost direct air capture technology in the world.

Essentially, Santos wants to help the science agency with its CSIRO Carbon Assist technology and put it to work. This technology is geared towards removing CO2 from the atmosphere and higher-concentration post-combustion scenarios. In other words, any circumstance where there might be high CO2 emissions.

Furthermore, upon development, Santos will look to commercialise their work at its Moomba site in South Australia. Subsequently, CO2 will then be transferred to the company’s recently approved $220 million Moomba carbon capture and storage project.

Speaking on the topic of the CSIRO partnership, Santos CEO Kevin Gallagher said:

At Santos, we have an industry-leading target of achieving net-zero scope 1 and 2 emissions by 2040 and we are committed to looking at new technologies and finding cost-effective ways to reduce our emissions so that we can continue to supply affordable and cleaner energy to meet customer demand.

Following the go ahead for our Moomba CCS project this week, we’re proud to partner with CSIRO to develop ground-breaking carbon capture technology which is really a negative-emissions technology.

The announcement noted that the partnership includes a framework for future commercialisation of the technology.

Despite taking another green step forward, the Santos share price had little of its own green today.

Looking at Santos on the ASX

On the ASX, Santos has benefitted from the surge in oil prices over the past 6 months. Its shares have gained almost 40% in value over the past year. For context, the S&P/ASX 200 Index (ASX: XJO) is up 20.5% in the past 12 months.

However, the company’s bottom line is yet to recover to the same margins of 2019. Because of this, the price-to-earnings (P/E) ratio has expanded. Santos used to have a P/E of about 19x in 2019. Today, that figure is closer to 40.

Interestingly, a record quarter for sales revenue in the three months ending 30 September did not bring earnings back to normality.

The Santos share price has floated around without a clear direction since the quarterly release.

The post Santos (ASX:STO) slips amid CSIRO carbon capture partnership appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Move over Twiggy, here’s why Santos’ (ASX:STO) boss is focused on blue hydrogen
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• Why ASX 200 energy shares are tanking on Thursday

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

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ASX investors have been inundated with headlines about rising inflation over the past quarter.

And rising inflation, historically, leads to central banks increasing interest rates to keep a lid on the pace of any price rises.

Increasing interest rates, in turn, tend to broadly lead to lower share market performance. There are a number of reasons behind that phenomenon.

Among them, with higher interest rates alternative, safer investments – like cash deposits or government bonds – become relatively more attractive to owning shares.

Rising interest rates also increase the present-day cost of money. That can be particularly onerous for growth shares whose revenue streams might not come online for several years into the future.

So, with all the media attention on inflation and rising rates, you might think these would top the list of ASX investor concerns.

But the latest quarterly global Retail Investor Beat report from global multi-asset investment platform eToro shows Australian investors have a much larger concern.

What’s keeping ASX investors awake at night?

According to the global survey by eToro – which queried 6,000 retail investors across 12 countries, including 500 in Australia – the biggest external risk that might drag on the ASX in 2022 is the state of the Aussie economy.

Some 47% of Australian respondents listed a shaky economic outlook Down Under as their prime concern. That was followed by 44% of Aussies who said the global economy posed the biggest risk to the ASX and international markets.

Inflation concerns came in well below that at 25%.

And only 16% of Aussie investors cited rising interest rates as the biggest risk to share markets.

Commenting on the results, eToro’s global markets strategist Ben Laidler said:

There are a number of headwinds facing investors at the moment in the shape of rising inflation, interest rate hikes and a faltering economic recovery.

Typically, you would expect most investors to take action to counter these headwinds, but our data shows the opposite is true at this moment in time. It seems as though the vast majority of retail investors are taking a ‘wait and see’ approach in the hope that inflation is temporary and the recovery gets back on track.

With home prices growing strongly in Australia and many investors having increased their cash and decreased their debts during the year of COVID, Laidler added:

Many households have reduced their debt during the pandemic, using spare cash to pay down credit cards, loans and mortgages, which makes them less susceptible to rises in interest rates. Add to this higher house and equity prices, alongside rising wages, and we see that many investors are resilient to the risks ahead.

What’s the best place to invest in the ASX over the next 3 months?

Australian investors were also asked which sectors look best to them over the coming quarter. And the ASX and global healthcare sector came out on top.

According to eToro, 37% of Aussies think stocks in the healthcare sector will provide the best investment buying opportunities over the next 3 months. That was followed by technology shares at 35% and financial services shares at 24%.

Some other interesting nuggets revealed in the survey

The Retail Investor Beat report also broke down ASX investors by age group. This revealed that:

• 21% of Aussie investors are 18-34
• 21% of Aussie investors are 45-54
• 39% of Aussie investors are 55+

And when asked about their outlook for US share markets – which tend to greatly influence the performance of the ASX – for 2022, 22% of Aussies (of all ages) believed US markets will be range-bound in the next 12 months.

The optimists weren’t too far behind though, with 20% of Australian investors saying they think US markets will rally next year.

The post Forget rising interest rates. Here are the top concerns keeping ASX investors awake appeared first on The Motley Fool Australia.

More reading

• Here’s why Janus Henderson (ASX:JHG) is currently focused on preserving investor capital
• Santos (ASX:STO) slips amid CSIRO carbon capture partnership
• 70% in a month: What’s put a rocket under the Lithium Energy (ASX:LEL) share price?
• Wesfarmers (ASX:WES) share price lifts as rival drops out of race for API
• Here are the top 10 ASX shares today

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

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Shares in battery minerals company Lithium Energy Ltd (ASX: LEL) have outperformed all major benchmarks in the past month to climb 70% into the green.

Lithium Energy shares finished the session at $1.07 apiece, a further 25.15% gain from market open today.

Why don’t we take a walk through what’s been sending this ASX resource share northwards this past month.

Graphite project updates

Aside from its lithium exposure, the company also has a large stake in the Burke Graphite Project in Queensland.

The Burke project is dubbed as having one of the world’s highest grade graphite deposits, with a JORC inferred mineral resource grade of 16% total graphitic carbon (TGC).

For reference, TGC is a term used within the analysis side of the graphite industry, where the graphite content in ‘commercial graphite samples’ is reported as a percentage of carbon or ‘graphitic carbon’.

The company released an announcement last month updating investors on progress at the site.

Lithium Energy exclaims the deposits at Burke are of a high grade and low in impurities, making it “particularly attractive for use in lithium-ion batteries”.

The company also advised it has “commenced investigations into the establishment of a dedicated, environmentally sustainable manufacturing facility to purify and spheronise graphite” sourced from the site.

Lithium Energy intends to put the graphite to use as an anode material in lithium-ion batteries, per the release.

Investors piled into Lithium Energy shares in response to the announcement and sent prices soaring over 15% higher in the last few days of October.

What else is driving Lithium Energy shares lately?

In the absence of any other market-sensitive information to last month, it appears the approximate 10% gain in the spot price of lithium was a positive catalyst for the company’s share price.

For instance, shares in the lithium player first took off early in October, in a corresponding move to this jump in lithium prices.

Why is this important? Because Lithium Energy is an ASX resource share that produces the commodity, it is considered a price taker on sales of lithium.

In other words, it has no pricing power on the commodity it sells, and therefore must rely on what is offered in the market.

With that in mind, Lithium Energy’s share price can – and does – fluctuate with volatility in the broader commodity and/or lithium markets.

At the time of writing, lithium is commanding $41,092/tonne – also its all-time high – after making another 6% upward move towards the end of October.

It is therefore unsurprising to see Lithium Energy’s share price hit its all time high in late October, posting a further 15% in gains in just 8 days to finish the month.

In fact, after a gigantic few months of returns since listing, Lithium Energy shares have gained over 417% for the company’s early investors.

The post 70% in a month: What’s put a rocket under the Lithium Energy (ASX:LEL) share price? appeared first on The Motley Fool Australia.

More reading

• Wesfarmers (ASX:WES) share price lifts as rival drops out of race for API
• Here are the top 10 ASX shares today
• Shiba Inu crashes and Dogecoin slides. What’s happening with the ‘dog coins’?
• These were the 5 best performing ASX media shares in October
• Here are the 3 most heavily traded ASX 200 shares this Friday

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

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The Wesfarmers Ltd (ASX: WES) share price finished in the green today amid news a rival bidder for Australian Pharmaceutical Industries Ltd (ASX: API) has backed down.

Sigma Healthcare Ltd (ASX: SIG) withdrew its takeover proposition for the Priceline owner this morning. That leaves Wesfarmers’ takeover bid of $1.55 per API share with no outstanding competition.

At today’s closing bell, the Wesfarmers share price was up 2.05% at $60.33.

For context, the S&P/ASX 200 Index (ASX: XJO) finished 0.39% higher.

Wesfarmers is the last entity standing

The Wesfarmers share price is gaining after Sigma’s $1.57 mostly-scrip offer to acquire API was scrapped.

The API board had previously stated Sigma’s offer was superior to the Wesfarmers bid. Sigma was granted due diligence following its bid in late September, 11 days after Wesfarmers was given the same.

It was yet another bump in the road for Wesfarmers’ plan to takeover API. The Priceline owner knocked back a $1.38 per share bid from Wesfarmers in July.

In what might have been an attempt to block a future takeover by Sigma, Wesfarmers increased its holding in API to 19.3% earlier last month.

It did so by exercising an agreement with Washington H Soul Pattinson and Co Ltd (ASX: SOL), allowing it to buy some of Soul Patts’ holding in API for $1.38 apiece. If Wesfarmers’ takeover proposition is successful, it will pay Soul Patts the 17 cent difference between the purchase price and Wesfarmers’ bid.

Now, however, the retail conglomerate is seemingly the last entity standing looking to takeover API.

Whether the news is the cause of the rise in the Wesfarmers share price today is impossible to say. Still, market watchers might want to keep an eye out for news on the ongoing due diligence Wesfarmers is still undergoing for API.

Wesfarmers’ bid represents a 5% premium on API’s current share price of $1.48.

Wesfarmers share price snapshot

Right now, Wesfarmers’ stock is trading for 17% more than it was at the start of 2021.

Its value has also gained 26% since this time last year.

The post Wesfarmers (ASX:WES) share price lifts as rival drops out of race for API appeared first on The Motley Fool Australia.

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• What’s going on with the Wesfarmers (ASX:WES) API takeover bid?
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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 owns shares of and has recommended Washington H. Soul Pattinson and Company Limited and 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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