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It has been another busy week for Australia’s top brokers. This has led to the release of a large number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

AVITA Medical Inc (ASX: AVH)

According to a note out of Bell Potter, its analysts have retained their buy rating and $9.80 price target on this regenerative medicine company’s shares. This follows news that the US Centre for Medicare has approved a new reimbursement code that will provide separate payment for AVITA’s Recell devices used in the outpatient setting. Bell Potter feels this represents an important breakthrough for the company and further validation of the clinical benefit of the Recell technology. It notes that this new code is only granted to devices that offer substantial clinical improvement over the standard of care. The AVITA share price is trading at $5.12 today.

Hipages Group Holdings Ltd (ASX: HPG)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating and lifted their price target on this tradie platform provider’s shares to $4.90. This follows news that the company has acquired a 25% interest in property management technology platform, Bricks + Agent. Goldman notes that this gives Hipages exposure to the A$21 billion Residential and Commercial Property Management channel. Goldman also expects the investment to expand Hipages’ ability to capture a greater share of tradie spend. The Hipages share price is fetching $4.02 on Friday.

Suncorp Group Ltd (ASX: SUN)

Analysts at Citi have upgraded this banking and insurance giant’s shares to a buy rating with a $12.80 price target. The broker notes that Suncorp’s hazards claims have overrun in FY 2022. This has led to the broker downgrading its earnings estimates for the current financial year. However, Citi remains positive on the medium term and believes recent share price weakness has left its shares trading at an attractive level. The Suncorp share price is trading at $11.51 this afternoon.

The post Brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• The Avita Medical (ASX:AVH) share price just leapt 16% because of this
• Why CSR, Hipages, NIB, and Paladin Energy shares are racing higher
• Why the Suncorp (ASX:SUN) share price is dropping today
• Why this medical tech ASX share could rocket today
• 3 fantastic ASX growth shares to buy this month

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 Avita Medical Limited and Hipages Group Holdings Ltd. The Motley Fool Australia has recommended Avita Medical Limited and Hipages Group 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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The Lake Resources N.L. (ASX: LKE) share price is on the rise today following the company’s latest positive announcement.

At the time of writing, the clean lithium developer’s shares are flat at $1.01 a pop. But, during early morning trade, its shares reached an all-time high of $1.185.

What did Lake Resources announce?

Lake Resources shares are climbing after the company provided an update on the bonus options and funding facility.

According to its release, Lake Resources advised around 78% of shareholders took up the 1-for-1 additional bonus options. This resulted in 86.1 million new shares being issued to participating shareholders, providing around $30 million for the company.

If listed on the ASX, these options if converted will add a further $64 million to Lake Resources’ coffers by mid-next year.

The company declared that at the end of October it had about $63 million in cash reserves.

Lake Resources managing director, Steve Promnitz stated that the company is progressing its flagship Kachi Lithium Brine Project. It aims to have the final investment decision wrapped up and construction beginning next year.

In addition, the company extended its Controlled Placement Agreement (CPA) with Acuity Capital to 31 January 2023. The funding amount increased to $80 million, giving ample firepower to pursue growth opportunities.

Successful drilling has continued at the Kachi project and Lake Resources plans to upgrade and expand the resource. This will see the site move from Inferred Resources to Measured and Indicated (M&I) Resources.

The term Inferred Resources refers to quantity, grade (quality) and mineral content that is estimated with a low-level of confidence. On the other hand, M&I Resources is a reasonable to high-level of confidence based on enough samples being collected.

If this can be achieved, Kachi would become a significant producer globally. The company would bring high purity lithium carbonate to the market with a low carbon footprint.

About the Lake Resources share price

The Lake Resources share price has been one of the best places to invest in the past year, zooming an incredible 1,940%. While renewed investor sentiment within the battery industry has helped support the share price, the company has been making significant tailwinds.

Based on today’s price, Lake Resources commands a market capitalisation of roughly $1.35 billion, with approximately 1.2 billion shares outstanding.

The post Why the Lake Resources (ASX:LKE) share price hit a record high today appeared first on The Motley Fool Australia.

More reading

• Why the Lake Resources (ASX:LKE) share price surged 10% on Tuesday
• Why ASX lithium shares are surging higher on Tuesday
• ASX lithium shares higher as spot prices mark new all-time high
• Lake Resources (ASX:LKE) share price jumps 19%, charges to an all-time high
• ASX lithium shares mixed on Tuesday as prices surge to all-time highs

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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Commonwealth Bank of Australia (ASX: CBA) is handily beating the S&P/ASX 200 Index (ASX: XJO) in afternoon trade. CBA shares are up 0.9% compared to a 0.5% gain for the ASX 200.

Today’s outperformance was mirrored in October.

Last month CBA shares gained 0.3%, closing October at $104.68. The ASX 200 went the other way, losing 0.1% for the month.

What happened with CommBank’s share price in October?

In the middle of the month, the bank held its annual general meeting (AGM).

Addressing CBA shareholders, chairman Catherine Livingstone underlined the $6.2 billion in dividends the bank paid during the 2021 financial year.

And she pointed to the fact that CBA shareholders received another $6 billion from the bank’s off-market share buyback.

Livingstone also highlighted CommBank’s healthy profit margins. “Cash net profit after tax was up 19.8% on the prior year, reflecting an improvement in economic conditions, and the strong operating performance of our core banking businesses,” she said.

CBA shares receive conflicting broker forecasts

ASX investors looking for guidance from brokers received some widely conflicting forecasts for the outlook for CBA shares.

Bell Potter came out with a bullish outlook for CommBank for the full 2022 financial year. Bell Potter’s analysts forecast a 9.6% year-on-year increase in the bank’s full-year cash profit for FY22. The analysts also predict a 16% lift in CBA’s FY22 dividend payout. Bell Potter listed a price target of $118 per share.

On the other side of the coin, Morgans had a very bearish outlook for CommBank, with a price target of $80. At the current price of $109.58 per share, that implies a share price fall of some 27%.

Later in October, Morgan Stanley joined the bearish bandwagon. The broker had a sell rating on CBA shares, with a price target of $90 over the next 12 months.

How have CBA shares performed longer term?

That’s the snapshot for October.

Longer-term, CBA shares are up 57% over the past 12 months, compared to a gain of 22% posted by the ASX 200.

Year-to-date the CommBank share price is up 31%.

The post Own CBA shares? Here’s how the share price performed in October appeared first on The Motley Fool Australia.

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• Leading brokers name 3 ASX shares to sell 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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The S&P/ASX 200 Index (ASX: XJO) is on form again and on course to end the week on a positive note. In afternoon trade, the benchmark index is up 0.55% to 7,468.5 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are storming higher:

Jumbo Interactive Ltd (ASX: JIN)

The Jumbo share price is up 7.5% to $17.10. This appears to have been driven by a broker note out of Morgan Stanley this morning. Its analysts were pleased with the lottery ticket seller’s performance during the first quarter. In response, the broker retained its overweight rating and $18.50 price target.

Link Administration Holdings Ltd (ASX: LNK)

The Link share price has jumped 11% to $4.81. Investors have been buying the administration services company’s shares after it received a takeover approach from Carlyle Group. The private equity firm has made a conditional, non-binding indicative proposal to acquire Link for $5.38 per share. This comprises $3.00 cash per share and a pro rata distribution of Link’s shareholding in PEXA Group Limited (ASX: PXA) valued at $2.38 per share.

News Corp (ASX: NWS)

The News Corp share price has surged 9% higher to $34.62. This follows the release of the media giant’s first quarter update. According to the release, News Corp reported an 18% increase in revenue to US$2.5 billion and a 53% jump in EBITDA to US$410 million during the quarter. One of the drivers of this strong result was its Dow Jones media segment. It recorded its highest quarter of revenue and profitability since acquisition.

REA Group Limited (ASX: REA)

The REA share price is up 5.5% to $176.52. This follows the release of the property listings company’s first quarter update. For the three months ended 30 September, REA delivered a 35% increase in revenue to $264 million and a 25% lift in EBITDA including associates to $158 million. This was driven by growth across all Australian segments, underpinned by an increase in national listings. Management also revealed that the second quarter has started strongly, with national listings up 16% year on year in October.

The post Why Jumbo, Link, News Corp, and REA shares are storming higher appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Link receives takeover offer
• Why the Link (ASX:LNK) share price is surging 12% higher today
• News Corp (ASX:NWS) share price in focus as first quarter delivers growth
• Why the Link (ASX:LNK) share price could rocket higher today
• REA Group (ASX:REA) share price on watch after delivering strong Q1 growth

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 Jumbo Interactive Limited and Link Administration Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. The Motley Fool Australia has recommended REA Group 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 ETFS Semiconductor ETF (ASX: SEMI) has performed exceptionally since it was listed a little over two months ago. Since listing, the semiconductor-focused exchange-traded fund (ETF) has delivered a return of 5.3%. In contrast, the S&P/ASX 200 Index (ASX: XJO) fell 0.8% during that time span.

Even more impressive, the ETF has rebounded off a slight dip to climb over 14% in the last month. Such a high monthly return from an investment vehicle that contains 29 holdings is quite an achievement.

So, let’s find out more about this new ETF that is taking the market by storm.

What is the ETFS Semiconductor ETF?

Put simply, the SEMI ETF is an ASX-listed ETF offered by etf Securities that gives investors exposure to 29 companies involved in the production of microchips. This opens up the opportunity to capitalise on advancements in modern computing, artificial intelligence, cloud computing, and electric vehicles.

While the fund is dealing in a high-growth industry, there are no highly speculative microcaps within the ETF. In fact, a criterion for inclusion is a market capitalisation of more than US$1 billion and a minimum average daily trading value of US$1 million over 3 months.

Although the ETF contains 29 holdings, it is heavily weighted towards its largest 10, making up approximately 70% of SEMI ETF’s portfolio. You might recognise some of the names in the fund’s top holdings listed below in order of weighting (largest to smallest):

• ASML Holding NV (AMS: ASML)
• Nvidia Corporation (NASDAQ: NVDA)
• Taiwan Semiconductor Manufacturing Co Ltd (TPE: 2330)
• Intel Corporation (NASDAQ: INTC)
• Broadcom Inc (NASDAQ: AVGO)
• Texas Instruments Inc (NASDAQ: TXN)
• Qualcomm Inc (NASDAQ: QCOM)
• Advanced Micro Devices Inc (NASDAQ: AMD)
• Applied Materials Inc (NASDAQ: AMAT)
• Analog Devices Inc (NASDAQ: ADI)

As you might be able to tell from the holdings above, the ETF is heavily weighted towards companies based in North America. Meanwhile, nearly 20% are companies situated in Asia, with the remainder 12.8% being European companies.

What are the costs of the SEMI ETF?

As with all ETFs, there are costs associated with the management of the fund. The SEMI ETF is no different and currently carries a management fee of 0.57%. In other words, $10,000 invested in this ETF would incur a $57 management fee over a one-year period.

For comparison, the Vanguard MSCI Index International Shares ETF (ASX: VGS) has a management fee of 0.18% per annum. However, this ETF is far broader and larger which allows for it to charge a lower fee. For instance, this particular Vanguard fund has $25.4 billion worth of assets under management (AUM). The SEMI ETF, on the other hand, has only $54.3 million worth of AUM.

The post Why has the ETFS Semiconductor ETF (ASX:SEMI) leapt 14% in a month appeared first on The Motley Fool Australia.

More reading

• 3 high quality ETFs getting ASX investors excited
• Here’s why Vanguard MSCI Index International Shares ETF (ASX:VGS) could be a top passive investment idea
• 2 excellent ETFs for ASX investors
• Why is the Vanguard MSCI Index International Shares ETF (ASX:VGS) underperforming the ASX 200 lately?
• Own ASX ETFs? Why the ATO might be focusing on you

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. owns shares of and has recommended Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares 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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On Wednesday I looked at three ASX shares brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three ASX shares that have just been given sell ratings by brokers are listed below. Here’s why these brokers are bearish on them:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

According to a note out of Credit Suisse, its analysts have retained their underperform rating and cut their price target on this pizza chain operator’s shares to $77.73. This follows the release of a trading update which revealed a sudden deterioration in the company’s performance in the Japan market. The broker believes this highlights just how difficult it is to forecast post-COVID sales. In addition, Credit Suisse has concerns over the availability of workers and suspects it could impact the company. The Domino’s share price is trading at $117.34 this afternoon.

Magellan Financial Group Ltd (ASX: MFG)

A note out of UBS reveals that its analysts have retained their sell rating but lifted their price target on this fund manager’s shares slightly to $29.50. This follows the release of Magellan’s latest funds under management update. UBS continues to see risks to fund outflows and pressure on its fees. Particularly given the ongoing underperformance of its global fund. The Magellan share price is fetching $35.19 today.

Paradigm Biopharmaceuticals Ltd (ASX: PAR)

Analysts at Morgans have downgraded this biopharmaceutical company’s shares to a reduce rating with a $1.68 price target. The broker made the move largely on valuation grounds following a strong gain after the company was granted approval by the US FDA to undertake a major knee osteoarthritis major trial. In addition, Morgans has concerns that the trial may have been adjusted unfavourably in respect to marketability to gain approval from the regulator. The Paradigm share price is trading at $2.44 on Friday.

The post Top brokers name 3 ASX shares to sell today appeared first on The Motley Fool Australia.

More reading

• Top broker says Domino’s (ASX:DMP) share price is cheap after selloff
• Why Domino’s, Inghams, Kogan, and Paradigm shares are sinking
• ASX 200 (ASX:XJO) midday update: Zip’s record month, Domino’s crashes
• Why the Domino’s (ASX:DMP) share price is crashing 19% today
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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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The S&P/ASX 200 Index (ASX: XJO) is kicking off the last trading day of the week today on a positive note. At the time of writing, the ASX 200 is up a healthy 0.62% to 7,473 points. But this rising tide isn’t lifting all boats this Friday. A few ASX tech shares are proving to be a drag on the broader markets today. Let’s check out what’s going on.

Even though the ASX 200 is comfortably in positive territory so far today, a couple of prominent ASX tech shares are struggling and dragging down the broader market.

The Xero Limited (ASX: XRO) share price is one. It’s currently down 0.47% at $152.96 a share. But Afterpay Ltd (ASX: APT) shares are among the worst-performing ASX 200 shares today, with a nasty 3.2% drop thus far to $120.40 a share.

Of course, with an ASX 200 weighting of 1.46% for Afterpay and just 0.94% for Xero, these two companies’ fortunes don’t affect the ASX 200 too much. After all, if the big four banks have a good day, that’s usually enough for the ASX 200 to follow suit. Afterpay and Xero be damned.

But let’s dive into why these two companies are suffering today regardless.

Xero and Afterpay shares weigh on ASX 200

In Afterpay’s case, the answer is probably relatively simple. Ever since Afterpay agreed to be acquired by the US payments giant Square Inc (NYSE: SQ) back in August, this company’s fortunes have been tied to the Square share price.

That’s because Square put up an all-scrip deal. This will see existing Afterpay shareholders receive 0.375 shares of Square for every Afterpay share held. And we saw the Square share price take a bit of a hit overnight (our time) on the US markets.

Square shares fell 1.99% last night to US$247.46 a share. In after-hours trading, the drop was even steeper, with Square losing 3.03% at US$239.96 a share. So it’s perhaps no surprise the Afterpay share price is also taking a hit today, given the intertwined relationship the two companies’ share prices now have.

But in the case of Xero, the answer is less clear on why it’s having a bad hair day this Friday. There is no news or announcements out of the company today. However, one possible explanation is some expert investor opinions. As my Fool colleague Tristan covered earlier this week, one broker isn’t too bullish on Xero right now.

Brokers at Macquarie Group Ltd (ASX: MQG) have recently rated Xero as a ‘sell’, with a 12-month share price target of $130. That implies a potential downside of almost 15% over the next 12 months. Macquarie reckons Xero is facing some fierce competition from its US competitor Intuit Inc (NASDAQ: INTU), which has been accentuated by Intuit’s recent acquisition of Mailchimp.

So the ASX 200 looks like it will finish up the week on a positive note. But even so, it would have been even better without Xero and Afterpay shares weighing it down this Friday.

The post Which tech shares are dragging down the ASX 200 on Friday? appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Link receives takeover offer
• Expert highlights big threat to the Zip (ASX:Z1P) share price
• Own ASX BNPL shares? These were the best performers during October
• Afterpay (ASX:APT) share price set to tumble after Square’s shares sink
• Get ready for a 10% share market correction: expert

Motley Fool contributor Sebastian Bowen owns shares of Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Square, and Xero. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Macquarie Group Limited, and Xero. 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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At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week in a positive fashion. The benchmark index is currently up 0.6% to 7,471.7 points.

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

REA Group quarterly update

Investors have been bidding the REA Group Limited (ASX: REA) share price higher today after it released its first quarter update. For the three months ended 30 September, the property listings company delivered a 35% increase in revenue to $264 million and a 25% lift in EBITDA including associates to $158 million. This was driven by growth across all Australian segments, underpinned by an increase in national listings.

Link receives takeover approach

The Link Administration Holdings Ltd (ASX: LNK) share price is surging higher after it received a takeover approach from Carlyle Group. The private equity firm has tabled a conditional, non-binding indicative proposal to acquire Link for $5.38 per share. This comprises $3.00 cash per share and a pro rata distribution of Link’s shareholding in PEXA Group Limited (ASX: PXA) valued at $2.38 per share. Link is considering the offer but hasn’t granted Carlyle with due diligence at this stage.

News Corp impresses

The News Corp (ASX: NWS) share price is rocketing higher following the release of an impressive first quarter update. The media giant reported an 18% increase in revenue to US$2.5 billion and a 53% jump in EBITDA to US$410 million. One of the drivers of this strong result was its Dow Jones media segment, which recorded its highest quarter revenue and profitability since acquisition.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the Link share price with an 11% gain following its takeover approach. The worst performer has been the Clinuvel Pharmaceuticals Limited (ASX: CUV) share price with a 16% decline. This morning Jefferies downgraded the biopharmaceutical company’s shares to a hold rating from buy.

The post ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Link receives takeover offer appeared first on The Motley Fool Australia.

More reading

• Expert highlights big threat to the Zip (ASX:Z1P) share price
• Why the Link (ASX:LNK) share price is surging 12% higher today
• News Corp (ASX:NWS) share price in focus as first quarter delivers growth
• Why the Link (ASX:LNK) share price could rocket higher today
• REA Group (ASX:REA) share price on watch after delivering strong Q1 growth

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 Link Administration Holdings Ltd. The Motley Fool Australia has recommended REA Group 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 Zip Co Ltd (ASX: Z1P) share price fell to a 10-month low this morning as a threat to its business model looms large.

Shares in the buy now, pay later (BNPL) company slipped 0.5% to $6.17 in morning trade when the S&P/ASX 200 Index (Index:^AXJO) gained 0.5%.

At least the decline isn’t as bad as its bigger rival. The Afterpay Ltd (ASX: APT) share price tumbled 4.3% to $119.10 at the time of writing.

Shine comes off Zip share price

The prospect of rising interest rates has taken the gloss off tech shares. But there’s another big risk factor to the Zip share price and to the sector.

This threat comes in the form of a surcharge. The Reserve Bank of Australia (RBA) recommended that BNPL companies cannot stop merchants from passing the cost of using such services to consumers.

Big risk to BNPL shares

UBS undertook a survey and most consumers said they would not use BNPL if they were slugged with extra fees. And who can blame them as the fees could be pretty high.

“71% of Afterpay’s customers surveyed agreed that they would not use it if charged a 4% fee, only 10% would (19% neither agreed nor disagreed),” said UBS.

“Users of BNPL services were generally unaware of BNPL’s cost to merchants: once made aware, 30% stated they would not use BNPL at small businesses and 23% at large businesses.”

Regulatory risk hangs over the Zip share price

The silver-lining here is that the fee-passthrough is only relevant in Australia. Both Zip and Afterpay are banking on the US and Europe for most of their growth.

On the flipside, one can’t rule out other jurisdictions making similar rules about fees. One has to wonder if consumers in other countries have a strong distaste for fees as we Aussies.

While it is too early to panic, ASX investors should be watching the regulatory risks closely as this can have a big impact on the Zip share price and Afterpay share price.

Strong consumer awareness

Another saving grace is that consumer awareness for BNPL services is very high. UBS’ survey found that 88% of non-BNPL consumers have heard of the service in 2021. This compares to 2019 when only 79% of this group were aware and 2020 when 85% knew what BNPL was.

And if you were wondering which BNPL company had the highest mindshare, this would be Afterpay. Around 91% of non-users recognised the Afterpay brand.

This compares with 55% for Zip, 18% for Klarna and 17% for Humm Group Ltd (ASX: HUM).

Higher risk and lower profit

“The survey again indicates a bifurcation of BNPL customers like a credit card book, i.e, a portion of low risk, affluent users, and a riskier portion that use it as credit,” said UBS.

“We therefore see a risk ‘free-riders’ may use BNPL less if surcharged, causing adverse customer selection (higher credit risks) and lower sales volumes for BNPL businesses.”

UBS has a “sell” recommendation on the Zip share price and “neutral” on the Afterpay share price.

The post Expert highlights big threat to the Zip (ASX:Z1P) share price appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Link receives takeover offer
• Own ASX BNPL shares? These were the best performers during October
• Afterpay (ASX:APT) share price set to tumble after Square’s shares sink
• Get ready for a 10% share market correction: expert
• 5 things to watch on the ASX 200 on Friday

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ASX cannabis shares were nothing short of a mixed bag last month. Several names did well but a large body of shares missed the benchmark completely.

For some context, the S&P/ASX 200 Health Care index (ASX: XHJ) regained steam over the course of last month. It came off a 3-month low to post a solid return of almost 5%. With that in mind, it was pleasing for investors to see several ASX cannabis shares lead the index.

So, without further delay, here are 3 of the best performing ASX cannabis shares in October.

Incannex Healthcare Ltd (ASX: IHL)

Shares in medicinal cannabis innovator Incannex climbed 34% in October, reaching a closing high of 47 cents at the end of the month. This was also a new 52-week high, with the share price coming off a low of 33 cents earlier in the month.

A suite of regulatory and company-specific tailwinds helped prop up the Incannex share price ahead of its peers.

For instance, it engaged drug manufacturer Procaps Laboratories S.A to develop its IHL-42X soft gel capsules. IHL-42X is Incannex’s proprietary cannabinoid formula and that is used to treat obstructive sleep apnoea (OSA). Incannex has filed patent protection in several jurisdictions for the drug.

In other news, studies have confirmed success in Incannex’s IHL-675A label. It has shown to be effective in reducing inflammatory-type symptoms in conditions like rheumatoid arthritis.

Incannex also filed for F-1 registration to list on the US NASDAQ exchange earlier in the year, which is akin to an initial public offering (IPO) in Australia.

Incannex shares have started the session poorly today, and are now trading 1% down at 52.5 cents apiece.

Creso Pharma Ltd (ASX: CPH)

After trading sideways for the majority of October, investors piled into Creso Pharma shares in the final days of the month after a suite of market updates.

The cannabis-focused biotech advised it had purchased Canadian life sciences entity ImpACTIVE for $217,000.

Creso intends to widen its territory in North America, seeking to penetrate those markets further with its product line.

Aside from this, Creso made a curious move in releasing a prospectus outlining the sale of bonus options to its shareholders.

Whilst the company stated this was in part a reward to shareholders for their support, it actually serves a deeper purpose. The options, if exercised in full, give Creso access to approximately $100 million in liquidity by earning 25 cents per option.

Not only that, the contracts are tradeable on any ASX exchange that permits derivatives trading. This gives investors the opportunity to participate in price discovery of these assets.

To cap off the month, Creso also reported its quarterly earnings, recognising a 92% year-on-year gain in revenue.

In early trading today, Creso Pharma shares are almost 4% higher at 14 cents each.

Althea Group Holdings Ltd (ASX: AGH)

Medicinal cannabis distributor Althea Group was also a net winner last month, with its share price rising 21%.

Despite no announcements from Althea early in the month, investors still bid up its share price from a low of 24 cents on 4 October.

Investors started buying in rapid succession, sending its share price north in almost vertical fashion over a 2-week period. The resulting 32% gain corresponded with the performance of the broader S&P/ASX 200 Health Care index.

Unfortunately for Althea shareholders, the steam was let out at express-pace after the company released its quarterly update.

Although it posted a record quarter with 116% year-on-year growth in customer receipts — up 57% on the prior quarter – investors were quick to exit their positions. This created a wave of selling pressure on Althea’s share price. It fell sharply by about 10% in the final 2 weeks of October.

The Althea share price is flat today at 27 cents.

A quick rundown on medicinal cannabis

There is no special type of cannabis plant (also known as marijuana) that is medical. Medicinal cannabis is just regular old cannabis.

Cannabis has been used as medicine for thousands of years in many cultures. It is only relatively recently that the plant has gained traction as a mainstream treatment for various ailments.

Medicinal cannabis production is highly regulated in order to comply with Australian medical standards. Our standards are (correctly so) some of the tightest in the world.

The plant’s primary active compounds are cannabinoids called delta-9 tetrahydrocannabinol (also known as THC), terpenes, and cannabidiol (CBD).

It is these three ingredients that contain the medicinal properties of the cannabis plant.

They work by binding to the body’s own cannabinoid receptor sites – yes, we have our own internal cannabinoid system – to produce a range of therapeutic effects. These include pain relief, anti-nausea and appetite enhancement.

They can even stabilise uncontrolled body movements in neurological disorders like Parkinson’s disease.

The post These were the best performing ASX cannabis shares in October appeared first on The Motley Fool Australia.

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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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