Tag: Motley Fool

The CSL Limited (ASX: CSL) share price has fallen around 10% over the last couple of weeks. Could the healthcare giant be a good one to consider for the long-term?

What does the business do?

This is a global biotechnology business that is headquartered in Melbourne. It aims to save lives and protect the health of people who were stricken with a range of serious and chronic medical conditions.

CSL says it develops and delivers innovative biotherapies and influenza vaccines.

Research and development is an important part of the picture for CSL. It has spent US$4.1 billion on R&D investments in the last five years to develop its product pipeline. It has more than 1,700 people committed to its R&D team.

Blood plasma collection is another sizeable element of the business. It has 300 centres across China, Europe and North America.

Do brokers rate the CSL share price as a buy?

There are differing opinions about the healthcare giant.

For example, Credit Suisse has a neutral rating on CSL, with a price target of $315. The broker notes that competition is rising from competitors, which makes it harder for CSL’s longer-term growth because of how new plasma collection locations are an important driver for growth. However, it still thinks it can grow profit in the coming years.

Credit Suisse puts the CSL share price at 38x FY23’s estimated earnings.

However, Morgans is a bit more positive on the business, with a price target of $324.40 for the CSL share price. The performance of Seqirus was a key feature from the FY21 result for the broker.

FY21 result and FY22 outlook

In constant currency terms, CSL reported 10% growth of both revenue and net profit. The business generated US$2.375 billion of net profit.

Management highlighted that critical operations were maintained during the worst points of the COVID-19 pandemic, demonstrating CSL’s resilience and agility. The new distribution model is fully operational in China with sales of albumin now normalised.

Seqirus, the vaccine business, saw total revenue growth of 30%, with seasonal influenza vaccine sales up 41%.

It said that new and extended influenza pandemic agreements had been reached. It also said that the next generation influenza vaccine facility is going to be constructed in Australia.

With its outlook, CSL warned that its margin was easing as a result of increased plasma costs. It sees FY22 as a transitional year as it continues to invest for its long-term strategy.

In FY22 it’s expecting to generate net profit of between US$2.15 billion to $2.25 billion in constant currency terms.

What’s the market capitalisation at the current CSL share price?

At the current CSL share price, it has a market capitalisation of $131 billion according to the ASX.

The post Is the CSL (ASX:CSL) share price a buy today? appeared first on The Motley Fool Australia.

More reading

• It’s been a rollercoaster for the CSL (ASX:CSL) share price over the last 6 months
• 2 beaten-up ASX shares now ready to rally: expert
• The CSL (ASX:CSL) share price is down 8% this week. Is it a bargain?
• 5 things to watch on the ASX 200 on Thursday
• Why CSL, Domino’s, Temple & Webster, & Xero shares are tumbling

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. owns shares of and has recommended CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/2WKLrYG

Leading ASX copper shares have handily beaten the benchmark returns over the past 12 months.

Sandfire Resources Ltd (ASX: SFR), for example, is up 36% over the past full year.

Meantime, S&P/ASX 200 Index (ASX: XJO) listed copper giant Oz Minerals Ltd (ASX: OZL) has seen its share price soar 56% over the same time. A time that saw the ASX 200 itself post a 22% gain.

Both copper producers enjoyed strong tailwinds from soaring prices for the red metal for much of the year.

On 5 October 2020, 1 tonne of copper was trading for US$6,528. It went on to hit record highs of US$10,445 per tonne on 12 May, a gain of more than 60%.

Since then, prices have edged lower, currently at US$9,250 per tonne. And so have the share prices of the ASX copper miners named above.

Oz Minerals’ share price is down 17% since copper hit all-time highs on 12 May. And Sandfire’s share price has dropped 27%.

But, according to Saxo Markets’ Q4 2021 Quarterly Outlook, the ASX copper miners could be in for a rebound over the remainder of the calendar year.

Saxo’s bullish outlook for commodities

In the just released market outlook, Saxo’s head of commodity strategy Ole Hansen says, “After what has already been a strong year for commodities, we maintain a bullish outlook into Q4 and beyond.”

Hansen notes that commodities will, in general, face some headwinds as the world’s biggest economies start to taper their pandemic era fiscal and monetary largesse over the coming months. However, he adds, “Supply constraints will, in our opinion, continue to support prices despite a slower growth trajectory.”

Part of copper’s strength is that it’s a critical metal in the world’s march to low carbon energy sources, used in both batteries and wiring.

According to Hansen, “We continue to see underlying strength resulting in higher prices for ‘green’ metal, a group that … also includes copper.”

And copper supplies, like most commodities dug from the ground, can’t be ramped up quickly to meet any rapid growth in demand.

“The supply chains,” says Hansen, “are inelastic due to a lack of support for permitting, board approval and a lack of capital flowing into the ‘dirty’ production side of the equation due to ESG priorities.”

What does this mean for ASX copper miners?

Numerous factors determine the share price movements of ASX resource shares. But the price of the resources they mine from the earth certainly ranks high on that list.

And, if Saxo Markets’ forecast is correct, ASX copper shares could see another solid lift over the last 3 months of 2021.

According to Hansen:

Copper’s surge to a record high earlier this year was, to a certain extent, being driven by the reflation trade. Until it deflated during the third quarter, this had provided a key source of support. While supply constraints lifted nickel and aluminium, copper is waiting for a renewed and strong pick-up in both physical and investment demand, with the speculative length the leanest it has been in more than a year.

A break back above $10,000 would likely be the signal that triggers a fresh move towards new all-time highs. We believe that journey will resume sometime during the final quarter.

A break back above US$10,000 per tonne would certainly be welcome news to shareholders of ASX copper shares like Sandfire and Oz Minerals.

The post Why Saxo Market’s Q4 outlook bodes well for ASX copper shares appeared first on The Motley Fool Australia.

More reading

• Why the Sandfire (ASX:SFR) share price is lifting 5% today
• Why Limeade, Paradigm, Sandfire, & Vita shares are falling
• Which ASX 300 shares are leading the way on Monday?
• ASX 200 (ASX:XJO) midday update: Fortescue jumps, Wesfarmers dealt takeover blow
• Leading brokers name 3 ASX shares to buy 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.

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

The benchmark S&P/ASX 200 index (ASX: XJO) closed 0.55% in the red at 7238.6 points, in continuation with its 3-month downtrend.

Despite the broad market’s weakness today, the ASX gold basket outperformed, with the S&P/ASX All Ordinaries Gold Index (XGD) booking a 2.6% gain.

The Predictive Discovery Ltd (ASX: PDI) share price also soared into the green today and finished the session 15% higher at 26.5 cents apiece.

Predictive also released the details of an upcoming investor update to the market earlier. Here’s what we know.

Investor briefing scheduled

Predictive Discovery advised that the company’s managing director Paul Roberts, will provide a 30 minute overview of the company’s “recently released maiden resource estimate (MRE)” at its Bankan Gold Project.

The company had previously updated investors on the 3.65 million ounce MRE for the gold project located in Guinea’s Siguiri Basin last week.

As a result of that update, the total mineral resource at its Bankan sites now comes in at almost 73 million tonnes, at 1.56g/t Au for 3.65 million ounces of gold.

This is a rapid growth schedule for the Guinea-based project, that was first defined only some 18 months ago.

At the time of the announcement, Roberts commented that “this is just the beginning of the Bankan gold discovery story”.

As part of the investor briefing, scheduled for 8 October, Roberts will lead an update on the scoping study level metallurgical work the company is doing.

Attendees will also see a broad overview of the operations at Bankan, what’s been done to date, and the company’s “planned exploration activities and plans for further technical studies”.

Investors appeared to have been chasing Predictive Discovery shares today, which opened the session at 23.5 cents.

At one point during the day, the Predictive Discovery share price was changing hands at an intraday high of 27 cents apiece. It is unclear if the investor update sparked any buying.

Strengths in the broader ASX gold index appear to have also helped the company’s popularity to reach these gains.

Predictive Discovery share price snapshot

The Predictive Discovery share price has claimed a return of over 334% this year to date, extending its gain in the past 12 months to well over 307%.

It’s rallied 100% in the last month and gained a further 60% this week.

Each of these results is well ahead of the broad index’s return of approximately 25% this past 12 months.

The post Predictive Discovery (ASX:PDI) share price rockets 13% following investor update appeared first on The Motley Fool Australia.

More reading

• Predictive Discovery (ASX:PDI) share price surges 23% on resources update
• Predictive Discovery (ASX:PDI) share price zooms 21% on drill results
• Why the Predictive Discovery (ASX:PDI) share price is rocketing 9%

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.

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

Motley Fool Australia Chief Investment Officer Scott Phillips joined Nine’s Late News on Monday night to discuss the bounce back for the ASX (including our banks and travel stocks), hopes for a new COVID treatment, and the seemingly endless Evergrande saga taking a new turn.

The post Travel stocks soar. Hopes for a new COVID treatment. Evergrande drags on. Scott Phillips on Nine’s Late News appeared first on The Motley Fool Australia.

More reading

• CBA (ASX:CBA) share price in focus amid Aussie banking first
• Why the ANZ (ASX:ANZ) share price has lagged the ASX 200
• Why ASX 200 travel shares are having a bumper day
• CBA (ASX:CBA) share price jumps following $6 bn share buy back completion
• Up 7%, the Flight Centre (ASX:FLT) share price is surging. Here’s why

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

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

The S&P/ASX 300 Index (ASX: XKO) is again taking investors on a rollercoaster ride, partly erasing Monday’s gains of 1.25%.

At the closing bell, the ASX 300 finished down 0.46% to 7,246.3 points. This means the index has dropped close to 4% over the past month.

Let’s take a look at which ASX 300 companies are the strong performers today.

De Grey Mining Ltd (ASX: DEG)

The De Grey share price shot out the lights on the ASX 300 today, closing 9.84% higher to $1.06.

The gold mining company provided investors with a positive update in regards to its Mallina Gold Project. The results from a scoping study identified “clear opportunities” for improvement.

In addition, the board approved the progression of the project to a pre-feasibility study with results expected in H2 2022.

Gold Road Resources Ltd (ASX: GOR)

The Gold Road share price pushed higher with a 7.23% gain to $1.33.

The Australian-based gold miner didn’t release any market-sensitive news today. However, investors are riding on the back of yesterday’s production update and December quarter guidance from this ASX 300 share.

Gold Road advised its process plant has returned to normal production rates following unscheduled ball mill maintenance. As such, the December production guidance is forecasted to come in between 71,000 and 81,000 ounces.

Annual guidance has been revised to between 250,000 and 260,000 ounces. That’s down from original estimates of between 260,000 and 300,000 ounces of gold. It appears the market is being buoyed by the rebound in the price of gold.

Silver Lake Resources Limited (ASX: SLR)

Also flying higher is the Silver Lake share price, which finished up 5.67% to $1.49 apiece.

The gold producing and exploration company hasn’t released any news in the past few weeks. However, the rising price of gold has likely provided a boost to its share price.

In mid-September, investment firm Macquarie raised its price target on Silver Lake shares by 5% to $2.10. Based on the current share price, this implies an upside of around 42%.

Now, let’s take a look at the weaker ASX 300 companies.

Novonix Ltd (ASX: NVX)

One ASX 300 share being weighed down today is Novonix. Its share price fell 8.95% to $5.19.

The lithium company’s shares appear to be cooling off after registering a sharp upwards trajectory since August. Novonix shares have doubled in value from 2 August, and are up 320% in 2021.

Vulcan Energy Resources Ltd (ASX: VUL)

Also falling today is the Vulcan share price. It finished 8.29% lower to $11.50, with no new market announcements from the company.

Investors have sold off the lithium developer’s shares after the company reached a record high of $16.65 on 13 September. Its share price has now declined 20% in a month.

Nonetheless, Vulcan shares are still up an astounding 900% since this time last year.

The post Which shares are the biggest winners and losers on the ASX 300 today? appeared first on The Motley Fool Australia.

More reading

• Why De Grey Mining, Gold Road, Nick Scali, & Redbubble shares are racing higher
• Bullish on lithium and batteries? 4 ASX shares this fund manager loves
• De Grey (ASX:DEG) share price jumps 4% on gold project update
• ASX 200 (ASX:XJO) midday update: Afterpay & Zip sink, energy shares rise
• Which ASX 300 shares are on the move for the start of the week?

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

from The Motley Fool Australia https://ift.tt/3mtL4ut

The Afterpay Ltd (ASX: APT) share price is plunging lower today despite no news having been released by the buy now, pay later (BNPL) company.

It’s likely the last thing the company’s shareholders want to see after Afterpay’s stock fell 10% over the course of last week.

One explanation for Afterpay’s recent struggles could be that its shares are trending alongside those of Square Inc (NYSE: SQ). Square’s stock also fell 10% last week before tumbling 5.45% on Monday (Tuesday AEST).

At the time of writing, the Afterpay share price is $113.69, 4.94% lower than its previous close.

That’s a larger drop than the one the broader market is experiencing today. Right now, the S&P/ASX 200 Index (ASX: XJO) is down 0.3% while the All Ordinaries Index (ASX: XAO) has dipped 0.5%.

Let’s take a closer look at what might be driving the Afterpay share price lower on Tuesday.

Afterpay’s stock struggles alongside Square’s

The Afterpay share price is plummeting today despite the company’s silence.

However, while most of Australia slept, Afterpay’s likely future buyer, Square, had a tough day on the New York Stock Exchange.

Square’s stock slipped more than 5% on Monday to close the session at US$226.25.

Of course, Square is planning to purchase Afterpay for a whopping $39 billion all-scrip deal.

Therefore, if all goes to plan, investors with a holding in Afterpay will soon become Square shareholders.

So, it makes sense the two companies’ share prices often move in relative unison.

Additionally, Afterpay isn’t the only BNPL company struggling on the ASX today.

The Zip Co Ltd (ASX: Z1P) share price is currently down 4.3% while that of Sezzle Inc (ASX: SZL) has fallen 9.4%.

Afterpay share price snapshot

Today’s drop has added to the Afterpay share price’s recent woes.

Right now, it is 4% lower than it was at the start of 2021. However, the company’s stock’s value has gained 43% since this time last year.

The post Why is the Afterpay (ASX:APT) share price plunging 5% today? appeared first on The Motley Fool Australia.

More reading

• Why Afterpay, Atomo, Opthea, & Sealink shares are falling today
• ASX 200 (ASX:XJO) midday update: Afterpay & Zip sink, energy shares rise
• Why the Zip (ASX:Z1P) share price is down 4% today
• Why did the Afterpay (ASX:APT) share price have such a bad month in September?
• ASX 200 tech shares set to slide as Nasdaq plunges 2%

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Square, and ZIPCOLTD FPO. 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.

from The Motley Fool Australia https://ift.tt/3oxk7IM

The Appen Ltd (ASX: APX) share price is sliding today, currently trading 4.58% down at $8.54.

In fact, Appen shares have been swimming in a sea of red this year to date, beginning their sharp descent in February.

Curiously, there’s been no market-sensitive news out of Appen’s camp today that might impact its share price.

So let’s take a look at what’s behind the downward pressure on the technology company’s shares lately.

What’s up with the Appen share price today?

To answer this question, we have to cover why ASX tech shares in particular have absorbed the latest tremble in global markets.

Appen shares are leading the loss for the broader sector today with the S&P/ASX 200 All Technology Index (XTX) also falling 2.6%.

The index has seen headwinds of late, spurred on by a hike in US Treasury bond yields and a corresponding rotation of capital away from high-growth tech shares.

This is important for a number of reasons.

In layman’s terms, the yield on a US government or Treasury bond (or any bond) is just the annual interest rate an investor earns after purchasing the security.

The way it works is when you buy a US Treasury bond, you are, in effect, loaning the US government a set amount of money.

In turn, the government will pay you interest at a specified yield/rate and then return your principal at a future date.

US government bonds are seen as extremely safe assets, given the unlikely odds the US government will default on its debt. So the yield on these is seen as a benchmark for other rates, also known as the ‘risk-free rate’.

This rate is essential in the financial mathematics involved with asset valuations and also has an inverse relationship with investors’ risk behaviour.

Basically, as bond yields rise, investors tend to wind back the amount of risk they have on the table and place their capital somewhere else – usually by buying ‘safer’ assets over speculative, growth-type tech shares.

One reason is that they know they can get a reasonable rate of return in more predictable asset classes.

But why else does this hurt tech shares?

The other major reason why a rise in US Treasury yields is a problem for tech shares boils down to share valuations and how the market allocates capital based on them.

When experts value an asset, such as a company’s shares, they try to forecast how much cash/return they can produce into the future and value that in today’s terms.

A part of the financial mathematics involved uses the US Treasury yield to do so.

In a nutshell, the higher the yield, the lower a share’s valuation, and vice versa.

The effect is particularly harsh on growth-type companies, given their forecasts of massive profits into the future. It also dampens the valuation of Appen’s future dividend stream.

Many tech shares – like Appen – fall into the growth category and are, thus, impacted disproportionately when these events happen. As financial theory states, this is because many assets that are ‘overvalued’ can correct down towards their ‘fair value’.

As such, investors tend to allocate their hard-earned capital towards industries, sectors and even asset classes with what they perceive as more ‘respectable’ valuations to avoid ‘catching the falling knife’.

Honing in on what’s happened recently, the yield on the 10-year US Treasury bond – the standard proxy in these calculations – has spiked lately.

On 20 September, it ticked up from 1.30% to a fresh high of 1.53% nine days later which caused a pulse through share markets these past few weeks.

It’s since crept down a fraction to 1.49%. Nonetheless, the corresponding effect has been realised in ASX tech shares and in Appen’s share price.

The Appen share price has continued to slide more than 5% since US yields made the jump. Meantime, the ASX All Technology Index has slumped 6% in this time.

This is despite no market-sensitive news from the company.

Foolish takeaway

With a rise in US Treasury yields, this tends to impact investor behaviour and hurt the valuations on high-growth tech shares.

Investors will shift their capital to more stable investments that offer a reward from the increased yield whereas share valuations are compressed if yields increase.

Appen shares have been on the down lately which appears to have been spurred by a recent rise in US Treasury yields and weakness in the broader ASX tech sector.

The post Why the Appen (ASX:APX) share price is falling today appeared first on The Motley Fool Australia.

More reading

• Analysts name 3 stellar ASX growth shares to buy
• 3 ASX 200 shares down more than 50% in 2021
• How have the WAAAX shares performed so far this year?
• Why these 3 ASX shares all hit 52-week lows today
• The Appen (ASX:APX) share price just hit a 3-year low. Here’s why

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

from The Motley Fool Australia https://ift.tt/3mr3Sug

At the start of each week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) continues to be the most shorted ASX share with short interest of 11%. Short sellers may be regretting not closing their positions sooner, though. The travel agent’s shares have rallied 17% higher over the last five trading sessions.
• Kogan.com Ltd (ASX: KGN) has short interest of 9.2%, which is down notably week on week. Concerns over this ecommerce company’s inventory position have been weighing on Kogan’s shares.
• Webjet Limited (ASX: WEB) has short interest of 9%, which is down week on week. As with Flight Centre, the Webjet share price has been rising in recent sessions, much to the dismay of short sellers. The prospect of both state and international borders reopening in the coming months has boosted travel shares.
• Zip Co Ltd (ASX: Z1P) has seen its short interest ease to 8.9%. News that this buy now pay later provider has made an investment in India and signed a deal with Microsoft may have spooked short sellers.
• Electro Optic Systems Hldg Ltd (ASX: EOS) has 8.6% of its shares held short, which is down week on week. Short sellers continue to target this defence and space company due to accounting and cash generation concerns.
• Mesoblast limited (ASX: MSB) has seen its short interest fall slightly to 8.4%. There are concerns that Mesoblast may need to raise funds again in the near future if it doesn’t have significant trial success.
• Inghams Group Ltd (ASX: ING) has 8.3% of its shares held short, which is down week on week. High grain costs could be weighing on investor sentiment.
• Redbubble Ltd (ASX: RBL) has seen its short interest rise to 7.7%. Short sellers won’t have been pleased to see Morgan Stanley initiate coverage on this ecommerce company’s shares with an overweight rating and $6.50 price target today.
• Cooper Energy Ltd (ASX: COE) has 7.7% of its shares held short, which is down week on week. Concerns over Project Sole continue to weigh on investor sentiment.
• Tassal Group Limited (ASX: TGR) has short interest of 7.5%. Short sellers have been targeting this seafood company due to weakness in salmon prices.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

More reading

• Redbubble (ASX:RBL) share price surges 7% following broker upgrade
• Why De Grey Mining, Gold Road, Nick Scali, & Redbubble shares are racing higher
• ASX 200 (ASX:XJO) midday update: Afterpay & Zip sink, energy shares rise
• Why the Zip (ASX:Z1P) share price is down 4% today
• ASX 200 tech shares set to slide as Nasdaq plunges 2%

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 Electro Optic Systems Holdings Limited, Kogan.com ltd, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Electro Optic Systems Holdings Limited, Kogan.com ltd, and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/2WH0BOB

Bitcoin (CRYPTO: BTC) investors have enjoyed a strong week, with more gains coming in over the past 24 hours.

One Bitcoin is currently worth US$49,400 (AU$67,670). That’s up 4% since this time yesterday and up 16% over the past full week.

That puts its market cap back close to the trillion dollar mark, currently at US$931 million.

Ethereum (CRYTPO: ETH), the world’s number 2 crypto by market valuation, has been trending higher too. Ether is up 1% over the past 24 hours and 15% over the past 7 days.

Ethereum, and most other cryptos, often gain when Bitcoin goes up.

So, what’s driving the recent surge in price for the world’s biggest crypto?

US ETF rumblings

Crypto analysts are pointing to the increasing likelihood of the United States greenlighting a Bitcoin exchange traded fund (ETF) as a bullish signal for the digital token.

This week, United States Securities and Exchange Commission (SEC) Chair Gary Gensler indicated that crypto investors should be entitled to the same kinds of safety measures in place for traditional investments, like share markets.

That’s particularly relevant with the total crypto market valuation is approaching the US$3 trillion mark.

One method Gensler mentioned to help regulate the crypto market and open the door to non-tech savvy investors is a US listed Bitcoin ETF. The current proposal still envisions one which invests in futures contracts, rather than holding the actual tokens, which many proponents prefer.

Nonetheless, analysts believe that even a futures-based ETF trading in US markets could be a big boon for Bitcoin.

Marcus Sotiriou, a sales trader at digital asset broker GlobalBlock told CoinDesk:

It would still open the floodgates for institutional adoption and hopefully result in a spot-backed ETF being approved in the not-so-distant future, which would allow ordinary people to include the asset easily [in their brokerage accounts].

Bitcoin’s volatile price action

Though you may have banked 16% in virtual gains if you bought Bitcoin 7 days ago, don’t lose track of the token’s notorious volatility.

Investors who buy during the peaks and sell during the troughs are losing plenty of money.

In mid-April, for example, Bitcoin peaked at more than US$64,000. By late July it was down to US$29,800. And it has bounced around plenty since then.

Invest with care.

The post What’s driving the Bitcoin price surge? appeared first on The Motley Fool Australia.

More reading

• Why the Ethereum (CRYPTO:ETH) price is trouncing Bitcoin’s gains
• Why inflation angst is driving more Aussie investors to Bitcoin
• Will Ethereum overtake Bitcoin?
• China brings the hammer down on Bitcoin and all other crypto transactions
• AMP Capital’s chief economist on the future of Bitcoin and altcoins

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.

from The Motley Fool Australia https://ift.tt/2WH03Ix

The Redbubble Ltd (ASX: RBL) share price is taking off today after a leading brokerage began covering the stock.

Morgan Stanley has initiated coverage of Redbubble today, placing a generous target on the company’s share price.

At the time of writing, the Redbubble share price is $4.46, 6.95% higher than its previous close.

But that’s still a long way off what Morgan Stanley believes is a good price for the online marketplace’s shares.

The brokerage has placed a $6.50 price target and an overweight rating on Redbubble’s stock.

That suggests Morgan Stanley believes Redbubble’s stock has another 45% to gain to meet its value.

What Morgan Stanley’s sees in Redbubble

According to Reuters, Morgan Stanley noted its overweight rating of the Redbubble share price is partially due to the company’s large addressable market.

The brokerage believes such a market could see Redbubble with strong long-term growth.

It also recognised that Redbubble’s customer base is under-monetised and its business model highly profitable.

Further, Morgan Stanley stated the company’s business model is free cash flow generative, which supports its access to capital.

Let’s take a closer look at Redbubble’s metrics.

Is the Redbubble share price undervalued?

Redbubble is the operator of an online marketplace where artists can connect with customers. The company is, therefore, part of the ASX technology sector.

The company had a successful financial year 2021. It reported that its revenue had increased 58% on that of the prior financial year to $553 million.

Even more impressive, Redbubble’s earnings before interest, tax, depreciation, and amortisation (EBIDTA) came to $53 million – 930% more than that of financial year 2020.

At its current price, Redbubble has a market capitalisation of around $1.24 million.

Its earnings per share (EPS) comes to 11.3 cents, giving Redbubble a price-to-earnings (P/E) ratio of around 39.

However, despite Morgan Stanley’s bullishness, the Redbubble share price is having a tough year on the ASX.

It is currently 24% lower than it was at the start of 2021. Although, it is 6% higher than it was this time last year.

The post Redbubble (ASX:RBL) share price surges 7% following broker upgrade appeared first on The Motley Fool Australia.

More reading

• Why De Grey Mining, Gold Road, Nick Scali, & Redbubble shares are racing higher
• Redbubble (ASX:RBL) share price has surged 16% in 9 days. Is it a buy?
• Fund manager sees multibagger potential in Redbubble (ASX:RBL) share price
• These are the 10 most shorted ASX shares
• Got cash to invest? Here are 2 ASX shares that could be buys

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.

from The Motley Fool Australia https://ift.tt/3lcU9IF