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The Prospect Resources Ltd (ASX: PSC) share price is performing well in September.

While the company has released good news this month, its share price is seemingly moving independently.

At the time of writing, the Prospect Resources share price is 40 cents, 11.11% higher than it was at the end of August.

Let’s take a look at the latest news from the lithium and gold producer.

The month so far for Prospect Resources

The Prospect Resources share price is having a great month on the ASX.

It comes after the company released an update on the sale of its Penhalonga Gold Project.

The project’s buyer, Luzich Resources, has executed an options agreement for the purchase and has agreed to pay the remaining US$750,000 balance on the US$1 million purchase price.

Luzich paid a deposit on the project when it signed a binding term sheet in October 2020.

According to Prospect Resources’ website, the Penhalonga Gold Project is the only gold project currently held by the company.

After its sale, it will focus all its efforts on its Arcadia Lithium Project.

The Prospect Resources share price didn’t react to the update on the sale. However, it has since gained 11%.

The sale might not be the only catalyst for the Prospect Resources share price’s recent boost.

The price of lithium has been gaining steadily in September and it might be dragging Prospect Resources’ stock along with it.

According to S&P Global Platts, the price of lithium carbonate has been gaining this month as concerns surrounding global supply have increased demand.

Prospect Resources share price snapshot

September’s gains have added to Prospect Resources’ strong performance on the ASX.

Right now, the company’s share price is 135% higher than it was at the start of 2021. It has also gained 150% since this time last year.

The company has a market capitalisation of around $157 million.

The post Why is the Prospect Resources (ASX:PSC) share price up 11% this month? appeared first on The Motley Fool Australia.

More reading

• Li-S Energy (ASX:LIS) share price up another 3% in second day of trading
• Why this top broker rates the Webjet (ASX:WEB) share price a buy
• Argosy (ASX:AGY) share price edges lower on Tonopah Lithium Project update
• 4DS Memory (ASX:4DS) share price lifts on patent update
• Why PPK (ASX:PPK) and Li-S Energy are this fund’s largest positions

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

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Yesterday, we saw what turned out to be one of the hottest ASX IPOs of 2021 play out. That would be the Li-S Energy Ltd (ASX: LIS) share price.

LIS shares had an ASX debut to remember yesterday after the lithium-sulphur battery company rocketed an incredible 174% by the end of the day, rising from its IPO price of 85 cents a share to finish the trading day at $2.33.

That’s not all though. At one point soon after market open yesterday, Li-S Energy shares hit a high of $3.05 a share. That represents a gain of almost 260%. Not bad for day one, one could say.

Today, Li-S Energy has had a far less dramatic start to the trading day. The Li-S share price is currently trading at $2.41 a share this morning after opening at $2.36. That’s up another 3.4% from where the company closed at yesterday.

So far, at least in its short history on the ASX, the Li-S Energy share price has turned out to be quite the market defier.

Whilst Li-S Energy was enjoying its 200%-plus gains yesterday, the broader S&P/ASX 200 Index (ASX: XJO) was having a clanger of the day. The ASX 200 ended up down a nasty 1.6% by the end of the trading day.

This trend looks to be continuing today. While Li-S Energy has opened pretty strongly today, the ASX 200 is continuing its sell-off so far this morning, down 1.01% at the time of writing to 7,202 points. These ASX 200 moves come after some equally depressing falls on the US markets, both last night and the night prior (our time).

What’s behind the Li-S Energy share price?

Behind the dramatic moves we saw yesterday with Li-S Energy’s enthusiastic IPO, we have an emerging energy company working on a new battery technology.

As we covered yesterday, Li-S Energy’s flagship battery uses a lithium-sulphur compound for energy storage, which the company believes offers superior energy density, longevity and safety over the widely-used lithium-ion technology of today.

At the current Li-S Energy share price, the company has a market capitalisation of $1.49 billion.

The post Li-S Energy (ASX:LIS) share price up another 3% in second day of trading appeared first on The Motley Fool Australia.

More reading

• Why is the Prospect Resources (ASX:PSC) share price up 11% this month?
• Why this top broker rates the Webjet (ASX:WEB) share price a buy
• Argosy (ASX:AGY) share price edges lower on Tonopah Lithium Project update
• 4DS Memory (ASX:4DS) share price lifts on patent update
• Why PPK (ASX:PPK) and Li-S Energy are this fund’s largest positions

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 Webjet Limited (ASX: WEB) share price has been caught up in the market selloff on Wednesday.

In morning trade, the online travel agent’s shares are down 2.5% to $6.27.

Despite this, the Webjet share price is still up 22% since the start of the year.

Is the Webjet share price in the buy zone?

According to a note out of Goldman Sachs, its analysts remain positive on the company.

This morning’s note reveals that the broker has retained its buy rating and $6.40 price target on its shares.

However, it is worth noting that based on the current Webjet share price, this implies only modest upside of 2.1% for its shares over the next 12 months.

What did Goldman say?

Goldman held a virtual investor meeting with Webjet’s management this week. It came away from that meeting feeling positive on the company’s recovery from the pandemic.

One key takeaway from the meeting was the different speeds in which certain markets are recovering from COVID-19.

Goldman said: “Sentiment and recovery in the rest of the world is significantly different from the ANZ region. Europe and Americas are in the most advanced stages of recovery, while the Middle East and Africa is only beginning to recover, and Asia remains a laggard.”

Its analysts also highlighted some positive commentary around the key WebBeds business.

The broker said: “The team has made 3-4 new hires in the [Americas] region and has been focused on developing the business capabilities organically in the region. 90% of the market is domestic and Webbeds is working on this opportunity. Previously Trans Atlantic was 2/3rd of this region’s business and therefore the November catalyst of USA reopening is important, although the domestic opportunity implies that getting to pre-pandemic levels should not be difficult.”

Trading conditions are also looking favourable in Europe for WebBeds. Especially given how some of its rivals failed to make it through the pandemic.

Goldman said: “Competition remains lower in the European market, as the group has not seen some companies who entered hibernation during COVID recover, and smaller players trying to enter new markets to disrupt is also lower. Management expects to look at M&A opportunities if it offers ancillary opportunities rather than to achieve scale.”

All in all, the broker came away feeling positive on Webjet’s recovery and has retained its buy rating.

It concluded: “Overall, the feedback from this meeting was largely positive with key internal process targets remaining on track to deliver, and travel recovery remaining positive on the international front. While the Webjet OTA and Online Republic businesses remain impacted by the shutdowns in the ANZ region, management remains confident of Webjet’s ability to grow market share as reopening recovers.”

The post Why this top broker rates the Webjet (ASX:WEB) share price a buy appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Wednesday
• Oil at a 3 year high and travel stocks soar. Scott Phillips on Nine’s Late News
• Webjet (ASX:WEB) share price gains 5% to reach new 52-week high
• Which ASX 300 shares are leading the way on Monday?
• These are the 10 most shorted ASX shares

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

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The Argosy Minerals Ltd (ASX: AGY) share price is sliding on Wednesday morning despite a positive update from the company.

At the time of writing, the lithium miner’s shares are down 1.82% to 16.2 cents apiece.

What did Argosy announce?

A catalyst for the Argosy share price being dragged down may be overall weak market sentiment on the ASX today. The All Ordinaries Index (ASX: XAO) is heavily retreating, down 1.13% to 7,495.6 points at the time of writing.

In today’s statement, Argosy advised it has completed interpretation and analysis of the magnetotelluric (MT) resistivity survey data for its Tonopah Lithium Project in the US state of Nevada.

The company hired the services of a Perth-based MT specialist geophysical consultant to identify potential brine targets within the area.

Modelling works found a major conductive anomaly which is being interpreted as a possible lithium brine aquifer. The depth to the top of this feature varies between 300 metres to 700 metres.

Argosy noted that the main anomaly contains three MT targets that may define a closed basin and hold lithium brine deposits. The targets will require drill testing, however, to the deepest hole of up to 1,500 metres.

As such, the company will consider further exploration programs before moving to the next stage of drilling.

Argosy managing director Jerko Zuvela commented:

The geophysical works conducted at Tonopah have succeeded in delineating lithium brine targets within our project area. We now look forward to progressing works to realise the potential of our strategic project in an established tier 1 mining region.

The significant impetus for local lithium supply in the USA has become critical, and out Tonopah Lithium Project is in prime position and enhances Argosy’s value to all strategic groups across the battery and EV industry supply chain.

Argosy share price summary

Over the past 12 months, Argosy shares have gradually trekked higher to post a gain of more than 200%. Year-to-date has also been impressive with its shares more than doubling in value.

Based on today’s price, Argosy commands a market capitalisation of roughly $206.3 million and has approximately 1.25 billion shares outstanding.

The post Argosy (ASX:AGY) share price edges lower on Tonopah Lithium Project update appeared first on The Motley Fool Australia.

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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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The 4DS Memory Ltd (ASX: 4DS) share price is pushing higher despite the broader All Ordinaries Index (ASX: XAO) falling today.

At the time of writing, 4DS shares are up 3.70% to 14 cents, while the All Ords is down 1.42% to 7,473.5 points.

Let’s take a closer look at what 4DS Memory updated the ASX with this morning.

4DS Memory furthers patent protection

Investors appear excited by the company’s latest update, sending 4DS Memory shares higher.

According to its release, 4DS Memory advised that it has been granted an additional patent to add to its portfolio. Approved by the United States Patent & Trade Mark Office, this brings the total amount of granted patents to 32 within the United States.

4DS Memory stated that the new patent is titled, ‘Conductive Amorphous Oxide Contact Layers’ (patent number 11,133,464).

The company noted that all its patents and applications are developed in-house and are wholly-owned. This gives 4DS peace of mind away from royalty and licencing commitments.

4DS Memory CEO and managing director, Dr Guido Arnout commented:

The granting of patents is an extremely important strategy for the company to protect its unique Interface Switching ReRAM in the overall ReRAM space.

What does 4DS do?

4DS Memory is a semiconductor company that develops resistive random-access memory (ReRAM). With research facilities in Silicon Valley, the start-up tech seeks to commercialise its product to become a replacement for more traditional Flash memory storage.

The company is developing breakthrough storage memory that could be used in advanced applications in the near future.

It is estimated that the total addressable market for the memory industry is around $40 billion.

About the 4DS share price

It has been a great 12 months for 4DS Memory investors, with its share price jumping by more than 100%. Year-to-date, however, is currently registering a gain of just under 10%.

The company’s shares reached a multi-year high of 28 cents in January 2021, before treading lower after some profit-taking.

Based on today’s price, 4DS Memory commands a market capitalisation of roughly $178.5 million, with approximately 1.3 billion shares outstanding.

The post 4DS Memory (ASX:4DS) share price lifts on patent update appeared first on The Motley Fool Australia.

More reading

• 4DS Memory (ASX:4DS) share price up 7% on Thursday

Motley Fool contributor Aaron Teboneras owns shares of 4DSMEMORY FPO. 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 PPK Group Limited (ASX: PPK) share price rewarded investors handsomely during August. While the S&P/ASX 200 Index (ASX: XJO) pulled a paltry 1.9% in the month, PPK soared an astonishing 49.9%.

Much of this gain could be put down to the excitement surrounding the anticipated listing of Li-S Energy Ltd (ASX: LIS). Speaking of which, the lithium-sulphur battery tech company made its debut yesterday, exploding 174% in value. The rampant share price surge benefits PPK, with the company retaining a 45.4% shareholding.

Although much of the excitement took place yesterday, one Australian fund manager remains extremely bullish on PPK’s prospects.

Let’s take a closer look.

A big bet on ASX-listed PPK

In its August fund update, EGP Capital gave its investors a rundown on the latest for its Concentrated Value Fund. This fund is focused on Australian listed companies with the ambition of outperforming the Aussie index by 3% to 5% on an annual basis.

It was unsurprisingly a solid month for the fund, delivering a return of 6.7%. One of its biggest contributors was the PPK share price. Being the fund’s largest holding, investors benefitted from the enthusiasm behind the listing of Li-S Energy.

At the end of August, PPK constituted 15% of the fund’s overall holdings — this is nearly double its second-largest holding, United Overseas Australia Limited (ASX: UOS), at 8.8%.

Despite the miraculous returns thus far, EGP Capital holds a deeply positive sentiment towards ASX-listed PPK. As detailed in its monthly report, the fund believes the prospective market opportunity for the Li-Sulphur batteries is immense. In fact, founder and chief investment officer Tony Hansen stated:

I shall be surprised if the stock ever trades below $1 per share (the IPO price is 85c). Executed properly, this is a multi (multi)-billion-dollar opportunity.

One day in and Li-S Energy is sitting well above $2, let alone the $1 zone that Hansen mentions.

Massive market potential

In addition to this, the fund spoke highly of another PPK investment, White Graphene. The company released a table outlining some of its developmental projects.

From this, EGP Capital points out several large market opportunities for the application of White Graphene’s boron nitride nanosheets. These include:

• Concrete floor coating: estimated US$1.8 billion annual global market by 2027
• Wood coating: estimated US$12.3 billion annual global market by 2027
• Paint: estimated US$218 billion annual global market by 2028
• Fibreglass: estimated US$25.5 billion annual global market by 2028
• Faux leather: estimated US$57 billion annual global market by 2028
• Ammunition: estimated US$28.4 billion annual global market by 2028
• Wires and cables: estimated US$273.7 billion annual global market by 2028

Based on PPK’s final report for FY21, the company owns 59.8% of White Graphene.

Now what?

Finally, the fund addressed the risk posed to investors with the fund holding such a large position in PPK.

In Hansen’s words, “The management of each business needs to be careful about ensuring their investors are properly kept appraised of the prospects of each business. This is incredibly hard to do with prospectively world-changing technologies.”

As a result, the fund accepts increased volatility but expects strong upside potential for PPK on the ASX.

The post Why PPK (ASX:PPK) and Li-S Energy are this fund’s largest positions appeared first on The Motley Fool Australia.

More reading

• The PPK (ASX:PPK) share price soars 10% amid Li-S Energy’s IPO
• PPK (ASX:PPK) share price wobbles on joint venture news
• PPK (ASX:PPK) share price storms 9% higher to an all-time high
• Which ASX 300 shares are making headlines on Thursday?
• These were the best ASX All Ordinaries performers in August

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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The Woolworths Group Ltd (ASX: WOW) share price is trading lower with the market on Wednesday.

In morning trade, the conglomerate’s shares are down 0.5% to $38.13.

Not even the announcement of the pricing of $700 million of bonds has been able to keep the Woolworths share price in positive territory.

What did Woolworths announce?

This morning Woolworths announced that it has successfully priced $350 million of senior unsecured six year notes and $350 million of ten year notes. These were launched as part of its medium term note programme.

The company is raising these funds in order to support its growth and are linked to sustainability goals. Management notes that this reflects the company’s commitment to reducing carbon emissions.

In fact, the Sustainability Linked Bonds (SLB) structure embeds a penalty (via a margin increase) into the terms of the notes. These would apply if, at the end of FY 2025 and FY 2029 (for the six year and ten year notes respectively) the company’s scope 1 and 2 emissions are not aligned with the forecast trajectory to meet Woolworths’ 2030 carbon emissions reduction target.

Notes pricing

The release explains that the notes were priced at 1.85% for the six year notes and 2.75% for the 10 year notes. Settlement is expected to occur on 6 October 2021.

Woolworths intends to use the proceeds from the notes for general corporate purposes. This includes establishing long term funding of its recent investments in Quantium and PFD Food Services.

Woolworths’ Chief Financial Officer, Stephen Harrison, said: “Following the strong level of demand for our Euro sustainability linked bond transaction, we are pleased to have provided the Australian debt capital markets with a similar domestic offering. There was strong interest in the market reflecting the growing importance of sustainability in the debt capital markets.”

The Woolworths share price is up over 12% in 2021.

The post Woolworths (ASX:WOW) share price lower after raising $700 million appeared first on The Motley Fool Australia.

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• Woolworths (ASX:WOW) share price slumps this week despite Everyday Market launch
• Woolworths (ASX:WOW) and Coles (ASX:COL) could face a margin shock
• How do you value the Woolworths (ASX:WOW) share price?
• September hasn’t been a great month so far for the Woolworths (ASX:WOW) share price
• Why is the Woolworths (ASX:WOW) share price underperforming Coles today?

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

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ASX tech shares are taking off after Wall Street as rising bond yields pressured investors out of fast-growing technology shares.

The S&P 500, Nasdaq Composite and Dow Jones Industrial Average logged sharp declines, sliding 2.04%, 1.63% and 2.83% respectively.

Major US tech shares including Alphabet, Apple, Facebook and Microsoft fell between 2.38% to 3.66%, weighing on the S&P 500 and Nasdaq.

Benchmark 10-year US treasury yields have continued to rise this week, trading at their highest levels since late-June.

The yield on benchmark 10-year Treasury notes rose 5 basis points on Tuesday night to 1.541% and are currently fetching 1.546%.

A sea of red for ASX tech shares

The S&P/ASX Information Technology (INDEXASX: XIJ) index is currently the worst performing sector on Wednesday, down 2.85%.

This compares to the S&P/ASX 200 Index (ASX: XJO) which is currently down 1.37% to a 3-month low of 7,176.

Taking the brunt of the losses include EFTPOS provider Tyro Payments Ltd (ASX: TYR) sliding 5.10% to $3.91 and Zip Co Ltd (ASX: Z1P) down 4.93% to $6.75.

On the big end of town, heavyweights Afterpay Ltd (ASX: APT), Xero Limited(ASX: XRO) and WiseTech Global Ltd (ASX: WTC) are logging consistent declines, down between 2.6% and 3.8%.

Other notable losers include Nextdc Ltd (ASX: NXT) down 4.09% to $11.95, Carsales.com Ltd (ASX: CAR) down 3.53% to $24.59 and Altium Limited (ASX: ALU) down 2.89% to $34.57.

Why do yields matter?

Tech shares are able to justify expensive valuations from much higher cash flows expected in the future.

As yields increase, this can make future cash flows appear less valuable in the present.

Higher borrowing rates could also hinder growth prospects, especially if the company is already carrying significant debt.

ASX tech shares have enjoyed a prolonged era of ultra-low interest rates.

But looming interest rate hikes could pose a risk to tech and high-growth sectors.

The post Why ASX tech shares are crashing on Wednesday appeared first on The Motley Fool Australia.

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• Square slides 5%. What does this mean for the Afterpay (ASX:APT) share price?
• 2 hot ASX growth shares that this income fund manager favours
• 5 things to watch on the ASX 200 on Wednesday
• Why CSL, Domino’s, Temple & Webster, & Xero shares are tumbling

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Kerry Sun 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, Alphabet (A shares), Alphabet (C shares), Altium, Apple, Facebook, Microsoft, Tyro Payments, WiseTech Global, Xero, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Altium, WiseTech Global, and Xero. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Apple, Facebook, Tyro Payments, and carsales.com 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 Polynovo Ltd (ASX: PNV) share price has not had a good time of it recently.

In the past 3 weeks, shares in the medical device company have tumbled more than 15%.  

Let’s take a look at why investors have been dumping Polynovo shares.

What’s weighing down the Polynovo share price?

The Polynovo share price has had a shocking year thus far.

The pain has continued for shareholders in the last 3 weeks as shares in the biotech continue their slide.

Despite the bearish price action, Polynovo has been scarce with price-sensitive news.

Most recently, the company made headlines after announcing the commencement of its Biomedical Advanced Research and Development Authority (BARDA) funded burn study in the United States.

Shares in Polynovo were given a brief reprieve as the company pursued FDA approval for its NovoSorb BTM product.

In addition, the resignation of the company’s chief operating officer, Dr Anthony Kaye, has also weighed on its shares.

However, much of the bearish sentiment towards the Polynovo share price can be traced back to its full-year report.

How did Polynovo perform in FY21?

Shares in Polynovo tanked late last month, despite releasing fairly robust results for FY21.

The biotech’s report was highlighted by a 32% increase in total revenue of $29.3 million.

Other highlights from Poynovo’s full-year report included:

• Distributor sales grew by 53% over the year
• Gross margin increased by 3% from “manufacturing efficiency gains”
• Corporate and overhead expenses increased by 10% as the business expanded
• Net profit after tax of $260,000 when adding back in non-cash items
• Achieved breakeven in FY21

Polynovo flagged strong results in FY22 in all of its markets, including the United States, Europe, United Kingdom, Middle East, Asia, Australia, and New Zealand.

However, investors did not seem impressed with the report, inflicting more selling pressure on the Polynovo share price.

Snapshot of the Polynovo share price

The Polynovo share price jumped off a cliff to start the year.

Shares in the Aussie biotech fell hard and fast in the early months of 2021 following a dour first-half report.

As a result, Polynovo shares have more than halved since the start of the year.

At the time of writing, shares in the biotech have continued their fall, trading more tan 2% lower for the day.  

The post Why has the Polynovo (ASX:PNV) share price tanked 15% in 3 weeks? appeared first on The Motley Fool Australia.

More reading

• Why the Polynovo (ASX:PNV) share price is edging higher today
• Why the Polynovo (ASX:PNV) share price is sitting at a 52-week low
• The Polynovo (ASX:PNV) share price has halved this year. What’s going on?
• These were the worst performing ASX 200 (ASX:XJO) shares last week
• Why Cleanaway, IRESS, Omni Bridgeway, & Polynovo shares are dropping

Motley Fool contributor Nikhil Gangaram 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 POLYNOVO FPO. 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) has slipped into the red in early trade on Wednesday, dropping 1.38% to 7,172.5 points.

Shares in rare earths’ producer Australian Strategic Materials (Hldngs) Ltd (ASX: ASM) are following the Index down, trading in the red this week and dropping another 1.12% this morning to $9.73.

In fact, the Australian Strategic Materials share price has dipped from a high of $13.66 on 26 August and is down 16% this month alone.

Here’s what appears to be behind these moves.

Why are Australian Strategic Materials’ shares trending down lately?

Even though Australian Strategic Materials’ share ticker was added to the S&P/ASX 300 Index (ASX: XKO) on 3 September, it hasn’t been enough to spur a lift in the company’s share price to date.

The company also released its FY21 statutory accounts last week where it outlined progress for the year, including several investment partnerships.

Investors didn’t appear too impressed given the company’s share price has failed to head back towards its previous highs.

Instead, investors have continued to sell ASM shares in droves. This has coincided with a cooling off in the price of Neodymium, a rare earth that the company has exposure to.

After a strong gain this year in the commodities markets, the price of Neodymium has climbed 26% this year to date.

However, this growth level has wound back in the last month or so and the rare earth has only edged higher by roughly 1.5% since August.

Zooming out, it appears there is weakness across the broader rare earths sector as well.

To assess the growth of shares in an industry, indexes and exchange traded funds (ETFs) serve as good proxies to do so.

The MVIS Global Rare Earth/Strategic Metals Index, which tracks the performance of the most important players in the global rare earths industry, is tracking down over the last month.

It has decreased in value by almost 5% since the start of September.

Also, the VanEck Rare Earth/Strategic Metals ETF (NYSEARCA: REMX) – another good proxy – has fallen 10% into the red this past month.

Hence, it appears that Australian Strategic Materials’ shares are falling in line with the broad sector, propelled by volatility in the underlying rare earths markets.

Australian Strategic Materials share price snapshot

On a longer term basis, the Australian Strategic Minerals share price has posted outsized returns this year to date.

It’s climbed 54% since January 1, extending its gain over the past 12 months to 363%.

These results are well ahead of the broad Index’s return of around 25% over the last year.

The post Why is the Australian Strategic Materials (ASX:ASM) share price down 16% this month? appeared first on The Motley Fool Australia.

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• Which ASX shares are looking to finish the week as the top movers on the ASX 300 today?
• Which ASX shares are leading the way on the ASX 300?
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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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