Tag: Motley Fool

The Vulcan Energy Resources Ltd (ASX: VUL) share price is falling in morning trade, down 3.55%.

Below we take a look at the ASX energy share’s proposal for a dual listing.

What did Vulcan propose?

Vulcan Energy’s share price is sliding after the company announced it has applied to dual list on the Frankfurt Stock Exchange (FSE). Vulcan intends to list in the Prime Standard market segment with high transparency requirements.

The company said the dual listing will boost its international profile and open the door for European investors to easily access shares.

Joh. Berenberg, Gossler & Co. KG (Berenberg) – the world’s oldest merchant bank – has been appointed as listing advisor.

Commenting on the dual listing, Vulcan’s managing director Francis Wedin said:

Given the German base and role in the EU energy transition of our Zero Carbon Lithium Project, Vulcan is aiming to increase its European investor base and international exposure, whilst meeting and exceeding the highest standards of governance, reporting and transparency.

This planned dual listing on the regulated exchange of the FSE, a first for any Australian company, will assist with this process. We look forward to working with Berenberg and our other advisors on this process, in what we hope will be an exciting next step for all shareholders as the company evolves.

Vulcan said it expects the listing process to take 6–9 months. Once completed, Vulcan will be the first Aussie company listed on the regulated market of the FSE.

Vulcan Energy share price and company snapshot

Vulcan Energy is working to supply the European electric vehicle revolution with lithium to power the batteries. The company’s goal is to become the world’s first lithium producer with net zero greenhouse gas emissions.

And its shares have been going gangbusters.

Vulcan Energy’s share price has gained an eye-popping 2,146% over the past 12 months. Over that same time the All Ordinaries Index (ASX: XAO) is up 25%.

Year-to-date the Vulcan Energy share price has continued to outperform, up 378% in 2021.

The post Up 2,146% in 1 year, Vulcan Energy (ASX:VUL) share price falls on dual listing news appeared first on The Motley Fool Australia.

More reading

• The Vulcan Energy (ASX:VUL) share price is rocketing 14% higher
• Here are the top movers in the ASX 300 today
• Why AnteoTech, BetMakers, News Corp, & Vulcan shares are racing higher
• Why the Vulcan (ASX:VUL) share price is running hot in August
• Why Argosy Minerals, Genworth, Vulcan, & Zip shares are charging higher

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 Tabcorp Holdings Limited (ASX: TAH) share price is on the rise. That’s after The Saturday Paper revealed the federal government approached the ASX-listed betting giant about “designing a lottery open only to those vaccinated against COVID-19.”

As of writing, shares in the company are selling for $5.01 – up 0.3%. The S&P/ASX 200 Index (ASX: XJO) is 0.34% higher.

Let’s take a closer look.

Tabcorp share price rises on vaccine lottery idea

To hit the Prime Minister’s target of 70% of eligible Australian’s vaccinated to enter Phase B of the transition to living with COVID, the government is reportedly seeking incentives to encourage Australians to get the vaccine.

Government isn’t alone in wanting to boost inoculations. The opposition Australian Labor Party has proposed a $300 payment for every fully vaccinated person. At the same time, the New South Wales government is allowing construction workers from hotspot areas to return to work. To do so, they must be partially or fully vaccinated.

The Morrison government seemingly believes a lottery may be the way forward. As Australia’s largest lottery operator, Tabcorp would have the expertise and systems to implement such a scheme if it were to happen.

It is somewhat ironic considering Tabcorp plans to demerge its lotteries business from its other operations. The Tabcorp share price fell on the day of the announcement.

In a statement to News Corp, which Tabcorp still stands by, the company said such a scheme would require jumping through several hurdles.

Introducing a dedicated lottery for those vaccinated would require, among other things, navigating the requirements of our state lottery licences and responsible gambling practices, the approval of state government regulators, gaining clarification from the Therapeutic Goods Administration around incentivising vaccinations, and maintaining customer privacy.

Is this happening elsewhere?

If the Australian government and Tabcorp were to implement a vaccine lottery, it would not be the only government to do so.

The New York Times reports several states in the United States are offering cash prizes of up to $1 million. The cash prizes are to encourage residents to get the vaccine. Ohio, the first state to offer such a lottery, abandoned its plans when an initial bump in vaccination rates dissipated.

Dr Stephen Duckett, a healthcare policy expert, endorsed the idea of a vaccine lottery previously.

“The path out of lockdowns and back to freedom requires almost all of us to be vaccinated. Let’s get there quicker by launching Vaxlotto,” Dr Duckett said.

This may help to explain the rise in the Tabcorp share price.

Tabcorp share price snapshot

Over the past 12 months, the Tabcorp share price has increased 44.1%. Year to date it is up 25.3%.

Tabcorp Holdings has a market capitalisation of $11.1 billion.

The post Tabcorp (ASX:TAH) share price rises after vaccine lottery idea appeared first on The Motley Fool Australia.

More reading

• Expert expects demerger to benefit Tabcorp (ASX:TAH) share price

Motley Fool contributor Marc Sidarous 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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Are you looking to make some additions to your portfolio? If exchange traded funds (ETFs) are of interest to you, then you might want to look at the three listed below.

Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF to look at is the BetaShares Asia Technology Tigers ETF. This ETF gives investors access to a number of the most promising tech shares in the Asian market. This means you’ll be owning a slice of growing companies such as ecommerce giant Alibaba, search engine company Baidu, WeChat owner Tencent, and online retail platform Pinduoduo.

The latter connects distributors with consumers directly through an interactive shopping experience, allowing shoppers to team up and buy items in bulk at lower prices. It is now the largest retailer in the region with 788 million annual active customers.

BetaShares Global Cybersecurity ETF (ASX: HACK)

Another ASX ETF to look at is the BetaShares Global Cybersecurity ETF. As it names indicates, this ETF gives investors exposure to the leading companies in the global cybersecurity sector. This could be a great place to be right now, with demand for cybersecurity services increasing due to the growing threat of cyberattacks.

Included in the fund are quality companies such as Accenture, Cisco, Cloudflare, Fortinet, Okta, Splunk, Zscaler, Crowdstrike. The latter is a provider of incident response and forensic analysis services via its Falcon platform. CrowdStrike’s services are designed to help businesses understand whether a breach has occurred. It then allows the user to respond and recover from a breach with speed and precision to remediate the threat.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

A final ETF for ASX investors to look at is the VanEck Vectors Video Gaming and eSports ETF. This ETF gives investors exposure to a portfolio of the largest companies involved in video game development, hardware, and esports.

Among the companies you’ll be buying a slice of are Activision Blizzard, AMD, Electronic Arts, Nintendo, Nvidia, Roblox, and Take-Two. VanEck notes that these companies are well-placed to benefit from the increasing popularity of video games and eSports.

The post 3 highly rated ETFs for ASX investors this month appeared first on The Motley Fool Australia.

More reading

• 2 impressive ASX shares that could be buys in August 2021
• 3 popular ETFs ASX investors need to know
• Expert: Chinese regulation worries could make Betashares Asia Technology Tigers ETF (ASX:ASIA) a buy
• Tencent share price plummets 10%, here’s what it means for ASX investors
• 2 excellent ETFs for ASX investors in August

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 BETA CYBER ETF UNITS. The Motley Fool Australia owns shares of and has recommended BETA CYBER ETF UNITS and BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports 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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I wrote last week about the phony war between ‘Value’ and ‘Growth’.

In short, it’s a phony war because they can’t be separated from each other, and, at the extremes, becomes a vain argument over identity and, as such, a waste of time.

What do I really think? I’m glad you asked…

That doesn’t mean there aren’t some great investors the market chooses to call ‘value investors’ (they may even use the label themselves). And the same for the great ‘growth investors’.

Which is kinda the point. If both can and do flourish, doesn’t that just prove that it doesn’t need to be an ‘either/or’ game?

I also mentioned that, rather than either label, my investing tends to (roughly) centre around the concept of ‘quality’.

I have my share of losing investments.

But among my winners are long term ‘growth’ stories like Corporate Travel Management Ltd (ASX: CTD) (I still own shares), and ‘value’ stories like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) (I still own them, too).

But, truth be told, while CTM had a lot of growth ahead of it when bought it, I paid what I thought was a defensible price, based on the value I saw in its shares.

And while Soul Patts is considered by some to be about as boring as it gets, according to the most recent figures it published, the company had beaten the market over the 1, 3, 5, 10 and 15 years. Not bad for a stodgy, boring value stock huh?

Now, you’re not going to get me to wave either the value or the growth flag here.

But I am going to speak for both, applied properly.

See, I thought CTM was great value, because of the potential growth I thought it could achieve via organic customer growth and some choosy and well-priced acquisitions.

Yep, value because of growth. It’ll blow some minds, but I thought it was true (and thus far, I’ve been roughly right).

And while Soul Patts is run by people often considered ‘conservative’, it’s more than a century old, and the company name couldn’t be more boring, some of its most important assets have grown very nicely. Companies like TPG Telecom Ltd (ASX: TPG), brickmaker Brickworks Limited (ASX: BKW) and in-house managed assets like a property fund and equity portfolio.

No, I’m not saying ‘everything is okay, depending on how you look at it’

I’m saying that it’s hard to make money as a value investor without growth.

And it’s hard to be a successful growth investor if you overpay for everything.

I do want to speak, though, to the value of growth (no juxtaposition intended) in an investment portfolio.

See, the investing equation runs something like this:

Your return equals:

— The percentage of the time you’re ‘right’ times the average gain when you’re right

minus:

— The percentage of the time you’re ‘wrong’ times the average loss when you’re wrong

Now, if you’re a hardcore venture capital investor you might be super high-risk: losing almost everything 9 times out of 10, but make 100 times your money when you’re right.

If you’re a hardcore deep value investor, your average gain when you’re right might be 30-40%, meaning you can’t afford to be wrong too often — one wipeout might cancel most or all of your gains.

Most of us, of course, are somewhere in between.

Professionally, my strike rate is around 6 times out of 10.

So that’s better than even.

Plus, my average gain tends to be large than my average loss.

Going back to our equation above, that should deliver — as it has, so far — market-beating results.

But here’s why I like to (mostly) but companies with growth potential.

If I was buying $1 for 70c (the deep value formula), once the market realised my dollar was worth a dollar, the gap would close, and my investment thesis would be over.

Oh, don’t get me wrong: it would have been a profitable investment, and I’d be happy… but I’d still have to close it out, rebait my hook, and cast again.

Nothing wrong with that. At all.

But, to torture my fishing analogy, what if I could hook the fish but leave it in the water to keep growing?

What if that $1 I bought for 70c could grow to actually be worth $1.30.

Then $1.75

Then $3.

I know I have the fish.

It’s on the hook.

I don’t have to rebait. Or recast.

Okay, enough of the fishing (for now, at least).

The ‘fish’ in this latter case is, of course, a growing company.

It’s Woolworths Group Ltd (ASX: WOW), bought at $3.

Commonwealth Bank of Australia (ASX: CBA), purchased at $10.

BHP Group Ltd (ASX: BHP), at $5.

I wouldn’t buy any of those companies, today, for growth.

But at the right point in history, in the right circumstances, at the right price?

Absolutely.

Compare that with Telstra Corporation Ltd (ASX: TLS) (whose shares I also own).

It has been a very long time since that company delivered any meaningful growth.

Maybe you could have bought it a little cheaper. And sold it a little dearer.

But compare that with the ten-bagger (ten-fold) returns from those other three companies.

Making money on Telstra was hard work. Bloody hard.

The others?

It was recognising they were quality businesses, with growth ahead of them, then buying.

And holding.

That last bit is important.

Not only do you minimise the chance of error in my mind (buying and selling over and over again means you’re making more decisions, each of which you have to get right), but you get the compounding power of quality.

So, while I don’t choose to put myself in the (partisan and usually unhelpful) bucket of either value or growth, it is important to highlight that I do look for companies with strong growth potential (and preferably a strong track record of growth, too).

Because, if you get it right, the compound returns can be astronomical.

Fool on!

The post Are you a ‘Catch and Release’ investor? appeared first on The Motley Fool Australia.

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• CBA (ASX:CBA) share price history: What caused the biggest ups and downs?
• Telstra (ASX:TLS) share price in focus after announcing $350m MedicalDirector acquisition
• ASX 200 Weekly Wrap: Blockbuster Afterpay deal turbocharges ASX to new record highs
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Scott Phillips owns shares of Corporate Travel Management Limited, Telstra Corporation Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks, Corporate Travel Management Limited, Telstra Corporation Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Wesfarmers Ltd (ASX: WES) share price is falling in early trade amid news of a green hydrogen agreement.

The agreement is between energy infrastructure company Jemena and Wesfarmers’ subsidiary Coregas. It will see green hydrogen supplied to New South Wales’ transport sector for the first time.

Right now, the Wesfarmers share price is $63.68, 0.42% lower than its previous close.

Let’s take a closer look at today’s news.

Green hydrogen deal

The Wesfarmers share price is down amid news of the agreement between gas producer and distributor Coregas and energy infrastructure company Jemena.

Under the agreement, Jemena’s green hydrogen will be available to transport and industry customers by early 2022.

Coregas’ executive general manager Alan Watkins commented on the deal:

Transforming the transport sector is a critical piece of the [decarbonisation] puzzle, and we are delighted to partner with Jemena to make renewably generated green hydrogen available to the transport industry in New South Wales.

Coregas has also recently ordered Australia’s first hydrogen-powered trucks. The trucks will be put to work at the company’s NSW hydrogen production facility. Coregas also plans to build the country’s first commercial hydrogen refuelling station at the facility. Watkins commented on Coregas’ hydrogen-powered trucks, saying:

Coregas is working hard to apply our expertise in hydrogen distribution, compression and storage to Australia’s transition to a hydrogen economy.

While the news might not be having a huge effect on the Wesfarmers share price, it promises to boost the decarbonisation of the transport sector.

Transport NSW notes hydrogen-powered heavy-duty vehicles are needed for the transport industry to reach its goal of net-zero emissions by 2050.

Jemena’s general manager for renewable gas Gabrielle Sycamore also commented on hydrogen’s role in decarbonising the industry, saying:

We know that green hydrogen has the immediate potential to become a viable zero emission alternative to many petroleum-based fossil fuels currently used by industries such as transport and remote power generation.

Wesfarmers share price snapshot

The Wesfarmers share price has been performing well lately.

It has gained 26% since the start of 2021. It is also almost 39% higher than it was this time last year.

The company has a market capitalisation of around $72.5 billion, with approximately 1.1 billion shares outstanding.

The post Wesfarmers (ASX:WES) share price slips amid green hydrogen agreement appeared first on The Motley Fool Australia.

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• Why the Wesfarmers (ASX:WES) share price is trading at record highs

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

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

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The COVID-19 pandemic leaves many bad memories for investors but it proved to be a catalyst for the mega-merger between the Afterpay Ltd (ASX: APT) share price and Square Inc (NYSE: SQ).

It turns out that Afterpay has been on the radar of Square for at least four years, reported the SMH.

The article said that Square’s former country manager for Australia, Ben Pfisterer, helped make the initial introduction.

Square eyeing Afterpay for years

This was in 2017 when Afterpay’s founder Nick Molnar was in San Francisco. But Pfisterer told the SMH that the timing wasn’t quite right back then for Square to contemplate an acquisition.

Square is founded by Jack Dorsey, a controversial tech business identity who started Twitter Inc (NYSE: TWTR).

But when the pandemic struck and bolstered the adoption of cashless payments, that changed everything.

Filling in the blanks

Square could see how the Afterpay platform can help it fill in a big missing gap in its merchant payment offering and consumer “Cash” app. The latter helps users make peer-to-peer payments and to invest in stocks and cryptocurrencies.

The popularity of the Cash app skyrocketed during COVID while its merchant payment solution tumbled.

Square believes having a fledging buy-now, pay-later (BNPL) offering will help bridge the gap between the two key offerings.

Should you take profit on the Afterpay share price?

From Afterpay’s perspective, being part of a bigger organisation with a higher profile will help it stay ahead of large competitors who are nipping at its heels.

But Afterpay shareholders hoping to get some advice on whether to take profit or hang on for the Dorsey dream machine won’t find many hints in the SMH article.

Liquidity and valuation questions cloud the merger

Experts appear divided on this question. The ASX will be a secondary listing for the all-scrip merger of the two. Naysayers warn that liquidity could be a problem for Australian investors.

Also, there are questions about whether the Square share price has run ahead of fundamentals. Its shares have surged by over 2000% over the past five years. Even with the Afterpay afterburner, Square may not be able to sustain its sky-high growth rates.

Reasons to hang on for the Afterpay-Square ride

On the flipside, Aussies suddenly have an easy way to join the US tech party. Many ASX investors are reluctant to own US tech shares even though they have outperformed just about every other benchmark over the past several years.

The Afterpay share price gives us one of the easiest ways to partake in the merrymaking without having to worry about currency risks and transaction costs.

And as long as the Reddit army of cashed up and bored millennials continue to be a force to be reckoned with, the Afterpay share price could have more upside as it joins Square.

The post Afterpay (ASX:APT) shares have been on Square’s radar for years appeared first on The Motley Fool Australia.

More reading

• If you invested $1,000 in Afterpay (ASX:APT) shares 4 years ago, here’s what it would be worth now
• ASX 200 Weekly Wrap: Blockbuster Afterpay deal turbocharges ASX to new record highs
• These were the best performing ASX 200 shares last week
• The Sezzle (ASX:SZL) share price is up 9% this month. Here’s why
• Here are the top movers in the ASX 300 today

Motley Fool contributor Brendon Lau 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 Twitter. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The ResMed Inc (ASX: RMD) share price is rising on Monday morning.

At the time of writing, the sleep treatment focused medical device company’s shares are up 2% to $38.04.

This follows a positive night of trade for the US-listed ResMed share price on Friday night.

Can the ResMed share price climb even higher?

One leading broker that believes the ResMed share price may have peaked for the time being is Goldman Sachs.

According to a note, the broker has retained its neutral rating and lifted its price target on the company’s shares to $36.20.

Based on the latest ResMed share price, this implies potential downside of almost 5% over the next 12 months.

What did Goldman say?

Goldman notes that ResMed expects an FY 2022 revenue benefit of US$300 million to US$350 million relating to the recall of rival Philip’s competing products. This is significantly less than the US$750 million to US$800 million of device sales Philips generates annually.

The broker believes that the constraint on further upside is more a function of supply than demand, due to component shortages. However, it also notes that Philips has previously stated that component shortages and distribution bottlenecks are surmountable. Therefore, it sees limited reason why ResMed could not achieve a similar outcome.

Earnings estimates upgraded

Goldman has upgraded its estimates to reflect this benefit and other items.

It commented: “We post +15% EBITDA upgrades in FY22E, primarily to account for a material increase in flow generator sales, but also additional mask sales (not included in the guided $300-350m tailwind). We also upgrade our FY23E EBITDA by +4% on the same drivers (net of cost upgrades), but we highlight inherent upside to these forecasts should execution of the recall and/or reputational impacts drag materially beyond 12 months.”

However, this isn’t enough for a more positive rating. It believes the ResMed share price is looking expensive at the current level.

Goldman explained: “Clearly, RMD has a substantial opportunity to capture sustainable share, but we believe the earnings upgrades that could follow today’s update may not justify US$11bn (A$15bn) of additional market capitalisation since mid-May (31-37x the guided FY22 revenue tailwind). Valuation of 32x NTM EV/EBITDA is now +54% vs. history, and we remain Neutral-rated.”

The post Top broker gives its verdict on the ResMed (ASX:RMD) share price appeared first on The Motley Fool Australia.

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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 recommended ResMed. The Motley Fool Australia has recommended ResMed Inc. 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 Latitude Group Holdings Ltd (ASX: LFS) share price is rising on Monday.

In morning trade, the instalments and lending company’s shares are up 3.5% to $2.37.

Why is the Latitude share price racing higher?

Investors have been bidding the Latitude share price higher today after it announced an agreement to acquire Symple Loans for $200 million in shares and cash.

According to the release, Symple is a Melbourne-based personal lending fintech. It uses state-of-the-art global technologies, advanced analytics, and proprietary risk-based pricing techniques to deliver simple digital experiences to customers and brokers, fast approvals, and same-day settlements.

Following completion, Symple will become the lending platform for all Latitude personal and auto loans, ~160,000 customers, and its $2.5 billion loan portfolio.

Why acquire Symple?

Management explained that Latitude will leverage Symple’s platform to support its existing business, launch new products, and build partnerships with other lenders.

It will also expand its auto loans business into New Zealand and personal loans into Canada through Symple’s established North American operations.

The purchase of Symple is expected to accelerate growth in Latitude’s loan portfolio and reduce costs, with anticipated in-year synergies starting in the second half of FY 2022 and growing to $32 million before tax in FY 2023.

This equates to an in-year 9% cash net profit after tax accretion based on the average analyst forecasts for FY 2023.

The release notes that the transaction is intended to be funded by the issue of 38.46 million Latitude shares at $2.60 per share and $100 million in cash.

Based on this, in-year cash earnings per share accretion is expected to be 5% higher in FY 2023 compared to the average analyst forecasts.

Latitude’s Managing Director and CEO, Ahmed Fahour, said: “This is an exciting and important opportunity for Latitude that will accelerate our growth plans. Symple’s scalable platform will enable Latitude to offer a wider range of products and product features in Australia and New Zealand, enter new geographies and significantly reduce costs while delivering superior customer and partner experiences.”

“Latitude will enhance its existing strengths, including its 2.8 million customers in Australia and New Zealand, rich data, risk capabilities and funding capacity, by adding Symple’s digital expertise, agility and proven technology. The addition of Symple’s founders Bob Belan and Paul Byrne will further strengthen our management team,” he added.

The post Latitude (ASX:LFS) share price rises on $200m Symple acquisition appeared first on The Motley Fool Australia.

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• The Zip (ASX:Z1P) share price is the best performing BNPL of 2021

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

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The Huon Aquaculture Group Ltd (ASX: HUO) share price is rocketing higher in morning trade.

At the time of writing, the salmon producer’s shares are up 40% to $3.92.

Why is the Huon share price rocketing higher?

Investors have been bidding the Huon share price higher today after it announced the receipt of a takeover offer on Friday evening.

According to the release, the company has entered into a scheme implementation deed with JBS Australia that will see the meat and food processing company acquire Huon for $3.85 cash per share.

This represents a 38% premium to the Huon share price of $2.79 at Friday’s close.

The company also advised that it intends to declare a fully franked special dividend of up to $0.125 per Huon share prior to implementation of the scheme.

Management notes that this would enable Huon shareholders to realise additional benefits from franking credits of up to $0.05 per Huon share. The scheme consideration would be reduced by the cash amount per share of any such dividend.

Based on the Huon share price on Friday, this represents a 4.5% dividend yield for investors.

Board recommendation

The release explains that Huon’s Board considers the scheme to be in the best interest of shareholders and unanimously recommends that they vote in its favour.

This is in the absence of a superior proposal and subject to an independent expert concluding that it is in the best interests of shareholders.

Each Huon director, including Huon’s founding and major shareholders, Frances and Peter Bender, intends to vote all the shares held or controlled by them in favour of the scheme. This represents approximately 53% of Huon’s issued shares.

Huon’s Chairman, Neil Kearney, stated: “Having fully considered a range of alternatives as part of a comprehensive strategic review process, the Board believes this transaction provides Huon shareholders with an opportunity to realise significant value for their shares. The Scheme provides certainty for Huon shareholders and a compelling premium in cash to recent trading prices for Huon shares.”

This sentiment was echoed by Huon’s Managing Director and Chief Executive Officer, Peter Bender.

He said: “The recommended acquisition of Huon by JBS represents an excellent outcome for our shareholders, partners and staff. This is a testament to the strong position Huon holds in the Australian salmon market. We look forward to seeing the continued growth of the Huon business as part of JBS. We do not anticipate any disruption to business operations.”

Huon shareholders will have the opportunity to vote on the scheme at a shareholder meeting. This is currently expected to be held in mid to late October.

The Huon share price is up 44% in 2021.

The post Why the Huon (ASX:HUO) share price is rocketing 40% higher on Monday appeared first on The Motley Fool Australia.

More reading

• Top broker gives its verdict on the ResMed (ASX:RMD) share price
• Latitude (ASX:LFS) share price rises on $200m Symple acquisition
• If you invested $1,000 in Afterpay (ASX:APT) shares 4 years ago, here’s what it would be worth now
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Afterpay Ltd (ASX: APT) share price has rocketed higher over the past few years, thanks in part to its first-mover advantage. Everyday consumers have been increasingly adopting the buy now, pay later (BNPL) company’s services as a replacement for credit cards.

Over the past 12 months alone, Afterpay shares have accelerated by more than 80%, reflecting positive investor sentiment.

How has Afterpay performed in recent times?

At the beginning of COVID-19, Afterpay shares sank to a multi-year low of $8.01 on 23 March 2020. The company’s shares quickly picked up as the federal government introduced stimulus packages such as JobKeeper. The initiative was designed to ensure people whose jobs had been impacted by the pandemic would continue to receive a wage and, thus, spend on discretionary items to keep the economy ticking over.

In the months following, Afterpay shares soared to dizzying heights, as the sky appeared to be the limit. The Afterpay share price hit an all-time high of $160.05 in February 2021, before sliding to around the $100 mark by late March. This was due largely to new BNPL competitors such as PayPal Holdings (NASDAQ: PYPL) signalling their interest in entering the market.

Since then, Afterpay shares mostly moved in circles until last week, when the company received a takeover offer from Square Inc (NYSE: SQ) for $39 billion.

The United States-based payments company proposed a fixed exchange ratio of 0.375 shares of Class A common stock for each Afterpay share held. The news sent Afterpay shares flying 30% to a high of $125.00 when the ASX opened up last Monday.

What if you had invested $1,000 in Afterpay shares 4 years ago?

If you had invested $1,000 in Afterpay shares in 2017, you would have bought them for around $2.95 apiece. This would have given you approximately 338 shares, without topping up when they fell to near all-time lows during COVID-19.

Fast-forward to today, the current Afterpay share price at the time of writing is $132.15. This means that those 338 shares would now be worth an astonishing $44,666.70 (338 shares x $132.15). When considering percentage terms, this implies an upside of almost 4,380%.

This is a mammoth return, particularly considering the S&P/ASX 200 Index (ASX: XJO) has given back an average of 6.50% per annum over the last 5 years.

Are Afterpay shares a buy now?

Two brokers rated the company with different price points last week. The first was Morgans, which raised its rating by 8% to $123.40. Following suit, Macquarie also raised its 12-month price target by 14% to a bullish $160.00.

The post If you invested $1,000 in Afterpay (ASX:APT) shares 4 years ago, here’s what it would be worth now 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. owns shares of and has recommended AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO and Macquarie 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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