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The S&P/ASX 200 Index (ASX: XJO) went up by 1.3% today to 7,491 points today.

Here are some of the highlights from the ASX:

Afterpay Ltd (ASX: APT)

It was announced today that Square wants to buy Afterpay. It’s valuing Afterpay at $39 billion.

Square expects to pay Afterpay shareholders in new Square stock. Under the terms of the deal, Afterpay shareholders will receive a fixed exchange ratio of 0.375 Square shares for each Afterpay share they own.

Based on Square’s last closing price of US$247.26 on 30 July 2021, this represents an implied transaction price of $126.21 per Afterpay share, being a premium of 30.6% to the last Afterpay share price.

The ASX 200 buy now, pay later business also released a trading update for FY21.

Total underlying sales increased 90% to $21.1 billion. Looking at the individual regional breakdown, there were $9.8 billion of North American underlying sales (up 148%), $9.4 billion of ANZ underlying sales (up 44%) and $1.8 billion of Clearpay (UK and EU) underlying sales (up 227%).

Afterpay’s overall revenue increased 78% to $925 million and merchant revenue went up 90% to $822 million. It also revealed that gross profit went up 75% to $675 million.

Active merchants rose 77% to 98,200. Total active customers increased by 63% to 16.2 million, but whilst North American active customers rose 88% to 10.5 million. The ANZ active customers only increased by 8% to 3.6 million.

The Zip Co Ltd (ASX: Z1P) share price also rose by around 9% today. It was the second highest rise in the ASX 200.

Santos Ltd (ASX: STO) and Oil Search Ltd (ASX: OSH)

The share prices of Santos and Oil Search went up 0.6% and 4.7% respectively.

These two large businesses have reached an agreement on the merger ratio under the proposed deal.

Under the revised deal, Oil Search shareholders will receive 0.6275 new Santos shares for each Oil Search share they own.

After the merger, Oil Search shareholders will own approximately 38.5% of the combined entity and Santos will own the other 61.5%.

This revised proposal implies a transaction price of $4.29 for each Oil Search share, based on the closing prices on 19 July 2021. This represents a 16.8% premium to the Oil Search closing price on 19 July.

The two ASX 200 oil shares are expecting compelling value benefits to both sets of shareholders.

Aussie Broadband Ltd (ASX: ABB)

The Aussie Broadband share went up around 2.5% today after providing a trading update.

It said that in the fourth quarter of FY21, its revenue increased 8% quarter on quarter. Revenue for the quarter to 30 June 2021 was $100.1 million.

FY21 earnings before interest, tax, depreciation and amortisation (EBITDA) excluding IPO costs is expected to be at the upper end of guidance (which is between $17 million to $20 million).

Fourth quarter overall broadband connections increased 7.4% and business broadband connections increased 12% on the previous quarter.

It also said that fourth quarter mobile services increased by 20% from the previous quarter, up from 18,684 to 22,454 connections.

Aussie Broadband also said it has signed its first white label customer.

The company said that it launched services on the new Optus mobile virtual network operator (MVNO) agreement.

The post ASX 200 rises, Afterpay soars, Zip jumps appeared first on The Motley Fool Australia.

More reading

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• These are the 10 most shorted ASX shares
• Why a2 Milk, Afterpay, Dicker Data, & Oil Search shares are charging higher
• How is the IAG (ASX:IAG) share price performing against the financial services sector?
• Surging Afterpay (ASX:APT) share price reinvigorates BNPL sector

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Aussie Broadband Limited and AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Aussie Broadband 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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ASX gold shares, as a whole, have not had the best of years.

After riding high in the early months following the outbreak of the global pandemic, most ASX gold shares have retraced sharply over the past 12 months.

The Newcrest Mining Ltd (ASX: NCM) share price, for example, has lost 25% over the past full year. The Northern Star Resources Ltd (ASX: NST) has fallen 35%. And the Gold Road Resources Ltd (ASX: GOR) share price is down 29%.

This comes as the gold price has also fallen, down roughly 12% since this time last year. The yellow metal has dropped from US$2,064 (AU$2,827) per troy ounce in early August 2020 to the current price of US$1,810 per troy ounce.

While numerous factors impact the price of ASX gold shares, the value of the metal they dig from the ground is one investors keep a sharp eye on.

Why China frictions could boost the gold price

No one, we have to hope, wants to see recent tensions between the West and China continue to simmer. Let alone get worse.

Not even investors in ASX gold shares, which could receive a boost if these simmering tensions end up driving gold prices higher.

That potential was highlighted by Ian Goldin. Goldin is a professor of globalisation and development at the University of Oxford, a former adviser to South Africa’s Nelson Mandela and a former vice-president of the World Bank.

Speaking at the Diggers & Dealers mining conference underway in Western Australia, Goldin warned of the potential fallout from the United States’ and Australia’s frictions with China.

As the Australian Financial Review reports, Goldin said, “he was bullish about the gold price given the pandemic, the threat of a new Cold War [with China] and as central banks continued to print money as part of stimulus packages”.

“My own view is it stay around US$2000 an ounce. I do think gold will hold its own,” he said.

If Goldin is right and gold prices do stabilise at that level, it will represent more than a 10% increase from the current price. Which in turn will help ASX gold shares boost their profit margins.

How have these ASX gold shares been performing?

Let’s look at the 12-month performance for 3 leading ASX gold shares up top.

More recently the Newcrest share price is roughly flat year-to-date, and up 5% over the past month.

Meanwhile, the Northern Star share price has continued to struggle in 2021, down 22% this calendar year. Over the past month, the share price has turned around, up 4%.

Finally, ASX gold share Gold Road is down 3% year-to-date and up 3% over the last month.

The post How China tensions could be a boon for ASX gold shares appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: ASX grinds to a halt following new all-time high
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Bernd Struben 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 Wesfarmers Ltd (ASX: WES) share price has been steadily climbing over the past month. Shares in the Australian conglomerate have gained nearly 6% in the past 30 days, despite its bid for Australian Pharmaceutical Industries Ltd (ASX: API) being rejected in July.

However, Wesfarmers is still filled to the brim with cash – opening the doors for optionality to the company.

At the end of Monday, the Wesfarmers share price finished 1.7% higher to $62.19.

Could Wesfarmers shares be a buy?

Despite the rejection of Wesfarmers’ API takeover bid late last month, shares in the company are holding firmly. As a result, the company continues to sit on its enormous cash pile, much like other ASX-listed large caps.

Considering Wesfarmers is seeking to use its capital effectively, investors might be wondering what other options it might be weighing up.

Morgan Stanley estimates that Australian companies have accumulated roughly $40 billion of cash during the pandemic. Some ASX-listed shares have nominated to return this capital via beefed-up dividends or share buyback programs.

Such examples include Rio Tinto’s recently unveiled US$9.1 billion dividend splurge and National Australia Bank Ltd.’s (ASX: NAB) $2.5 billion share buyback.

With Wesfarmers 2021 full-year results expected on Friday 27 August, shareholders might be pondering the chances of similar rewards.

While some experts are not in favour of buybacks, Airlie Australian Share Fund portfolio manager, Emma Fisher expects more to come. The fund manager said, “The next 12 months is going to be one of significant capital returns in the Aussie market.”

What do brokers think?

According to Goldman Sachs, the reporting season could be shaping up to be a good one for Wesfarmers. Analysts are expecting full-year revenue of $34,132.1 million, representing a 10.6% increase year over year. Similarly, the broker foresees earnings before interest and tax (EBIT) to come in at $3,508 million.

Corresponding with the rise in earnings, Goldman is anticipating a juicy $1.84 dividend from the company. Based on the current Wesfarmers share price, that would indicate a potential 2.96% yield.

The post Is it a good time now to buy Wesfarmers (ASX:WES) shares? appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: ASX grinds to a halt following new all-time high
• API share price (ASX:API) falls after rejecting Wesfarmers takeover offer
• Wesfarmers (ASX:WES) share price falls after API rejects takeover offer
• Own Wesfarmers (ASX:WES) shares? Here’s what to look for during reporting season
• 2 ASX shares to hold onto for the next 5 years

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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National Australia Bank Ltd (ASX: NAB) shares have been very strong performers over the last 12 months.

During this time, the banking giant’s shares have risen a sizeable 57%.

This is more than double the 26% gain by the the S&P/ASX 200 Index (ASX: XJO) over the same period.

Is it too late to buy NAB shares?

The good news is that it may not be too late to buy NAB shares according to one leading broker.

A note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating and lifted their price target to $30.34.

With the current NAB share price trading at $26.55, this implies potential upside of 14% over the next 12 months before dividends. This stretches to approximately 19% if you include dividends.

What did Goldman say?

According to the note, Goldman was pleased with the bank’s announcement of a $2.5 billion share buy-back. It notes that the timing was earlier than it anticipated, which it believes demonstrates the strength of the sector.

The good news is that Goldman believes the buybacks may not stop there, which will boost NAB’s earnings per share in the coming years.

It explained: “We amend our forecasts for today’s announced A$2.5 bn buyback, and also assume a further A$1.0 bn buyback that we expect to take place in 2H22E given the surplus capital that still remains. As a result, our FY21/22/23E EPS move by 0.3%/2.9%/4.7%, and our TP increases to A$30.34.”

Furthermore, the broker acknowledges that even after a combined $3.5 billion buyback, there’s still scope for further capital management given how its CET1 ratio will be above APRA’s unquestionably strong benchmark of 10.5%.

It said: “We highlight that even with our assumption of A$3.5 bn of total buybacks, our 2H22E CET1 ratio still remains at c. 12%, well above its target range.”

All in all, Goldman sees plenty of reasons to be positive on NAB shares right now. As a result, it remains its top pick among the big four.

The post This leading broker believes NAB (ASX:NAB) shares can run a lot higher appeared first on The Motley Fool Australia.

More reading

• Is now a good time to buy NAB (ASX:NAB) shares?
• ASX 200 Weekly Wrap: ASX grinds to a halt following new all-time high
• ASX 200 falls, NAB rises, Afterpay sinks
• ASX 200 midday update: NAB’s $2.5bn buyback, Origin shares sink
• NAB (ASX:NAB) share price on watch after announcing $2.5bn buy-back

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 Australian Foundation Investment Co. Ltd (ASX: AFI) share price set a new all-time high today during a somewhat bumpy ride in the green.

At the market close, the AFIC share price was right back where it started at $8.42, a major step down from its intraday record high of $8.49.

Despite the flat end to today’s run, shares in the listed investment company have gained almost 8% in the last month alone.

Let’s examine the tailwinds behind the AFIC share price.

Net tangible asset growth

Back in early July, AFIC gave us an update on its core portfolio’s performance for the month of June.

As at 30 June, AFIC’s net tangible assets (NTA) per share grew to $7.45 per share, a sequential growth from $6.19 the month prior.

Much of the growth was underscored by strengths in large holdings like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and Wesfarmers Ltd (ASX: WES) for instance.

The AFIC share price has climbed 14% since this announcement.

Return of the dividend

AFIC also announced it will resume its dividend in its preliminary quarterly earnings report. It detailed that it will return 14 cents per share back to its shareholders this payment.

The shares will go ex-dividend on 11 August and shareholders will enjoy the return of the dividend in their bank accounts on 31 August.

The announcement balanced sentiment on AFIC’s quarterly results, which saw revenue contract 0.6% year on year. In addition, AFIC saw net profits decrease by 2.2% to $235 million in the quarter.

This number was propped up by dividends received on the back of Endeavour Group Ltd (ASX: EDV)’s demerger from Woolworths Group Ltd (ASX: WOW) earlier in the year.

AFIC shares have climbed a further 4% since this announcement on 26 July.

AFIC share price snapshot

The AFIC share price has lifted 14.2% year to date, extending the previous 12 month’s return of almost 35%.

These returns have outpaced the S&P/ASX 200 Index (ASX: XJO)’s return of around 23% over the past year.

The post Why is the AFIC (ASX:AFI) share price making news again? appeared first on The Motley Fool Australia.

More reading

• The AFIC (ASX:AFI) share price is up after releasing its unaudited results
• The AFIC (ASX:AFI) share price just hit an all-time high

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 recommended Wesfarmers 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 Webjet Limited (ASX: WEB) share price dipped into negative territory in Monday’s session following news of an extended lockdown in Australia’s 3rd most populous state.

At market close, the online travel agent’s shares finished down 0.40% to $4.99.

COVID-19 lockdown weighing down Webjet shares

A catalyst for Webjet shares edging lower could be the resurgence of COVID-19 cases across the east coast of Australia.

According to ABC News, the Queensland government has extended the state’s current lockdown until 4pm on Sunday 8 August. This comes as the state recorded 13 new local COVID-19 cases. Contact tracing is underway for various locations around the state’s southeast.

Meantime, New South Wales is battling its own COVID-19 problems, reporting 207 new local infections today. Most worryingly, it appears the virus’s Delta strain is spreading within communities.

The developments have impacted Webjet shares of late as state governments enforce hard border lockdowns. New South Wales isn’t expected to lift restrictions until sometime in September and that could possibly be further extended.

Fortunately, Webjet still has substantial cash reserves to survive the ongoing crisis that’s put the travel industry into a tailspin.

At its most recent update on 19 May, the company had a strong capital position. Pro forma cash stood at $431 million, with an average cash burn rate of around $5.5 million per month. This gives the company the ability to weather the unpredictable nature of COVID-19 for the next 6.5 years without raising additional capital.

Nonetheless, Webjet will be hoping for a quick recovery in Queensland and New South Wales. The travel sector had begun to slowly pick up in domestic markets. Also, New Zealand previously offering quarantine-free travel to Australians provided a short-lived boost to limited international travel.

The company is expected to release its financial results for FY21 on 18 August 2021.

Webjet share price summary

During the last 12 months, Webjet shares have accelerated by more than 76% since hitting near COVID-19 lows. The company’s share price has gradually been trending upwards trend but is still a long way off 2019 levels.

Currently, the company’s share price is sitting just above the middle of its 52-week range of $2.63 to $6.33.

Based on valuation grounds, Webjet has a market capitalisation of around $1.89 billion, with approximately 379 million shares outstanding.

The post Webjet (ASX:WEB) share price slumps on extended QLD lockdown appeared first on The Motley Fool Australia.

More reading

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• The Qantas (ASX:QAN) share price gained 3% on Tuesday morning
• Webjet (ASX:WEB) share price weakens as COVID cases continue
• These are the 10 most shorted ASX shares

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 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 Seven West Media Ltd (ASX: SWM) share price is heading for the top of the podium. With most of Australia in or recently out of lockdown, ratings for the Tokyo Olympics are through the roof.

By the close of trade, shares in the diversified media company were selling for 49.5 cents each – up 5.32%. The ASX All Ordinaries Index (ASX: XAO) is 1.19% higher for context.

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

And the winner is…Channel 7!

A recent article in industry publication TV Tonight says Network 7 has captured a 50% market share during the first weeks of the Olympics. In fact, compared to the last Olympics in 2016, Seven’s audience is up across the 5 major metro markets by a whopping 59%.

It’s not just Olympic events that are doing well for Seven. Audience figures for the evening quiz show ‘The Chase’, is averaging 742,000. Breakfast news show ‘Sunrise’ is dominating during weekdays and on weekends too.

The Australian reports the glow of the Olympics is spilling over into Seven’s digital platforms. A recent article says streaming figures for the quadrennial event are the “largest in Australia’s history”.

Seven West Media chief digital officer, Gereurd Roberts, said

If we compare this to the previous biggest day in Australian streaming history, that was in July (State of Origin, game three) and that was 86 million minutes and we delivered 363 million minutes last Sunday (July 25).

The biggest day for the Rio Olympics was 36 million minutes.

He added

It’s absolutely surpassed everyone’s expectations from a 7plus and a streaming perspective, after just a week.

These astronomical figures may be piquing the interest of investors judging by the rise in the Seven West share price.

So why are ratings (and the Seven West share price) up?

There are two factors that go some way in possibly explaining why Seven’s audience figures are surpassing even the last Olympics.

The first is lockdown.

Most of the country is either in, or has recently come out of, stay-at-home orders. The largest metro market, Sydney, is in the middle of a 9-week lockdown that may be extended even further. With people at home avoiding coronavirus and with nothing else to do, the Olympics are a very enticing proposition.

Roberts concedes as much to The Australian.

Clearly what’s happened in terms of lockdowns … absolutely that’s something that’s helped with numbers and viewership and that makes this Olympics even more important to deliver.

The second reason? Australia is winning a lot of gold medals.

Currently, Australia is coming fourth on the Olympics medal tally with 14 gold, 3 silver, and 14 bronze medallions. 5 years ago, Australia finished tenth in the rankings with only 8 gold, 11 silver, and 10 bronze. Viewers may want to bask in the radiance of Australia’s winning ways.

Seven West share price snapshot

Over the past 12 months, the Seven West share price has increased 395%. Year-to-date it is up 37.5%.

The 52-week high is 59 cents per share and the low is 9.9 cents a share.

Seven West Media has a market capitalisation of around $723 million.

The post Seven West (ASX:SWM) share price rallies on “record” Olympics ratings appeared first on The Motley Fool Australia.

More reading

• 2 top ASX shares to buy according to WAM
• Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy

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 iron ore price tumbled into bear market territory and it’s the Fortescue Metals Group Limited (ASX: FMG) share price that’s feeling most of the heat.

The price of the steel making mineral plunged 7.4% to US$181.57 a tonne on Friday, reported the Australian Financial Review.

This puts it firmly in a bear market as it has fallen 23.5% from its record high in May of US$237.57 a tonne. The technical definition of a bear market is a peak-to-trough fall of 20% or more.  

Iron ore bear market mauls Fortescue and friends

This is why the ASX iron ore majors are underperforming today. The Fortescue share price lost 2.1% to $24.40 at the time of writing.

The BHP Group Ltd (ASX: BHP) share price and Rio Tinto Limited (ASX: RIO) share price also lagged the market. But BHP inched up 0.2% to $53.62 and Rio Tinto is flat at $133.41.

In contrast, the S&P/ASX 200 Index (Index:^AXJO) jumped 1.4% to a new record high of 7,492 points ahead of the close.

The sell-off in the Fortescue share price comes even as the miner is speculated to declare a bumper dividend this month.

Why the Fortescue share price is worse affected

Fortescue is regarded as the marginal player among the majors as its earnings are more leveraged to the iron ore price. This is one reason why it’s lagging the group.

Another reason is the risk that its lower quality iron ore export will decline more than higher purity ore from its bigger brothers.

The latest sell-off in the commodity is driven by China’s campaign to limit steel production to curb emissions.

Chinese steel output finally falling

The Chinese government had limited success in persuading its steel mills from cutting production. But its persistence may be paying off.

While steel output climbed 12% in the first half of calendar 2021, the AFR quoted Bloomberg as saying that the daily crude-steel output at major mills fell 5.6% in the first 10 days of July from June. This followed a drop a similar decline in June.

“The world’s fourth-largest steel producer, Shagang Group, said last week that it would curtail production and overseas sales to comply with government efforts to cut emissions,” said the AFR.

“Additionally, Chinese steel mills have reportedly resold contracted iron ore volume back to the market, according to S&P Global Platts.”

Volatility hangs over Fortescue share price

If Chinese steel producers are going to limit output, they may favour higher quality ore over what Fortescue sells.

This is because higher grade ore requires less coking coal. The price of coal has also surged along with most commodities, so it could be more economical for mills to use iron ore with less impurities.

However, experts warn that we won’t know for sure until the price volatility afflicting the commodity market subsides.

And that could take weeks.

The post Fortescue (ASX:FMG) share price under most pressure as iron ore crashes to bear market appeared first on The Motley Fool Australia.

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• The Fortescue (ASX:FMG) share price is falling on Monday
• Why Fortescue, Over The Wire, Pro Medicus, & Whispir shares are dropping
• ASX 200 midday update: Afterpay to be acquired by Square, Oil Search to merge with Santos
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The Novonix Ltd (ASX: NVX) share price has soared 10% in today’s trading session.

The most immediate catalyst that could explain today’s bullish price action can be traced back to late last week.

The battery materials and technology company released its quarterly report last Friday which initially saw shares in the company get sold down.

However, investors seem to have changed their tune after digesting the company’s report over the weekend.

Novonix share price recovers following quarterly report

Novonix released its quarterly activities and cash flow report to the market last Friday.

Initially, the company’s report was greeted with investors selling down shares in Novonix.

However, Novonix also provided investors with a recap of its recent notable milestones.

In particular, the company highlighted the purchase of its new facility in Chattanooga, Tennessee. Novonix noted the new facility will provide the company with 400,000 square feet of additional space, boosting production by more than 8,000 tonnes of anode material each year.

Novonix also highlighted strong revenue growth and expansion of hardware sales and service offerings for the quarter.

The company noted $2.03 million in receipts from customers, compared to $1.28 million in the prior quarter.

As of 30 June 2021, Novonix also reported a cash balance of $136.6 million.

More on Novonix

Novonix develops and commercialises high-performance materials, equipment, and services for the lithium-ion battery industry.

According to the company, Novonix is the only qualified US-based supplier of battery-grade synthetic graphite anode material.

The company is mainly focused on electric vehicle and energy storage applications that require long life and high performance.

Snapshot of the Novonix share price

The Novonix share price has enjoyed a strong year thus far. Including today’s price action, shares in the company have soared more than 134% since the start of 2021.

Novonix shares hit an all-time high of $4.23 in late January following a promising quarterly update. Since then the company’s share price has been rather volatile, trading in a wide range.

However, July was a promising month for the Novonix share price. It followed the company announcing plans in late June to purchase a second facility.

At market close on Monday, the Novonix share price finished the session nearly 10% higher at $2.83, just shy of its intra-day high of $2.86.

The post Here’s why the Novonix (ASX:NVX) share price stormed 10% higher today appeared first on The Motley Fool Australia.

More reading

• Why the Novonix (ASX:NVX) share price is up 21% in a month
• Australian Strategic Materials (ASX:ASM) share price stilled by trading halt
• Why the Novonix (ASX:NVX) share price rocketed 16% today

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. 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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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:

• Zip Co Ltd (ASX: Z1P) remains the most shorted share on the ASX with short interest of 11.7%. This was a sizeable increase week on week. Short sellers have been increasing their positions since rumours emerged claiming that Apple is planning to enter the BNPL market. Though, BNPL M&A activity today could give short sellers something to think about.
• Webjet Limited (ASX: WEB) has seen its short interest rise to 11.5%. This online travel agent’s shares continue to attract short sellers following the announcement of lockdowns across Australia. The latest being in the popular tourist destination of Queensland.
• Kogan.com Ltd (ASX: KGN) has short interest of 10.25%, which is up significantly week on week. Short sellers aren’t giving up on this one despite lockdowns potentially boosting sales and helping the company work through its excess inventory.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest ease slightly to 10%. Concerns over the travel market recovery continue to weigh on this travel agent’s shares.
• Inghams Group Ltd (ASX: ING) has 8.4% of its shares held short, which is up slightly week on week. The market is eagerly anticipating details over a major contract renewal with a supermarket giant. The latest contract is due to end in a few weeks.
• Electro Optic Systems Hldg Ltd (ASX: EOS) has 8.3 of its shares held short, which is up materially week on week. Short sellers appear to be targeting this communications, defence, and space company’s shares due to cash flow concerns.
• Tassal Group Limited (ASX: TGR) has short interest of 8.1%, which is up week on week. Weak salmon prices have been weighing on investor sentiment. Though, Goldman Sachs expects them to improve in FY 2022.
• A2 Milk Company Ltd (ASX: A2M) has seen its short interest rise to 7%. This infant formula company’s shares have been hammered this year following countless guidance downgrades and concerns over potential regulatory changes in China.
• PolyNovo Ltd (ASX: PNV) is back in the top ten with short interest of 6.7%. A weak finish to FY 2021 has been weighing heavily on this medical device company’s shares.
• InvoCare Limited (ASX: IVC) has also returned to the top ten with short interest of 6.5%. There are concerns that this funerals company is losing market share despite its significant investment in its Protect and Grow strategy and acquisitions.

The post These are the 10 most shorted ASX shares 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. owns shares of and has recommended Electro Optic Systems Holdings Limited, Kogan.com ltd, POLYNOVO FPO 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 A2 Milk, Flight Centre Travel Group Limited, and InvoCare 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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