The Beach Energy Ltd (ASX: BPT) share price is wobbly today after the company released its quarterly results this morning.

Beach Energy shares have slipped from their opening price of $1.265 and are currently trading at the previous close of $1.25 apiece.

Let’s comb through the oil and gas producer’s results in finer detail.

Beach’s fourth quarter results

Beach Energy recorded fourth quarter sales revenue of $421 million, which grew 7% from the previous quarter.

The company said this was largely due to a 10% higher realised price of oil at $99.7 per barrel.

Fourth quarter production was 5.96 million barrels of oil equivalent (MMboe), a slight decrease from the third quarter production of 5.99 MMboe.

In addition, the company reported sales volume of 6.44 MMboe, an increase of ~4% quarter on quarter.

These results contributed to a full-year production of 25.63 MMboe and full-year sales revenue of $1.52 billion.

The company also provided some colour on its FY 2021 guidance.

Beach forecasts FY21 production in the ranges of 25.2 – 25.7 MMboe, in line with previous estimates.

Beach also sees underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $850 – $900 million, which sits “at the top end of guidance”, according to the company.

Additional takeouts from the report

Additional takeouts from the report include an update on its Western Flank review, which played havoc on the company’s share price back in April.

Referencing the review, Beach Energy managing director and chief executive Matt Kay said:

In the Western Flank, following the April reserves downgrade, we have completed a thorough subsurface review and our attention turns to the recommencement of drilling activities, beginning with oil development and gas exploration wells, with an oil exploration program expected to follow.

The company also made progress on several emissions-targeting projects throughout the quarter, according to Kay:

Our emissions reduction program is progressing well, including the installation of a new mercury removal unit at the Otway Gas Plant… Additionally, the proposed Moomba Carbon Capture and Storage Project also took a step forward, receiving a $15 million commitment from the Commonwealth Government.

Beach will release its full year audited results in 16 August 2021, where FY 2022 guidance will also be provided.

Beach Energy share price snapshot

The Beach Energy share price has had a choppy year to date, posting a loss of 30% since January 1.

This has extended the loss of 15.5% incurred over the previous 12 months.

For comparison, the S&P / ASX 200 Index (ASX: XJO) has climbed 19% over this same time period.

At the time of writing, Beach Energy has a market capitalisation of $2.85 billion.

The post The Beach Energy (ASX:BPT) share price wobbles after quarterly update appeared first on The Motley Fool Australia.

More reading

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• Here’s why the Beach Energy (ASX:BPT) share price is in the red today
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• ASX energy shares on watch after oil prices sink 8%
• 5 things to watch on the ASX 200 on Tuesday

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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The PointsBet Holdings Ltd (ASX: PBH) share price is pushing higher on Wednesday.

In late morning trade, the sports betting company’s shares are up 3% to $12.05.

Why is the PointsBet share price pushing higher?

The rise in the PointsBet share price appears to have been driven by a leading broker’s positive reaction to its announcement on Tuesday.

In case you missed it, PointsBet has entered into an exclusive agreement with Cliff Castle Casino Hotel to pursue online sports betting market access in the US state of Arizona.

PointsBet USA’s CEO, Johnny Aitken, commented: “PointsBet is thrilled to begin the process toward offering the passionate, sports-loving communities of Arizona a fast and differentiated sports betting product across every customer touchpoint.”

“We look forward to quickly and responsibly introducing sports bettors and fans to the competitive advantages PointsBet possesses in owning our technology end-to-end, such as market-leading ease of use and the deepest slate of betting options available in the world,” he added.

Broker response

Analysts at Goldman Sachs were pleased with the news and have reiterated their buy rating and $17.20 price target on the company’s shares.

Based on the latest PointsBet share price, this implies potential upside of almost 43% over the next 12 months.

Goldman commented: “We see today’s announcement as another incremental positive for PBH following its recent market access agreement in the state of Maryland and positioning for the Canadian sports betting market. With the addition of Maryland, PBH now has direct market access to 16 states in the US (18 including untethered states), placing it on track for its target of being operational in 18 US states by the end of CY22.”

The broker notes that Arizona is the 14th most populous state in the US, making up ~2% of the US population. Based on this, it considers Arizona a tier 2 state and estimates that it offers a total addressable market of ~US$0.8 billion at maturity.

The post PointsBet (ASX:PBH) share price rises on bullish broker note 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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Investors are caught between whether inflation will sharply rise or remain subdued. The unknown factor has led to some volatility in the S&P/ASX 200 Index (ASX: XJO) over recent months.

While central banks point to any high inflation environment being transitory, not everyone believes that to be the case. As a result, there are already highly regarded fund managers adjusting for inflationary pressures.

So, what are some of the experts doing to combat a potential inflation headwind?

Magellan not one to be complacent

Yesterday, Magellan Financial Group Ltd (ASX: MFG) released its third annual edition of InReview magazine. Within the publication, Chief Investment Officer Hamish Douglass discussed the risk of inflation on global equities.

Douglass explained that while the fund tends to agree with central banks, there remains a meaningful risk. Commenting on the matter Mr Douglass said:

Even if you believe that inflationary pressures are more likely to be temporary, the most important question to ask is what happens if inflation pressures are not temporary. If central banks were forced to tighten monetary policy by reducing, or ending, asset purchases and increasing interest rates, we could witness a major correction in equity and other asset markets.

Consequently, the fund has taken action to make the Global Equity portfolio more resilient to such inflation woes.

According to the Magellan Global Equities Fund annual review, the portfolio has been constructed to consider the near-term risk of inflation. For example, the fund is comprised of 15% consumer staples (Nestle, PepsiCo, Procter & Gamble); 11% regulated US utilities and communications infrastructure (Crown Castle International, Eversource Energy, Xcel Energy); and 7% franchise-model restaurants (McDonald’s and Yum! Brands).

Disciplined value approach to fighting inflation

Another fund manager remaining vigilant of inflation risks is Bell Asset Management. In a release on Monday, Chief Investment Officer Ned Bell said:

Not having exposure to the extreme growth end of the market, because of our valuation discipline, has meant a slight drag on performance. However, going into an inflationary environment where very expensive stocks get beaten up will mean we’ll go from a headwind to a tailwind.

This was in relation to the fund’s bullish view towards a recovery in small and mid (SMID) market capitalisation stocks. Bell Asset Management takes a fundamental bottom-up approach for its Bell Global Emerging Companies Fund. Based on its June monthly report, the fund’s top 5 holdings included Rightmove plc, CGI Inc, Ritchie Bros Auct, and Euronext NV.

The post How these 2 fund managers have positioned their portfolios for inflation appeared first on The Motley Fool Australia.

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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 Lendlease Group (ASX: LLC) share price is climbing during morning trade following the sale of its Services business.

At the time of writing, the international property and infrastructure company’s shares are up 2% to $11.66.

Lendlease moves ahead with sale

Investors are buying Lendlease shares after digesting the company’s latest news to the ASX.

According to its release, Lendlease entered into an agreement with Service Stream Ltd (ASX: SSM) to offload its Services business.

Founded in 1996, Service Stream is Australia’s leading provider of essential network services. This includes the design, construction, operation, and maintenance of fixed, wireless and broadband services for utility and telecommunications asset owners.

The deal, which is subject to conditions including client and third-party consents, is valued at $310 million. Should everything run smoothly, the transaction is expected to be completed before the end of this calendar year.

The full amount of the proceeds is due to be received on completion of the sale.

Lendlease global CEO Tony Lombardo commented:

The divestment of the Services business, along with other recent divestments including the sale of the Engineering business and the US Telecommunications and Energy businesses, aligns with the Group strategy to be more focused on the areas where our competitive edge is the strongest.

The divestments, combined with recently announced changes to the organisational structure, better position the Group to deliver on our $110 billion development pipeline, continue to deliver our construction backlog and grow our investments platform in a more focused and efficient way.

About the Lendlease share price

Despite pushing ahead today, Lendlease shares haven’t been on a positive run for the year, down 10.8% year-to-date. The company’s share price has mostly travelled in circles for the past 12 months, failing to make any gains.

Lendlease commands a market capitalisation of roughly $8 billion, making it the 69th largest company on the ASX. The group also has approximately 688 million shares on its books.

The post Lendlease (ASX:LLC) share price edges higher on divestment news 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 BHP Group Ltd (ASX: BHP) share price is climbing, up 2% in morning trade.

BHP’s share price gain comes as the wider S&P/ASX 200 Index (ASX: XJO) is also climbing strongly, up more than 1%.

But the company may be getting an added lift after news broke that it’s reportedly considering pulling the plug on its oil and gas ventures.

Amongst the largest companies on the ASX 200, the mining and resource giant has been pumping oil and gas from the ground for more than 50 years.

But with rising environmental, social and corporate governance (ESG) concerns among global investors and the long-term outlook for oil demand cloudy, BHP may be ready to turn off the crude taps…for a price.

Why BHP may sell its oil and gas assets

These days, the profits from BHP’s petroleum segment only account for about 6% of its total profits, according to RBC Capital Markets’ forecast. Iron ore makes up the lion’s share of profits, some 72%. Copper makes up most of the rest at 21%, with coal providing a slender 1% of profits.

Quoting people familiar with the matter who asked not to be identified, Bloomberg reports, “The world’s biggest miner is reviewing its petroleum business and considering options including a trade sale… BHP wants to exit while it can still get a good price for the assets, aiming to repeat a 2018 sale of its shale business to BP Plc for $10.4 billion”.

The petroleum segement is expected to earn more than US$2 billion (AU$2.7 billion) this year.

According to RBC Capital Markets analyst Tyler Broda (quoted by Bloomberg):

BHP is an outlier in the mining sector for its petroleum business and this is often cited in our investors discussions as a point of detraction. With rising ESG pressures facing the industry, but also as this business potentially enters into a re-investment phase, we can see why management might be contemplating an exit.

Broda values BHP’s petroleum business at some US$14.3 billion.

Peak oil may be here sooner than expected

BHP may be getting on the front foot with its reported petroleum asset sale plans.

A new reported from BloombergNEF, its energy data and analysis firm, states that, “Demand for gasoline and diesel to fuel cars and trucks will peak in 2027 – four years earlier than expected – as more fuel-efficient autos and increasing adoption of electric vehicles curb global consumption.”

According to the report:

Policy makers are driving the automotive market toward low-carbon options and improved fuel efficiency. Automakers and large fleet operators are also, in turn, aiming for long-term decarbonization. Fuel producers with exposure to markets like the US or Europe are poised to see sales of diesel and gasoline decline significantly from current levels over the next decade.

If oil demand is close to peaking, then BHP’s share price may benefit longer term from the company’s reported plans to get out of the oil and gas game.

BHP share price snap shot

Over the past 12 months BHP’s share price is up 29%, outpacing the 19% gains posted by the ASX 200 over that same time.

Year-to-date the BHP share price has gained 18%.

BHP pays a 4.1% dividend yield, fully franked.

The post BHP (ASX:BHP) share price climbing as miner considers selling oil assets appeared first on The Motley Fool Australia.

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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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With the S&P/ASX 200 Index (ASX: XJO) climbing to all-time highs in recent weeks, it’s harder than ever to find underpriced shares to buy.

But Airlie Funds Management investment analyst Will Granger has a strategy to make hunting for cheapies that little bit easier.

“One of the common scenarios in which we find ‘undervalued quality’ is when a great business sits within an otherwise average sector, as industry peers tend to be priced off similar multiples,” he said on the company blog.

As such, he’s turned to the real estate investment trust (REIT) sector.

“This sector, while ‘defensive’, generates an average return on equity (ROE) only in line with the broader market — at around 12%.”

And Granger reckons he’s hit the jackpot, finding a high-quality gem within that industry.

Charter Hall’s pivot into funds management 

Charter Hall Group (ASX: CHC), according to Granger, has pivoted from an old-school direct-investment REIT into more of a property funds management business.

This has triggered outperformance over its ASX real estate peers.

“One of the ASX’s top performers over the past decade has been Charter Hall (CHC), which has delivered a total shareholder return of 19% per annum since listing in 2005,” said Granger.

“The company’s funds under management (FUM) have grown at a 17% compound annual growth rate (CAGR) over the decade, and now sit at over $52 billion.”

The great news for current buyers of the ASX share is that Charter Hall’s transition is now at a point where it will “drive very strong outcomes for shareholders”.

“Scale begets scale. Charter Hall [is] one of only a handful of managers that can compete for assets greater than $1 billion in value,” Granger said.

“Wholesale capital is relatively ‘sticky’ with ~7yrs between redemption windows. This means investors can’t simply pull their money out at once, enhancing the stability of earnings.”

The property assets themselves have some of the country’s most stable tenants.

“Government account[s] for 12.5% of rental income, Woolworths Group Ltd (ASX: WOW) 6.4%, Wesfarmers Ltd (ASX: WES) 5.9%, and Coles Group Ltd (ASX: COL) 5.2%.”

Another advantage of a bigger focus on funds management is that Charter Hall is now less capital-intensive.

“For each additional dollar of FUM added to the business, the capital investment required for that dollar of FUM has fallen by ~30% in just 3 years,” said Granger.

“As a result, Charter Hall’s incremental return on equity has increased dramatically. We estimate Charter Hall’s incremental return on equity, normalised for any large one-off performance fees, to be greater than 25%.”

Charter Hall stock price looks ripe for the picking

Although Charter Hall shares currently trade at almost 35 times the price-to-earnings ratio, the forward valuation looks cheap, according to Granger.

“We estimate Charter Hall is trading on a PE multiple of 24x FY22 underlying earnings, which is in line with the ASX 200’s PE multiple excluding resources and banks,” he said.

“This is despite the business generating roughly double the average market ROE. Given the company’s strong earnings momentum, high quality of earnings, and above-market returns profile, we see this business as a great example of undervalued quality.”

Early on Wednesday morning, Charter Hall shares were trading at $15.46. They have risen 1.26% for the year, but a whopping 49.1% in the past 12 months.

The post This ASX share doubled market returns but is still cheap: expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo 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 COLESGROUP DEF SET and 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 South32 Ltd (ASX: S32) share price is on the rise in early morning trade after the company made three announcements this morning.

The metals and mining company first released a mineral resource update from its Hermosa Project. Then it announced it will face a US$728 million pre-tax impairment charge for its Illawarra Metallurgical Coal operations. Finally, South32 released a report detailing its activities over the recent quarter.

Right now, the South32 share price is $2.88 – 2.49% higher than its closing price yesterday.

Let’s start by taking a look at South32’s quarterly report.

The news driving the South32 share price

Quarterly report

Perhaps the most notable news to influence the South32 share price today is its quarterly report.

South32 has reported that Worsley Alumina, Brazil Alumina, and Australia Manganese all saw record annual production in the 2021 financial year.

Additionally, South African Manganese and Illawarra Metallurgical Coal saw respective annual production increases of 21% and 9% when compared to the 2020 financial year. Cannington saw its zinc production increase by 14% over the 12 months ended 30 June.

Additionally, Cerro Matoso saw its nickel production lift 54% in the fourth quarter of the 2021 financial year.

The company’s production of energy coal and payable nickel have dropped 19% and 16% respectively over the 12 months ended 30 June.

At the same time, its production of payable lead and silver have increased 19% and 16% respectively.

The company also benefited from higher realised prices of aluminium, domestic coal, nickel, silver, and lead. While the prices of metallurgical coal and energy coal dropped 21% and 22% respectively.

Over the quarter just been, South32 has completed its divestment of South Africa Energy Coal. It also purchased 172 million of its own shares as part of an on-market buyback.

Impairment charge

Potentially weighing on the South32 share price this morning is its announcement that its full year results for the 2021 financial year will include a pre-tax impairment charge of US$728 million.

The company says the charge is due to the impact of the New South Wales Independent Planning Commission’s refusal to approve South32’s application for Illawarra Metallurgical Coal’s Dendrobium Next Domain life extension project.

South32 is now considering its next move. That could be taking the project to the Land and Environment Court of New South Wales or submitting an alternative mine plan to the NSW Minister for Planning and Public Spaces.

The company expects to have more news on the project before the end of year.

Updated mineral resource estimate

The final news that’s likely driving the South32 share price this morning is regarding its Hermosa Project.

The company has reported an update to the Arizona-based project’s mineral resource estimate.

The updated estimate is 138 million tonnes, constituting an average of 3.82% zinc, 4.25% lead, and 81 grams per tonne of silver. Those figures equal a contained 5.3 million tonnes of zinc, 5.9 million tonnes of lead, and 360 ounces of silver.

That’s greater amounts of zinc, lead, and silver than the project’s previous mineral estimate.

However, the update has brought a 17% decrease to the estimated tonnage.

Additionally, it has reported a reduction to the estimated net smelter return cut-off grade of US$80 per dry metric tonne.

The project’s pre-feasibility study was due to be released last month but it has been delayed due to COVID-19 restrictions.

South32 share price snapshot

The South32 share price has been performing well lately.

Its shares have gained 16.6% since the beginning of 2021. They’re also 30% higher than they were this time last year.

The company has a market capitalisation of around $13.3 billion, with approximately 4.6 billion shares outstanding.

The post Here’s why the South32 (ASX:S32) share price is up today appeared first on The Motley Fool Australia.

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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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The Altium Limited (ASX: ALU) share price has come under pressure on Wednesday.

In early trade, the electronic design software company’s shares were down as much as 5% to $32.75.

The Altium share price has recovered slightly but remains down 2.5% to $33.70 at the time of writing.

Why is the Altium share price under pressure?

Investors have been selling down the Altium share price after Autodesk confirmed that it had ended takeover talks.

And while Autodesk actually announced this yesterday (Australian time), only today does it appear to have caught the eye of investors.

What has been happening?

Last month Autodesk tabled a ~$5 billion or $38.50 per share offer to acquire the company.  This was swiftly rejected by the Altium board on the belief that it undervalues its prospects.

The Altium board believes the company is well-positioned to achieve its bold growth targets over the coming years. It is aiming to more than double its revenue to US$500 million and grow its subscribers to 100,000 by 2025.

It explained: “Altium’s strong track record of setting ambitious long-term goals and achieving them, gives the Altium Board confidence in the Company’s ability to pursue its transformative strategy for the electronics industry and to achieve its 2025 financial goals. Having successfully pivoted to the cloud, Altium is now well positioned to pursue market dominance and industry transformation. The adoption of Altium’s cloud platform is transforming Altium’s business model from maintenance based subscription to capability-based SaaS subscription.”

What’s the latest?

The latest is that Autodesk has confirmed that it has ended talks with Altium.

The software giant told Reuters: “We are not commenting on matters with Altium but can confirm that acquisition discussions have ceased at this time.”

Investors appear to have been hoping that Autodesk would return with a better offer, which until recently had kept the Altium share price trading close to the original takeover approach. However, with Autodesk signalling that takeover talks are over, Altium shares are now losing support and under significant pressure.

So much so, the Altium share price is down 10% over the last five days.

The post Why the Altium (ASX:ALU) share price is sinking 5% on Wednesday 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 Altium. The Motley Fool Australia owns shares of and has recommended Altium. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Zoom Video Communications (NASDAQ: ZM) announced last Sunday a definitive agreement to acquire the contact-center specialist Five9 (NASDAQ: FIVN) in a $14.7 billion all-stock transaction.

Should investors welcome such a large deal? Let’s take a closer look.

Not a surprise

Zoom’s foray into contact centers shouldn’t surprise investors. During the company’s latest earnings call, CEO Eric Yuan had commented on potential new developments in the contact center arena. Indeed, the company can develop synergies and cross-selling opportunities with call-center capabilities it can offer to enterprise customers.

So far, Zoom had been partnering with various contact-center vendors, including Five9, to enhance its services, allowing enterprises to better manage communications with their customers.

In contrast with legacy on-premises solutions that require clients to host and manage their own call-center infrastructure, Five9 provides those capabilities via the cloud. That gives users much more flexibility to manage and scale this part of their business. And because it’s hosted in the cloud, Five9’s offering is a natural complement to Zoom’s platform.

During a conference call in March, Yuan even highlighted the seamless combination between Five9 and Zoom’s cloud-based products, so this deal makes sense. Zoom can now provide customers with an integrated solution.

In addition, the acquisition will expand Zoom’s addressable market from $62 billion to at least $86 billion, according to management. While you should take these exact estimates with a grain of salt, it’s clear Zoom’s growth opportunities will be expanding further.

About that price tag …

However, with a $14.7 billion price tag that amounts to about 31 times Five9’s trailing-12-month revenue, did Zoom pay too much?

Granted, Five9 recently reported impressive results. For instance, revenue increased 45% year over year to $138 million during the first quarter as enterprises have been migrating their legacy on-premises contact centers to the cloud. And management raised its full-year revenue outlook to $550 million (at the midpoint), which corresponds to 26% growth over 2020.

But the agreed-upon deal is already pricing in these kinds of results over many years. In addition, with increased investments to fuel its growth, Five9 recorded a net loss of $12.3 million during the last quarter, compared to $7.4 million in the prior-year period.

Interestingly, Zoom didn’t leverage its rock-solid balance sheet to finance the transaction (by the end of its fiscal 2022 first quarter, it had accumulated $4.7 billion of cash and equivalents). Instead, the companies agreed to an all-stock deal, which is a smart choice for Zoom as it takes advantage of the strong currency its stock represents.

Indeed, thanks to the company’s phenomenal performance over the last several quarters, boosted by the need for remote communications during coronavirus-induced lockdowns, Zoom stock is up more than 400% since the beginning of last year. It currently trades at a similarly high price-to-sales ratio of 32.

Looking forward

It remains to be seen how this combination will play out with Five9 and Zoom’s existing partners. In a blog post, Yuan said Zoom will still support other contact-center solutions, and I don’t see any difficulty here.

In contrast, the integration of Five9’s products with other communication platforms may be at risk as competitors might want to avoid fueling Zoom’s growth. For instance, Microsoft could prioritize the support of other contact-center providers for its Microsoft Teams platform.

In any case, considering Zoom’s history of strong execution, investors should welcome the deal, which is expected to close during the first half of next year (subject to various approval by shareholders and regulators). The combination should offer a sizable boost to Zoom’s long-term growth potential.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Should investors welcome Zoom’s $14.7 billion deal? appeared first on The Motley Fool Australia.

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Herve Blandin 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 Zoom Video Communications. The Motley Fool Australia has recommended Zoom Video Communications. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Australian Strategic Mtrls (Hldngs) Ltd (ASX: ASM) share price is surging on Wednesday, up 16.76% to $8.64.

The ASM share price entered into a trading halt on Monday, pending a “material investment into the Company’s Dubbo Project”.

On Tuesday, the company revealed a major framework agreement with a consortium of South Korean investors to fund the development of Dubbo.

What’s driving the ASM share price?

The ASM share price is rallying to record highs after the company entered into a conditional exclusive framework agreement with a consortium of South Korean investors to subscribe for a 20% equity interest stake for US$250 million (A$340 million).

Included in the agreement is the provision for a ten-year offtake agreement for up to 2,800 tonnes per annum (tpa) of neodymium-iron-boron alloy from ASM’s Korean Metals Plant.

The investing partnership will see three respected South Korean private equity firms, Cerritos Holdings Co. Ltd, Kamur Partners LLC and ACE Equity Partners LLC, establish a consortium fund to acquire the 20% stake in ASM.

Alongside private equity investors, the consortium is also expected to include strategic investment from major Korean industrial companies.

What’s the funding for?

According to today’s announcement, the funds will be used to progress the development of the Dubbo Project.

ASM has described the Dubbo Project as a “large in-ground polymetallic resource of rare earths, zirconium, niobium, hafnium, tantalum and yttrium”.

As it stands, the project has “all major approvals and licences in place” and is “ready for construction, subject to financing”.

ASM said that today’s framework agreement “represents an important contribution of financial support for the Dubbo Project”.

In addition, on 28 June, the company received conditional finance support from Export Finance Australia for $200 million of debt funding. The additional funding announcement helped push the ASM share price 2.6% higher on the day.

What did management say?

ASM Managing Director David Woodall hailed the milestone:

In opening a financing pathway for the Dubbo Project, this Agreement heralds an exciting new phase in ASM’s growth and puts us one step closer to executing our ‘mine to metal’ strategy.

We are delighted our new South Korean partners have recognised the mutual value of the strategic investment opportunity represented by our integrated manufacturing capability that offers a new, cleaner source of critical metals and alloys to a rapidly expanding market. Cementing our ties with South Korea’s advanced manufacturing sector represents an incredible opportunity to create value from our Dubbo Project

ASM share price joins the $1 billion club

If the ASM share price can hold current levels, the company will hit a $1 billion valuation for the first time on record.

The ASM share price has rallied an extraordinary 107% from $4.17 on 24 March to a record high of $8.68 on Wednesday.

From a year-to-date perspective, the company’s shares are up 34%.

The post Australian Strategic Materials (ASX:ASM) share price is surging 16% appeared first on The Motley Fool Australia.

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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. 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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