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On Monday, we discussed the then-imminent departure of the founder and long time CEO of Amazon.com, Inc. (NASDAQ: AMZN), Jeff Bezos. Monday (our time) was Mr Bezos’ last day as CEO of the company he founded back in 1994. Yes, anyone aged 27 or under has never experienced a world without an Amazon with Bezos at the helm. Amazon now has a new CEO in Andy Jassy. Mr Jassy was formerly the head of one of Amazon’s largest profit engines – Amazon Web Services (AWS).

Bezos steps back from his baby, Amazon

So with Bezos going quietly into the night (well, not entirely, he is set to stay on as company chair), what does the future of the one of the world’s largest and most dominant companies look like? That’s a question that broker eToro is trying to answer. Josh Gilbert, eToro market analyst, reckons Bezos is “handing the reins to Jassy at a critical time”. He noted that Jassy has been at Amazon for nearly as long as Bezos. Indeed, since his graduation from Harvard Business School in 1997. He also notes that Jassy was one of the architects behind AWS in the first place, and has helped it grow into “a crucial role in Amazon’s overall income… [which accounts for] 47 per cent of Amazon’s overall operating income”.

Here’s some more of what he had to say:

The company has grown from strength-to-strength, with revenues surging each year. However, this sort of growth often attracts scrutiny, which we have seen from antitrust regulators globally. The regulators’ plan is to ‘de-monopolise companies such as Amazon with the capital and power to buy any competitor that stands in its way, which Jassy will have to suppress.

Bezos’ leadership has also come under fire previously, with employees saying targets took a physical toll on their health. Jassy will undoubtedly have his work cut out in areas like these. Despite this, it’s

expected that Jassy’s softer personality could work in Amazon’s favour. I believe that Jassy will add a

character that we haven’t seen from Amazon before, making it a more friendly and appealing

company.

What can investors expect in the age of Jassy?

But what about Amazon’s legion of loyal investors? What can they expect from Amazon now that one of the world’s greatest wealth creators in Bezos is stepping back? Gilbert is equally sanguine:

The post What will Amazon (NASDAQ:AMZN) look like in a post-Bezos world? appeared first on The Motley Fool Australia.

More reading

• A turning point: Jeff Bezos steps down as Amazon (NASDAQ:AMZN) CEO
• Amazon’s biggest threat in e-commerce
• Wondering which US shares Aussies bought last quarter? Here’s the answer
• FANG+ ETF (ASX:FANG) tumbles 10% on ex-dividend day
• Tesla back on top as the most popular US share for ASX investors

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool Australia has recommended Amazon. 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a strong gain. At the time of writing, the benchmark index is up 0.8% to 7,319.9 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are tumbling lower:

Nanosonics Ltd (ASX: NAN)

The Nanosonics share price is down 4.5% to $5.14. This follows the release of a bearish broker note out of Goldman Sachs this morning. According to the note, the broker has downgraded the infection prevention company’s shares to a sell rating and cut the price target on them to $4.93. Goldman has reduced its earnings estimates due to concerns that the growth recovery may be shallower than it was previously expecting. The broker also warned that there could be competitive risks from new technologies.

Oil Search Ltd (ASX: OSH)

The Oil Search share price is down 2.5% to $3.97. Investors have been selling Oil Search and other energy producers on Wednesday following a pullback in oil prices overnight. Traders were selling oil after OPEC postponed its production meeting indefinitely following disagreements.

Opthea Ltd (ASX: OPT)

The Opthea share price is down almost 5% to $1.33. This decline appears to have been driven by profit taking after a particularly strong gain on Tuesday. The biotech company’s shot higher after its OPT-302 therapy was granted fast-track designation for wet age‑related macular degeneration by the US FDA. The regulator “fast tracks” the review of novel therapies for serious conditions for which there is an unmet medical need.

Piedmont Lithium Inc (ASX: PLL)

The Piedmont Lithium share price has sunk 7% to 94.5 cents despite there being no news out of the lithium explorer. However, this follows a similarly severe decline occurred overnight with its US listed shares. This could be due to profit taking. Especially given how its shares are up over 150% in 2021.

The post Why Nanosonics, Oil Search, Opthea, & Piedmont Lithium are tumbling appeared first on The Motley Fool Australia.

More reading

• ASX 200 up 0.55%: Challenger jumps, Nanosonics sinks
• Nanosonics (ASX:NAN) share price sinks 7% on broker downgrade
• 5 things to watch on the ASX 200 on Wednesday
• 5 worst-performing ASX 200 healthcare shares of FY21
• Why Bigtincan, Oil Search, Opthea, & Xref shares are racing higher

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 Nanosonics Limited and Piedmont Lithium Inc. The Motley Fool Australia owns shares of and has recommended Nanosonics 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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Despite some volatility, ASX shares are still trading at record highs.

So is everything just too expensive to buy now? Are there any cheapies left that are actually decent businesses?

Burman Invest chief investment officer Julia Lee certainly thinks so. She this week picked out 3 ASX shares that pique her interest:

Even cloud computing needs to live somewhere

Cloud computing has become all the rage in the past decade, but was given an extra push by the masses forced to work from home from last year.

But even the ethereal cloud needs a physical location to exist. So a data centre provider like NextDC Ltd (ASX: NXT) will continue to see strong demand, according to Lee.

“I think NextDC is looking pretty attractive at these prices,” she told Switzer TV Investing.

“What we have seen in the data storage area is that supply has been increasing. But I think that’s because we’ve seen demand increasing as well.”

Lee reckons the next financial results will show NextDC has seen a big increase in business from the COVID-19 pandemic accelerating the migration to the cloud.

“Megaport Ltd (ASX: MP1) has been doing pretty well… NextDC has a bit of catch-up to play and I’ll put a valuation of around $14 to $15 [per share].”

NextDC shares are going for $12.04 in afternoon trading Wednesday, which is 1.6% up on the day.

People will eventually fly somewhere

Qantas Airways Limited (ASX: QAN) is a value-buy ASX share for Lee at the moment.

“At these prices, if you’re looking out to 2023 it’s a bit of a no-brainer.”

While great uncertainty still looms for Qantas’ international operations, its money-making domestic business is going gangbusters already.

“If we have a look at financial year 2022, it’s predicting that Jetstar capacity will get up to 122% of pre-COVID-19 levels, and Qantas to 107%,” she said.

“When things open up again we’re probably going to see everyone rushing to try to travel, so we’ll actually see demand initially spike up quite strongly.”

The Qantas share price is down 1.02% on Wednesday afternoon, trading at $4.86. It was up in the $6s and $7s early last year.

A nice sell-off makes for a bright future

Logistics and infrastructure provider Qube Holdings Ltd (ASX: QUB) sold off its Moorebank facilities in western Sydney for $1.7 billion on Monday.

Lee reckons this is a great move for holders of this ASX share.

“I think this is a really great price. It’s a price that equates to $1.36 per share plus about 32 cents in a deferred payment.”

The types of freight that Qube helps transport are all in high demand, meaning more business for the logistics provider.

“Consumer spending is pretty strong at the moment. Not only that, commodity prices are strong… If you have a look at soft commodities — like grains and cereal —  not only is the outlook strong but prices are quite strong at the moment.”

Qube shares were up as high as $3.20 on Monday morning after the asset sale news. They’re now at $3.05 on Wednesday afternoon, currently down by 0.65% for the day so far.

The post 3 ASX shares looking pretty cheap right now: expert appeared first on The Motley Fool Australia.

More reading

• ASX travel shares slip as Sydney lockdown extends for another week
• 2 top ASX tech shares rated as buys by brokers
• 2 high quality ASX shares that could be buys
• Here are the 5 best performing ASX 200 tech shares from FY21
• Qube (ASX:QUB) share price lifts on $1.67 billion asset sale update

Motley Fool contributor Tony Yoo owns shares of Qantas Airways Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT 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 Ramsay Health Care Limited (ASX: RHC) share price is pushing higher on Wednesday.

In afternoon trade, the private hospital operator’s shares are up 1.5% to $63.83.

Why is the Ramsay share price pushing higher?

The Ramsay share price was given a boost today by a positive broker note out of Citi this morning.

In response to Ramsay increasing its takeover offer for Spire Healthcare in the UK, the broker retained its buy rating and $76.00.

Based on the current Ramsay share price, this implies potential upside of 19% excluding dividends over the next 12 months. This potential return stretches to almost 22% if you include them.

What did Citi say?

Citi notes that Ramsay has increased its offer for Spire Healthcare to 250 pence per share. This values the UK-based private healthcare company’s equity at GBP1,040 million (A$1,900 million), which is an increase of ~$75 million.

According to the note, the broker believes that for Ramsay to maintain its investment grade rating, it will need to raise somewhere in the region of $600 million to $1,000 million. However, this is already factored into its valuation.

In light of this, it is focusing on the future and suspects that a successful acquisition and integration of Spire and a recovery in healthcare demand could drive a re-rating of the Ramsay share price later this year.

Citi commented: “We previously calculated that for RHC to maintain its investment grade rating, it will need to raise ~$850m in capital (we assume a hybrid security), which we include in our forecasts. Given the variables, the final capital gap could be between $600m and $1bn.

“Our TP implies RHC should trade on FY23E (normal year) PE of ~23x. There is risk to the FY21 result given the pandemic and more recently Australian lock downs – post the August result, we believe the market will focus on the recovery phase and integration of Spire, which will result in a re-rating of the stock,” the broker concluded.

The post Ramsay (ASX:RHC) share price higher on bullish broker note appeared first on The Motley Fool Australia.

More reading

• 2 growing ASX dividend shares named as buys
• 5 worst-performing ASX 200 healthcare shares of FY21
• ASX 200 drops, Myer soars, Ramsay down
• ASX 200 up 0.2%: Westpac asset sale, Ramsay increases Spire offer
• Ramsay (ASX:RHC) share price lower on UK acquisition update

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 recommended Ramsay Health Care 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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Shares in ASX golden child Afterpay Ltd (ASX: APT) aren’t all they’re cracked up to be, according to a May report from Yarra Capital Management.

In an analysis of how its Australian Equities Fund performed during May 2021, Yarra Capital Management called out Afterpay as among its poorer performing investments, highlighting a number of causes for concern and rating it is underweight.

The fund management firm is yet to release its report on the fund’s performance in June.

Despite Yarra Capital’s “negative view”, the Afterpay share price is having a great day on the ASX today. At the time of writing, shares in the buy now, pay later (BNPL) payments provider are trading almost 5% higher at $120.35 apiece.

However, the same couldn’t be said a few months ago. Let’s take a look at why Yarra Capital went cold on Afterpay in May.

Quick refresher

The Afterpay share price fell 21% in May, despite the company releasing no price-sensitive news to the market.

May was a particularly bad month for Afterpay shares, as well as for the S&P/ASX 200 Info Tech Index (ASX: XIJ). The entire index fell by around 10% across the month.

Luckily, the Afterpay share price has gained back the ground it lost plus more. It’s now almost 30% higher than it was at May’s end.

Why did the BNPL company disappoint Yarra Capital?

According to Yarra Capital, Afterpay underperformed in May as concerns its momentum is slowing started to escalate.

The fund management firm stated the growth rate of Afterpay’s app downloads slowed over the period. This caused it to question the sustainability of Afterpay’s “attractive” margins.

Yarra Capital also noted that competition in the BNPL space has increased. Over the period, high-profile companies such as PayPal Holdings Inc (NASDAQ: PYPL) ran onto the BNPL field, potentially stealing Afterpay’s thunder.

Additionally, increased regulation in the BNPL sphere was a cause for Yarra Capital’s concern.

Finally, the fund management firm stated it believes Afterpay’s intense capital growth is underappreciated by the market.

It said Afterpay’s current model is only able to function while its enterprise value-to-sales remain high. It says Afterpay’s enterprise value-to-sales is currently at 18.2 times on a 12-month forward basis.

Afterpay share price snapshot

So far, 2021 hasn’t been great for Afterpay. In fact, many BNPL shares beat it to the cake during the 2021 financial year.

Right now, the Afterpay share price has only gained around 2% year to date. However, it has gained around 77% since this time last year.

The BNPL giant has a market capitalisation of around $35 billion, with approximately 290 million shares outstanding.

The post Is momentum slowing for the Afterpay (ASX:APT) share price? appeared first on The Motley Fool Australia.

More reading

• Why Afterpay, Challenger, MyDeal, & St Barbara shares are charging higher
• Here’s what leading brokers are saying about the Afterpay (ASX:APT) share price in July 2021
• ASX 200 up 0.55%: Challenger jumps, Nanosonics sinks
• Got Sezzle (ASX:SZL) shares? What’s in store for FY22?
• Here are the 5 best performing ASX 200 tech shares from FY21

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and PayPal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended PayPal Holdings. 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 Lake Resources N.L. (ASX: LKE) share price is on the rise today following the company’s positive announcement.

At the time of writing, the clean lithium developer’s shares are selling for 38 cents, up 2.7%.

What did Lake Resources announce?

Lake Resources shares are climbing after the company revealed that drilling is underway at its flagship Kachi Lithium Brine Project in Argentina.

According to its release, Lake Resources advised increasing drill testing will support the doubling of current lithium production capacity.

A four well, 1,600-metre diamond drill program is advancing with brine sampling and pump testing also underway. The drilling works will see Lake Resources convert Inferred Resources to Measured and Indicated (M&I) resources.

The term Inferred Resources refers to quantity, grade (quality) and mineral content that’s estimated with a low level of confidence. On the other hand, M&I Resources are regarded with a reasonable to high level of confidence based on enough samples being collected.

The upgrade in Kachi’s 4.4 megatonnes (Mt) lithium carbonate equivalent (LCE) total resource is for a Definitive Feasibility Study (DFS). In addition, a production expansion study will be executed to identify opportunities.

Lake Resources stated that less than 20% of the current total resource is being utilised for its planned 25,500 tonnes per annum LCE production over 25 years.

Lake Resources managing director Steve Promnitz commented:

Interest continues to increase among potential offtakers to secure supply, especially of a premium product with ESG benefits which Lake can produce thanks to its sustainable direct extraction process.

This drilling program will support an expansion study to double production to 50,000tpa. This would make Kachi a globally significant producer and one of a few that can bring high purity lithium carbonate to market consistently with a low carbon footprint, perfect for the needs of leading EV makers.

About the Lake Resources share price

The Lake Resources share price has accelerated in the past year, gaining more than 880%. While renewed investor sentiment within the battery industry has helped support the share price, the company has been making tailwinds.

Based on the current share price, Lake Resources commands a market capitalisation of more than $400 million.

The post Why the Lake Resources (ASX:LKE) share price is storming higher appeared first on The Motley Fool Australia.

More reading

• Lake Resources (ASX:LKE) share price on fire today up 14%

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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Woolworths Group Ltd (ASX: WOW) has been one of the more eventful ASX 200 companies in 2021, with the Woolworths share price climbing 11.3% so far this year.

At the time of writing, the Woolworths share price is trading 1.35% higher at $37.67.

To bring you up to speed, we look at what analysts are expecting from Woolworths shares next.

Broker thoughts on the Woolworths share price

While investors are shopping for a buy, some leading brokers believe Woolworths shares might be worth skipping at the checkout.

For example, analysts at Credit Suisse have downgraded the supermarket operator’s shares to an underperform rating. According to the note, the broker considers the Woolworth share price expensive at current levels, with shares trading at roughly 30 times FY22 estimated earnings.

Additionally, Credit Suisse analysts point out that the company is trading at a significant premium to its rival, Coles Group Ltd (ASX: COL). For this reason, the broker holds a $32.92 price target, representing a possible ~13% downside to the Woolworths share price.

Goldman’s take on Woolworths

Another leading broker that thinks any near-term upside is now priced in is Goldman Sachs. Just over a week ago, the broker released its updated rating after adjusting its estimates to account for the recent demerger.

As a result, Goldman downgraded the company’s shares to a neutral rating and a $36.80 price target. This would imply a potential downside of 2.4% to the Woolworths share price.

However, this estimate excludes the blue chip’s dividends. The broker’s 12-month estimated returns come to -0.1% with payments included from today’s share price.

Compared to latest close of A$37.85, our revised 12m target price of A$36.80 offers a total potential return of -0.5%. While the short-term catalyst of an off-market buyback remains in play, we are taking advantage of the current strength in WOW to downgrade to neutral.

Since we upgraded WOW to a buy rating on 7 March 2021 the share price has appreciated 14.1% prior to the demerger vs. the market up +8%

Goldman Sachs

Based on the current Woolworths share price, the supermarket giant holds around $47 billion market capitalisation.

The post Here’s what leading brokers say about the Woolworths (ASX:WOW) share price in July appeared first on The Motley Fool Australia.

More reading

• Woolworths (ASX:WOW) share price dips as experts predict growth
• These ASX shares are the latest to be hit by broker downgrades
• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• ASX blue chips set to unleash buybacks and dividends! But which is better?
• Why Lendlease, Marley Spoon, Reece, & Woolworths shares are sinking

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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

BlueScope Steel Limited (ASX: BSL)

According to a note out of Morgan Stanley, its analysts have upgraded this steel producer’s shares to an overweight rating with an improved price target of $27.00. The broker made the move on the belief that current steel spreads will lead to consensus earnings upgrades and put the company in a position to consider capital management initiatives. In response to the favourable trading conditions, Morgan Stanley has upgraded its earnings forecasts materially for the coming years. The BlueScope share price is fetching $21.49 today.

IDP Education Ltd (ASX: IEL)

A note out of UBS reveals that its analysts have retained their buy rating and lifted their price target on this language testing and student placement company’s shares to $31.60. UBS has increased its earnings estimates to reflect the acquisition of the British Council India IELTS business. In addition to this, the broker suspects that this may not be the only business the company acquires from the British Council. This could mean plenty of further earnings accretive acquisitions down the line for IDP. The IDP Education share price is trading at $29.31 this afternoon.

Universal Store Holdings Ltd (ASX: UNI)

Analysts at Macquarie have initiated coverage on this retailer’s shares with an outperform rating and $8.60 price target. According to the note, Macquarie likes Universal due to its geographic spread and further planned expansion in Australia’s two most populous states. Overall, it believes the company’s shares deserve to trade on higher multiples. Particularly given its strong growth prospects and leading position in youth apparel. The Universal Store share price is fetching $7.29 today.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• The one thing ASX IPO losers have in common
• Leading brokers name 3 ASX shares to buy today
• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• These were the best performing ASX 200 shares last week
• Why a2 Milk, Chalice Mining, IDP Education, & Imugene are charging higher

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

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The S&P/ASX 200 Index (ASX: XJO) is having a pretty robust day on the share markets so far today. At the time of writing, the ASX 200 is up 0.86% to 7,324 points. Now that’s not an all-time high for the index.

We saw the ASX 200 hit 7,400 points briefly last month if you remember. But the move might be spurring another ASX company to never-before levels today.

The Australian Foundation Investment Co.Ltd. (ASX: AFI) share price (AFIC for short) has just hit a new all-time high of $7.90 this morning. AFIC shares opened at the new high today and are slightly down at $7.88 at the time of writing. That’s still up 0.77% for the day.

AFIC share price hits all-time high

So what’s prompting AFIC to hit these new highs? Well, AFIC is a Listed Investment Company (LIC) and one of the oldest on the ASX boards at that. LICs work by holding a portfolio of shares within themselves.

Investors who buy LIC shares are therefore essentially buying into the company’s investment portfolio. It’s a listed alternative to other investment vehicles like managed funds and (more recently) exchange-traded funds.

Thus, if AFIC’s portfolio holdings rise in value, it’s supportive of a higher AFIC share price. And yesterday afternoon (after market close), the company gave us an update on its portfolio holdings. AFIC advised that its net tangible assets (NTA) per share rose over the month of June to $7.45 per share (after tax).

That’s up substantially from the $6.19 per share from the previous month. This means that for every one AFIC share, investors are buying $7.45 worth of other assets.

So what are these ‘other assets’? Well, AFIC told us that its largest current positions include Commonwealth Bank of Australia (ASX: CBA) in top place, followed by BHP Group Ltd (ASX: BHP), CSL Limited (ASX: CSL), Wesfarmers Ltd (ASX: WES) and Westpac Banking Corp (ASX: WBC).

But these top 5 holdings are complemented by dozens of other ASX shares. And with the ASX 200 index recently rising to new highs, AFIC would have had a rising tide lifting its entire portfolio (evidenced by its NTA per share growth).

It’s likely that it’s for this reason the AFIC share price is hitting its all-time high today. And it’s not the only one. Other LICs in AFIC’s mould are also on the up. Today also saw the Argo Investments Limited (ASX: ARG) share price hit an all-time high.

At the current AFIC share price, the company has a market capitalisation of $9.62 billion and a trialling dividend yield of 3.05% (or 4.36% grossed-up with AFIC’s full franking credits).

The post The AFIC (ASX:AFI) share price just hit an all-time high appeared first on The Motley Fool Australia.

More reading

• Why the A2 Milk (ASX:A2M) share price is up more than 3% today
• ASX 200 up 0.55%: Challenger jumps, Nanosonics sinks
• 5 things to watch on the ASX 200 on Wednesday
• 2 ASX 200 shares that could be buys for dividends
• 5 worst-performing ASX 200 healthcare shares of FY21

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. 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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Metalstech Ltd (ASX: MTC) shares are gaining today on news the company has completed the sale of its lithium royalties to North American company, Lithium Royalty Corp (LRC).

At the time of writing, the Metalstech share price is trading 13.04% higher than yesterday’s close at 26 cents. However, earlier today, the company’s shares jumped by more than 17% before partially retreating.

Let’s take a look at what the deal will mean for the lithium, cobalt, and future gold producer.

Metalstech share price gets a boost

More funds in the bank

The Metalstech share price is well in the green on Wednesday after the company reported it has sold 4% of its lithium royalties to Lithium Royalty Corp in exchange for $6.65 million.

Following the sale, Metalstech has $6.8 million in its coffers and can begin funding the exploration and development of its Sturec Gold Mine.

Strurec is ready for phase II of drilling and an acceleration of scoping study works is set to begin shortly.

The mine is located in Slovakia and has historically produced over $3.4 billion worth of gold and silver. That figure was adjusted for today’s metal prices.

Update on Metalstech’s spin off

Additionally, Metalstech’s plan to spin off its lithium assets into an ASX-listed entity is continuing to progress.

The company plans for its spin-off entity to be named Winsome Resources and has reserved the ASX ticker code WR1.

$9 million worth of Winsome shares will be issued for 20 cents each as part of its initial public offering (IPO).

Metalstech originally hoped to raise between $5 million and $8 million in the IPO. That amount has since increased to between $12 million and $18 million.

The company’s plan is that each holder of 3.4 Metalstech shares will receive 1 share of Winsome.

LRC will also be taking part in Winsome’s IPO, subscribing to $3 million worth of shares.  

A shareholder notice meeting for the spin off is expected to be finalised in the coming weeks.  

Metalstech share price snapshot

2021 has been a good year so far for the Metalstech share price on the ASX.

Metalstech shares are currently trading around 29% higher than they were at the beginning of the year. They have also gained more than 100% since this time last year.

The company has a market capitalisation of around $41 million, with approximately 153 million shares outstanding.

The post Here’s why the Metalstech (ASX:MTC) share price is soaring 13% today appeared first on The Motley Fool Australia.

More reading

• Here’s why the MetalsTech (ASX:MTC) share price is rocketing 11% today

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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