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Its been an explosive month for Fertoz Ltd (ASX: FTZ) shares, surging 240% in June to a 52-week high today.

Shares in the organic fertiliser producer shot up 31% this morning, touching a high of 19 cents apiece. At the market close today, the Fertoz share price had lost some ground and was trading at 16.5 cents, up 13.7%.

Fertoz aims to tackle the issue of high carbon emissions from agriculture through its organic rock phosphate fertiliser product. The company is currently focused on supplying the North American and Australian organic and conventional agricultural markets.

Let’s take a closer look.

What did Fertoz announce today?

In an announcement to the ASX today, Fernoz provided an update on its plans to start mining operations at its Fernie Mining Project.

The Fernie project is a large phosphate deposit located in British Columbia, Canada.

According to the release, Fertoz plans to start phosphate mining and extraction operations at Fernie in July 2021 to meet increasing customer demand.

The company said that orders and contracts through the second quarter “have again been very strong” with more than 10,000 tonnes of organic rock phosphate due for filling and delivery.

What did management say?

Fertoz sales vice-president Sean Gatin welcomed the news, saying:

It has long been Fertoz’s strategy to open and use Canadian mines to supply Canada, and focus on Montana and Mexico mines for the US market. These improved volumes will allow opening and long term mining of our leases in the Fernie area.

Fertoz share price surges in 2021

It’s been a good year so far for the Fertoz share price, which has lifted ~183% year-to-date to a 52-week high of 19 cents.

Back in March, the company announced that it had experienced a “record start to 2021”, seeing strong demand from North America, Australia and Philippines markets.

The post Up 240% in June, the Fertoz (ASX:FTZ) share price hit a 52-week high today appeared first on The Motley Fool Australia.

More reading

• These 2 high-yielding ASX dividend shares are rated as buys by brokers
• FANG+ ETF (ASX:FANG) tumbles 10% on ex-dividend day
• Is this why the Appen (ASX:APX) share price is sinking 5% today?
• Top brokers tip Bapcor (ASX:BAP) share price to race higher
• BNPL provider Sezzle (ASX:SZL) partners with US media giant

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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Some ASX shares with high dividend yields are rated as buys by brokers.

Dividend shares are in higher demand these days with the official Reserve Bank of Australia (RBA) cash rate at almost 0%.

The below two businesses have picked by brokers as buys that also have higher yields:

Charter Hall Long WALE REIT (ASX: CLW)

This is a real estate investment trust (REIT) that is managed by Charter Hall Group (ASX: CHC). The aim of the REIT is to have a portfolio of properties that have long rental lease contracts. At the latest update, the REIT had a weighted average lease expiry (WALE) of 13.8 years after announcing some acquisitions last month.

Those acquisitions, which included two ATO buildings, increased the occupancy rate to 97.7% and the weighted average rent review (WARR) to 2.3%.

After the acquisitions, 31% of the ASX dividend share’s portfolio is long WALE retail, 22% is industrial, 27% is office, 16% is social infrastructure and 5% is agri-logistics. Those properties are spread right across Australia, as well as a small amount in New Zealand.

Some of the major tenants include Australian government entities, Telstra Corporation Ltd (ASX: TLS), BP, Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL), David Jones and Metcash Limited (ASX: MTS).

Charter Hall Long WALE REIT has increased its distribution each year since it listed in 2016, including through the COVID-19 year of 2020.

It’s currently rated as a buy by Citi, which believes that Charter Hall Long WALE REIT will pay a distribution yield of 6.3%.

Inghams Group Ltd (ASX: ING)

Inghams is a large poultry business. In the first six months of FY21, its group core poultry volume was 224.6kt (up 4%).

The company recently increased its profit guidance because of its operating performance. It’s now expecting underlying earnings before interest, tax, depreciation and amortisation (EBITDA) (pre AASB16) to be in a range of $203 million to $213 million. Underlying net profit after tax (NPAT) (pre AASB16) is expected to be between $96 million to $103 million.

In the FY21 half-year result it said that its underlying EBITDA (pre AASB 16) was up 9.8% to $100.7 million and underlying net profit was up 10.7% to $46.5 million.

In terms of the dividend, Inghams increased it by 2.7% to 7.5 cents per share in the half-year result. Citi also rates Inghams as a buy, it’s expecting Inghams to pay a grossed-up dividend yield of 6.1%.

The ASX dividend share’s board recently revised its dividend policy payout ratio to between 60% to 80% of underlying net profit.

Inghams said it will continue to focus on the execution of its five-year strategy to deliver more consistent, predictable and reliable returns to shareholders.

The company said the net impact of lower feed prices is expected to be modest in the second half of FY21, given the recent surge in international demand and its customer cost pass through mechanisms.

There is ongoing volatility remaining because of COVID-19 and the potential re-opening of some Australian export markets.

According to Citi, the Inghams share price is valued at 18x FY21’s estimated earnings.

The post These 2 high-yielding ASX dividend shares are rated as buys by brokers appeared first on The Motley Fool Australia.

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• Why Life360, Paradigm, Sayona Mining, & Telstra shares are charging higher
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• How the Endeavour (ASX:EDV) share price has performed so far
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Motley Fool contributor Tristan Harrison 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 Telstra Corporation 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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Investors of the ETFS FANG+ ETF (ASX: FANG) might be wondering what in the world of stocks is going on today.

The Australian listed exchange-traded fund (ETF) has fallen a steep 10%, prompting an eyebrow raise.

FANG+ ETF unit price falls

For those less familiar, the FANG+ ETF is a highly concentrated fund tracking a basket of US shares known as the FANG+ stocks.

Essentially it’s the old ‘FAANG’ faces with a few new friends. Most would know the usual suspects… Facebook, Inc. (NASDAQ: FB), Amazon.com, Inc. (NASDAQ: AMZN), Apple Inc (NASDAQ: AAPL), Netflix Inc (NASDAQ: NFLX), and Google parent company Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG). This tradeable fund throws in 5 more tantalising tech names, such as Tesla Inc (NASDAQ: TSLA) and NVIDIA Corporation (NASDAQ: NVDA).

Considering there wasn’t a major selloff in tech companies overnight, investors might be scratching their heads as the ETF drops. Well, the reason for the unit price falling today is the ETF going ex-dividend with a big capital distribution inbound.

The ex-dividend date is the cut-off date to receive the next dividend/distribution. With FANG+ ETF’s ex-div date being today, investors can take their money elsewhere and still collect the fund’s next payment. However, the fall in the unit price is a little more complicated.

Bigger distribution estimate

While some of the drop in the ETF price might be attributable to investors selling, a big contributor is a decrease in the fund’s net asset value (NAV).

Because the FANG+ targets an equal-weighting of each stock, ETF Securities needed to rebalance the fund by selling down some positions during the period. These capital gains are then passed onto investors via the fund’s regular distributions.

According to today’s update, the fund has revised its distribution estimate from $1.47 to $2.15 per unit — roughly a 46% increase. The higher payment is due to greater than expected capital gains during the period.

Furthermore, the capital to be returned to investors is built into the NAV. Therefore, with $2.15 per unit expected to be paid out, the ETF’s NAV has fallen to match the new NAV.

We reached out to ETF Securities for more insight. The fund’s Head of Distributions, Kanish Chugh said:

The distribution FANG is paying out is primarily from the realized capital gains generated during the financial year. Holders of FANG prior to the 30 June 2021 will receive this distribution on the payment date of 15 July 2021, either in the form of cash or new units if you’ve opted into the DRP.

Market beating returns

Despite the price pullback, the ETFS FANG+ ETF is still outperforming both the NASDAQ Composite Index (NASDAQ: IXIC) and the S&P/ASX 200 Index (ASX: XJO).

In the past year, the FANG-focused ETF rallied 55.8%. Meanwhile, the tech-heavy NASDAQ climbed 44.4%… returns were even lesser-so for the ASX 200, at 24.6%.

The post FANG+ ETF (ASX:FANG) tumbles 10% on ex-dividend day appeared first on The Motley Fool Australia.

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• How Tyler Winklevoss plans to go green with Bitcoin
• This ethical ASX ETF has doubled the ASX 200 in 2021 so far
• Is your money safe in Commonwealth Bank (ASX:CBA) shares right now?
• ASX 200 up 0.5%: Telstra asset sale, AGL demerger, Nuix crashes again

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Mitchell Lawler owns shares of Apple and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Facebook, NVIDIA, Netflix, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon, long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Facebook, NVIDIA, and Netflix. 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 Appen Ltd (ASX: APX) share price is ending the month on a disappointing note.

In late afternoon trade, the artificial intelligence data services company’s shares are down 5% to $13.60.

This latest decline means that the Appen share price is now down 47% since the start of the year.

Why is the Appen share price sinking today?

With no news out of the company, the decline in the Appen share price appears likely to be related to today’s date – 30 June.

As today is the final day of the tax year, investors will often do some tax-loss selling. This involves selling shares that have incurred a capital loss, which may then offset capital gains that have been realised throughout the financial year.

And given how poorly the Appen share price has performed this year, it certainly would be a candidate for this practice.

Is this a buying opportunity?

While opinion remains largely divided on the company, one leading broker that sees value in the Appen share price is Ord Minnett.

In response to its reorganisation update last month, the broker has put a buy rating and $24.75 price target on its shares. This price target implies potential upside of almost 82% over the next 12 months.

According to the note, the broker is pleased with its plans and expects the changes to lead to more clarity on the drivers of its growth.

In addition to this, Ord Minnett notes that Appen has reaffirmed its earnings guidance for FY 2021. And while this comes with a sizeable second half skew, it appears quietly confident the resumption of some deferred projects will help it get there.

All in all, while the last 12 months have been very disappointing for Appen shareholders, the broker appears to believe the next 12 months will be a different story.

The post Is this why the Appen (ASX:APX) share price is sinking 5% today? appeared first on The Motley Fool Australia.

More reading

• Which ASX 200 shares are standing tall after today’s volatile session?
• 2 beaten down ASX 200 shares that could be buys
• 5 things to watch on the ASX 200 on Wednesday
• Up 22% in a month: Is the Appen (ASX:APX) share price heading even higher?
• Why Appen, Orocobre, Sandfire, & Whitehaven Coal shares are sinking

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 Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen 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 Bapcor Ltd (ASX: BAP) share price is pushing higher again on Wednesday.

In afternoon trade, the auto parts retailer and distributor’s shares are up 1.5% to $8.51.

This means the Bapcor share price is now up 44% over the last 12 months.

Why is the Bapcor share price pushing higher?

Investors have been bidding the Bapcor share price higher today after brokers responded positively to its strategy update earlier this week.

That update revealed that Bapcor wants to open more than 694 new stores over the next five years. This includes growing its footprint in Thailand to at least 60 stores over the period. This will be up from six stores at present. Management expects this to help Bapcor grow its total turnover in Asia to $500 million annually

What did brokers say?

Two brokers that are bullish on the Bapcor share price are Citi and Morgan Stanley. In response to its update, they have held firm with their equivalent of buy ratings.

Citi has also lifted its price target to $9.55, whereas Morgan Stanley has held firm with its price target of $9.70.

Based on the current Bapcor share price, this implies potential upside of 12% and 14%, respectively, over the next 12 months.

Citi commented: “Our key takeaway from Bapcor’s strategic update was the company has an abundance of medium to long term growth opportunities which should help it grow in FY22 as it cycles favourable changes to consumer mobility and retail conditions. The key growth drivers include i) rollout within Trade and Retail, ii) private label expansion, iii) international rollout supported by its Thailand JV and recent acquisition of a 25% stake in Tye Soon, and iv) expansion of its Specialist Wholesale business.”

Overall, the broker is confident that Bapcor can deliver solid earnings and dividend growth over its forecast period.

The post Top brokers tip Bapcor (ASX:BAP) share price to race higher appeared first on The Motley Fool Australia.

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• 2 ASX shares that are rapidly growing
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• Fund managers are buying these ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. 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 Sezzle Inc (ASX: SZL) share price is down despite the company announcing a new partnership with US media behemoth Barstool Sports.

At the time of writing, shares in the buy now, pay later (BNPL) provider are trading for $8.96 – down 0.5%. For context, the S&P/ASX 200 Index (ASX: XJO) is 0.61% higher.

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

Sezzle shares down despite Barstool deal

In a statement late last night, the Afterpay Ltd (ASX: APT) rival declared it and Barstool Sports, creator of podcast shows such as ‘Call Her Daddy’ and ‘The Dave Portnoy Show’, would become partners.

Sezzle will undertake marketing promotions to Barstool audiences, including sponsoring many of its shows.

“We chose Sezzle because they are not simply a payments company but a marketing organization that speaks the language of our fans,” said Barstool CRO Deirdre Lester.

“Sezzle is an ideal partner for Barstool and is taking a 360 approach in reaching our audience.”

“They provide a highly rated payments solution for our e-commerce business as well as reaching fans across several of our marquee brands and shows.”

More than 70% of Sezzle users are millennials or from generation Z, according to the company. Barstool believes there’s enough overlap between their markets to warrant the partnership.

Despite the news, Sezzle shares are not ‘sizzling’ on the share market.

Management commentary

Sezzle CEO Charlie Youakim said of the news:

Barstool Sports is a brand that epitomizes consumerism of the new generation. At Sezzle, we actively promote product innovation that reaches the needs of young shoppers.

Whether through credit-building or purpose-driven marketing campaigns, we understand and appreciate that shoppers today look for authenticity in the brands they love. Barstool Sports provides a bridge to millions of brand-loyal consumers looking to redefine payments.

Sezzle shares snapshot

Over the past 12 months, Sezzle shares have increased in value by 138%. Of all BNPL providers listed on the ASX with a market capitalisation above $200 million, Sezzle has seen the greatest return on investment for shareholders in that time.

Sezzle’s market cap is approximately $925 million.

The post BNPL provider Sezzle (ASX:SZL) partners with US media giant appeared first on The Motley Fool Australia.

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• Are Zip (ASX:Z1P) shares cheap enough to buy now?
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• Top brokers name 3 ASX shares to buy next week
• Why is Sezzle outperforming the Zip (ASX:Z1P) share price so far in 2021

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Sezzle Inc. The Motley Fool Australia has recommended Sezzle Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in Marley Spoon AG (ASX: MMM) have had a bumper month of June, up a whopping 32%.

Despite no fresh news from the company, investors have added another 6.38% today, lifting the Marley Spoon share price to $3.17.

Marley Spoon is a subscription-based meal kit company, delivering fresh ingredients and recipes directly to consumers.

Let’s take a look at what might be influencing the company’s share price movement.

What’s been happening lately?

The last time Marley Spoon updated the market with price-sensitive news was back in April when the company released its first quarter results.

In that release, Marley Spoon CEO Fabian Siegel announced that user behaviour across the regions had “mostly normalised to its pre-COVID state”. He added:

While COVID-19 brought forward the structural shift online, the penetration rate of online grocery is still in its infancy.

The company highlighted first quarter FY21 revenue growth of 81% to ~$122.45, with all regions including Europe, America and Australia, experiencing a strong uplift in growth.

In this announcement, Marley Spoon upgraded its FY21 net revenue forecasts, expecting FY21 revenue to increase between 30% to 35% year-on-year.

First quarter results aside, investors might also consider these factors which could be influencing its recent rally.

Tackling supply chain challenges

Despite a strong first quarter, Siegel said that “the dramatic growth we have seen across all e-commerce verticals in 2020 has created some temporary operational challenges in logistics, labor and supply chain infrastructure in the industry”.

Fast forward to the company’s annual general meeting on 11 June, Siegel outlined the company’s continued investment in additional capacity and process improvements.

To meet customer demand, the company expanded cool room capacity at manufacturing centres in Melbourne, New Jersey, Texas and the Netherlands.

Additionally, a new manufacturing centre was launched in Perth. And major expansion projects are expected to begin in California and Sydney.

Another lockdown winner?

Monday sparked a sharp rally across a number of ‘COVID-19 winners’ including Kogan.com Ltd (ASX: KGN), Redbubble Ltd (ASX: RBL) and Temple & Webster Group Ltd (ASX: TPW).

This was possibly a result of a sweeping set of new lockdowns and border restrictions, including lockdowns across Greater Sydney and Queensland, Western Australia.

In same cases, the rally was short-lived however, with the Kogan share price sliding 7.27% on Wednesday.

While investors might have been quick to lock in profits for Kogan shares, it appears that the Marley Spoon share price is enjoying the slow burn.

The post Up 32% this month, the Marley Spoon (ASX:MMM) share price is firing again today appeared first on The Motley Fool Australia.

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• Why Core Lithium, Life360, Marley Spoon, & Metcash are storming higher
• The Marley Spoon (ASX:MMM) share price is up 20% this month
• Marley Spoon (ASX:MMM) share price jumps 9% following $20b sector forecast

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 recommended Marley Spoon AG. 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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Santos Ltd (ASX: STO) shares are edging lower on Wednesday. In late afternoon trade, the Santos share price is trading 1.11% lower at $7.13.

This comes following a report published by last night’s The Australian which highlights an Australian Government proposal to mandate a cleanup levy of 48 cents per barrel of oil equivalent (BoE) on offshore petroleum production.

Under the government proposal, originally released on 24 June, all entities with an ownership interest in a petroleum production license issued under the Offshore Petroleum and Greenhouse Gas Storage Act (2006) will be liable for the levy.

As Santos’ operations fall under this umbrella, it would be liable to pay the rate of 48 cents per BoE, shared among a string of other international and Australian oil producers such as BHP Group Ltd (ASX: BHP), Origin Energy Ltd (ASX: ORG) and Woodside Petroleum Limited (ASX: WPL). According to The Australian, it is estimated that Santos’ share of the cleanup bill would amount to around $8 million.

The impost has an expected cost of over $360 million per year for the sector, and with a total cost of up to $1 billion, many of Australia’s largest oil producers and suppliers may be up called upon for payment over the next 3 years.

At the time of writing, the Woodside share price is down by 0.22%, while Origin Energy shares are in the red by 2.59%. The BHP share price is currently trading 1.66% higher for the day so far.

Why the cleanup levy?

The Australian Government has been left footing the bill for offshore oilfield cleanups in the past.

For instance, the government absorbed the cleanup costs of the Northern Endeavour floating production storage and offtake facility and the associated Laminaria-Corallina oilfields last year. This came after the former owner, Northern Oil and Gas Australia, went into liquidation.

According to the government’s discussion paper, the initial purpose of the levy would be to fund decommissioning and remediation works in the Laminaria-Corallina oilfields. If given the go-ahead, the levy would become effective on 1 July.

The Australian reports that our biggest producers are attempting to fight the proposal with “furious lobbying between the oil and gas sector and Canberra”.

Santos share price snapshot

Including today’s slide, the Santos share price has fallen by 2.33% over the past five trading sessions.

At the current share price, Santos has a market capitalisation of around $15.02 billion and trades at a price-to-earnings ratio (P/E) of 12.84.

The Santos share price has climbed around 13% year to date, with a 12 month return of approximately 34%.

The post Santos (ASX:STO) share price slides following possible cleanup levy appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Santos (ASX:STO) share price sinks despite project update
• Oil hits 3-year high! How are ASX energy shares reacting?
• 5 things to watch on the ASX 200 on Monday
• Crude to $100 per barrel? 3 ASX 200 oil shares trading well below pre-COVID levels

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:

Life360 Inc (ASX: 360)

According to a note out of Morgan Stanley, its analysts have initiated coverage on this app maker’s shares with an overweight rating and $8.60 price target. The broker has been impressed with the company’s user base growth and feels that market under appreciates this. It has also been pleased with the company’s expansion from location tracking to solutions such as roadside assistance, ID protection, and phone insurance. The Life360 share price is fetching $6.73 this afternoon.

Nitro Software Ltd (ASX: NTO)

Another note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $3.70 price target on this document productivity company’s shares. This follows the company’s announcement of the acquisition of PDFpen. Morgan Stanley notes that this acquisition gives Nitro access to the Apple ecosystem, which bodes well for the future. The broker estimates that enterprise usage of iOS devices will increase from around 5% to 20% in the future. Nitro is currently only available on Windows. The Nitro share price is trading at $3.24 today.

Pilbara Minerals Ltd (ASX: PLS)

Analysts at Macquarie have retained their outperform rating and lifted their price target on this lithium producer’s shares to $1.60. According to the note, Pilbara Minerals’ shipments were well ahead of the broker’s expectations in the fourth quarter. In addition to this, it notes that the Ngungaju plant is being restarted earlier than it expected. This has led to an upgrade to Macquarie’s production estimates. Finally, the broker felt its recent drilling update was promising and suspects that mineral resource upgrades are coming. The Pilbara Minerals share price is trading at $1.45 today.

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

More reading

• Here are 3 of the most active ASX 200 shares today
• Why Life360, Paradigm, Sayona Mining, & Telstra shares are charging higher
• Life360 (ASX:360) share price up 206% in last 12 months
• Here are 3 ASX tech shares tipped for big things
• Up 63% this month, Australian Strategic Materials (ASX:ASM) share price rockets 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. has recommended Life360, Inc. The Motley Fool Australia has recommended Nitro Software 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 Andromeda Metals Ltd (ASX: ADN) share price is losing territory today after coming out of a trading halt. This comes after the mineral exploration company announced an update to its capital raising efforts.

During late afternoon trade, Andromeda shares are down a sizeable 15.56% to 15.2 cents.

Let’s take a closer look at what the company announced to the ASX market.

Capital raising completed

Investors have been punishing the Andromeda share price in fear of an impending shareholder dilution.

According to its release, Andromeda successfully raised $30 million (before costs) by a way of placement. The company received strong support from new and existing shareholders, with the introduction of high-quality domestic and offshore institutions.

The offer will see roughly 200 million new ordinary shares, at a price of 15 cents each, allocated to participating investors. This represents a 16.7% discount on the issued capital prior to when the company announced the placement (18 cents).

Andromeda will use the proceeds from the capital raise to fund a number of initiatives. This includes the bulk of the money going towards the Great White Project pre-construction and long lead items such as plant equipment purchases. In addition, the remaining amount will be allocated to Detailed Feasibility Studies (DFS), product development and marketing, research and exploration activities, and general working capital requirements.

Complementing the placement, Andromeda will also launch a Share Purchase Plan (SPP) to retail investors. The offer will see the company hoping to raise a further $15 million, with 100 million new shares created. The terms of the SPP will be the same conditions as the placement.

Settlement is expected to occur on Tuesday 6 July 2021, with the new shares available for trading the day after.

Andromeda’s managing director, James Marsh, commented:

The Company thanks our existing shareholders for their ongoing support and welcomes the new institutional investors to the register. The support led to demand in excess of the funds sought by the Company. Andromeda has not had to raise funds for the past two years and the equity funding, on the back of the MSI binding offtake agreement, provides the Company with the financial support it needs to complete the Great White DFS later this year, leading into construction and mining next year.

About the Andromeda share price

Adding to today woes, Andromeda shares have fallen around 45% year-to-date, but have risen 200% over the past year. The company’s share price reached a record high of 45 cents in March, before being sold off.

Andromeda presides a market capitalisation of roughly $329 million, with more than 2.1 billion shares outstanding.

The post Andromeda (ASX:ADN) share price sinks 15% on capital raising update appeared first on The Motley Fool Australia.

More reading

• Andromeda (ASX:ADN) share price slides 8% despite positive updates
• Why the Minotaur Exploration (ASX:MEP) share price is up 22% today
• Why the Andromeda Metals (ASX:ADN) share price is surging 20% today

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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