Tag: Motley Fool

One ASX financial stock has been savaged in the past month but that just doesn’t match up with its fundamentals.

That’s according to Cyan Investment Management portfolio manager Dean Fergie, who’s frustrated by the market’s treatment of RAIZ Invest Ltd (ASX: RZI).

Over the month of May, the micro-investment app’s shares sank 13%, from $1.53 to $1.33.

“We have been somewhat perplexed by the weakness in consumer investment platform Raiz’s share price in recent months,” Fergie said in a memo to clients. 

“Raiz’s performance is at odds with a strong underlying market and the company’s continued growth in both FUM and customer numbers.”

He could only attribute the negative sentiment to “some indigestion and associated selling” from a $10 million share placement in late April.

US version of Raiz worth $2.8 billion

Raiz allows users to round-up everyday purchases and put those cents into investments such as shares.

It was originally the Australian version of US company Acorns. The local version rebranded and became independent of its American parent in 2018.

Acorns in the US announced recently that it would list on the NASDAQ via a special-purpose acquisition company (SPAC), in a deal that values the business at about US$2.2 billion ($2.8 billion).

To Fergie, that backed up his bullishness on Raiz.

“On similar valuation metrics such as customer numbers and FUM [funds under management], would value Raiz at somewhere around AUD$4 per share or 3 times its current pricing.”

Rest of market starting to wake up

It seems other investors have woken up to what Fergie is indicating.

Raiz shares rocketed 7.14% on Wednesday morning to trade at $1.50. That’s almost a 13% pick up in the first few days of June.

This week the company revealed funds under management have reached $750 million. According to Raiz, this keeps it on track to achieve its previously stated goal of $1 billion by the end of this year.

According to The Motley Fool’s Brooke Cooper, Raiz now has 76.2% more funds under management than 12 months ago.

The post This tumbling ASX fintech should be 3 times current price: analyst appeared first on The Motley Fool Australia.

More reading

• Here’s why the Raiz (ASX:RZI) share price has gained 5% today
• How does Raiz (ASX:RZI) stack up against its old friend Acorns?
• Why the Raiz (ASX:RZI) share price is edging lower

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 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.

from The Motley Fool Australia https://ift.tt/3w7V3ZN

The Whitehaven Coal Ltd (ASX: WHC) share price is on fire today. Whitehaven shares are currently up 13.82% at the time of writing to $1.94 a share after closing at $1.84 yesterday and opening at $1.88 this morning. Since Monday morning, Whitehaven shares are now up around 10.7%. They are also up a hefty 53.5% over the past month.

So what’s going so right for Whitehaven?

Haven for coal

Well, there’s one substantial catalyst for this recent run that we can point to – coal prices. Coal is currently fetching close to US$120 a tonne, its highest price in many years, and very close to its all-time high. Coal has risen substantially over the past year or so, and even in the past month. This is likely to be contributing to Whitehaven’s strong run over the past few weeks and months.

As the Fool covered this week, we can thank strong demand from China and some scattered supply squeezes combining to push coal to its current heights. That’s despite China refusing to accept Australian coal at the current time due to the trade animosity and diplomatic disputes that have been afflicting the two countries’ bilateral relationship over the past year or so.

But this refusal of the Chinese government to accept Australian coal is only helping to distort supply chains and push coal prices higher.

Another factor that may be contributing to investors bullishness over Whitehaven could be its directors – namely one director in George Raymond Zage III. Mr Zage has recently been on a buying spree when it comes to Whitehaven shares. According to ASX notices, Mr Zage picked up just over 883,000 Whitehaven shares back in May, and another 350,000 earlier this month. He now holds roughly 10 million Whitehaven shares (worth close to $20 million on today’s pricing).

That’s arguably a pretty strong case of a director ‘putting their money where their mouth is’ when it comes to their company, and this would have likely piqued at least some investor interest. ASX investors typically love to see a company’s management team buy more shares (and hate the opposite situation), and so these actions are also a likely contributing factor to Whitehaven’s recent share price strength.

About the Whitehaven Coal share price

At the current Whitehaven Coal share price, the company has a market capitalisation of $2 billion. Even though Whitehaven has enjoyed some substantial gains in recent weeks, the company remains down around 67% from its all-time high above $7 a share that we saw back in 2011. Even so, Whitehaven is still up around 130% from its 52-week low of 85 cents.

The post Here’s why the Whitehaven Coal (ASX:WHC) share price is on fire this week appeared first on The Motley Fool Australia.

More reading

• China losing the war against these ASX shares
• These ASX coal shares shone today. What’s next?
• The Whitehaven Coal (ASX:WHC) share price gained 23% in May
• These were the best performing ASX 200 shares in May
• ASX 200 Weekly Wrap: After record high, ASX dips on inflation fears

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. 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.

from The Motley Fool Australia https://ift.tt/2TfK6Xq

The Splitit Ltd (ASX: SPT) share price has been a positive performer on Wednesday after the US-based buy now, pay later (BNPL) company announced a new partnership.

At the time of writing, the Splitit share price is 3.28% higher to 63 cents.

Splitit joins the ChargeAfter network

ChargeAfter is a network of global lenders and retailers that offers BNPL and point-of-sale financing to customers, both online and in-store. Its platform delivers the most relevant financing options to its customers at checkout from its pool of lenders based on credit type.

Through this partnership, merchants using ChargeAfter can now offer their customers Splitit services. The announcement highlights that Splitit will be the first financing-free installment payment option on the platform.

Splitit believes this will offer customers a more “flexible way to leverage the hard-earned credit on their existing credit cards to spread payments out over time”. The service also means customers can continue to earn rewards points or other benefits from their credit cards.

For merchants, Splitit says that its services help lift key spending metrics of higher-value customers. The update mentions that the company has an average order value of over $1,000, or more than four times most other BNPL alternatives.

Splitit CEO Brad Paterson commented:

Not every consumer is looking to open a new line of credit for the purchase and just want a smarter way to use the credit they have already earned. We serve this type of shopper by giving them the flexibility to use their existing credit cards to spread payments over time without additional fees.

A rough 12 months for the Splitit share price

The Splitit share price has shed more than 70% in value since its September 2020 highs of $1.93.

Most of its underperformance came about during February and March this year, when leading players such as Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) began to sell off.

The post Splitit (ASX:SPT) share price higher on BNPL network partnership appeared first on The Motley Fool Australia.

More reading

• Why the Afterpay (ASX:APT) share price is up 10% this week
• ASX 200 falls below 7,000, Xero sinks, Afterpay falls
• What’s driving the Afterpay (ASX:APT) share price to 8-month lows?
• Why is the Zip (ASX:Z1P) share price down 11% so far this month?

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

from The Motley Fool Australia https://ift.tt/3w5MfDZ

Mercury NZ Ltd (ASX: MCY) shares are down late morning after the company downgraded its guidance for the 2021 financial year. At the time of writing, the Mercury share price is 3.94% lower than yesterday’s closing – with shares in the company swapping hands for $6.09.

It’s the second time this year the New Zealand electricity supplier has dropped its earnings guidance. Today, it has been reduced by 11.5%.

The company cited dry weather, an outage at its geothermal power station, elevated wholesale prices, and its acquisition of Tilt Renewables Ltd (ASX: TLT) as reasons for the downgrade.

Let’s take a closer look at the news that might be weighing on the Mercury share price today.

New guidance

Mercury announced this morning that its expected earnings before interest, tax, depreciation, amortisation, and financial instruments (EBITDAF) has fallen.

The company now expects EBITDAF of $420 million for the 2021 financial year – down from its previous guidance of $520 million.

This is the second time this year that Mercury has dropped its guidance. In February, Mercury downgraded its 2021 financial year guidance from $535 million to $520 million.

Why Mercury’s earnings have dropped

According to Mercury, its Kawerau geothermal power station’s unplanned outage is weighing on its earnings.

The power station’s outage is said to have been caused by a mechanical failure on Monday. It is expected to be out of action for months. Mercury says it will update the market on when the Kawerau power station will be back in operation once it knows more.

Additionally, Mercury stated its EBITDAF has been hindered by Tilt Renewables’ higher associated earnings.

Previously, Mercury and AGL Energy Limited‘s (ASX: AGL) subsidiary, PowAR, were set to acquire Tilt for NZ$7.80 per share. Following the acquisition, Mercury was to operate Tilt’s New Zealand-based assets, while PowAR was to take over its Australian-based operations.

In April, following reports a Canadian pension fund had offered Tilt NZ $8.00 per share, Mercury stepped back from the acquisition and PowAR increased its offer to NZ$8.10 per share.

Now, Mercury will buy Tilt’s New Zealand-based assets from PowAR once the acquisition is complete. The workaround increased the cost of Mercury’s purchase by NZ$27 million.  

Further, dry weather in the Taupo catchment has caused Mercury’s full-year hydro generation guidance to fall by 200 gigawatt hours. Mercury now expects to generate 3,600 gigawatt hours of hydro energy this financial year.

Finally, increasing wholesale prices have added to Mercury’s woes. The company stated spot prices for the fourth quarter of the 2021 financial year to date are averaging at around $285 per megawatt hour in Auckland.

Mercury share price snapshot

The Mercury share price has not had a great run in 2021, falling 2.87% since the start of the year. However, it has still gained 35.33% since this time last year.

The electricity supplier has a market capitalisation of nearly $8.3 billion, with approximately 1.36 billion shares outstanding.

The post Mercury (ASX:MCY) share price falls after earnings downgrade appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares that brokers reckon might be dividend traps
• The AGL Energy (ASX:AGL) old dog with green new tricks
• ASX 200 Weekly Wrap: ASX hits 7,300 points for the first time
• The 10 ASX dividend shares delivering the highest yields
• AGL (ASX:AGL) may need a ~$600m capital raise to complete demerger

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.

from The Motley Fool Australia https://ift.tt/3w5rIPT

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.

In conjunction with its first-quarter earnings release, NVIDIA (NASDAQ: NVDA) revealed plans for a four-for-one stock split, with the intention of making its shares “more accessible to investors and employees.” The move was conditional on obtaining shareholder approval at the chipmaker’s 2021 annual stockholders meeting, which took place on Thursday, June 3, as it required an increase in the number of authorized shares of common stock from 2 billion to 4 billion. 

The votes have been tallied, and in a regulatory filing submitted after the market close yesterday, NVIDIA announced that “our stockholders approved an amendment … to increase the number of authorized shares of common stock.” Here’s what happens next. 

The stock split will be payable in the form of a stock dividend. Each shareholder of record as of June 21 will receive an additional three shares of stock for every share held. The shares will be distributed after the market close on July 19, and the newly split shares will begin trading when the market opens on Tuesday, July 20. 

Existing shareholders won’t have to do anything to receive the additional shares, which will be deposited directly into their brokerage accounts once the stock split takes effect. It’s important to note that investors shouldn’t necessarily expect the new shares to appear in their account immediately after the market close on July 19. As internal processes differ from brokerage to brokerage, it may take as many as several days for the new shares to show up in investor accounts.

Finally, investors should remember that a stock split does nothing to change the value of the underlying business, but merely divides it into a great number of ownership portions. As an example, NVIDIA shares have lately been trading for roughly $700. This means instead of having one share worth $700, shareholders would own four shares, each worth $175.

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

The post Shareholders approve NVIDIA stock split. Here’s what happens next appeared first on The Motley Fool Australia.

More reading

• NVIDIA expects its new cryptocurrency GPU to make $400 million in fiscal Q2
• 3 unstoppable growth trends to invest in today

Danny Vena owns shares of NVIDIA. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended NVIDIA. The Motley Fool Australia has recommended NVIDIA. 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.

from The Motley Fool Australia https://ift.tt/3w7PvyD

The National Storage REIT (ASX: NSR) share price has returned to trading following the company’s completed Institutional Entitlement Offer.

At the time of writing, the self-storage provider’s shares are swapping hands for $2.05, down 1.44%.

National Storage share price resumes

It’s been a disappointing day for National Storage shares, with investors selling their holdings amid the company’s successful equity raise.

According to its release, National Storage has raised gross proceeds of approximately $260 million through the accelerated non-renounceable entitlement offer.

The institutional component sees 1 share issued for every 6.27 National Storage shares owned. Issued at a price of $2.00 apiece, the majority of eligible institutional security holders took up their allocated minimum entitlements.

The newly created shares will be allotted to accounts on 23 June, and available to trade on the same day.

With the Institutional Entitlement Offer now completed, the retail component will commence on 15 June 2021. Hoping to raise an additional $65 million, National Storage will offer the same terms and ratio of shares to eligible retail shareholders. The Retail Entitlement Offer is expected to close on 24 June.

In total, the company is aiming to raise $325 million to repay debt and provide further liquidity on its balance sheet.

National Storage managing director, Andrew Catsoulis commented:

We are very appreciative of the huge amount of support received for National Storage and its growth strategy from both existing and new institutional shareholders. The equity raising will allow National Storage to strengthen the balance sheet, replenish investment capacity and provide additional funding flexibility going forward.

About the National Storage share price

Despite the small and sharp share price movements, National Storage shares are up by 7% over the last 12 months. Year-to-date share price performance is also similar, increasing by more than 6%.

National Storage presides a market capitalisation of roughly $2 billion, ranking 186 in terms of company value on the ASX.

The post National Storage (ASX:NSR) share price returns on equity raising efforts appeared first on The Motley Fool Australia.

More reading

• Why the National Storage (ASX:NSR) share price is frozen
• 2 ASX dividend shares with attractive yields for next week
• 2 top ASX dividend shares with attractive yields
• These ASX dividend shares could help you beat low rates
• 2 quality ASX dividend shares for income investors

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.

from The Motley Fool Australia https://ift.tt/3z60Z7w

The Emerge Gaming Ltd (ASX: EM1) share price opened as much as 20% higher to 4.6 cents this morning after the company announced a subscriber milestone for its MIGGSTER gaming platform.

At the time of writing, the company’s shares have pulled back slightly to 4.2 cents, still up by 10.53% for the day so far.

What’s driving the Emerge Gaming share price?

Emerge Gaming shares are on the move today after the company announced it has surpassed the 1 million paid subscriber milestone for its MIGGSTER platform.

MIGGSTER aims to build an online gaming community with features such as chat, friends and team functionality. Users can pay a monthly subscription fee of A$12.00 per month or an annual subscription of A$113 to access more than 100 games and participate in all worldwide tournaments.

Emerge described the 1 million paid subscriber figure as a key milestone in reaching its goal of “building a globally recognised community which will enable the company to target a broader audience and additional revenue opportunities”.

Commenting on this achievement, Emerge Gaming CEO Gregory Stevens said:

I am excited by the achievement of this milestone for the MIGGSTER platform and the progress of our overall growth strategy in Emerge. MIGGSTER demonstrates that our platforms are globally scalable in a profitable manner – it provides an excellent, real world case study which we will use to unlock other opportunities with new partners. Our next milestone is to achieve a 1.5 million paid subscriber community size across all products. As part of the first phase of this growth strategy, we are seeking to rapidly grow subscriber numbers by offering a variety of discounted promotional offerings to prospective subscribers

Foolish takeaway

Emerge Gaming shares have surged by more than 130% over the past 12 months. Year to date, however, the company’s shares are not faring so well, and are down by nearly 47%. Based on the current share price, Emerge has a market capitalisation of around $47 million.

The post Why the Emerge Gaming (ASX:EM1) share price is up 11% today appeared first on The Motley Fool Australia.

More reading

• Why the Emerge Gaming (ASX:EM1) share price soared 33% today

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.

from The Motley Fool Australia https://ift.tt/351h7tf

The Chalice Mining Ltd (ASX: CHN) share price jumped this morning after it released positive exploration results.

The Chalice share price rallied 2.7% to $8.63 when the S&P/ASX 200 Index (Index:^AXJO) added less than 0.1% at the time of writing.

While other ASX mining shares are outpacing the broader market with the BHP Group Ltd (ASX: BHP) share price and South32 Ltd (ASX: S32) share price gaining less than 1% each, Chalice was the standout.

Chalice share price jumps on potential big find

The market got excited about Chalice as it unveiled its ground gravity survey and soil sampling results at Julimar project.

The gravity data indicated the presence of a largely continuous gravity high extending over 26km. Management is hopeful that they have uncovered a substantial nickel (Ni) and copper (Cu) ore body.

“Several extensive Ni-Cu+/-Pd soil anomalies identified associated with gravity highs,” said the miner.

“And, in some cases, coincident with airborne EM anomalies at the Baudin, Jansz and new Drummond targets.”

Energised by nickel, copper and palladium

The positive data was reinforced by soil samples collected by Chalice. This was done by a first-pass screening technique to assess and prioritise targets.

“Numerous new low-level nickel and copper +/- palladium soil anomalies have been defined along the Complex, which are comparable to the initial anomalies delineated along an east-west traverse across Gonneville pre-discovery,” added Chalice.

“Background metal content in soils was approximately 25ppm nickel, 5ppm copper and <1ppb palladium across the entire dataset.

“Values above 80ppm nickel, 20ppm copper and 5ppb palladium are considered highly anomalous.”

Commodities supercycle adding to Chalice share price gains

This is a good time to be announcing big finds. Commodity prices have skyrocketed as the global trend towards electric vehicles and green tech will boost demand for copper and nickel.

The Chalice share price is likely to exit this financial year as the top performing ASX mining share on the ASX 200.

Top ASX 200 performers for FY21

Chalice has surged over 700% over the past year with the Pilbara Minerals Ltd (ASX: PLS) share price in second place with a circa 300% increase.

The Galaxy Resources Limited (ASX: GXY) share price is following close behind with similar a similar gain.

No doubt its proposed merger with fellow lithium miner Orocobre Limited (ASX: ORE) has given it a big boost.

The post Why the Chalice Mining (ASX:CHN) share price is outperforming today appeared first on The Motley Fool Australia.

More reading

• Why ‘value’ and ‘growth’ share categories are meaningless
• 2 ASX 200 blue chip shares named as buys
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises, EML up, Ansell announces CEO
• These 3 ASX 200 shares were among the biggest movers today

Brendon Lau owns shares of BHP Group Ltd, Galaxy Resources Limited, Orocobre Limited and South32 Ltd. Connect with me on Twitter @brenlau.

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.

from The Motley Fool Australia https://ift.tt/2SiyRxm

The ResMed Inc (ASX: RMD) share price has been a positive performer over the last 12 months.

Since this time last year, the sleep treatment focused medical device company’s shares have risen a sizeable 18%.

Is it too to buy ResMed shares?

According to one leading broker, the ResMed share price could be nearing its full value.

A note out of Goldman Sachs this morning reveals that its analysts have retained their neutral rating and $28.40 price target on the company’s shares.

This compares to the latest ResMed share price of $27.15.

What did the broker say?

The broker notes that ResMed recently presented at its Annual Global Healthcare Conference.

At the event, ResMed’s COO, Rob Douglas, spoke positively about recent trading and a new product launch, which could capitalise on competitor challenges.

However, Mr Douglas also revealed that supply chain issues could put pressure on its near term costs.

Current trading

Goldman commented: “With vaccine roll-out progressing well in most key markets, RMD sees scope to reach pre-Covid-19 levels of new patient starts within the next two quarters. In our view, evidence of this recovery is the key factor to support a sustained re-rating in the stock.”

“Management acknowledges that the cumulative impact of fewer diagnoses through the trailing quarters is now a headwind to mask growth, but believes this will normalise relatively quickly as diagnoses continue to recover (we estimate c.20% of mask sales are derived through new patient starts).”

Cost pressures

Commenting on cost pressures, Goldman said: “In line with many other medical device manufacturers, RMD is currently encountering various pressures across its supply chain (most notably the availability and cost of freight). One of the more attractive features of the business over the last decade has been the consistent ability to grow revenue ahead of costs. With cost growth now increasing and revenues not yet normalised we see scope for near-term margin pressure.”

Though, the broker points out that “management was keen to emphasise the target to continue to deliver positive operating leverage through the mid/longer-term.”

New product launch

Goldman Sachs also notes that the launch of its new flow generator, AirSense 11, could be a boost to sales.

It explained: “Historically, a new launch has tended to precede a modest uptick in device sales growth; generally due to more favourable pricing on the legacy portfolio. Following the €250m provision recently announced by Philips for a corrective field action for its DreamStation1, there has been some debate about the extent to which RMD can capitalise. Whilst certain customers have contacted them to enquire around their scope to backfill, RMD was keen to emphasise that their primary focus is ensuring the best outcomes for patients overall.”

Neutral rating

While Goldman Sachs remains positive on the long term, it isn’t recommending the ResMed share price as a buy just yet.

It concluded: “We retain a positive view on mid-/long-term fundamentals, but maintain a Neutral rating RMD on short-term challenges and valuation grounds.”

The post Is the ResMed (ASX:RMD) share price good value? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• 3 highly rated ASX growth shares analysts love
• 2 blue chip ASX shares rated as buys
• 2 blue chip ASX 200 shares analysts love
• 2 ASX 200 shares to buy for growth

James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3ctml5c

The Austal Limited (ASX: ASB) share price is lifting this morning after the company announced a contract award.

This comes after news earlier this week of a different shipbuilding contract.

At the time of writing, the Austal share price is swapping hands for $2.34, up 1.30%.

Details of the contract

In this morning’s release, Austal revealed it has been awarded a US$44 million contract from the United States Navy.

The fixed-price deal will see Austal design and develop an autonomous capability on the future USNS Apalachicola, an expeditionary fast transport (EPF) vessel. The shipbuilder has delivered a total of 12 Spearhead-class EPF vessels for the United States Navy.

Austal CEO Paddy Gregg welcomed the contract, saying:

Austal noted in our half year results presentation that the funding for an autonomous EPF conversion contract had been appropriated in the USA Government 2021 Budget, so we are pleased that it has now been converted into a formal contract.

Winning a $44 million contract is welcome from a revenue perspective, but strategically this contract award is even more significant for Austal.

Autonomous vessel capability has been identified as an area of strategic importance by the US Navy, so it is promising for Austal that the US Navy has awarded Austal USA a contract for the design, procurement, production implementation and demonstration of autonomous capability of one of our vessels, the Expeditionary Fast Transport (EPF) 13, the future USNS Apalachicola.

About the Spearhead-class EPF program

The Spearhead-class EPF is a 103-metre high-speed aluminium catamaran. The vessel has an 1,800 square metre cargo deck, medium-lift helicopter deck and can hold more than 300 troops.

The primary function of the EPF is to provide rapid transit and deployment of military forces, and equipment and supplies. The ship can also be used for maritime security operations to deploy humanitarian aid and disaster relief.

Austal share price summary

Austal shares have continued to trend lower over the the last 12 months by more than 30%. The company’s shares are around 15% up from their 52-week low of $1.98 seen in February.

Based on its share price, Austal ranks 326 on the ASX in terms of market capitalisation, valued at $836 million. The company has approximately 359.5 million shares on its registry.

The post Why the Austal (ASX:ASB) share price is rising today appeared first on The Motley Fool Australia.

More reading

• Why the Austal (ASX:ASB) share price is moving up today
• Austal (ASX:ASB) share price lower despite new contract bid
• Why the Austal (ASX:ASB) share price is edging higher

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Austal Limited. 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.

from The Motley Fool Australia https://ift.tt/2RGpGqs