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The Ingenia Communities Group (ASX: INA) share price is rising today, adding to already solid recent gains, after the company announced its acquired a portfolio of 5 coastal holiday parks.

The Ingenia share price is up 2.08% to $5.09 per share.

Ingenia is an Australian property group that owns, operates and develops a portfolio of lifestyle and holiday communities, with an adjacency in the rental market.

Ingenia’s recent holiday acquisitions

Ingenia’s decision to purchase another 5 coastal parks comes at a boom time for the Australian domestic tourism industry when outgoing travel bans have seen domestic demand for Australian holiday attractions surge.

The company has also acquired a large ocean-front land parcel in Bargara, Queensland with approval for a 344-home lifestyle community. This will be 100% Ingenia owned.

The combined purchase price of all 5 coastal parks and greenfield site is $40 million, which the company says offers “a combination of immediate earnings accretion and approved development”.

Ingenia’s new holiday park purchase increases its holiday park portfolio by more than 20% and adds 844 cabins, sites and annuals.

What Ingenia management said

Ingenia CEO Simon Owen said the group’s acquisition team has had a busy period, with more than $220 million spent on acquisitions year-to-date.

Despite a marked increase in competition for quality communities and development sites, we continue to benefit from a pipeline and relationships that have taken many years to establish.

The current buoyant market for domestic travel and greater awareness of the stable cash flows generated from our lifestyle communities have underlined the attractiveness of the sectors we operate in and we remain positive about the outlook for the group as we continue to grow.

Ingenia background

A $1.7 billion market capitalisation company, Ingenia’s communities are located throughout Australia, primarily along the eastern seaboard states of Queensland, New South Wales and Victoria, where the majority of Australia’s population lives and tourism occurs.

Ingenia also operates in the managed funds space after acquiring Eight Gate Capital Management in 2019. Eight Gate is a funds and asset management business, which comprises lifestyle communities and holiday parks that operate under the Allswell Communities brand.

Interestingly, the company was formerly related to the international ING banking conglomerate. It was called ING Real Estate Community Living Group and traded on the ASX under the ticker code IFL. However, Ingenia Communities Group emerged in 2012, following the internalisation of ING management.

Ingenia share price snapshot

The Ingenia share price has risen by 7.3% over the past month and is up 9.5% since 2021 began. It’s also up more than 50% over the past 12 months.

More reading

• Why is the Taruga Minerals (ASX:TAR) share price up a ridiculous 69% today?
• Why is the Telstra (ASX:TLS) share price rising today?
• Here’s why the Magnetite Mines (ASX:MGT) share price is up 11% today
• Here’s why the Caravel (ASX:CVV) share price is backtracking today
• Why Dubber, PointsBet, Starpharma, & Westpac shares are storming higher

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Taruga Minerals Ltd (ASX: TAR) share price is going gangbusters, up an extraordinary 69% at time of writing after the company made a high-grade copper discovery at its Mount Craig Project in South Australia.

Taruga Minerals shares are now trading at 10 cents, after starting the day at just 5.9 cents.

Taruga has a tiny market capitalisation of just $46 million but its exploration activities are spread across Africa and Australia. It’s focused on the exploration of copper, gold and silver in South Australia, but base metals and lithium in the Democratic Republic of Congo. Its projects also span across Mali, Cote d’Ivoire and Niger.

Taruga Minerals copper discoveries

Taruga report that all of its 30 reverse circulation (RC) drill holes intercepted visible copper mineralisation or alteration, with the first 5 drill hole assay results confirming high-grade copper discoveries at the company’s Wyacca prospect.

Here are those 5 high-grade assay results in full:

• RC Drillhole WCRC006: five metres at 2.4% copper from 17 metres deep, includes one metre at 9.5% copper from 18 metres deep.
• RC Drillhole WCRC021: 11 metres at 1.5% copper from 85 metres deep, includes four metres at 2.7% copper from 85 metres deep, including one metre at 5.9% copper from 88 metres deep.
• RC Drillhole WCRC017: Seven metres at 1.8% copper from 85 metres deep, includes four metres at 3.1% copper from 87 metres deep, including two metres at 3.5% copper from 88 metres deep.
• RC Drillhole WCRC005: Five metres at 0.9% copper from 33 metres deep, includes two metres at 1.7% copper from 34 metres deep, including one metre at 2.7% copper, from 35 metres deep.

The results show a mining trifecta. Not only are the drilling depths very shallow, all below 100 metres deep, and therefore cheaper open-pit mining, but grades of up to 9.5% copper present a very lucrative on-selling potential. The company believes it has only explored slightly more than half the potential strike range at Wyacca.

What Taruga Minerals management said

Taruga CEO Thomas Line spoke about the company’s next steps.

This high-grade copper discovery at Wyacca is further validation of the significant potential of Taruga’s South Australian copper projects. It is clear from the limited drilling results received to date that this unit hosts very high-grade copper mineralisation, up to 9.5% Cu, and that there is significant opportunity to identify further zones at these grades with further drilling… We have really only scratched the surface at Wyacca, and we are now planning follow-up RC drilling and geophysics to further define and extend the mineralised footprint.

Taruga Minerals share price snapshot

Immense gains in the Taruga share price today bring its monthly increase to 104%. It’s now up 966% over the past 12 months.

More reading

• Why is the Telstra (ASX:TLS) share price rising today?
• Here’s why the Magnetite Mines (ASX:MGT) share price is up 11% today
• Here’s why the Caravel (ASX:CVV) share price is backtracking today
• Why Dubber, PointsBet, Starpharma, & Westpac shares are storming higher
• What’s with the Vmoto (ASX:VMT) share price today?

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Telstra Corporation Ltd (ASX: TLS) share price is having a cracking day today.

Telstra shares are up 2.8% at the time of writing to $3.49 a share after closing at $3.38 on Friday afternoon. They opened at $3.40 this morning. That’s a significant outperformance compared to the broader markets.

The S&P/SX 200 Index (ASX: XJO) is only up 0.02% today by comparison. The Telstra share price went as high as $3.49 early last month, but it had slowly retreated from those highs before today.

As we covered last week, Telstra shares have been pretty much flat over April, despite rising strongly in the previous month. On today’s pricing, Telstra is now only a few cents from its 52-week high of $3.54 that we saw in July last year.

So why are Telstra shares rising so healthily today?

Telstra share price on the rise 

It’s not entirely clear what has gotten investors hot under the collar for Telstra today.

There have been no major market announcements out of the ASX’s largest telco since 23 April. That announcement detailed how Telstra had spent $277 million on additional 5G spectrum rights.

At the time, Telstra CEO Andy Penn said the new spectrum would help the company build on the “already superior 5G experience Telstra provides across the country”. Telstra’s 5G network now covers close to two-thirds of the Australian population. It’s on track to reach three-quarters by the end of June.

But that was almost 2 weeks ago now, so it’s probably not what is driving the Telstra share price higher today.

Perhaps it’s just continued optimism over Telstra’s well-received plan to separate and restructure its assets into 4 companies that were announced last month as well. This will see Telstra effectively become 4 separate companies trading under one umbrella by the end of the year.

Or perhaps a group of investors, or one large investor, has just looked at the Telstra share price and liked what they’ve seen. The company is trading with a market capitalisation of $41.3 billion, a price-to-earnings (P/E) ratio of 23.3, and a trailing dividend yield of 4.61% (6.59% grossed-up) on current pricing.

Whatever the reason, Telstra’s share price gains today will no doubt be welcomed by its shareholders.

More reading

• Morgans just added these ASX shares to its “best ideas” buy list
• ASX 200 up 0.25%: Westpac result impresses, PointsBet jumps
• Deterra (ASX:DRR) share price outperforms on royalty update
• ASX miners set for tough start even as commodity premiums hit a 14-year high
• ASX 200 Weekly Wrap: Shares have average week but a great month

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra 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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Magnetite Mines Ltd (ASX: MGT) shares are soaring following the release of the company’s (corrected) third-quarter results on Friday afternoon. At the time of writing, the Magnetite Mines share price is trading 10.71% higher at 6.2 cents.

Magnetite Mines initially released its activities and cash flow report shortly after midday on Friday. But within a few hours, the revised version copy hit the market barely 50 minutes before it closed for the week.

Let’s take a look at the mining company’s activities and results for the quarter ended 31 March 2021.

Third-quarter financial results

Magnetite Mines spent $648,000 on exploration, evaluation and the purchasing of equipment over the quarter. It also reported staff and administration costs of $241,000.

The company stated that, during the quarter, it didn’t conduct any drilling. This was because it had access to historical drill samples and datasets. Most of its spending was due to pre-feasibility studies from its Razorback Iron Project.

It ended the quarter with approximately $4.1 million in the bank. This means that if every quarter’s expenses are similar to the one that’s just been, Magnetite Mines has enough cash to fund over a year of operations without requiring further income.

What was Magnetite Mines up to over the quarter?

Magnetite Mines continued to work on the Razorback Iron Project’s pre-feasibility study through the quarter. The company plans to release the study’s results during the current quarter as it’s still working on updating Razorback’s resource estimate.

During the quarter, Magnetite Mines won the tender for the Muster Dam tenement package from the South Australian Department for Energy and Mines.

The Muster Dam Iron Project is within the Braemar Iron Formation, which is also home to the Razorback Iron Project. Muster Dam is around 110 kilometres northeast of the Razorback Iron Project.

A mineral resource estimate for Muster Dam was done in November 2011 by a previous tenement holder. It found the project contained 1.5 billion tonnes at 15.2% mass recovery.

This quarter, the company appointed Peter Schubert as its interim CEO, in addition to his role as executive chair, and Mark Eames as technical director.

Commentary from management

Schubert commented on the company’s quarterly activities and results. He said:

In this last quarter, [Magnetite Mines] has made significant progress towards delivery of a robust high grade iron ore business. We are on budget and on track with our plans…

The Magnetite Mines team, together with our globally recognised technical specialist consultants, has worked with meticulous, singular vision and commitment to deliver an optimal [pre-feasibility study] outcome for shareholders…

While we are designing our project to compete through the cycle, we note that strong demand and a muted supply response support robust iron ore pricing and that the product we plan to produce is both valuable and in demand.

Magnetite Mines share price snapshot

The Magnetite Mines share price is having an incredible performance on the ASX, with Friday’s news preceding its latest boost.

Currently, the Magnetite Mines share price is up 520% year to date. It’s also up a humongous 6,100% over the last 12 months, having been trading for just 0.1 cents this time last year.

The mining company has a market capitalisation of around $161 million, with approximately 2.8 billion shares outstanding.

More reading

• Why’s the Magnetite Mines (ASX:MGT) share price up 34% this week?
• The Magnetite Mines (ASX:MGT) share price is up 330% in 2021

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

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The Caravel Minerals Ltd (ASX: CVV) share price is in reverse following the company’s announcement of a share placement.

During early-afternoon trade, the base metals provider’s shares are going for 29 cents a pop, down 3.3%.

Details of the share placement

Investors are dropping Caravel shares on news of the company’s latest capital raising.

According to its release, Caravel advised it has received firm commitments to raise $7.5 million through a share placement. The offer was presented to institutional and professional investors at an issue price of 27 cents per share. This equates to close to 27.8 million new ordinary shares being added to the company’s registry.

Caravel highlighted that a large institutional investor put forward its intent to subscribe for $7 million in the placement.

However, for the capital raising to go ahead, shareholders will need to approve the company’s placement at the shareholder meeting. It is expected this will be held in mid-June. Should everything go according to plan, Caravel will issue the new shares, ranking them equally with the existing shares outstanding.

Proceeds of the placement will be allocated towards a number of objectives, including:

• Additional infill and extensional drilling on the Caravel Copper Project
• Potential acquisition of land over the Bindi Deposit and Caravel Copper Project
• General working capital.

Caravel noted that it remains fully-funded to complete its Pre-Feasibility studies as well as advance some key initiatives. This includes land acquisition that will reduce the risk of the copper project and hasten development decisions.

The monies received from the placement will provide detailed drilling at Bindi East after discovering new potential mineral resources. The main criteria of the programme will be to define higher-grade areas that can be brought into the early-mining planning schedule.

Caravel share price review

Caravel shares have been a standout over the past 12 months, accelerating over 1,200%. This means if you picked up $1,000 worth of shares this time last year, it’d be worth north of $12,000.

Based on the Caravel share price at the time of writing, the company has a market capitalisation of roughly $100 million, with 347.6 million shares on issue.

More reading

• Why Dubber, PointsBet, Starpharma, & Westpac shares are storming higher
• What’s with the Vmoto (ASX:VMT) share price today?
• Morgans just added these ASX shares to its “best ideas” buy list
• 2 must-see takeaways from Facebook’s earnings call
• REA (ASX:REA) share price eyes new record highs after running 10% in April

Motley Fool contributor Aaron Teboneras 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.

The post Here’s why the Caravel (ASX:CVV) share price is backtracking today appeared first on The Motley Fool Australia.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) has given back the majority of its morning gains and is trading just a fraction higher for the day. At the time of writing, the benchmark index is up slightly to 7,030.3 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are storming higher:

Dubber Corp Ltd (ASX: DUB)

The Dubber share price has continued its positive run and is up a further 12% to $2.86. Investors have been fighting to get hold of the unified call recording and voice intelligence provider’s shares since its third quarter update last week. That update revealed that Dubber’s annualised recurring revenue (ARR) increased 20% over the three months to $34 million. This was also a 158% increase over the prior corresponding period.

PointsBet Holdings Ltd (ASX: PBH)

The PointsBet share price has stormed 7% higher to $14.55. This follows the release of two positive broker notes this morning in response to its third quarter update. Both Goldman Sachs and Credit Suisse have the equivalent of buy ratings on the sports betting company’s shares. Goldman has a $17.20 price target and Credit Suisse has a $16.15 price target on its shares.

Starpharma Holdings Limited (ASX: SPL)

The Starpharma share price has jumped 10% to $1.86. This appears to have been driven by excitement around the company’s Viraleze product. Viraleze is an antiviral nasal spray that contains astodrimer sodium, which has been shown in laboratory studies to inactivate a broad spectrum of respiratory viruses. This includes >99.9% of coronavirus SARS-CoV-2, the virus that causes COVID-19.

Westpac Banking Corp (ASX: WBC)

The Westpac share price is up 4.5% to $26.09. Investors have been buying the banking giant’s shares after it reported first half cash earnings of $3,537 million. This is a 256% increase over the prior corresponding period and a 119% lift over the second half of FY 2020. Westpac also declared a fully franked interim dividend of 58 cents per share and revealed significant cost cutting plans.

More reading

• ASX 200 up 0.25%: Westpac result impresses, PointsBet jumps
• Westpac (ASX:WBC) share price up 4%: Here’s an expert’s opinion
• Leading brokers name 3 ASX shares to buy today
• Leading broker tips PointsBet (ASX:PBH) share price to shoot higher
• This is the best of the big ASX banks: fundie

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Pointsbet Holdings Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Dubber and Starpharma Holdings Limited. The Motley Fool Australia has recommended Pointsbet Holdings Ltd and Starpharma Holdings 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 Vmoto Ltd (ASX: VMT) share price is flat today as the company announced its first quarterly update for the calendar year.

Despite a couple of lifts this morning, shares in the electric scooter company are currently back where they started, trading at 44 cents. For comparison, the All Ordinaries Index (ASX: XAO) is up 0.03%.

Let’s take a closer look at what’s happening with the Vmoto share price.

Sales performance

For the first quarter ended 31 March 2021 (1Q21), Vmoto reported strong sales growth. The company sold 42% more units than in the first quarter of 2020, bringing its total to 5,869. Of these, 5,636 were sold into international markets with 233 specifically sold into China.

The company advised the sales were in line with its expectations and reflected seasonality across Europe and China.

The strong sales performance also led to positive operating cash flows for the first quarter. The company expects this to continue with firm international orders of 10,702 units as of March 31.

Furthermore, it has appointed new distributors to boost the number of international orders. They have shared ongoing discussions and samples with a significant number of potential new customers.

Looking ahead

Despite the impacts of the COVID-19 pandemic, Vmoto said it was confident in the strength of its global growth strategy. As a result, the company expects to deliver similar levels of growth for the 2021 financial year. As stated in its release:

Vmoto continues to execute on its strategy of selling high performance and value electric two-wheel vehicles into international markets and continues to build both its B2B and B2C distribution network worldwide.

In addition, Vmoto intends to continue developing its product suite, with $15.8 million in the bank to fund growth and no bank debt on its books.

Pushing into the future, the electric scooter company believes it has significant tailwinds. As stated by the company, this is “thanks, in large due to the global focus on mitigating the effects of climate change” and the consequential push towards electric vehicles.

About the Vmoto share price

While the Vmoto share price is trading flat today, the company has undergone a phenomenal year of growth. In the last year alone, its shares are up 193.33%.

More reading

• Here’s why the Caravel (ASX:CVV) share price is backtracking today
• Why Dubber, PointsBet, Starpharma, & Westpac shares are storming higher
• Morgans just added these ASX shares to its “best ideas” buy list
• 2 must-see takeaways from Facebook’s earnings call
• REA (ASX:REA) share price eyes new record highs after running 10% in April

Motley Fool contributor Daniel Ewing 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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It’s not easy finding buying opportunities when the market is trading close to its peak, but Morgans just highlighted a few ASX shares as it updated its “best ideas” list.

These are ASX shares that the broker believes are best placed to generate superior risk-adjusted returns over the next 12-months.

The new picks come at a time when the S&P/ASX 200 Index (Index:^AXJO) is within striking distance of breaking a new record high set in February last year.

Best bank for your buck

There are three ASX large cap shares that made it on Morgans’ list this month. The first is the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price.

“We believe ANZ is the most compelling of the major banks on a valuation basis,” said the broker.

“We expect ANZ to benefit the most of the major banks from the tailwinds currently in place for treasury and markets income.”

Morgan’s 12-month price target on the ANZ Bank share price is $33.50 a share.

Positive results put this ASX share on the best buy list

The second on the best buy list is the Sonic Healthcare Limited (ASX: SHL) share price. The medical testing facilities operator has been one of the COVID-19 winners thanks to mass testing.

But the momentum may not wane even as mass vaccinations are rolled out across the world.

“We see COVID-19 testing continuing into the foreseeable future, with growth potential in COVID serology testing,” said Morgans.

“SHL’s global base business is increasingly resilient, benefitting from geographical diversity. Strong [balance sheet] (gearing 21.6x; A$1.3bn headroom) opening the door to acquisitions, contracts and JVs.”

Morgan’s 12-month price target on the Sonic share price is $30.09.

Bright outlook and capital return potential

Meanwhile, the Reliance Worldwide Corporation Ltd (ASX: RWC) share price was also added for its leverage to the ongoing building and renovation boom.

“RWC continues to benefit from strong demand for DIY activity across all regions (Americas, EMEA, Asia-Pacific) which we think will at least continue in the near term,” added Morgans.

“Despite higher input costs such as copper and zinc, management has indicated strong confidence in passing this through to customers via price increases.”

There’s also a good chance that Reliance will undertake a capital return of some sort, according to the broker. Morgan’s price target on the Reliance share price is $5.50 a share.

More reading

• ASX 200 up 0.25%: Westpac result impresses, PointsBet jumps
• Deterra (ASX:DRR) share price outperforms on royalty update
• ASX miners set for tough start even as commodity premiums hit a 14-year high
• ASX 200 Weekly Wrap: Shares have average week but a great month
• 5 things to watch on the ASX 200 on Monday

Brendon Lau owns shares of Australia & New Zealand Banking Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Reliance Worldwide Limited. The Motley Fool Australia has recommended Reliance Worldwide Limited and Sonic Healthcare 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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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.

Facebook (NASDAQ: FB) absolutely obliterated analyst estimates when it reported its first-quarter results last week. The social network reported first-quarter revenue of $26.1 billion, up 48% year over year. Net income nearly doubled, hitting $9.5 billion, translating to earnings per share of $3.30. Analysts, on average, were expecting revenue and earnings per share of $23.7 billion and $2.37, respectively.

Though the headline numbers from the earnings release certainly tell quite a story, there was a lot more for investors to digest about the tech company in Facebook’s first-quarter earnings call. Two particular topics that surfaced during the call, for instance, were the company’s growing ambitions in e-commerce and the key drivers for its huge advertising revenue growth.

Here’s what management said about these topics during the call. 

Facebook has big plans for e-commerce

One hot topic during the earnings call that received more attention than usual was the social network’s growing investment in e-commerce. Facebook CEO Mark Zuckerberg called commerce one of its “long-term opportunities” that it’s “really focused on.” In addition, Zuckerberg said, “Commerce has been growing in our services for a while, but it has become a lot more important as the pandemic has accelerated a broader shift toward businesses moving online.”

Further, it sounds like Facebook may have an interesting new e-commerce feature in its pipeline that it’s readying for release this year. “[W]ith Instagram and Facebook, we have a unique ability to bring creators and commerce together, and we will share more on that later this year,” Zuckerberg said.

Facebook already has a shopping experience that lets users sell products in a seamless shopping experience that works across Facebook and Instagram. The company has over 1 million monthly active shops and sees 250 million monthly visitors to these shops.

Surging demand from advertisers

Fueling the company’s advertising revenue growth was a 12% year-over-year increase in ad impressions and 30% growth in price per ad.

But what exactly caused such a sharp increase in advertising pricing across Facebook’s social networks? While advertising in its commerce vertical was exceptionally strong, most of Facebook’s advertising revenue growth was simply due to stronger-than-expected demand from all verticals and a sharp recovery from verticals that were negatively impacted by COVID-19.

“[R]eally just strong across-the-board demand for ads has been what’s driven it for us,” explained CFO David Wehner.

Facebook shareholders may want to give the first-quarter earnings call a listen. In addition to the call featuring further discussion of the topics covered in this article, management provided more details on Facebook Marketplace, WhatsApp, payments, and more.

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

More reading

• Why Facebook reported the most impressive earnings of 2021 so far
• Retail just changed. Forever…
• Why Facebook and Apple couldn’t lift the Nasdaq Thursday
• Facebook earnings just obliterated expectations
• Why Facebook is still great value

Daniel Sparks has no position in any of the stocks mentioned. 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. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Facebook. The Motley Fool Australia has recommended Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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Record low interest rates, a swift economic recovery and low listing volumes have launched national housing values to new record highs. The tailwinds for the Australian property sector has helped the REA Group Ltd (ASX: REA) share price push ~10% higher in April to a close of $158.35, within an arms reach of its previous all-time record high of $162.00 on 8 April. 

Housing prices surge past 2017 peak

At the end of April, the CoreLogic national home value index increased a further 1.82%, driving housing values some 10% higher since September last year. During this time, the REA share price managed to break above its pre-COVID high of $115 in August 2020 before staging a 40% rally to today’s prices. 

Looking over at auction volumes, 2,885 capital city homes went under the hammer last week, an increase of 38% on the prior week. One year ago, a significantly lower 612 homes were auctioned as COVID-19 related restrictions put activity on halt. Interestingly, the final clearance rate for houses came in at 79.1% last week. This is the first time clearance rates have dropped below 80% this year. 

As the property market continues to heat up, it might be worth dividing attention towards the downside risk factors that could eventually ‘pop’ the so-called bubble. Overall, CoreLogic believes that the RBA’s commitment to hold interest rates and the current rebounding economic cycle means solid housing prices are here to say. However, it does point out tighter credit conditions as a potential near term risk. 

Through previous housing cycles, the factors that generally slowed the housing market were either rising interest rates, worsening economic conditions or tighter credit conditions. Looking at each of these factors, we aren’t expecting a lift in short term mortgage rates any time soon, and the economy has some positive momentum, so the most likely factor that will slow housing conditions is a new round of credit tightening along with housing affordability becoming more of a challenge, especially for first home buyers.

Morgan Stanley sees a higher REA share price in 2021–22 

Morgan Stanley was the latest broker to provide an update for the REA share price. On 14 April, the broker rated REA shares as overweight with a $175 target price. 

The broker believes that a sharp increase in Australians searching for new homes carries important implications for the business. Its commentary centres around a potential earnings super cycle in 2021–22 driven by factors such as positive listings growth and additional houses for sale. 

More reading

• These ASX 200 shares are tracking the Aussie economy higher in 2021
• Why Zip (ASX:Z1P) and these ASX shares are rated as buys
• 2 outstanding ASX growth shares rated as buys
• How $20,000 turns into $250,000 in 10 years with ASX shares
• Broker tips REA Group (ASX:REA) share price to shoot higher from here

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post REA (ASX:REA) share price eyes new record highs after running 10% in April appeared first on The Motley Fool Australia.

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