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The Element 25 Ltd (ASX: E25) share price is rising today after the company shared news from its Butcherbird Project.

The resource explorer announced the project’s development is progressing smoothly and the first ore has been processed.

At the time of writing, the Element 25 share price is $2.36, up 5.8% from yesterday’s closing price. Let’s take a closer look at today’s news.

Butcherbird Project update

The first stage of development of Element 25’s wholly-owned Butcherbird Project has been successfully completed. Its completion comes only 11 months after its pre-feasibility study was first published.

The Butcherbird Project aims to produce high purity manganese sulphate monohydrate for electric vehicle batteries.

Element 25 believes potential supply limits for nickel and cobalt may force battery manufacturers to use high manganese cathodes for electric vehicle production in coming years. It states the project is ideally positioned to feed any such demand. 

The production of in-specified 30% to 35% manganese content concentrate has been successfully produced in the commissioning process, with encouraging indications to potential plant throughput.

The company is now working to optimise the plant’s processing quantity and product quality.

Today’s release said there were no significant flaws in any of the project’s processing equipment or stages. Water and power services are operating reliably.

Commentary from management

Element 25 managing director Justin Brown commented on today’s news, saying:

This is another important milestone in the development of the project and we look forward to updating the market further in coming weeks as we progress towards our first shipment.

Element 25 share price snapshot

The Element 25 share price has been flourishing on the ASX of late, with today’s news giving it another boost.

The Element 25 share price has risen 49% since the start of the year. It’s also gained a massive 1,460% since this time last year.

The company has a market capitalisation of around $331 million, with approximately 148 million shares outstanding.

More reading

• Why is the Element 25 (ASX:E25) share price tumbling 8% today?

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 4DS Memory Ltd (ASX: 4DS) share price is charging higher today, up more than 8% in late morning trade.

Below we take a look at the ASX technology share’s latest quarterly activity report.

What did 4DS Memory report for the quarter?

The 4DS Memory share price is soaring after the company reported it had completed testing of its Second Non-Platform Lot, with positive results.

The memory storage provider said it managed to repeat the results for “each of the key memory characteristics (speed, endurance and retention)” which it had achieved with its First Non-Platform Lot.

In a milestone achievement for the company, it reported that 19 of the 21 device wafers were functional. 4DS noted that both non-functional wafers “were the result of being manufactured outside the imec process window”.

The company said that the latest testing has increased its knowledge of how changing key process parameters impact key memory characteristics. This could enable it to manipulate the process parameters to increase memory characteristics.

imec and Western Digital have been providing support and technical input for the project.

Earlier in the quarter, 4DS reported that production of the Second Platform Lot had started at imec’s Belgium facilities.

In this morning’s update, 4DS said that production remains on track. Barring unexpected equipment issues or new impacts from COVID-19, it expects to analyse these wafers during the current quarter (Q2) and provide the market with results late in this quarter.

Financial summary and index inclusion

4DS reported it held $5.5 million of cash as at 31 March, down from $6.5 million at the end of the previous quarter. Just under $1 million was used for operating activities.

In a win for the company, it was admitted to the S&P/ASX All Technology Index (ASX: XTX) on 22 March.

4DS Memory share price snapshot

Over the past 12 months, the 4DS Memory share price is up an eye-popping 388%. By comparison, the All Ordinaries Index (ASX: XAO) is up 32% at the same time, whilst the All Tech index has gained 79%.

Year-to-date 4DS Memory shares are up 39%.

More reading

• 4DS Memory (ASX:4DS) share price lifts on patent news

Motley Fool contributor Bernd Struben 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is out of form and edging slightly lower. At the time of writing, the benchmark index is down a few points to 7,020 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are storming higher:

Ampol Ltd (ASX: ALD)

The Ampol share price is up 6% to $25.87 following the release of its first quarter update. According to the release, the fuel retailer’s performance improved during the three months ended 31 March. Ampol reported higher earnings before interest and tax (EBIT) across its three major segments. One of those was its Australian Fuels & Infrastructure (F&I) ex Lytton, which delivered EBIT of $59 million. This was up from $47 million in both the prior quarter and the prior corresponding period.

Netwealth Group Ltd (ASX: NWL)

The Netwealth share price is up 3% to $14.78. Investors have been buying the investment platform provider’s shares following the release of its third quarter update. That update reveals that Netwealth continued its strong form during the quarter. As a result, at the end of March, its Funds Under Administration (FUA) reached $41.8 billion. This represents a $3 billion or 7.8% increase since the end of December, including a positive market movement of $0.8 billion.

Orocobre Limited (ASX: ORE)

The Orocobre share price has stormed 4% higher to $6.22. This solid gain appears to have been driven by a broker note out of Macquarie this morning. Although the lithium miner’s sales volume during the third quarter was lower than it expected, it was pleasantly surprised by stronger than expected pricing. This led to Macquarie retaining its outperform rating and $7.10 price target on its shares.

Race Oncology Ltd (ASX: RAC)

The Race Oncology share price has jumped 10% to $3.37. This follows the release of an update on its phase 2/3 cancer drug, Bisantrene. According to the release, independent researchers have found Bisantrene to be a highly effective inhibitor of the Fat Mass and Obesity associated protein (FTO). The University of Chicago team also identified that FTO plays a critical role in the development of skin cancers caused by low-level arsenic exposure.

More reading

• ASX 200 flat: Zip raises $400m, Bank of Queensland results, Regis crashes
• Why the Ampol (ASX:ALD) share price is climbing
• Why the Race Oncology (ASX:RAC) share price is rocketing 10% higher
• Why the Netwealth (ASX:NWL) share price is charging higher
• Macquarie (ASX:MQG) just delivered ASX lithium shares a big boost

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Netwealth. 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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From buy now pay later (BNPL) to insurance, here are the ASX 200 shares that brokers think could outperform the market. 

ASX 200 shares rated as a buy 

1. Afterpay Ltd (ASX: APT) 

Morgan Stanley highlights the continued momentum in Afterpay’s US app downloads, with approximately 760,000 in March and exceeding December 2020 levels. Perhaps more importantly, the broker notes that US BNPL peers did not experience such an increase. 

The broker also notes Afterpay’s recent global partnership with Adyen, a Dutch payments company offering merchants online services. Furthermore, the broker highlighted the company’s expansion into the travel vertical in Australasia with its Play Travel brand. The product works exactly like any other Afterpay product, allowing customers to choose a holiday package or build their own up to $3,000 and pay in four fortnightly instalments.

Morgan Stanley retained its overweight rating with a $149 target price. Afterpay shares are slightly weaker today, down 0.16% to $127.65. 

2. AUB Group Ltd (ASX: AUB)

AUB is Australia and New Zealand’s largest equity-based insurance network. A number of insurance shares were upgraded last month. This was on the basis that the insurance market is moving through a hard cycle where premiums increase and the capacity for most types of insurance decreases. Therefore, the general broker census is that an uplift in premiums will translate to improved margins over the short to medium term. 

Macquarie notes that third quarter premiums increased by 4%. It highlighted that property class rates continued while the moderation in commercial motor premiums have reverted. The broker’s commentary believes that higher premiums are needed to support underwriting profitability in today’s lower interest rate environment. 

An outperform rating was retained with a $20.40 target price. AUB shares have also surged into record territory, up almost 20% year-to-date and currently trading at $19.20. 

3. Aurizon Holdings Ltd (ASX: AZJ) 

A core component of Aurizon’s business is its management of the Central Queensland Coal Network. Macquarie observed weaker coal volumes in the March quarter, reflecting the wet weather in NSW. 

Despite the limited growth in the coal sector, Macquarie believes there is an incremental opportunity in freight. The broker highlights the re-tender by CBH, Australia’s largest exporter of grain, for grade haulage in Western Australia as a key opportunity.

Macquarie has an outperform rating on Aurizon shares with a $4.40 target price. Unlike most ASX 200 shares that have managed to come back to pre-COVID highs, the Aurizon share has drifted some 30% lower in the past 12 months. Its shares are currently sitting at a 5-year low of $3.91. 

4. Steadfast Group Ltd (ASX: SDF)

Macquarie’s opinion of Steadfast follows a similar narrative as AUB where premium rate rises continue to be supportive. It highlights the increases in property class rates and the reversion of commercial motor rates. 

The broker retained an outperform rating with a target price of $4.40. Steadfast shares currently sit around all-time record highs. However, they are relatively flat in terms of year-to-date returns. Its shares are currently fetching $4.11. 

More reading

• Is the Afterpay (ASX:APT) share price set to surge later this month?
• Why the IOUpay (ASX:IOU) share price is up 15% this week
• Is the Klarna / Flybuys partnership the future for ASX BNPL providers?
• Why the Zip (ASX:Z1P) share price is in a trading halt
• How does Afterpay’s (ASX:APT) growth rates compare to peers?

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Aurizon Holdings Limited and Steadfast Group 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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Finding quality ASX dividend shares can be a tricky process. As we all learned the hard way last year, a seemingly good dividend-paying investment can turn out to be less than what we hope for. After all, there are no guarantees when it comes to dividends – a company can cancel a dividend faster than you can say franking.

However, these two dividend shares could be worth considering for income today, judging by their performance over the past 12 months and beyond. 

Super Retail Group Ltd (ASX: SUL)

Super Retail Group is an ASX retail powerhouse. This company is the name behind popular retail chains like Macpac, BCF, Super Cheap Auto and Rebel. It turns out that the coronavirus-induced lockdowns last year actually proved to be a big winner for Super Retail. In its earnings report for the 6 months to 31 December 2020 that was released back in February, Super Retail reported group sales of $1.78 billion. That included online sales growth of 87% and overall was a 23% increase from the prior corresponding period. Underlying net profit after tax also rocketed 139%, helping to fund a 33 cents per share dividend for the half.

On current pricing, Super Retail shares offer a trailing yield of 4.5%, which grosses up to a 6.43% yield with Super Retail’s full franking.

BetaShares S&P 500 Yield Maximiser (ASX: UMAX)

The second ASX dividend share to consider today is a whole different kettle of fish. This exchange-traded fund (ETF) holds the companies in the American S&P 500 (INDEXSP: .INX), an index not normally known for its high dividends. 

However, this ETF doesn’t do things the conventional way. It employs a unique strategy of using covered call options to increase the fund’s potential for generating income. These covered calls help the fund to generate extra income on top of the dividends it receives from its shareholdings. This strategy increases the income the fund produces and also decreases its volatility compared to the broader market. However, it does so by forfeiting some overall performance (there’s no free lunch here). Long story short, you can expect higher income and lower volatility in exchange for lower performance compared to a pure S&P 500 ETF.

UMAX pays a dividend distribution quarterly and currently has a 12-month trailing yield of 6.8%. The fund also charges a management fee of 0.79% per annum. It has returned an average of 10.16% per annum since its inception in 2014. 

More reading

• 2 high yield ASX dividend shares rated as buys
• 2 ASX dividend shares rated as strong buys by brokers
• 3 ASX dividend shares to buy today
• 2 quality ASX dividend shares to buy this week
• Retail shares: buy what you know, but who owns what you buy?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BetaShares S&P500 Yield Maximiser and Super Retail Group 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 competition watchdog has cleared a shareholder of iSelect Ltd (ASX: ISU) of any wrongdoing in attempting to buy up more stock.

In November, the Australian Competition and Consumer Commission (ACCC) started investigating the activities of iSelect shareholder Innovation Holdings Australia (IHA).

The potential problem was that IHA, via a complex web of entities, also owns CompareTheMarket.com.au, which provides similar services to iSelect.

Both brands are rivals in the competitive comparison site sector, allowing Australians to contrast different energy, insurance and financial services providers.

IHA had already bought up 29% of iSelect shares over 2 years without notifying the ACCC. The watchdog was prompted into action after it was tipped off about an additional 6% purchase.

ACCC commissioner Stephen Ridgeway said at the time that such arrangements could “give rise to competition concerns”.

‘Unlikely to substantially lessen competition’

In good news for IHA and current iSelect shareholders, the ACCC on Thursday announced it would not oppose the 6% buyup.

The commission concluded that a 35% stake would be “unlikely to substantially lessen competition” in the comparison site market.

“Other routes to market exist for providers – including other comparison websites,” Ridgeway said on Thursday.

“There are also government websites available to consumers such as www.energymadeeasy.gov.au and www.privatehealth.gov.au.”

The iSelect share price is up 5.45% at the time of writing, trading for 29 cents.

iSelect owns the comparison engines iselect.com.au and energywatch.com.au. IHA is associated with the insurance brand Budget Direct, as well as the CompareTheMarket.com.au site.

When the ACCC investigation first started in November, a CompareTheMarket (CTM) spokesperson denied that it was owned by IHA.

“CTM is owned by Financial Holdings Australia (FHA), which has shareholders in common with IHA, but the two are separate entities,” she told The Motley Fool.

“The group structure is convoluted, but while Compare the Market and Innovation Holdings Australia share common investors, it is not accurate to state that CTM acquired shares in iSelect.”

More reading

• Brokers pick these ASX 200 shares to outperform the market
• 2 ASX dividend shares to buy for income today
• Why the Alcidion (ASX:ALC) share price just hit an all-time high
• ASX 200 flat: Zip raises $400m, Bank of Queensland results, Regis crashes
• Why the Whitehaven Coal (ASX:WHC) share price is plunging 14%

Motley Fool contributor Tony Yoo 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 Alcidion Group Ltd (ASX: ALC) share price is having a stellar day on Thursday. Today’s positive price movement comes after the company provided updates on a new acquisition, a new government contract, and a capital raising endeavour.

At the time of writing, shares in the health-focused IT company are trading for a record 37.5 cents – up 10.29%. By comparison, the All Ordinaries Index (ASX: XAO) is currently 0.66% higher for the day so far.

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

Alcidion share price surges

In separate statements to the ASX, plus an overarching investor presentation, Alcidion declared the following:

1. The acquisition of ExtraMed, a UK National Health Service (NHS) patient flow software provider for $9.6 million cash.
2. The awarding of a $21 million contract by the Australian Department of Defence for “a system that records, stores, aggregates and analyses health information for the Defence population.”
3. A $17.9 million capital raise.
4. An FY21 Q3 update.

Acquisition of ExtraMed

With the purchase of ExtraMed, Alcidion claims it will now be “the leader in the UK market for patient flow, adding nine NHS Trusts, six of which are new to Alcidion.” The statement says the company now has a 19% market share in the NHS system.

As well, before its purchase, ExtraMed signed a contract with Hitachi to build a “large-scale” fully integrated, hospital-wide digital command centre at Salford Royal Hospital.

Alcidion is forecasting the purchase will add an extra $2.7 million worth of revenue in FY22, and added earnings before interest, tax, depreciation, and amortisation (EBITDA) of $500,000.

Kate Quirke, Alcidion managing director, said:

This acquisition significantly strengthens our position in the UK and signals our commitment to this very important market.

The combination of our technologies, staff and customers establishes Alcidion as the UK market leader for patient flow and as a foundation platform for digital command centres.

Government tender

In its second announcement, the company advised the Australian Government has awarded it a 5.5-year, $21 million contract for a health information system for the Department of Defence. Alcidion is part of a consortium of bidders who were awarded the contract. The $21 million valuation is Alcidion’s estimated share of the contract.

Alcidion will specifically provide an aggregation of data from “its consortium partners and other systems in the Defence environment…” via its Longitudinal Health Record system. The project is expected to commence in the last three months of 2021.

Ms Quirke said:

Alcidion is looking forward to working with the HKM project team to bring the negotiations to a successful conclusion so we may start this exciting and significant project for Defence.

Capital raising

Alcidion will issue 48 million shares at a price of 32 cents each to raise enough funds to cover the costs of the ExtraMed acquisition and to ensure “Alcidion has sufficient investment funds and working capital to continue its growth strategy.”

The issuing price represents a 6% discount to Tuesday’s close price.

This endeavour will raise approximately $15.4 million. The remaining $2.5 million will be raised via a share purchase plan. Eligible shareholders will be able to purchase additional shares (up to $30,000 worth) at the same price as the issuance (32 cents).

Q3 results

Finally, the company said it has earned $24.7 million of revenue so for this financial year. Of this, $3 million was earned during Q3. Revenue for FY21 is already 33% higher than the full-year results for the previous financial year.

Alcidion share price snapshot

Over the past 12 months, the Alcidion share price has increased 97.4%. In fact, just over the last 6 months, the value of the company has grown by 188%!

Alcidion has a market capitalisation of $366.6 million.

More reading

• Alcidion (ASX:ALC) shares are in a trading halt. Here’s why.
• 4 exciting small cap ASX shares to watch
• Why Alcidion, GrainCorp, Premier Investments, & Xero are storming higher
• Why the Alcidion (ASX:ALC) share price is surging 5% higher
• Why these ASX shares are breaking out into record highs

Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Alcidion Group Ltd. The Motley Fool Australia has recommended Alcidion Group 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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At lunch on Thursday, the S&P/ASX 200 Index (ASX: XJO) is having a mixed day. The benchmark index is currently trading flat at 7,025.6 points.

Here’s what has been happening on the market today:

Zip raises $400 million

The Zip Co Ltd (ASX: Z1P) share price is trading lower today after emerging from its trading halt. This morning Zip announced that it has successfully priced its $400 million zero coupon senior unsecured convertible notes. These notes are convertible into fully paid ordinary shares of Zip at an initial conversion price of $12.39 per share. This represents a conversion premium of 29% over the Zip share price prior to its halt. The funds will be used to support the active pursuit of both core and international growth opportunities.

Bank of Queensland half year results

The Bank of Queensland Limited (ASX: BOQ) share price is in the red today despite announcing a solid half year result. During the first half of FY 2021, the regional bank posted a 9% increase in cash earnings after tax to $165 million. This was driven by balance sheet growth, improved net interest margin (NIM), disciplined expense management, and lower loan impairment expense. This allowed the bank to declare a 17 cents per share fully franked interim dividend. This result was in line with what Goldman Sachs was expecting. It pencilled in cash earnings of $164 million and a 17 cents per share dividend.

Regis Resources share price crashes

The Regis Resources Limited (ASX: RRL) share price is crashing lower today after returning from its trading halt. Investors have responded negatively to its plan to acquire a 30% interest in the Tropicana Gold Project for $903 million from IGO Ltd (ASX: IGO). To fund the acquisition, Regis has raised $494 million from institutional investors at a 14.8% discount of $2.70 per share. The company will now seek to raise a further $156 million via the fully underwritten retail component of the entitlement offer.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Thursday has been the Ampol Ltd (ASX: ALD) share price with a gain of over 5%. This follows the release of the fuel retailer’s first quarter update. The worst performer has been the Regis share price with a 14% decline. This follows its aforementioned equity raising.

More reading

• Why the Whitehaven Coal (ASX:WHC) share price is plunging 14%
• The Pendal (ASX:PDL) share price lifts on funds update
• Top brokers name 3 ASX shares to sell today
• What’s happening with the Boral (ASX:BLD) share price?
• Is the Afterpay (ASX:APT) share price set to surge later this month?

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 ZIPCOLTD FPO. 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 Whitehaven Coal Ltd (ASX: WHC) share price is sinking today after the coal mining company provided its quarterly production report and revised FY21 guidance.

It seems the market has homed in on the negatives from a mixed bag of information. At the time of writing, the Whitehaven Coal share price has fallen steeply by 14.3% to $1.58 a share.

Taking the good with the bad

The good news first. Whitehaven’s managed run-of-mine (ROM) coal production increased 12% compared to the prior corresponding period in the March quarter. The increase put its ROM production at 5.5 million tonnes (Mt). Additionally, the company’s managed saleable production increased 6% to 4.3Mt compared to the same time last year.

Coal sales also increased 7% to 4.8Mt compared to the prior period, leaving Whitehaven with 2.8Mt of coal stocks by the end of March. Improved coal prices also bolstered sales over the quarter due to increased economic activity and supply constraints.

However, the good news ends there. While coal prices are attractive, Whitehaven has been impacted by poor weather conditions and geological challenges. The Narrabri underground longwall mine lost two weeks of production due to geological issues. On top of that, the longwall’s key components will require a further two weeks of downtime for overhauling.

Narrabri’s additional downtime has resulted in Whitehaven revising its FY21 managed ROM production. Rather than the previous 5.3Mt to 5.5Mt forecasted, the company now expects 4.5Mt to 4.9Mt from the Narrabri mine.

Logistics take it from bad to worse

Whitehaven also provided an update on the logistics issues previously reported. Operations were dampened in March by faults in a ship loader at the Port of Newcastle. This resulted in the company suspending ship loading while maintenance was carried out on the equipment.

Logistics were further complicated by the weather-related restrictions on the port at the time, resulting in a large queue of 40 ships awaiting entry at the port.

Due to these issues, Whitehaven on 23 March revised its FY21 managed coal sales guidance down to 18.5Mt to 19Mt.

Today, the Whitehaven Coal share price is being hit by the further decrease of its sales guidance. The company now expects 17.8Mt to 18.3Mt as a result of Narrabi’s extended downtime.

For consolation, sales volume slippage caused by the logistics issues is anticipated to be recovered early in FY22.

Whitehaven share price recap

It’s been a few difficult years for the coal producer. Since July 2018, the Whitehaven Coal share price has been on a downtrend, erasing 72% off its market capitalisation.

Even as the economy recovers, shareholders haven’t experienced any of the resurgence. The Whitehaven Coal share price has actually lost a further 22% over the past year. Meanwhile, investors of the S&P/ASX 200 Index (ASX: XJO) have basked in a 28% gain.

More reading

• The Pendal (ASX:PDL) share price lifts on funds update
• What’s happening with the Boral (ASX:BLD) share price?
• Is the Afterpay (ASX:APT) share price set to surge later this month?
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises above 7,000, Resolute Mining soars, Galaxy jumps

Motley Fool contributor Mitchell Lawler 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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Respected fund manager Wilson Asset Management (WAM) has recently identified two ASX shares that it owns in its portfolio.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Research Limited (ASX: WAX).

There’s also one called WAM Leaders Ltd (ASX: WLE) which looks at the larger businesses on the ASX.

WAM says WAM Leaders actively invests in the highest quality Australian companies.

The WAM Leaders portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 14% per annum since inception in May 2016, which is superior to the S&P/ASX 200 Accumulation Index average return of 9.1%.

These are the two ASX shares that WAM outlined in its most recent monthly update, which were two of the largest contributors of performance for the month:

Telstra Corporation Ltd (ASX: TLS)

Telstra is the clear market leader when it comes to telecommunications, providing both broadband and mobile offerings to households, businesses and governments.

WAM Leaders is positive about Telstra because of the plan to realise value through the separation and partial sale of its mobile phone towers that is currently underway.

The fund manager said that Telstra’s average revenue per mobile user has reached an inflection point, with the earnings outlook expected to improve as 5G take up accelerates and even more after international roaming revenue returns.

NBN headwinds are subsiding because the transition has largely already occurred. WAM Leaders thinks that the ASX share will only need to hit the lower end of management’s medium-term earnings targets to continue to pay the current full year dividend of 16 cents per share.

However, the fund manager said that one of the key risks for Telstra is industry competition and changes to the TPG Telecom Ltd (ASX: TPG) board in late March are a “clear positive” for industry rationality over the coming years.

Boral Limited (ASX: BLD)

Construction products business Boral is the other ASX share that the fund manager brought attention to.

It’s a large business with 23,000 employees and 783 operating and distribution sites globally.

WAM Leaders likes the new management team and that strategy that is being pursued. Boral is currently trying to reduce costs, go through a turnaround, divest assets (such as its US building product assets) and manage its capital. Boral also benefits from macroeconomic tailwinds.

The fund manager thinks there are several catalysts that can help the business over the next year.

Progress is being made on management’s $300 million transformation of earnings before interest and tax (EBIT) targets and the expected improvement in operating conditions for both Australian building products and US fly ash.

Boral recently completed the sale of its stake of USG Boral for US$1 billion. It’s going to use this money to pay down debt.

It has started its on-market share buyback ahead of schedule and this is one of the reasons for WAM Leaders liking the ASX share.

More reading

• What’s happening with the Boral (ASX:BLD) share price?
• This ASX telco and bank will go gangbusters: fundie
• 2 fantastic blue chip ASX shares to buy in April
• 4 reliable ASX dividend shares to buy for income
• Why focus could soon shift to dividend upgrades for the Telstra (ASX:TLS) share price

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. 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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