Tag: Motley Fool

The Michael Hill International Ltd (ASX: MHJ) share price is having a fantastic day today. Michael Hill shares are, at the time of writing, up 9.86% to 78 cents a share after closing at 71 cents yesterday and opening at 73 cents a share this morning.

Today’s move is the latest in what has been a very good month for Michael Hill shareholders so far. On top of a very good 2021 and an outstanding 12 months. Michael Hill is now up more than 11% year to date and more than 23% since the start of April. The shares are also up a mouth-watering 117% over the past 12 months. In saying that, Michael Hill is still a ways off of the $1.71 per share levels we were seeing back in 2016, so it hasn’t been an unbridled success story for long term investors.

So who is Michael Hill International? And why are the shares rocketing today?

When diamonds are a shareholders’ best friend

Michael Hill International is a chain of jewellers. The company owns a string of 289 jewellery stores across Australia, New Zealand and Canada. The company was started by the eponymous Michael Hill in New Zealand back in 1979. It listed on the New Zealand Stock Exchange in 1987, and the ASX in 2016. The company expanded into the Australian market in 1987, and the Canadian market in 2002.

Michael Hill was a company that managed to weather the COVID storm rather well last year. In its most recent earnings update back in February, the company reported an 82.1% bump in net profits after tax for the 6 months to 27 December 2020. That was fuelled by a 67% increase in earnings before interest and tax (EBIT), and a 6.3% rise in same-store sales growth.

All of that came despite the jeweller losing 3,709 store trading days as a result of lockdowns, which Michael Hill estimated cost the company $23 million in revenues. 

Why are Michael Hill shares glinting today?

As we touched on earlier, Michael Hill shares are having quite the day today. Normally, a rise of near-10% is sparked by some big news or announcement from the company. But alas, today we have had no such news. The company’s last major announcement was back on 9 April. And that was just some routine paperwork.

In fact, there is no obvious reason at all why Michael Hill shares are rocketing. There are two possible reasons we can speculate on today though. The first is that a share market broker or other investing firm has rated Michael Hill as a buy or upgraded their outlook on the company. The second is that a major institutional investor has taken out a position in Michael Hill shares. Seeing as this company has a market capitalisation of just over $300 million on recent pricing, it wouldn’t take much for a large purchase of stock to push the company’s share price up. 

ASX trading data shows a significant uptick in Michael Hill share trading today. Almost 526,000 shares have swapped hands today, significantly higher than the 5-day average of ~140,000, let alone the 88,000 that traded on Monday. 

Whatever the cause, it has certainly been a good day for Michael Hill International shareholders today.

More reading

• What’s keeping ASX 200 investors awake at night?
• 2 outstanding ASX growth shares to buy now
• Could the Galaxy (ASX:GXY) share price be next to raise capital after Zip (ASX:Z1P)?
• Why the Fortescue (ASX:FMG) share price is slipping today
• Why the Vitalharvest (ASX:VTH) share price is up 21% in 2021

Motley Fool contributor Sebastian Bowen 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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If you have money invested in S&P/ASX 200 Index (ASX: XJO) shares and you’re losing sleep at night, you may want to alter the risk profile of your portfolio.

That’s according to an age-old investor adage, which says you should be comfortable with the risks you’re taking with your money. If you’re tossing and turning at night thinking about your ASX 200 shares, it means you may have too much — or too little — invested in the market.

The solution for you and me is pretty simple. A few minutes on your online trading account or a quick call to your broker and you can adjust your share market exposure to your comfort level.

But spare a thought for the world’s fund managers. Men and women with many millions, if not billions, of other people’s dollars in their hands. Money that they’ve been tasked with putting to good work.

What’s keeping them awake at night?

For an answer to that, we turn to Bank of America Corp’s latest fund manager survey.

COVID-19 booted to fourth place

The Bank of America survey polled 200 fund managers with more than $700 billion of combined assets under management for its monthly survey in April.

The survey revealed that the global pandemic is no longer the fund manager’s number 1 bogeyman.

With the rollout of vaccines underway, the fund managers’ top concern is the so-called taper tantrum. That’s where the US Federal Reserve and other leading global central banks scale back their quantitative easing (QE) programs sooner and more aggressively than they’ve signalled. This could see share investors rushing for the exits as it would lead to rising interest rates.

Second on the list of fund managers’ concerns is inflation. Should inflation return with more vigour than the central bankers have been assuring us it will, this could force the central banks’ hands. To keep inflation in check they may have little choice but to raise interest rates. Again, this would raise the cost of money and make assets outside the share markets (like bonds and cash deposits) relatively more attractive.

Higher tax concerns also beat out COVID-19 for what’s keeping the polled fund managers awake at night. Though tax hikes may be some ways off in Australia, newly elected US President Joe Biden has already indicated his intentions to unwind some of former President Donald Trump’s corporate tax cuts.

Whether corporate or income or sales, higher taxes mean less money in the private sector and tend, at least in the medium term, to present headwinds for share prices.

ASX 200 retail investors

Having admittedly not conducted any polls among retail investors on the ASX 200, I’ll go out on a limb and say the same 4 concerns listed by the fund managers above are likely on your list as well. If not in the same order.

But unlike the fund managers, we have the option to be far more…or less…nimble.

As a retail investor, you don’t have to meet any benchmarks, except those you set for yourself.

So let the fund managers fret about their top concerns. If you’re finding yourself anxious about your allocation to ASX 200 shares then adjust your exposure as you feel best. And enjoy a good night’s rest.

Happy investing.

More reading

• 2 outstanding ASX growth shares to buy now
• Could the Galaxy (ASX:GXY) share price be next to raise capital after Zip (ASX:Z1P)?
• Why the Fortescue (ASX:FMG) share price is slipping today
• Why the Vitalharvest (ASX:VTH) share price is up 21% in 2021
• Is it time to jump on the Westpac (ASX:WBC) share price?

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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If you’re a growth investor then you’re in luck. The Australian share market is home to a number of quality shares that have the potential to grow strongly in the future.

Two top ASX growth shares that have been tipped as buys are listed below. Here’s why they are highly rated:

IDP Education Ltd (ASX: IEL)

The first ASX growth share to look at is IDP Education. It is a leading provider of international student placement and English language testing services.

IDP Education has been impacted greatly by a significant reduction in demand for its services because of the pandemic. This led to the company reporting a 29% decline in revenue to $269 million and a 46% decline in EBIT to $47.3 million during the first half.

While this is disappointing on paper, it is worth noting that trading conditions improved greatly as the half progressed. So much so, in December, testing volumes were broadly in line with those experienced in the final month of 2019 prior to the pandemic.

This bodes well for the second half, particularly given the roll out of vaccines across the world. Furthermore, due to the company’s strong financial position, it is well-placed to win a greater share of the market when the pandemic passes.

Morgan Stanley is a fan of the company. Last month it put an overweight rating and $30.00 price target on the company’s shares. The broker is expecting its earnings to bounce back strongly in FY 2022.

Zip Co Ltd (ASX: Z1P)

Another ASX growth share to consider buying is Zip. This leading buy now pay later (BNPL) provider has been growing at a rapid rate over the last few years.

This has been driven by the ever-increasing popularity of the BNPL payment method with consumers and merchants, the decline in credit card use, and its international expansion. The latter was underpinned by the incredibly successful acquisition of Quadpay in the United States.

While the ANZ business is still growing strongly, Quadpay is the real growth engine right now. And thanks to its massive opportunity in the United States, it looks well-placed to continue driving its growth for a long time to come. So much so, there have been suggestions that Zip should change its name to Quadpay now.

One broker that is positive on the company is Citi. In response to its stellar third quarter update this week, the broker upgraded its shares to a buy rating with an $11.30 price target.

More reading

• Could the Galaxy (ASX:GXY) share price be next to raise capital after Zip (ASX:Z1P)?
• Why the Zip (ASX:Z1P) share price is in a trading halt
• 3 latest ASX shares that top brokers have upgraded to “buy” today
• Why BWX, Fortescue, Webjet, & Zip shares are dropping
• How does Afterpay’s (ASX:APT) growth rates compare to peers?

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 Idp Education Pty Ltd and 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 surge in the Galaxy Resources Limited (ASX: GXY) share price to a three-year high should prompt investors to ask if the miner could be close to pulling the trigger on a capital raising.

This is the perfect time to rattle the can as the S&P/ASX 200 Index (Index:^AXJO) closes in on record high.

Just ask our friends at Zip Co Ltd (ASX: Z1P), which went into a trading halt to prepare for a fresh capital injection. Never mind that Zip undertook a placement and share purchase plan only in December last year.

You can’t blame management teams to strike while the iron’s hot!

Why Galaxy Resources could be mulling a cap raise

That’s why I am half expecting Galaxy Resources to tap shareholders on the shoulder, particularly as the high-flying lithium miner outlined ambitious plans for its Sal de Vida project.

Galaxy Resources is looking increasingly unlikely to sell a stake in the project, reported Peter Ker from the Australian Financial Review.

The recent surge in the lithium price is giving management courage to go alone on the first state of the US$153 million ($200 million) project.

This first stage should be enough for Sal de Vida to produce 10,700 tonnes of lithium carbonate a year. Around 80% of this output is expected to be battery grade.

Stars aligned for a placement and SPP

In case you were asleep, lithium is the flavour of the month. Several experts are predicting a looming supply shortfall on accelerating sales of electric vehicles.

This could not be a more perfect time for Galaxy Resources to raise cash. It would almost be like shooting fish in a barrel.

One also cannot underestimate the miner’s need for cash if it wants to accelerate the second and third phases of Sal de Vida.

Growing capex requirements

The expansion will more than triple the project’s output at a cost of another US$313 million. It’s perfectly logical to want to increase production as quickly as possible to capitalise on high commodity prices.

You can bet other lithium miners are desperately looking for ways to boost production. Galaxy Resources won’t want to be a late comer to the party.

The miner’s chief executive Simon Hay is reported as saying he would prefer to sell a stake in Sal de Vida in the second or third stages of the project. That’s when Galaxy Resources will need US$244 million for its James Bay project in Canada.

Foolish takeaway

But I am not discounting Galaxy Resources holding on to all of Sal de Vida if it can raise sufficient cash from shareholders.

The last time Galaxy Resources raised capital was in November last year when it got a circa $160 million cash injection.

Never mind the miner’s repeated recent claims of having a strong balance sheet. I have yet to meet a CEO who would turn down an easy cap raise.

More reading

• Why the Zip (ASX:Z1P) share price is in a trading halt
• 3 latest ASX shares that top brokers have upgraded to “buy” today
• Why BWX, Fortescue, Webjet, & Zip shares are dropping
• How does Afterpay’s (ASX:APT) growth rates compare to peers?
• Why BrainChip, Dubber, Galaxy, & Resolute shares are charging higher

Brendon Lau owns shares of Galaxy Resources Limited. Connect with me on Twitter @brenlau.

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.

The post Could the Galaxy (ASX:GXY) share price be next to raise capital after Zip (ASX:Z1P)? appeared first on The Motley Fool Australia.

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The Fortescue Metals Group Limited (ASX: FMG) share price is falling slightly today amid news that the company met with Jordanian government officials to discuss hydrogen energy, with few other details revealed.

The Fortescue share price is down 0.54% to $20.25 today.

Fortescue is one of Australia’s largest miners, involved primarily in the exploration, development, production, processing and sale of iron ore. Unlike Australia’s other large mining companies, however, it has a net-zero emissions target by 2030.

Fortescue’s hydrogen shift 

In recent years, Fortescue chair Andrew Forrest has been one of Australia’s most vocal proponents of shifting towards renewable energy. The company recently announced plans to become carbon neutral by 2030.

Fortescue is planning to shift towards producing hydrogen energy and ammonia, which was the stated purpose of its meeting with Jordanian officials.

It’s been a busy few months in this space for the Australian mining giant. Fortescue recently signed an agreement with South Korean steel manufacturer Posco to collaborate on a hydrogen-production partnership.

It signed similar deals with South Korea’s Hyundai and the Commonwealth Scientific and Industrial Research Organization last year.

Fortescue, hydrogen and the Middle East

A delegation from Fortescue met with Jordanian Planning Minister Nasser Shraideh to explore and discuss investment opportunities. Forrest has recently returned from a world tour scouting potential hydrogen-producing destinations.

Shraideh reportedly gave a presentation on Jordan’s investment environment and spoke of the government’s clean energy plans, suggesting the Middle Eastern country is keen on attracting Fortescue’s investment. Australia’s Jordanian ambassador also attended the meeting.

The Middle East appears to be emerging as the go-to destination for hydrogen energy producers, with the world’s largest hydrogen plant recently opened in Saudi Arabia.

The plant is being opened near the Jordanian border in Neom, a planned new mega-city built around the burgeoning renewable energy industry.

Neom, in many ways, is targeted to be the new centre of world hydrogen production, and the Jordanian government may be keen to profit and replicate from the emerging industries on their doorstep.

But Jordan is already developing a highly effective renewable energy industry of its own. Jordan is scheduled to raise renewable electricity production to 2,400 megawatts this year, accounting for approximately 22% of the country’s total requirements.

Fortescue share price snapshot

The Fortescue share price has fallen 18% since the beginning of 2021. Despite these losses, it’s still up more than 74% over the past 12 months, largely due to high iron-ore prices.

More reading

• Why BWX, Fortescue, Webjet, & Zip shares are dropping
• Fortescue (ASX:FMG) share price tumbles on broker downgrade
• Is the Fortescue (ASX:FMG) share price an attractive opportunity?
• Why are the big ASX mining share prices slipping today?
• ASX 200 Weekly Wrap: ASX sees 7,000 points once more

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.

The post Why the Fortescue (ASX:FMG) share price is slipping today appeared first on The Motley Fool Australia.

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The Vitalharvest Freehold Trust (ASX: VTH) share price is shooting like a beanstalk in 2021. Since the first trading day of the year, shares in the real estate investment trust (REIT) have appreciated by 21.4%.

Presently, its shares are swapping hands for $1.19 each – up 0.42% on yesterday’s close. By comparison, the All Ordinaries Index (ASX: XAO) is up by around 4.7% in 2021 and 0.72% today. 

Let’s take a closer look at what’s driving the Vitalharvest share price higher.

Tug-of-war pushes Vitalharvest share price higher

So, what’s affecting Vitalharvest shares? A bidding war for the company, that’s what. Back in November 2020, news broke that Macquarie Group Ltd (ASX: MQG) subsidiary Macquarie Infrastructure and Real Assets (MIRA) proposed to buy all shares in the trust for $1.00 per unit. At the time, this represented a 27% premium on the last closing price.

Since then, private equity firm Roc has entered the fray. Both parties have subsequently been submitting ever-increasing bids for the company, sending the Vitalharvest share price higher.

Roc’s most recent proposal improved its offer for the company from $1.12 to $1.16 per share. On top, Roc is willing to pay a 2.5 cent dividend on each share for “rent received to 31 December 2020.”

Today, MIRA fired back. The company matched Roc’s offer to buy shares for $1.16 per unit and pay a 2.5 cent dividend on each share. Responding to the offer, Vitalharvest said:

[Vitalharvest] is assessing whether [MIRA]’s further revised proposal would, or would be likely to, provide an equivalent or superior outcome for [Vitalharvest] unitholders than the Modified Roc Offer.

[Vitalharvest] will update the market as soon as possible.

It should be noted that today’s Vitalharvest share price is half a cent above the offer from both companies, when factoring in the dividend payment.

What is Vitalharvest?

Vitalharvest owns one of the largest aggregations of berry and citrus farms in Australia. These are located in rural and regional New South Wales, South Australia and Tasmania and are leased to Costa Group Holdings Ltd (ASX: CGC).

In further good news for the company, a Rabobank report released last month predicted agricultural commodity prices will continue heading north.   

Vitalharvest share price snapshot

Over the last 12 months, the Vitalharvest share price has appreciated by 72.5%. As outlined above, most of those gains have occurred in the last 6 months. Vitalharvest’s value has appreciated 52.6% since mid-October last year.

Based on the current share price, the company has a market capitalisation of $219.2 million.

More reading

• Leading brokers name 3 ASX shares to sell today
• Macquarie (ASX:MQG) just delivered ASX lithium shares a big boost
• This beaten-down ASX sector could soon be turning the corner
• ASX 200 Weekly Wrap: ASX sees 7,000 points once more
• ASX 200 climbs 1%, Westpac rises, Western Areas jumps

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO and Macquarie 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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Is it time for investors to jump onto the Westpac Banking Corp (ASX: WBC) share price?

Westpac shares just keep going higher and higher. Over just the last two months it has risen by 13.3%.

What’s driving the Westpac share price higher?

Westpac saw most of its recent gain occur after releasing its FY21 first quarter update during reporting season. 

The major ASX bank reported a quarterly statutory net profit of $1.7 billion, which was up significantly from the FY20 second half quarterly average of $550 million.

Its cash earnings came in at $1.97 billion, which was much stronger than the second half of FY20’s quarterly average of $808 million (up 54% excluding notable items).

Westpac reported an impairment benefit of $501 million from improved credit quality, better economic outcomes and a better economic outlook.

Despite the low rate interest environment and all of the difficulties that Westpac is facing, it managed to increase its net interest margin (NIM) by 3 basis points, compared to the second half of FY20, up to 2.06%. The increase was 2 basis points excluding notable items.

However, Westpac did provide detail about the underlying numbers – core earnings were up 28%, or just 3% excluding notable items.

Westpac’s balance sheet has been improving, just like the other big banks of Commowealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ).

The Westpac common equity tier 1 (CET1) capital ratio improved by 74 basis points to 11.9% compared to 30 September 2020.

One thing that investors may want to note is that Westpac is now looking at its New Zealand business. Westpac said that given the changing capital requirements in New Zealand and the Reserve Bank of New Zealand requirement to structurally separate Westpac’s New Zealand business operations from its operations in Australia, it’s assessing the best structure for these businesses going forward.

Management thoughts

Westpac CEO Peter King said:

While uncertainty remains around the impact of local COVID outbreaks, there is cause of optimism. The economy is recovering, consumer and business confidence is strong, and the labour market has been much more resilient than expected. At the end of December there were 12.9 million employed Australians compared to 13 million in March 2020.

We are also beginning to improve momentum in mortgages and while the book was little changed over the half, we have processed a significant increase in applications. Low interest rates, rising house prices, new construction, and high consumer confidence all point to continued recovery in home lending activity in 2021.

Is the Westpac share price a buy?

The broker Morgan Stanley rates Westpac shares as a buy because of how exposed it is to the home loan market. Loan growth is increasing and the improvement in credit demand is likely to mean that the Westpac share price can keep rising.

On Morgan Stanley’s numbers, Westpac is valued at 16x FY21’s estimated earnings with a grossed-up dividend yield of 6.2%.

More reading

• The Coinbase (NASDAQ:COIN) IPO price has been announced
• ASX 200 rises, Zip (ASX:Z1P) flies, bank ratings upgraded
• Why Westpac (ASX:WBC) could be about to deliver a dividend surge
• Why the NAB (ASX:NAB) share price could push higher from here
• ASX 200 Weekly Wrap: ASX sees 7,000 points once more

Motley Fool contributor Tristan Harrison 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 Is it time to jump on the Westpac (ASX:WBC) share price? appeared first on The Motley Fool Australia.

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Last week, we discussed how one of the ASX banks in Westpac Banking Corp (ASX: WBC) was set to enjoy an upcoming windfall. The source of this windfall? An investment the Westpac-backed venture capital fund Reinventure made in a US company by the name of Coinbase. Coinbase provides an exchange for investors to buy and sell cryptocurrencies, where users can trade popular cryptocurrencies like Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH) and Ripple (CRYPTO: XRP)

Reinventure made a $50 million investment in Coinbase back in 2015. That investment could now be worth much more tomorrow. Coinbase is about to list over in the US on the Nasdaq exchange (ticker to be NASDAQ: COIN). And we’ve just found out its listing price.

Coinbase set to debut tonight

According to an article from Nasdaq.com, Coinbase will list at a price of US$250 per share. That share price would value Coinbase at almost US$50 billion. As the Nasdaq notes, that price is “not an offering price for investors to purchase shares, but rather a benchmark for performance when the stock starts trading”. And there’s a fair bit of evidence to suggest it will rise above that benchmark. Firstly, Coinbase is in an area (cryptocurrencies) that garners a lot of attention from retail investors these days. We have seen how a hyped up and enthusiastic retail base of shareholders can drive a newly listed tech company to massive initial gains on listing. Just look at the Snowflake Inc (NYSE: SNOW) last year. Or the recent ASX listing of Airtasker Ltd (ASX: ART). As such, we can reasonably expect to see a generous level of interest for Coinbase when it lists.

Further, the Nasdaq report notes that Coinbase shares were trading with a US$343.58 volume-weighted average price per share on private markets in the first quarter of this year.

All of this also comes as the price of cryptocurrencies like Bitcoin hit all-time highs – which is perhaps a fortuitous coincidence for Coinbase at this time. Or, as my Fool colleague Bernd Struben noted the other day, perhaps this is a chicken-and-egg scenario where interest in the Coinbase IPO is actually feeding into the Bitcoin price. 

Either way, this is shaping up to be quite the blockbuster share market event. For both Coinbase and Bitcoin. Of course, we ASX investors will need to stay up late tonight to see how it all unfolds (the US markets will open trading at 11:30 pm AEST). See you then, perhaps.

More reading

• Is it time to jump on the Westpac (ASX:WBC) share price?
• Bitcoin price hits new record high as Bitcoin ETF tops $1.3 billion
• The DigitalX (ASX:DCC) share price is up 30% this week
• ASX 200 rises, Zip (ASX:Z1P) flies, bank ratings upgraded
• Why Westpac (ASX:WBC) could be about to deliver a dividend surge

Sebastian Bowen owns Bitcoin, Ripple and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Bitcoin and Snowflake Inc. 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 has been a very eventful day for the Zip Co Ltd (ASX: Z1P) share price on Wednesday.

At one stage today, the buy now pay later (BNPL) provider’s shares were up as much as 9% to $10.61.

However, the Zip share price began to fade in afternoon trade, leading to it giving back its gains and more.

This left the company’s shares trading 1% lower at $9.61 before being hurried into a trading halt.

Why is the Zip share price in a trading halt?

This afternoon Zip requested a trading halt pending the release of an announcement relating to a capital raising.

The company expects that the trading halt will remain in place until the commencement of normal trading on Friday 16 April.

What is Zip aiming to raise?

While the company has not revealed what it is seeking to raise, the AFR understands that it is aiming to raise $300 million-plus.

According to the report, Zip will follow the lead of rival Afterpay Ltd (ASX: APT) by raising these funds via a convertible notes offering. Last month Afterpay completed its $1.5 billion notes offering.

With the Zip share price up 72% since the start of the year, it appears as though management sees now as an opportune time to raise money at good price.

Though, some shareholders will no doubt be disappointed with the news given that it wasn’t that long ago that Zip raised funds.

In January the company completed a placement and share purchase plan which raised a total of $176.7 million at an issue price of ~$5.34. This led to Zip having almost $1.5 billion of liquidity in Australia at the end of March, according to yesterday’s third quarter update.

Positively, the report suggests that Zip will not struggle to raise the funds given the appetite for convertible notes from institutional investors. And given the rate in which its US-based Quadpay business is growing, Zip’s convertible notes are likely to be an attractive proposition for many investors.

More reading

• 3 latest ASX shares that top brokers have upgraded to “buy” today
• Why BWX, Fortescue, Webjet, & Zip shares are dropping
• How does Afterpay’s (ASX:APT) growth rates compare to peers?
• Top brokers name 3 ASX shares to buy today
• Are brokers bullish on the Zip (ASX:Z1P) share price after quarterly results?

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

The post Why the Zip (ASX:Z1P) share price is in a trading halt appeared first on The Motley Fool Australia.

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The path of least resistance is up for our market and top brokers have just boosted these ASX shares to “buy”.

The S&P/ASX 200 Index (Index:^AXJO) rallied 0.6% in after lunch trade and is closing in on its record high from just before the COVID-19 market meltdown.

Many experts have a bullish 2021 outlook for ASX shares and here are three that just got put on the broker buy list.

Supply deficit boosts Sandfire share price to buy

The first is the Sandfire Resources Ltd (ASX: SFR) share price. Goldman Sachs upgraded the copper miner to “buy” from “neutral” as it revised up its copper price forecasts.

The broker reckons the red metal will jump by a third from the current spot price to US$5.39 a pound next year. It also lifted its long-term price forecast by 24% to US$4 a pound.

Goldman believes copper and aluminium are facing a supply deficit over the long term. Miners cannot keep up with demand from renewables – a problem made worse by a lack of investment in new mining projects.

The broker’s 12-month price target on the Sandfire share price is $7.60 a share.

The ASX share zipping higher     

Another ASX share that got an upgrade is the Zip Co Ltd (ASX: Z1P) share price. Citigroup increased its rating on the buy now, pay later (BNPL) company to “buy” from “neutral”.

A better-than-expected update from Zip Co’s US business, Quadpay, prompted the bullish turn.

“The key highlight from Zip’s 3Q update was stronger than expected volume growth, with Quadpay TTV +31% ahead of CitiE and up +14% qoq on a seasonally strong Dec qtr,” said Citi.

“With Quadpay accelerating and continuing to beat our expectations, we upgrade Zip to Buy.”

The broker’s 12-month price target on the Zip Co share price is $11.30 a share.

The ASX share upgraded on potential earnings surprise

Meanwhile, the newest ASX share to make it on Jarden’s buy list is the Computershare Ltd (ASX: CPU) share price.

The broker initiated coverage on the share registry services group and called it an “underappreciated macro recovery play”.

While the Computershare share price has bounced since the onset of COVID-19, investors are underestimating the pace of its earnings recovery, particularly following the acquisition of Wells Fargo’s US Corporate Trust Services (CTS) business.

“Annual cost synergies of $80m should support proforma FY21E EPS accretion of 15%+ and a 9% ROIC (emerges over 5 yrs),” said Jarden.

“However, leverage to rising interest rates could boost EPS accretion and ROIC to 25% by FY25E.”

The broker’s 12-month price target on the Computershare share price is $18.65 a share.

More reading

• Why the Zip (ASX:Z1P) share price is in a trading halt
• Why BWX, Fortescue, Webjet, & Zip shares are dropping
• How does Afterpay’s (ASX:APT) growth rates compare to peers?
• This could be boosting the Kogan (ASX:KGN) share price today
• Top brokers name 3 ASX shares to buy today

Brendon Lau owns shares of Sandfire Resources Ltd. 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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