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The Zip Co Ltd (ASX: Z1P) share price surged on Tuesday after the company announced yet another solid quarterly update. At the time of writing, the Zip share price is trading for $10.56, up 8.53%.

Investors turned their attention as to whether or not rising competition in the buy now pay later sector would impact near-term growth. And if Zip could continue to capitalise on the significant United States retail and e-commerce market. 

Off to the races with the Zip share price 

The Zip shares opened a solid 4.5% higher on Tuesday. However, this was just the beginning of its bullish intraday run. Unrelenting buying momentum throughout the day pushed its shares an eye-watering 16.95% higher by close. 

It is apparent that the market is pleased with the quarterly results. The company delivered an 80%, 195%, and 114% increase in revenue, transaction numbers, and transaction volume respectively on the prior corresponding period. 

Perhaps more importantly, the company’s US-based QuadPay business continued to gain momentum. Transaction volumes grew 234% to $762 million and active customers growing 153% to 3.8 million. This also translated to a 188% increase in revenue to $54.4 million, or a record 47.55% contribution to group revenue. 

Zip takes aim at greater international exposure

Afterpay has always led the buy now pay later (BNPL) sector in terms of international exposure. It was one of the first ASX-listed BNPL shares to begin operations in the US and UK. Additionally, it took the initiative to acquire Pagantis to access Europe and furthermore establish a base in Singapore.

More recently, the company successfully obtained the go-ahead from the Bank of Spain, going live with merchants in France, Spain, and Italy with additional access to Germany and Portugal. 

Zip has lifted its international efforts following a $120 million capital raising back in late December 2020. This capital raising established a “New Markets” division for the business to lead the active pursuit of global growth opportunities. 

The division hit the ground running with an investment in Spotii, a leading BNPL focused on the Gulf Cooperation Council region. In addition to Twisto, a leading payments platform operational in Czechia and Poland. 

In Tuesday’s quarterly update, the New Markets division continued to expand its global footprint across both the developed and developing world. This included a soft launch in Canada, driven by its US merchant demand, a strategic investment into South East Asia via TendoPay in Philippines, and a follow-on investment into Twisto. 

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises, Zip (ASX:Z1P) flies, bank ratings upgraded
• 2 outstanding ASX tech shares to buy
• What’s lifting the Afterpay (ASX:APT) share price today?
• Afterpay and Zip were among the most traded ASX shares last week

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of 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.

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The Woodside Petroleum Limited (ASX: WPL) share price is under pressure on Wednesday.

In morning trade, the energy producer’s shares are down 1% to $24.06.

Why is the Woodside share price edging lower?

After the market close on Tuesday, Woodside provided an update on its CEO succession.

According to the release, the Woodside Board and its CEO, Peter Coleman, have agreed that Mr Coleman will retire from the role on 3 June 2021.

This follows an announcement in December stating Mr Coleman’s intention to retire from Woodside in 2021, by which time he will have served ten years in the role of CEO.

What now?

Replacing Mr Coleman on an acting basis will be Woodside’s Executive Vice President Development and Marketing, Meg O’Neill. She will commence in the role next week on 20 April.

Woodside’s Chairman, Richard Goyder, commented: “Peter has been an outstanding CEO, creating a resilient and future-focused organisation. “Throughout his time at the helm of Woodside, Peter has demonstrated a commitment to promoting inclusion and diversity, operational excellence, a safe workplace, prudent capital management and maintenance of a strong balance sheet.”

Mr Goyder spoke very positively about the appointment of Meg O’Neill as Acting CEO.

He said: “The Board is very pleased to announce the appointment of Meg O’Neill as Acting CEO. Meg has demonstrated that she is an extremely capable executive, underpinned by her extensive experience and track record in the global energy sector.”

The company advised that its internal and external search for Woodside’s next permanent CEO is progressing.

However, one person that won’t be taking the role is Santos Ltd (ASX: STO) CEO, Kevin Gallagher. Earlier this week Santos gave him a one-off growth projects incentive to keep him in the role.

Oil price rise not enough

Mr Coleman’s exit appears to have offset news of a rise in oil prices overnight following the release of strong economic data out of China.

According to Bloomberg, the WTI crude oil price is up 1.2% to US$60.41 a barrel and the Brent crude oil price has risen 1% to US$63.91 a barrel.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 Weekly Wrap: ASX sees 7,000 points once more
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor James Mickleboro 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 Telix Pharmaceuticals Ltd (ASX: TLX) share price is storming higher this morning.

At the time of writing, the clinical-stage biopharmaceutical company’s shares are up 5% to $4.24.

Why is the Telix share price rising?

Investors have been buying Telix shares this morning following the release of an update on its prostate cancer imaging product, Illuccix.

According to the release, the Australian Therapeutic Goods Administration (TGA) has accepted the company’s submission for the registration of Illuccix and has now commenced the priority evaluation process.

Under the priority registration pathway, the TGA will evaluate Telix’s submission to register Illuccix on the Australian Register of Therapeutic Goods (ARTG) with a target timeframe of 150 working days and an indicative decision date of 12 November 2021.

This means that the company now has regulatory reviews for Illuccix in progress in 17 countries globally. This includes Canada, the European Union, and the United States.

Management commentary

 Telix’s CEO, Dr. Christian Behrenbruch, said: “We are pleased that the TGA has accepted our submission for the registration of Illuccix and has now commenced the priority evaluation phase. This brings us significantly closer to our goal of providing widespread access to state-of-the-art prostate cancer imaging for Australian men living with prostate cancer.”

“Should we be successful in gaining TGA registration of Illuccix in Australia, we would also anticipate filing a New Medical Application with Medsafe in New Zealand under the abbreviated evaluation process for medicines approved by recognised overseas regulators. We are committed to providing access to Illuccix for all men living with prostate cancer, regardless of where they reside.”

There certainly is a need for this state-of-the-art technology. The release explains that prostate cancer was the most commonly diagnosed cancer in men in both Australia and New Zealand in 2020.

More than 85,000 Australian and New Zealand men were estimated to be living with prostate cancer last year.

More reading

• Why the BrainChip (ASX:BRN) share price is rocketing 27% higher today
• AMP (ASX:AMP) share price hits new 52-week low
• 2 of the best ASX 200 blue chip shares to buy
• U.S. gives Johnson & Johnson’s COVID-19 vaccine a timeout
• 4 reliable ASX dividend shares to buy for income

Motley Fool contributor James Mickleboro owns shares of TELIXPHARM DEF SET. 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 BrainChip Holdings Ltd (ASX: BRN) share price is rocketing higher on Wednesday.

In early trade, the artificial intelligence (AI) technology company’s shares are up a massive 27% to 67.5 cents.

Why is the BrainChip share price rocketing higher?

Investors have been buying the company’s shares after it announced the start of volume manufacturing of its Akida AKD1000 neuromorphic processor chip for edge AI devices.

According to the release, the engineering layout for BrainChip’s high-performance, ultra-low power chip was designed in partnership with Socionext. It is a developer of advanced System-on-Chip (SoC) solutions.

Socionext then released the engineering layout of the production version of the AKD1000 chip to Taiwan Semiconductor Manufacturing Company, which has begun preparing to manufacture at volume.

What is Akida?

The company describes its Akida Neural Processor technology as a revolutionary advanced neural networking processor that brings AI to the edge in a way that existing technologies are not capable.

It notes that the solution is high-performance, small, ultra-low power and enables a wide array of edge capabilities.

It can be used in applications including Smart Home, Smart Health, Smart City and Smart Transportation. These applications include home automation and remote controls, industrial IoT, robotics, security cameras, sensors, unmanned aircraft, autonomous vehicles, medical instruments, object detection, sound detection, odor and taste detection, gesture control and cybersecurity.

BrainChip’s CEO, Peter van der Made, commented: “I am grateful to our engineering team, who worked hard over the past eight months to release the Akida technology for volume production, and to our EAP customers that have helped lead us to market readiness.”

“This move to manufacturing is a major milestone for BrainChip and for the industry at large as the first realistic opportunity to bring AI processing capability to edge devices for learning, enabling personalization of products without the need for retraining,” he concluded.

More reading

• Airtasker and Zip were among the most traded ASX shares last week
• Why BrainChip, Crown, Qantas, & Quickstep shares are tumbling lower
• BrainChip (ASX:BRN) share price sinks on shock CEO exit
• ASX quarterly rebalance: HUB24 joins ASX 200, Brainchip into ASX 300

Motley Fool contributor James Mickleboro 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 AMP Limited (ASX: AMP) share price has had a tough start to the year. Shares in the Aussie financial services group have slumped 20.5% amid hitting a new 52-week low at Tuesday’s close.

Why is the AMP share price falling?

AMP has been in the news a lot as of late. Last year, major US private equity group, Ares Management confirmed its interest in acquiring 100% of AMP shares. That came in the form of an indicative, non-binding, conditional proposal in November. 

Ultimately, however, that $6 billion takeover deal fell through when Ares withdrew in February. AMP has since been working on a $1.35 billion sale of 60% of its AMP Capital unlisted markets business. The AMP Capital business is one of the most profitable arms under the AMP brand.

AMP will retain a 40% stake in the private markets business under the proposed joint venture with Ares. The deal also follows the sale of AMP Life for $3 billion to Resolution Life in July 2020 to leave a slimmed-down financial services group.

The AMP share price is under pressure as negotiations continue. Many investors have sold down, pushing the company’s share price to $1.24 per share at yesterday’s close. Well below Ares’ takeover offer of $1.85 per share.

There have also been leadership changes at the Aussie company. AMP CEO Francesco de Ferrari announced his retirement in late March 2021. He is set to be replaced by former Australia and New Zealand Banking Group Ltd (ASX: ANZ) deputy CEO, Alexis George.

The AMP share price has continued to slide to its current level amid the changes. It comes after Mr. De Ferrari was installed to right the ship after a scandal-plagued period highlighted by the 2018 Financial Services Royal Commission.

Foolish takeaway

The AMP share price remains under pressure in 2021 amid many operational and leadership changes at the group. Shares in the Aussie trading group fell lower on Tuesday to hit a new 52-week low of $1.24 per share at the market close.

Shares in the Aussie financial services group are underperforming the S&P/ASX 200 Index (ASX: XJO) by 24.9% so far this calendar year.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises, Zip (ASX:Z1P) flies, bank ratings upgraded
• Why ASX 200 tech shares are vital to manufacturers’ reshoring plans
• ASX 200 flat: Zip rockets, Cleanaway higher, Regis-IGO announce Tropicana deal
• The Orocobre (ASX:ORE) share price is climbing. Here’s why.

Motley Fool contributor Ken Hall 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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There a few S&P/ASX 200 Index (ASX: XJO) blue chip shares that could be worthy of your attention.

Businesses that have strong competitive advantages and keep investing in their product have a good chance of producing solid long-term returns.

These two may be among the best in the ASX 200:

Xero Limited (ASX: XRO)

Xero is one of the largest technology businesses on the ASX.

It offers small and medium businesses online accounting software which is presented in an easy-to-understand way. It also has plenty of useful tools to help do the accounting work quicker and give the business owner and financial adviser greater insights into how the business is performing.

This offering is proving popular all over the world. Xero is building a global subscriber base in countries like Australia, the UK and the USA. At the latest count, Xero had 2.45 million subscribers at 30 September 2020 – an increase of 19% from the prior corresponding period.

Xero invests heavily for the long-term and addressing customer needs. In the FY21 half-year period it invested $140 million, which was up 29% compared to the prior corresponding period and significantly more than the operating revenue growth of 21%.

It’s a powerful combination with Xero’s gross profit margin of close to 86%. That’s very high for an ASX 200 blue chip share.

Xero CEO Steve Vamos said about the HY21 result:

This result demonstrates the value our customers attribute to their Xero subscription and the underlying strength of Xero’s business model. We continue to prioritise investment in customer growth and product development in line with the long term opportunity we see.

Altium Limited (ASX: ALU)

Altium is another of the leading technology businesses. It wants to be the world-leading provider of electronic PCB software.

It’s trying to achieve that with its Altium 365 product, which is an online cloud offering which allows engineers to collaborate on projects.

This is the world’s first digital platform for design and realisation of electronics hardware and it’s gaining strong early adoption.

Altium 365 will also give the company the opportunity to generate revenue through different models. The company could generate transaction fees on manufacturing (like the Airbnb model) and there’s also the opportunity for premium services (like Amazon Prime).

When Altium reported its FY21 half-year result, it said that Altium 365 had 9,300 active users (up 83%) and over 4,400 active accounts (up 69%).

Over the next few years, the ASX 200 blue chip share is targeting 100,000 active subscribers to compel key industry stakeholders to support its agenda to transform electronic design and its realisation.

It’s aiming to reach US$500 million of revenue by 2025 and this should translate into materially higher profit margins, which will help grow the bottom profit line faster than the revenue.

More reading

• 2 excellent ASX shares that could be strong buys
• How you can become rich buying and holding ASX shares
• Leading brokers name 3 ASX shares to buy today
• ASX 200 down 0.3%: Webjet completes note offering, Xero pushes higher
• Why the Xero (ASX:XRO) share price can go even higher from here

Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Altium. The Motley Fool Australia owns shares of Altium. 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.

The third coronavirus vaccine authorized for emergency use in the United States is going to sit in the corner by itself for a little while. On Tuesday morning, the Centers for Disease Control and Prevention and the Food and Drug Administration issued a joint statement regarding Johnson & Johnson‘s (NYSE: JNJ) COVID-19 vaccine.

The agencies recommended that health care providers pause their use of Johnson & Johnson’s vaccine until an advisory committee can review six cases in which inoculations were followed by dangerous blood clots. All six occurred in women between the ages of 18 and 48 years old. Most importantly, they were associated with a low concentration of blood platelets.

If there is an associated risk, it’s an extremely small one. As of Monday, more than 6.8 million people had received Johnson & Johnson’s COVID-19 vaccine.

At a rate of less than one patient in a million, this pause might seem like an excessive overabundance of caution. The agencies won’t please anyone with this decision, but they really don’t have another option.

Both AstraZeneca‘s (NASDAQ: AZN) COVID-19 vaccine and Johnson & Johnson’s employ a non-replicating virus that delivers genetic instructions. The European Medicines Agency recently said unusual blood clots that present in combination with low platelet levels should be listed as a very rare side effect of AstraZeneca’s COVID-19 vaccine after assessing dozens of cases similar to the six reported in association with J&J’s vaccine.

Blood clots that break free and travel to the blood vessels that serve the heart and other organ systems can be fatal. Strong blood thinners are standard treatments for dangerous clots, but giving those to patients with low platelet concentrations can be just as dangerous. 

The Advisory Committee on Immunization Practices will meet on Wednesday, so based on its determination, injections with Johnson & Johnson’s vaccine could be allowed to resume before the end of the week.

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

More reading

• Analyst downgrades AstraZeneca stock due to vaccine side effect concerns
• ASX 200 Weekly Wrap: ASX sees 7,000 points once more
• Could AstraZeneca double your money despite vaccine woes?
• 2 top ASX ETFs to buy right now
• Are COVID-19 vaccine worries affecting the CSL (ASX:CSL) share price?

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Johnson & Johnson. 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 U.S. gives Johnson & Johnson’s COVID-19 vaccine a timeout appeared first on The Motley Fool Australia.

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

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There are some ASX dividend shares that have been chosen by an expert stock picker as ideas for income.

Paul Rickard is one of the leading figures at Switzer Financial Group, and he recently shared some of his favourite income picks that aren’t miners or banks. Mr Rickard’s idea of a good ASX dividend share is one that’s quite boring, reliable, and importantly – has relatively stable capital. That means it won’t go up or down in price much.

These are the four ideas that he named:

Charter Hall Long WALE REIT (ASX: CLW)

As the name suggests, this is a real estate investment trust (REIT) which is focused on finding quality properties and quality tenants, and maintaining a long-term weighted average lease expiry (WALE). The WALE is around 14 years, which is one of the longest in the sector.

Mr Rickard pointed out the diversification of the REIT. It’s invested in a variety of sectors including industrial and logistics, retail, office, telco exchanges and agri-logistics.

It has many recognisable tenants like government entities, BP, Woolworths Group Ltd (ASX: WOW), Ingham’s Group Ltd (ASX: ING), Coles Group Ltd (ASX: COL) and David Jones.

The REIT’s 100% distribution payout ratio means that it has a high yield. In FY21 it’s expecting to generate operating earnings per share (EPS) of at least 29.1 cents, which is growing of at least 2.8% and translates to a distribution yield of at least 6%.

APA Group (ASX: APA)

APA owns and operates $22 billion of energy infrastructure assets, including a huge gas pipeline network around the country, as well as pipelines that connect to 1.4 million gas consumers. It also owns various other energy assets.

Mr Rickard pointed out that “approximately 89% of APA’s revenue is ‘take or pay’ being either capacity charge revenue, regulated revenue or contracted fixed revenue. This means it is relatively fixed and not subject to short term variable demand.”

The nature of APA’s business, assets and customers means that the business has a lot of visibility for its financial expectations.

The ASX dividend share is expecting to pay a distribution of 51 cents per unit, which equates to a distribution yield of 5.1%.

Mr Rickard likes the low risk nature and stable cashflows of the business.

Medibank Private Limited (ASX: MPL)

Australia’s largest private health insurance business is the third pick of the financial commentator.

He noted that it keeps increasing its total policyholder count as well as its market share. It has done well to offset the difficulties of participation and affordability. There are areas of growth that the company is pursuing like in-home care, health and wellbeing services, and telehealth ancillary services.

Although the CEO will soon be departing, there are positives for the ASX dividend share – like the strong profit growth of both its investment income profit and the health insurance operating profit.

However, claims are expected to rise in the second half of FY21 as the COVID-19 effects on private health activities subsides, and volumes return. But the company is also expecting more efficiency improvements.

Using the numbers that Mr Rickard shared about the expected Medibank FY21 dividend, it has a forward grossed-up dividend yield of 5.8%.

Telstra Corporation Ltd (ASX: TLS)

The telco was the final pick by Mr Rickard, he thinks that Telstra can generate a little bit of share price growth, perhaps up to $3.75 over time. The demand for income, and the sale of TowerCo, could provide a floor for the Telstra share price.

For the foreseeable future, the dividend is expected to be $0.16 per share.

That means that the Telstra share price could offer a grossed-up dividend yield of 6.6% for the next couple of years.

More reading

• Why focus could soon shift to dividend upgrades for the Telstra (ASX:TLS) share price
• 2 ASX 200 shares to buy for dividends
• Telstra (ASX:TLS) share price hits new 8-month high
• How this ASX ETF is battling the biggest threat to Australian business growth
• 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 owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of APA Group, COLESGROUP DEF SET, and Woolworths 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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Alcidion Group Ltd (ASX: ALC) shares will enter a trading halt this morning after the company’s early morning request.

Why are Alcidion shares in a trading halt?

The Aussie healthcare information company requested a trading halt from the market operator prior to this morning’s open. This comes ahead of an announcement to the market regarding acquisitions and capital raising.

Alcidion has requested a trading halt to remain in place until Friday’s market open. Alternatively, the halt will end when an announcement regarding the planned acquisition and capital raise is made.

That means Alcidion shares will not start trading on Wednesday unless an update is provided prior to 10 am AEST. 

What does Alcidion do?

Alcidion is a Melbourne-based group combining information technology with healthcare solutions. The company focuses on developing and licensing a range of software products for use in the healthcare sector.

Alcidion operates across Australia, New Zealand, and the United Kingdom under brands such as Miya, Patientrack, and Smartpage. Alcidion has more than 65,000 users across more than 300 hospitals around the world.

How has Alcidion been performing recently?

As of Tuesday’s close, Alcidion boasts a market capitalisation of $332 million and closed just shy of a 52-week high. Alcidion shares have returned 86.5% for shareholders in the year to date and a whopping 580% in the last 5 years.

Shares in the Aussie healthcare informatics group will be worth watching this week. Particularly following the acquisition and capital raise update from the company. 

Alcidion shares have been rocketing higher to start the year with a strong performance in late February and March. Much of that has been driven by newly developed partnerships on a global scale.

This includes hitting new 52-week highs on the back of new agreements with a New Zealand District Health Board (DHB) and East Lancashire Hospitals HS Trust in the UK.

More reading

• 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

Ken Hall 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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The South32 Ltd (ASX: S32) share price will be one to watch closely on Wednesday.

This follows news that the mining giant has been added to a leading broker’s conviction buy list.

What happened?

Goldman Sachs has been looking into the mining sector and has made changes to many of its recommendations.

One of those was adding the South32 share price to its conviction buy list with an improved price target of $3.40.

This price target implies potential upside of 18.5% over the next 12 months excluding dividends. Including the 5% dividend yield Goldman is expecting over the next 12 months, this return stretches to over 23%.

What did Goldman say?

The broker made the move after increasing its earnings per share estimates for FY 2021 and FY 22 by 12% and 31%, respectively. This was to reflect revisions to foreign exchange and commodity price estimates.

Based on these earnings estimates, Goldman feels the South32 share price is trading at an attractive level. This is particularly the case given its recovering free cash flow.

It commented: “We forecast a FCF yield of c.12% over the next two years, driven by our forecast 2% lift in Cu Eq production in FY21, S32’s decision to defer US$100mn in sustaining capex in FY21 and lowering cost base, and the recent removal of the Dendrobium Next Domain (DND) extension met coal project from our Illawarra mine model.”

Another reason the broker is positive on South32 is its commodity mix.

Goldman explained: “In addition to base metals (aluminium, nickel), we are also positive on alumina, met coal and manganese prices in 2H 2021 and 2022. These commodities represent over 50% of S32’s EBITDA.”

Finally, Goldman notes that the company’s restructuring has a number of benefits.

“S32 expects the sale of SA Energy coal to close imminently; pending closure we do not include this proposed transaction in our estimates; however, we estimate a potential net c. A10cps benefit (c.3% lift in our NAV) with the removal of US$875mn in asset closure provisions on the deal’s closure. This number also accounts for the recently revised deal structure in which S32 will provide an additional US$200mn in rehabilitation aid and a US$50mn working capital facility to Seriti, the acquirer of SAEC; this should provide Eskom and SA Treasury the confidence in the final sign-off on the transaction.”

All in all, Goldman believes the South32 share price is ain the buy zone today.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Acquisitions and spin-offs put these 3 ASX shares on brokers’ “buy” list
• Why the South32 (ASX:S32) share price is climbing
• Why the South32 (ASX:S32) share price is outperforming today
• Why AVZ, Betmakers, Santos, & South32 shares are storming higher

Motley Fool contributor James Mickleboro 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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