Tag: Motley Fool

The Liontown Resources Limited (ASX: LTR) share price is rising this morning as the mineral explorer provided an update on a potential gold discovery in Western Australia.

At the time of writing, Liontown shares were swapping hands for 44 cents each, up 2.33%. By comparison, the S&P/ASX 200 Index (ASX: XJO) is 0.15% higher.

Let’s take a closer look at today’s announcement and how it might affect the Liontown share price.

What might affect the Liontown share price?

In a statement to the ASX, Liontown declared preliminary results at its Moora Project in WA have been “outstanding”.

The company has drilled 264 holes since December 2020 and in that time Liontown has been able to identify 3 separate zones in its site. They are:

• Angepena Zone – a 900m long gold zone with ore of 1.7grams of gold per tonne and even 21.2g/t.
• Northern Zone – a 2km long and 150m wide copper and gold zone with ore of 2.1% copper and 1.2g/t of gold.
• South Eastern Zone (SEZ) – an area consisting of 0.4g/t of gold and 0.2% copper.

The company says further testing in the SEZ is needed as the potential for more gold and copper reserves in the area is high.

Furthermore, at the Bindi Bindi prospect, Liontown believes it may have intersected an “anomalous” amount of nickel.

Work will continue at the site to assess the feasibility of further and deeper exploration. These announcements seem to be pushing up the Liontown share price. 

A look at gold and copper prices

The price of gold has been falling since it reached an all-time high of US$2,068.90 per troy ounce in August last year. At present, the price of the precious metal is US$1,732.93 per troy ounce.

Generally, the price of gold is seen as inversely related to the economy. This means as the prospect of an economic recovery post-pandemic grows, the price of gold is likely to continue to fall. This could be negative for the Liontown share price.

Copper, on the other hand, usually moves in the same direction as GDP growth. As of writing, the metal is trading for US$4.03 a pound. It’s only slightly below its 5-year peak of US$4.29 per pound.

The price of copper is also being affected by supply issues out of Chile, according to the Trading Economics website. This, on the other hand, could be more optimistic for the Liontown share price.

Liontown share price snapshot

Over the last 12-months, the Liontown share price has increased 458.44%. The company’s lithium division seems to be the main driver of this increase in value. A surge in demand for lithium is seeing many ASX lithium shares rise too.

Liontown has a market capitalisation of $771.6 million.

More reading

• Liontown Resources (ASX:LTR) share price lifts after lithium update
• Surge in mining exploration to benefit these small-cap ASX shares: broker

Motley Fool contributor Marc Sidarous 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 Liontown (ASX:LTR) share price rises after gold update appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/32fRq6F

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.

As great as an investment Amazon (NASDAQ: AMZN) has been for long-term growth investors it’s no match lately against the meteoric stock rise of GameStop (NYSE: GME). The video game retailer saw its stock more than triple last year, and this year it catapulted as a “meme stock.” Even after retreating sharply since their frenzied peak the shares are up 741% this young year. 

If we draw the starting line at the end of February last year GameStop is a stunning 45-bagger. That’s a jaw-dropping spurt in a little more than 13 months. Amazon’s been a perpetual market beater but you would have to go back 12 years to find the point where the world’s leading online retailer is also a 45-bagger. 

GameStop is the hot stock, but the fundamentals are overwhelmingly in Amazon’s favor. Let’s size up each name to see which one is the better buy right now.

GameStop comes to play

Step aside from the hype, and GameStop investors are caught between a stock and a hard place. The company has posted 12 consecutive quarters of year-over-year declines in revenue, even in its latest financial report where low-margin PS5 sales weren’t enough to will the retailer to positive sales growth. 

The empire is shrinking its physical footprint, closing 12% of its stores over the past year. This isn’t necessarily a bad thing, especially with the surge in e-commerce giving investors hope that the nostalgic brand can be repositioned in a digital future. GameStop will have to keep cutting costs if it wants to compete more effectively with Amazon and other online specialists, especially with its highest margin business — the resale of physical video games — fading in the online revolution. 

Net sales have been nearly cut in half over the past five years, down 46% from where they were five fiscal years ago. A few years ago GameStop was a money machine, but it has posted three consecutive years of steep losses. GameStop doesn’t seem to look the part of a stock hitting all-time highs this year, and with short interest dropping substantially is there life for GameStop beyond the meme squeeze? 

The key to GameStop justifying its 45-fold spike since the end of February last year is its ability to transform. It will die if it stands still. There’s fresh blood flooding the boardroom and its executive ranks. Will that be enough? It’s playing from behind at this point.

Amazon makes it rain

In the same five years that GameStop’s business has been roughly cut in half we’ve seen Amazon revenue more than triple. Momentum is naturally on Amazon’s side here, accelerating with the 44% year-over-year top-line spike in its record-breaking holiday quarter. 

There is a lot Amazon excels in, but it’s also everywhere GameStop wants to be. It’s been selling video games and related gear online for more than two dozen years. Amazon’s Twitch is the gold standard for diehard gamers looking to share their in-game streams, a market that GameStop would love to own. Digital distribution is largely in the hands of console makers and software publishers, but if GameStop sees an opportunity in joining the crowded realm of cloud-based gaming services it will have Amazon’s recently unveiled Luna to reckon with now.

Facing the end boss

Everywhere GameStop turns for growth it seems as if Amazon is already there. This isn’t the real problem for the hot-but-damaged retail stock. GameStop’s enterprise value of $11.6 billion is less than 1% of Amazon’s $1.7 trillion.

The problem for GameStop is that a lot is expected with the stock at new highs but its fundamentals are at new lows. GameStop has tried to make a dent in digital, even years ago when it actually had the cash flow to deploy next-gen growth initiatives. It didn’t work then. There’s a lot of brand awareness now as a meme stock, but the clock is ticking on its ability to turn its influencer cred into a bankable business. Amazon is the best buy at this point. 

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

More reading

• Better buy: Amazon vs. Kroger
• 2 investing approaches to help get you started on the ASX
• Is it riskier NOT owning Tesla (NASDAQ:TSLA)?
• Amazon planning its annual prime day event for June this year
• GameStop names activist investor Ryan Cohen as chairman of the board

Rick Munarriz has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Better buy: Amazon vs. GameStop appeared first on The Motley Fool Australia.

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

from The Motley Fool Australia https://ift.tt/3g6h71W

The Zip Co Ltd (ASX: Z1P) share price is racing higher on Tuesday morning.

In early trade, the buy now pay later (BNPL) provider’s shares are up a sizeable 11% to $9.25.

Why is the Zip share price racing higher?

Investors have been fighting to get hold of Zip shares this morning following the release of its third quarter update.

According to the release, Zip’s strong form continued during the quarter, with the company delivering record quarterly revenue and transactions.

For the three months ended 31 March, Zip posted an 80% increase in group quarterly revenue to $114.4 million. This was driven by a 195% increase in transaction numbers to 12.4 million and a 114% jump in quarterly transaction volume to $1.6 billion.

Also continuing to grow was the company’s customer numbers. At the end of the period, Zip had 6.4 million active customers globally. This was up 88% from the prior corresponding period and 12.3% from 5.7 million at the end of December.

How did its businesses perform?

The company’s US-based QuadPay business was the standout performer. It achieved record results across all core metrics during the quarter.

QuadPay’s transaction volume grew 234% to $762 million, its revenue rose 188% to $54.4 million, and customer numbers grew 674,000 or 153% to 3.8 million.

This was complemented by the Zip ANZ business, which continued its strong momentum. It recorded a 61% increase in transaction volume to $837.3 million and a 37% lift in customer numbers to 2.6 million. Positively, quarterly revenue rose 10% quarter on quarter to $57.9 million despite seasonal trends.

Another positive was that the net bad debts for its ANZ business reduced to 1.78% from 1.93%. Management notes that this is a very strong result which further validates the strength of Zip’s proprietary credit decision technology and ability to manage risk.

Management commentary

Zip’s Managing Director and CEO, Larry Diamond, said: “We are extremely pleased with the strong growth and momentum in the business, delivering another exceptional set of numbers. Our US business was again a standout, confirming our position as truly one of the fastest growing global BNPL leaders.”

“The resilience of the UK team is now delivering results and we look forward to a very exciting future for that region. It was fantastic to see more lighthouse brands join the platform and the global merchant pipeline is extremely healthy. Our focus on unit economics continues to provide a point of difference and points to a strong bottom line at scale. We continue to innovate and deliver new features to our customers in line with our mission to become the first payment choice everywhere, every day,” he added.

International expansion

Zip also revealed that it is following in the footsteps of rival Afterpay Ltd (ASX: APT) by expanding into other markets.

During the quarter, Zip made a number of key moves including a soft launch into Canada. This was driven by US merchant demand.

It also agreed terms for a strategic investment into South East Asia via leading Philippines BNPL player, TendoPay, and made a follow-on investment into leading Eastern European BNPL player, Twisto.

Management commented: “Outside of Zip’s core markets of Australia, New Zealand, US and the UK, the Company is investing in New Markets to expand its global footprint across both the developed and developing world. The aversion to traditional credit cards, long term revolving debt and the rapid adoption of BNPL is truly a global phenomenon.”

More reading

• These top 2 ASX 200 shares have thumped the index’s 2021 returns
• ASX 200 Weekly Wrap: ASX sees 7,000 points once more
• These were the best performing ASX 200 shares last week
• Why it looks like a V-shaped recovery for the Xero (ASX:XRO) share price
• The Afterpay (ASX:APT) share price is up almost 20% 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 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 Zip (ASX:Z1P) share price races 11% higher on record Q3 performance appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3a99qEa

The Splitit Payments Ltd (ASX: SPT) share price is on the move this morning. Shares in the Aussie payment solutions provider charged more than 4% higher after announcing a new global partnership deal. At the time of writing, the Splitit share price has retreated slightly, trading at 83 cents, up 6.41%.

Why is the Splitit share price climbing higher?

Splitit has this morning announced a new global partnership with UnionPay International. That is part of China UnionPay, the provider of bank card services and a major card scheme in mainland China.

UnionPay International will integrate Splitit into its network as part of the new deal. That will give UnionPay cardholders and those accepting UnionPay the chance to use Splitit’s instalment payments product.

The Splitit share price jumped more than 7% at the open on the back of this morning’s news. The new deal will open up Splitit’s solutions to over 55 million merchants on the UnionPay global acceptance network. That includes over 32 million merchants outside of mainland China. The offering will be active from June 2021 onwards.

Splitit CEO Brad Paterson said:

Partnering with UnionPay opens up our solution to UnionPay credit cardholders, building on our existing card partner networks. It combines our unique instalment solution and global reach with UnionPay’s powerful cardholder base.

He also added that:

The partnership is another significant milestone in Splitit’s Asia Pacific expansion strategy to boost consumer adoption and merchant acceptance.

The Splitit share price is on the move despite the actual value of the agreement with UnionPay International being currently unknown.

That’s due to the “contingent nature” of the results that may be generated by the agreement. According to the release, Splitit doesn’t see much short-term economic benefit for the company. However, it will support the company’s strategic growth plans.

Foolish takeaway

The Splitit share price jumped as much as 7.7% in early trade after its latest global partnership deal. The UnionPay International deal will expand Splitit’s Asia Pacific reach and continue to fuel growth for the Aussie payments group.

More reading

• The Afterpay (ASX:APT) share price is up almost 20% this month
• What’s with the Splitit (ASX:SPT) share price today?
• Is the Affirm share price dragging ASX BNPL shares lower?
• Why the Flexiroam (ASX:FRX) share price opened 7% higher today
• Why Austal, Boral, Spark NZ, & Splitit are tumbling lower

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.

The post Why the Splitit (ASX:SPT) share price is up 7% this morning appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3dbJD08

The National Tyre & Wheel Ltd (ASX: NTD) share price has surged more than 21% this morning after another trading update from the Aussie motor vehicle group.

At the time of writing, National Tyre shares are trading at $1.04.

Why is the National Tyre share price climbing?

The National Tyre share price has rocketed higher at the open following a 2.4% gain in yesterday’s trade. Today’s big news was National Tyre providing updated guidance for the financial year ended 30 June 2021 (FY2021).

National Tyre reported that trading in Q3 had “continued recent trends”. As a result, it expects to record operating earnings before interest, tax, depreciation and amortisation (EBITDA) of between $31 million and $33 million in FY2021. That figure excludes items relating to the August 2020 Tyres4U acquisition and AASB16 adjustments.

This comes after a strong trading update in January that saw the company’s share price rocket higher. In that announcement, the company said first-half trading had “exceeded expectations”.

Per this morning’s release, the company is now estimating basic earnings per share (EPS) of 17 cents. That represents a significant payout against yesterday’s $0.85 closing National Tyre share price.

National Tyre also provided an update on its financial position. The company said its balance sheet remained strong with $24.8 million of cash on hand at 31 March 2021. The group’s net debt sits at $19.3 million as at quarter-end.

Today’s guidance assumes no material impact on operations from a market downturn or withdrawal of the JobKeeper program.

Foolish takeaway

Shares in the Aussie motor vehicle services group are surging higher in early trade. Today’s update is just one of many good performance updates from National Tyre over the past 12 months.

The National Tyre share price has rocketed 226.9% higher in the last year. That comes amid a hot used car market in part due to strong economic stimulus measures and reduced consumer spending options due to the coronavirus pandemic.

More reading

• Why the Splitit (ASX:SPT) share price is up 7% this morning
• Netflix just fixed its only disadvantage in streaming
• Why the Aussie Broadband (ASX:ABB) share price is surging higher today
• Regis Resources (ASX:RRL) announces $900m Tropicana Gold Project acquisition
• Why the Sheffield Resources (ASX:SFX) share price is on watch

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.

The post Why the National Tyre (ASX:NTD) share price rocketed 21% today appeared first on The Motley Fool Australia.

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

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.

Netflix (NASDAQ: NFLX) may be all about its original series and films, but its library can still benefit from familiar studio blockbusters. That’s why it inked a deal with Sony (NYSE: SNE) to exclusively stream the studio’s output starting with its 2022 film release slate. The deal also includes first-looks at Sony’s direct-to-home releases and several key back catalog titles, and builds on its existing deal for Sony’s animated film releases.

The opportunities to strike these deals have become few and far between as new competitors pop up and studios retain their film output. Sony may have been Netflix’s only option to even the playing field.

Streaming silos

Studios used to strike first-run deals with premium cable channels like AT&T‘s (NYSE: T) HBO or Lionsgate‘s Starz. Then Netflix’s streaming service came along and expanded from buying old back catalogs of films to first-run releases like the premium channels.

The licensing revenue from these deals was great for the studios. It’s extremely high-margin, and some deals could help breathe new life into old releases.

But now, after significant consolidation in the media industry, nearly every major studio is associated with its own streaming service. Many media companies have their own in-house collections of films and television series that they can bring direct to the consumer with streaming with efficient costs, making it a more profitable endeavor.

Studios	Parent Company	Streaming Service
Walt Disney, Marvel, Pixar, Lucasfilm	Walt Disney (NYSE: DIS)	Disney+
20th Century, Searchlight	Walt Disney	Hulu
Warner Bros., DC, New Line	AT&T	HBO Max
Paramount	ViacomCBS	Paramount+
Universal, Dreamworks, Illumination	Comcast (NASDAQ: CMCSA)	Peacock
Lionsgate	Lionsgate	Starz
MGM	MGM	Epix

Table source: Author. 

Sony is the only notable film studio without direct ties to a streaming service. Sony sold its ad-supported Crackle streaming service in 2019.

Comcast currently licenses Universal films to HBO Max, Illumination films to Netflix, and Dreamworks films to Hulu. However, it’s considering retaining the rights for Universal and Illumination films for Peacock as negotiations for those rights come back up this year. It could also strike a non-exclusive deal that would allow it to stream its films on Peacock while licensing them to other streaming services.

If Netflix wanted access to a film studio output, Sony was its only option.

But why does Netflix want an output deal anyway?

Simply put, Sony has something Netflix can’t get anywhere else.

While Netflix can make its own films, it won’t have any theatrical blockbusters like Sony will. The familiarity of popular films on the streaming service can drive engagement. And with all the other studios keeping their film streaming rights for themselves, Sony is the only source for Netflix to get those kinds of films.

Moreover, Sony has some key intellectual property. Most notably, it owns the rights to the Spider-Man universe, which ties into the rest of Disney’s Marvel Cinematic Universe. With the immense popularity of Disney+, retaining some Marvel fans with Sony’s Spider-Man output is a nice bonus. 

Sony also owns the rights to franchises including Jumanji, Ghostbusters, and The Karate Kid. The latter spawned an extremely popular series now available on Netflix, so there could be easy opportunities to increase engagement.

Netflix isn’t paying too much for the deal either. Despite the fact that the deal fetched a “record-setting price tag,” according to reports, the total estimated outlay for the five-year deal is between $1 billion and $2 billion. Even at the high end — $400 million per year — that represents a tiny percentage of Netflix’s $19 billion projected content budget for 2021. It’s also notably paying Sony more than $500 million per year for the rights to stream Seinfeld starting this June. 

So, in the grand scheme of things, the Sony film deal presents good value for Netflix. It ought to keep subscribers engaged with the service, and engaged subscribers don’t cancel.

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

More reading

• Love tech shares? This ASX ETF is a great buy today
• Netflix is crushing Disney in this fast-growing market
• Netflix is experimenting with releasing new episodes over a longer timeframe
• How much does password sharing cost Netflix?
• I want to double your money every 5 years: fundie

Adam Levy owns shares of Netflix and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Netflix and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Comcast. The Motley Fool Australia has recommended Netflix and Walt Disney. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Netflix just fixed its only disadvantage in streaming appeared first on The Motley Fool Australia.

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

from The Motley Fool Australia https://ift.tt/326Dax1

In morning trade, the Aussie Broadband Ltd (ASX: ABB) share price has been a positive performer.

At the time of writing, the internet service provider’s shares are up 4.5% to $3.08.

Why is the Aussie Broadband share price pushing higher?

This morning Aussie Broadband announced the launch of a new white label solution for major retail brands.

This will allow retail brands to sell Aussie Broadband’s internet and VoIP services under their own brand. Aussie Broadband will also provide customer support, service delivery, account and credit management.

Positively, the company has already signed its first white label customer – a large retail business with more than 3 million customers across Australia.

While the company is unable to disclose the name of the customer for commercial reasons, it is worth noting that Kogan.com Ltd (ASX: KGN) recently surpassed 3 million customers in Australia.

As part of this agreement, Aussie Broadband expects to transfer more than 25,000 of the customer’s existing broadband and VoIP services to its network. The first tranche of customers will transfer to the company’s services in early FY 2022.

Aussie Broadband’s Managing Director, Phillip Britt, commented: “We have built scalability into our network and support platform to take on additional white label customers as it is an important pillar in Aussie Broadband’s growth strategy.”

“The market is evolving as we’re seeing a number of well-known Australian retail brands across several industries either looking to expand into telecommunication services under their own label, or needing a higher quality customer experience for their existing telco customer base to match their brand promise.”

“Our excellent reputation in the industry and our new white label capability makes Aussie Broadband a logical choice for any major retailer looking for a high-quality telco product. It gives us access to an alternative channel to grow our market share with residential and business connections,” he added.

The release advises that its new white label capacity provides NBN, Opticomm, and VoIP services, allowing white label customers to choose elements from Aussie Broadband’s product cycle that suit their needs.

Connections update

In addition to the above, the company provided an update on its connections.

During the third quarter of FY 2021, the Telstra Corporation Ltd (ASX: TLS) rival reported net broadband additions of 30,424. This brought its total connections to 373,058 and does not include the aforementioned white label deal.

Mr Britt said: “The quarterly increase in connections is a testament to our strategy and core offering, providing high quality customer support and enabling innovative, technology-led solutions to drive efficiency in the company. We continue to scale the business with our new white label solution which will boost our market share and allow us to increase the number of connections on our network.”

More reading

• Regis Resources (ASX:RRL) announces $900m Tropicana Gold Project acquisition
• Why the Sheffield Resources (ASX:SFX) share price is on watch
• 2 exciting small cap ASX shares to buy
• Is the Webjet (ASX:WEB) share price a bargain buy?
• Tesla stock: headed to $1,071?

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 Aussie Broadband Limited. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd and Telstra Limited. The Motley Fool Australia has recommended Aussie Broadband Limited. 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 Aussie Broadband (ASX:ABB) share price is surging higher today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2PY45J5

The Regis Resources Limited (ASX: RRL) share price won’t be going anywhere on Tuesday.

This morning the gold miner requested a trading halt prior to the market open.

Why is the Regis Resources share price in a trading halt?

Regis Resources requested a trading halt so that it can undertake an equity raising to fund a major acquisition.

According to the release, the company has signed a conditional binding agreement with IGO Ltd (ASX: IGO) to acquire its 30% interest in the Tropicana Gold Project for A$903 million.

The release notes that Tropicana is a low cost, high margin, top five producing Australian open-pit and underground gold mine located in the Albany-Fraser Orogeny in Western Australia. It is one of the largest gold mines in Australia with gold production of 463koz in FY 2020 and guidance of 380koz – 430koz in FY 2021.

Management notes that the acquisition diversifies Regis’ existing production base with a non-operated interest in a high quality, low cost, high margin gold asset.

It also comes with a world class joint venture partner in AngloGold Ashanti. It is a proven gold miner with a successful track record of developing and operating Tropicana and other underground assets.

Regis’ Managing Director and CEO, Jim Beyer, commented: “This is a genuinely transformational transaction for Regis and one that delivers on our strategic objectives to grow as a safe, responsible, reliable, long life, low cost gold producer, generating strong financial returns.”

“Diversifying the Company’s robust portfolio through the acquisition of a 30% interest in the Tropicana operation will deliver significant improvements in the Company’s Resources, Reserves and annual production, along with providing additional immediate cashflows, all of which adds to the strength of our platform for undertaking further organic and inorganic growth activities.”

Equity raising

Regis intends to fund the acquisition through a combination of a fully underwritten equity raising of up to A$650 million.

This comprises a A$200 million institutional placement and an accelerated pro rata non-renounceable A$450 million entitlement offer. The company has also secured a new A$300 million loan facility.

All new shares offered will be issued at a price of A$2.70 per new share, which represents a 14.8% discount to its last close price.

Shareholders of IGO have responded positively to the news. The IGO share price is up 4% in morning trade.

More reading

• ASX 200 jumps, Cleanaway’s treasured acquisition, Afterpay soars
• Why the Regis Resources (ASX:RRL) share price is in focus
• Top ASX shares to buy in April 2021
• Why Corp Travel Management, IGO, Limeade, & ResApp are tumbling lower

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.

The post Regis Resources (ASX:RRL) announces $900m Tropicana Gold Project acquisition appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/32fNYsJ

Sheffield Resources Ltd (ASX: SFX) shares will be on watch following news of an upper management reshuffle this morning. At yesterday’s market close, the Sheffield share price was trading at 38.5 cents, representing a 3.75% drop from Friday’s closing price.

In an announcement to the ASX this morning, the mineral exploration company advised its managing director and CEO has stepped down, while its commercial director has taken on the role.

Let’s take a closer look at Sheffield’s new upper management team.

Management transition

The Sheffield share price will be in focus today after the company advised its managing director and CEO, Bruce McFadzean, will step down from the roles on 1 July 2021. He has held the top position at the company since 2015.

McFadzean will continue with Sheffield as a non-executive director.

Filling his boots will be Bruce Griffin, who is currently Sheffield’s commercial director. Griffin will take on the role of executive chair.

Griffin has held leadership positions in a range of companies and consultancies in the mineral sands industry. According to Sheffield’s release, the role of executive chair will allow the company to best utilise Griffin’s industry experience. 

The final piece of the shake-up involves Sheffield’s current non-executive chair John Richards’ new job. He will be taking up the newly created role of lead independent director.

New management commentary

Mr Richards offered his congratulations to McFadzean, noting the key role he played in delivering the company’s Yansteel joint venture. He also looked to the company’s future, as Griffin will be leading Sheffield into its up-and-coming Thunderbird project.

Bruce [McFadzean] worked tirelessly over a long period to identify and then execute the transaction which provides the equity component of the Thunderbird project development and the Board expresses its sincere thanks for those efforts. We look forward to continuing to rely on Bruce’s knowledge of the project and his relationships with key stakeholders as a Non-Executive Director.

As we move forward with Yansteel to building and operating Thunderbird, we are extremely fortunate to have someone of Bruce Griffin’s experience and stature to take over and I look forward to working with him through the next stages of Sheffield’s development.

Mr McFadzean said:

I look forward to working with our JV partner Yansteel under the leadership of a minerals sands industry expert Bruce Griffin. We are now well structured for the next leg of the Thunderbird journey towards production.

Mr Griffin said:

I look forward to building on the strong foundations Bruce has built at Sheffield as we complete the financing, build and then operate Thunderbird with our partner Yansteel.

 Sheffield share price snapshot

The Sheffield Resources share price has had a roaring time on the ASX lately.

Year to date, it’s only up by 1.32% – but over the last 12 months, it has gained a whopping 250%.

Sheffield has a market capitalisation of around $133 million, with approximately 346 million shares outstanding.  

More reading

• 2 exciting small cap ASX shares to buy
• Is the Webjet (ASX:WEB) share price a bargain buy?
• Tesla stock: headed to $1,071?
• Why the Home Consortium (ASX:HMC) share price is on watch
• BHP (ASX:BHP) share price on watch as copper demand tipped to soar

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.

The post Why the Sheffield Resources (ASX:SFX) share price is on watch appeared first on The Motley Fool Australia.

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

The Webjet Limited (ASX: WEB) share price has been out of form over the last four weeks.

Since this time on 18 March, the online travel agent’s shares have fallen approximately 15%.

This has been driven by concerns over the vaccine rollout and its decision to raise more funds last week.

Is this a buying opportunity?

According to a note out of Goldman Sachs this morning, its analysts believe the recent weakness in the Webjet share price is a buying opportunity.

Although the broker has downgraded its earnings forecasts to reflect its convertible notes offering, it has retained the buy rating and $7.00 price target it has on its shares.

Based on the current Webjet share price of $5.31, this implies potential upside of almost 32% over the next 12 months.

What did Goldman say?

Goldman commented on its capital raising. It said: “We view this announcement as a move towards removing capital structure uncertainty. While the new convertible notes are likely to be dilutive to equity shareholders in the future (considering our WEB target price), they are currently out of the money with par value 20.3% above the current share price.”

“In the interim, the announcement further lengthens debt maturity, removes the P&L impact from mark to market of the convertible option revaluation and lowers the interest cost on debt. While not a key factor in our base recovery scenario, we believe that these factors ease uncertainty in the bear case recovery scenario.”

Is the Webjet share price good value?

Goldman Sachs currently estimates that the Webjet share price is trading at a lofty 117x estimated FY 2022 earnings.

While this is very excessive, it quickly normalises in FY 2023 when trading conditions are expected to be back to normal.

Based on its earnings per share estimate of 21 cents per share in FY 2023, Webjet’s shares are trading at a more reasonable 25.5x estimated FY 2023 earnings.

This could make it worth considering for investors that are willing to make a patient investment.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Trashed COVID-19 vaccine targets hit ASX travel shares
• These are the 10 most shorted shares on the ASX
• Why ASX travel share prices are slipping today
• ASX 200 down 0.3%: Webjet completes note offering, Xero pushes higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Is the Webjet (ASX:WEB) share price a bargain buy? appeared first on The Motley Fool Australia.

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