Tag: Motley Fool

The ASX tech sector has become very famous over the past few years. Tech winners like Xero Limited (ASX: XRO) and Afterpay Ltd (ASX: APT) have prompted many an investor to try and find the ‘next Xero’ or the ‘next Afterpay’. Unfortunately, unlike some other markets, the ASX tech sector holds a relatively small slice of the Australian share market.

Thus, if you are really bullish on tech, it might be prudent to look beyond our shores to bolster your portfolio.

That’s where this ASX exchange-traded fund (ETF) comes in.

The BetaShares Asia Technology Tigers ETF (ASX: ASIA) is an ETF dedicated to tracking the best tech companies in Asia, outside of Japan. Asia is the most populous continent on the planet. Despite this, it’s also an area where the big US tech companies have a far more limited reach and scope than in advanced economies like the US and Australia. Alphabet Inc‘s (NASDAQ: GOOG)(NASDAQ: GOOGL) Google is essentially banned in China, after all. As is Netflix Inc (NASDAQ: NFLX) and Facebook Inc‘s (NASDAQ: FB) products.

Asian tech tigers roar

That’s where the usefulness of an Asian tech company like Baidu might come in handy. It’s often described as the ‘Google of China’. Or iQiYi, the ‘Netflix of China’. Not to mention the pervasive dominance of Chinese ecommerce companies like Tencent Holdings, JD.com or Alibaba Group Holding Ltd. These companies dominate both the Chinese e-commerce market, as well as China’s social media scene.

All of these tech companies are major holdings of the BetaShares Asia Technology Tigers ETF. Other holding include the global electronics titan Samsung Electronics Co. As well as the giant computer chip manufacturer Taiwan Semiconductor Manufacturing Co Ltd.

But China is the country that dominates this ETF with 54% of the fund’s holdings. Taiwan comes in second with 22%, with South Korea, India, and Hong Kong rounding out the list with 18.3%, 4.8%, and 0.2% respectively.

But turning to performance, and we can really see the value of investing in the Asian tech sector. The index that the ASIA ETF tracks has returned an average of 26.3% over the past 3 years and 29% per annum over the 5 years. The ASIA ETF itself has returned 36.5% per annum since its inception in 2018. As well as a whopping 70.34% over the past 12 months alone. It charges a management fee of 0.67% per year.

More reading

• Will a retreating Reddit army trample the IOUpay (ASX:IOU) share price?
• This broker thinks the Afterpay (ASX:APT) share price is a buy in April
• ASX 200 up 1%: Big four banks and miners take ASX 200 above 7,000 points
• Brokers name 3 ASX shares to buy today
• 5 things to watch on the ASX 200 on Thursday

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares) and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alibaba Group Holding Ltd., Alphabet (A shares), Baidu, Facebook, JD.com, Netflix, and Taiwan Semiconductor Manufacturing. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Alphabet (A shares), Facebook, JD.com, and Netflix. 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 IOUpay Ltd (ASX: IOU) share price, up 1.28% today, trading at 40 cents per share. Despite the intraday gain, shares in the ASX fintech company are now down 44% from the 15 February highs when it closed at 70 cents per share.

Still, even after that retreat, IOUpay is trading at more than 5-year highs. Shares remain up 98% so far in 2021 and up an eye-popping 3,850% over the past 12 months. Over that same period, the All Ordinaries Index (ASX: XAO) is up 38%.

And, as Bloomberg notes, despite the recent share price retreat, “IOUpay remains Asia’s top-performing interactive media and services stock over the past year”.

What’s driving ASX investor interest in IOUpay?

The IOUpay share price has been buoyed by a number of factors over the past months.

The ASX fintech company capitalised on the massive investor interest in buy now, pay later (BNPL) shares, like Afterpay Ltd (ASX: APT).

The IOUpay share price surged in February after the company entered into a merchant referral agreement with EasyStore Commerce. The agreement allows EasyStore’s clients to use IOUpay’s BNPL payment services.

Retail traders communicating and coordinating their activities on Reddit have also been widely credited with IOUpay’s meteoric rise. That’s the same group of traders that sent the GameStop Corp (NYSE: GME) share price to the moon, burning a number of institutional short sellers in the process.

As Bloomberg reports, IOUpay’s huge daily share moves began “after it was touted by investors on Reddit”, adding that the ASX fintech share “has been the subject of several discussion threads on Reddit”.

Will a retreating Reddit army sink the IOUpay share price?

As the world begins to recover from the viral lockdowns, the hoard of retail traders appears to be turning their attention, and their money, back towards the pursuits they’ve been denied this past year. Like travelling, dining out, and returning to work in the office.

And this retreat could spell bad news for high flying meme stocks.

According to Carl Capolingua, an analyst at online brokerage ThinkMarkets Australia Ltd:

We may see the price subdued for a long period of time as retail investors get bored waiting and sell out to find something more exciting. The question will be if they can get traction in the Asian markets they’re targeting before the bigger players come in.

Like so many movements impacting global markets, the Reddit army was born in the United States and has since gone worldwide.

What the longer-term implications are for the IOUpay share price remains to be seen.

More reading

• This broker thinks the Afterpay (ASX:APT) share price is a buy in April
• ASX 200 up 1%: Big four banks and miners take ASX 200 above 7,000 points
• Brokers name 3 ASX shares to buy today
• Tesla and GameStop were some of the most popular US shares last week
• Why the Bubs (ASX:BUB) share price is up 5% today

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. 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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Buying fundamentally strong ASX shares that have surged in recent weeks or months can be challenging. Here are two ASX shares that brokers think can keep going higher. 

1. Calix Ltd (ASX: CXL) 

The Calix share price has surged some ~170% in the past 6-months. In particular, this movement is likely driven by the increased investor appetite for green solutions. Calix’s core technology is used to reduce emissions and more environmentally friendly solutions for a broad range of sectors including batteries, crop protection, aquaculture, and also C02 mitigation. 

Canaccord Genuity has called out ESG and decarbonisation as “multi-decade structural thematics in their infancy and underpin demand for CXL’s technology across multiple industries”. 

On 1 April, the broker rated the company as a buy and increased its target price from $2.50 to $2.60. Furthermore, its report believes that CY21 is shaping up to be a transformational year for the business. Furthermore, pointing to multiple industries as growth drivers. 

Water treatment and aquaculture is currently a key revenue segment for Calix. Canaccord points to strong momentum in its US-based water treatment business. In addition to a potential European acquisition to expand revenue and gross margins. 

Calix’s C02 mitigation vertical is currently targeting cement and lime industries with a world-first ambition to produce zero-emissions lime. While this segment is not yet revenue-generating, the broker believes the foundations of commercialisation is beginning to form with the progression of its LEILAC-2 project and an agreement with Adbri Ltd (ASX: ABC). 

Other verticals such as batteries, sustainable processing, and biotech are in their early days. However, the broker sees strong early results which are supportive of accelerating timelines. 

Calix shares are currently fetching $2.26, not far off its all-time record high of $2.47. 

2. Lark Distilling Co Ltd (ASX: LRK) 

Lark is a Tasmanian-based producer of craft whisky and gin. Its shares are up more than 200% in the past 12-months and 72% higher year-to-date. 

Its strong share price performance has been driven by solid earnings momentum, with its latest half-year accounts showing a 91% increase in revenue to $7.29 million and turning a profit of $542,436. 

What’s interesting about Lark is its 817,549 litres of whisky set for maturing over the next six years. The liquidation value of its maturing whisky is approximately $56.69 million today. Additionally, the estimated net sales value at maturity is approximately $113.6 million. To add some perspective, Lark has a market capitalisation of just $156 million. 

Moelis Australia is bullish on spirit consumption trends, the company’s increasing ecommerce penetration, and production volume uplift. It initiated coverage in late March with a buy rating and $2.65 target price. The Lark share price is currently fetching $2.42 and within ~5% of its all-time record highs. 

More reading

• ASX 200 up 0.25%: EML surges on acquisition news, Westpac’s APRA update
• 5 things to watch on the ASX 200 on Wednesday
• Why the Calix (ASX:CXL) share price is eyeing record highs
• ASX 200 Weekly Wrap: ASX 200 gets its mojo back
• These were the best performers on the ASX 200 last week

Motley Fool contributor Kerry Sun 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 EML Payments Ltd (ASX: EML) share price is once again rocketing today, with EML shares up another 4.4% today at the time of writing to $5.63 a share. It’s shaping up to be the second day of big share price rises for EML in a row.

Yesterday, EML shares hit a new all-time high of $5.80. This new high finally vaults EML to above its pre-COVID highs. Even after cooling off since those highs, EML shares are now up 10.7% since yesterday morning, and 16.12% since last Thursday. It also means that EML shares are now up an eye-watering 257% since 23 March last year, as well as 33% in 2021 alone.

So who is EML Payments? And why are this company’s shares continuing to rocket higher?

Who is the company?

EML Payments is… a payments company which specialises in prepaid debit cards. These cards can be used for anything from a gift card to salary packaging to a cash card for use at a casino. EML operates across Australia, as well as in North America and Europe. Its payments platform is highly integrated with the US payments giant Mastercard Inc (NYSE: MA) in particular. EML works with a number of large clients, including the Queensland Government, Ladbrokes, Sportsbet, bet365, Shell Canada and Harley Davidson. 

The company has been performing very well of late. In its earnings report for the 6 months ending 31 December on February, EML reported revenue growth of 61% to $95.3 million on the back of gross debit volume of $10.2 billion (up 54%). The company also reported a 30% lift in net profits after tax to $13.2 million. it expects this growth to continue as well, guiding for between $180-190 million in revenues and $30-33.5 million in net profits for FY2021.

Why are EML shares shooting the moon today?

As mentioned above, EML shares have been in demand since the company reported its earnings back in February. But investors have really stepped on the gas over the past week. The likely catalyst behind this recent bullishness was an announcement made by the company yesterday.

Before market open, EML announced that it had netted a major acquisition. The company will completely acquire Sentinal Limited through a binding share purchase agreement. Sentinal is a European company that specialises in account-to-account payments as well as open banking. EML’s management told investors that the Sentinel acquisition will expand EML’s product line to include non-card-based payments on its platform, amongst other positive synergies.

EML will pay 70 million euros for the deal, plus an “earn-out component of up to 40 million euros”. The funding for the takeover will stem from a combination of 38.9 million euros in cash and the issuance of 31.1 million euros’ worth of EML shares.

Evidently, investors have embraced this deal, judging by the performance of the EML share price since yesterday morning. At the current EML share price, the company has a market capitalisation of $2.05 billion.

More reading

• Why Creso, EML, Immutep, & Western Areas shares are storming higher
• Brokers name 3 ASX shares to buy today
• Bullish ASX 200 shares breaking into 52-week highs 
• EML Payments (ASX:EML) and these ASX shares just hit new highs
• ASX 200 rises, EML jumps, Zip falls

Sebastian Bowen owns shares of Mastercard. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends EML Payments and Mastercard. The Motley Fool Australia has recommended EML Payments and Mastercard. 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 golden run in the Australian dollar may be over and that could have implications for a number of ASX shares.

The Aussie crashed to around US57 cents during the height of the COVID-19 mayhem in March 2020 but came roaring back.

It peaked at just under US80 cents in February this year before easing back to just over US76 cents.

Australian dollar past its prime

The Aussie battler is unlikely to be testing new highs anytime soon. It’s even tipped to weaken further, according to JPMorgan.

The broker looked at the forward curves (the future pricing of the Australian dollar against the US dollar). The Aussie is predicted to average at US75 cents this year before returning to US76 cents in 2022.

The new 2021 estimate is 0.8% below the previous forecast and the 2022 estimate is 2.5% below earlier expectations.

This may not sound like much to you, but it can have a material impact on ASX shares with large US dollar exposure.

How the exchange rate affects ASX shares

However, the impact of the weakening Aussie against the greenback is offset by its expected strength against the Euro.

Many S&P/ASX 200 Index (Index:^AXJO) shares with US operations also sell products into the EU. Some examples include the Cochlear Limited (ASX: COH) share price and Ansell Limited (ASX: ANN) share price.

Meanwhile, ASX shares like the Ramsay Health Care Limited Fully Paid Ord. Shrs (ASX: RHC) share price have greater leverage to the Euro.

Balancing act limits earnings impact

“The decline in the expected A$ and NZ$ relative to the US$ had a positive earnings impact on companies with offshore earnings reporting in local currency, but the benefit was offset for most by an opposite move in the Euro,” said JPMorgan.

“For the USD-reporting companies the stronger US$ had a negative impact on our forecasts, but our spot valuations were supported by a 2¢ drop in the A$.”

What this means is that the currency impact is modest for just about every ASX share under the broker’s coverage. But there is an exception.

Biggest winner from a weaker Aussie

This is the Nanosonics Ltd. (ASX: NAN) share price as its sales are especially weighted to the US.

JPMorgan upgraded its earnings per share (EPS) forecast on the medical equipment disinfection company by 3.7% and 6.2% for FY21 and FY22, respectively.

However, the brighter earnings outlook for Nanosonics wasn’t enough to convince JPMorgan to upgrade its recommendation on the shares.

The broker is sticking to its “neutral” call on the Nanosonics share price but upped its price target by 10 cents to $5.40 a share.

More reading

• Why the ASX 200 is at a 15-month high today
• ASX 200 up 1%: Big four banks and miners take ASX 200 above 7,000 points
• 2 ASX 200 shares to buy for growth
• Why the Orocobre (ASX:ORE) share price is surging
• The National Storage (ASX:NSR) share price is at a 52-week high. Here’s why

Brendon Lau owns shares of Ansell Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and Nanosonics Limited. The Motley Fool Australia has recommended Ansell Ltd., Cochlear Ltd., Nanosonics Limited, and Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The FYI Resources Ltd (ASX: FYI) share price is edging higher today, up 2% at the time of writing.

This comes after the company emerged from a trading halt pending today’s ASX release. We take a look at the latest announcement from the ASX resource share below.

What update did FYI Resources report?

FYI Resources shares are moving higher after the company released an updated definitive feasibility study (DFS) of its high purity alumina (HPA) project. Today’s update replaces the DFS update that FYI Resources released on 31 March, which it said investors should no longer rely upon.

The new DFS estimates the net present value (NPV) of the company’s HPA project to be US$1.014 (A$1.334 billion), an increase of 87% from previous estimates. FYI said the DFS took into account “the technical and commercial improvements, market applied metrics relative to its peer group, updated inputs (exchange rate) and discount rate (8%).”

Under the new DFS the company now forecasts annual project revenue of US$261million, with annual project earnings before income, taxes, depreciation and amortisation (EBITDA) of US$186 million. It estimates a project payback period of 3.2 years.

Commenting on the updated DFS, FYI Resources managing director Roland Hill said:

The update to the company’s initial DFS was an obvious progression in the development of our HPA project strategy. The quality and robustness of our HPA Project was demonstrated in our initial DFS released in March 2020. Since then, the company has continued the evolution of the Project through further process design improvements, detailed test-work via numerous pilot plant trials and other supporting activities to assist in de-risking the Project…

The updated DFS outcome represents a persuasive economic case and demonstrates the merit of the Project in being developed as potentially one of the HPA sector’s highest quality, lowest capital and operating cost projects.

FYI Resources share price snapshot

Over the past 12 months FYI Resources has absolutely shot the lights out, with shares up 1,300%. For comparison the broader All Ordinaries Index (ASX: XAO) has gained 38% in that same time.

Year-to-date the FYI Resources share price is up 100%. At the current price of 56 cents per share, FYI Resources has a market cap of $176 million.

More reading

• ASX stock of the day: EML Payments (ASX:EML) shares keep rising
• A$ tipped to weaken and this ASX share stands to gain the most from that
• Why the Greenland Minerals (ASX:GGG) share price is crashing 45% lower today
• McPherson’s (ASX:MCP) share price lifts on takeover developments
• This broker thinks the Afterpay (ASX:APT) share price is a buy in April

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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One of the worst performers on the Australian share market on Thursday has been the Greenland Minerals Ltd (ASX: GGG) share price.

The rare earths focused mineral exploration company’s shares crashed 45% to 8.8 cents before being placed into a trading halt this morning.

Why is the Greenland Minerals share price crashing lower?

As its name implies, Greenland Minerals is a Greenland-based mineral exploration company aiming to develop the Kvanefjeld rare earth project in south west of the country.

Management has previously said that Kvanefjeld has the potential to become the most significant western world producer of rare earths.

Unfortunately for the company, its aspirations were dealt a massive blow overnight when Greenland’s left-wing environmentalist party won the country’s election.

According to the BBC, the Inuit Ataqatigiit party won 37% of votes and vowed to halt the mining project.

The media outlet notes that many locals had raised concerns about the potential for radioactive pollution and toxic waste in the farmland surrounding the proposed mine.

The outgoing Siumut Party believes the controversy surrounding the Kvanefjeld mine was one of the main reasons for its election loss. It was supporting the mine, arguing that it would generate hundreds of jobs and significant revenue for the country over several decades.

However, Inuit Ataqatigiit’s leader, Múte Bourup Egede, stated that: “The people have spoken.”

What now for Greenland Minerals?

While nothing has been finalised at this point, it looks set to be a tough road ahead for Greenland Minerals following this election result.

The company has yet to respond to the news but requested its trading halt late this morning in order to prepare an announcement.

It commented: “The trading halt is requested pending an update to the market regarding the results of the recent election in Greenland. The Company requests that the trading halt be lifted on the earlier of the release of an announcement to the market or on the commencement of normal trading on Monday, 12 April 2021.”

More reading

• McPherson’s (ASX:MCP) share price lifts on takeover developments
• This broker thinks the Afterpay (ASX:APT) share price is a buy in April
• Worley (ASX:WOR) share price edges lower despite contract award
• Why the ASX 200 is at a 15-month high today
• ASX 200 up 1%: Big four banks and miners take ASX 200 above 7,000 points

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 McPherson’s Ltd (ASX: MCP) share price is rising today after its board recommended shareholders reject the takeover bid from Gallin Pty Ltd.

At the time of writing, shares in the health and beauty supplier were trading higher at $1.425, up 0.71%. By comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) is up 0.84%.

Let’s take a closer look at these latest developments and how they might affect the McPherson’s share price.

McPherson’s brushes off Gallin

In today’s ASX statement, McPherson’s confirmed its board was unanimously recommending shareholders reject the offer from Gallin to buy 100% of the shares in the company for $1.34 each.

The board said the offer “profoundly undervalued the company”.

McPherson’s chair Graham Cubbin said Gallin was “exploiting” recent share price weakness to buy the company:

The offer has been opportunistically timed to exploit McPherson’s recent share price weakness following a period of challenging trading conditions.

Shareholders who sell their MCP Shares to Gallin will not benefit from any future growth and any share price improvement above recent lows.

In the release, Mr Cubbin told shareholders McPherson’s still had significant room for growth.

The company was currently working on a “comprehensive” operational review to identify areas of growth and implement strategies.

At just under $1.43, the current McPherson’s share price is trading higher than the Gallin offer of $1.34.

In its pitch to shareholders, Gallin claimed McPherson’s was “in urgent need of reinvigoration…” In addition, Gallin said a $46 million capital raising effort by McPherson’s in October 2020 followed by a profit downgrade within 1 month of it raised “a number of red flags…” about the company.

McPherson’s claimed Gallin was merely trying to “acquire as large an investment exposure as possible to McPherson’s at the least possible price”. The board did not indicate whether it would be prepared to accept a revised offer from Gallin.

McPherson’s share price snapshot

As noted, the McPherson’s share price has faced challenges recently. Over the past 12 months, the company’s shares have fallen 36.5%. The company has been hit especially hard by the COVID-19 pandemic and international border closures.

McPherson’s has a market capitalisation of $183.6 million.

More reading

• Why Brickworks, McPherson’s, MedAdvisor, & Premier Investments are storming higher
• Why the McPherson’s (ASX:MCP) share price is zooming 14% higher today

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.

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The Afterpay Ltd (ASX: APT) share price is making up for lost ground after an underwhelming performance this year. Its shares are up more than 15% in April, bringing it back to break-even territory for year-to-date returns. 

Why the Afterpay share price was sold off in February and March 

The buy now pay later (BNPL) sector broadly topped out in early February. Just before a majority of companies announced half-year results. Whether the earlier moves had already priced solid results or perhaps a ‘buy the rumor and sell the news’ narrative was taking place. Either way, Afterpay’s half-year results were not well received by the market. Its shares fell more than ~10% on the day to a 1 1/2 month low of $119.50.

Negative factors continued to weigh the Afterpay share price in March. This included surging bond yields that typically have a negative impact on richly valued shares including tech.  

To add further insult to injury, the Commonwealth Bank of Australia (ASX: CBA) announced its entry into the Australian BNPL market. Big brokers were quick to react to the news, with UBS retaining its sell rating and $36.00 target price. Macquarie also released a detailed report on 24 March. The report maps a 10-year flight path for the sector including key inflection points and triggers.

A key highlight from the report was the near-term pain it expects the industry to undergo, before emerging stronger in the medium to long term. 

The BNPL industry has seen explosive growth in the past few years and quickly gained popularity as a payment alternative, but as with many other such trends experienced in the past (China Commodities in 2015, China Autos in 2018), we think an excessive number of participants has entered the industry in the near term resulting in industry overcapacity.

We expect this to be followed by a few years of industry consolidation (i.e. pain for all players) before industry normalisation at a healthier supply/demand equilibrium.

Morgan Stanley bullish on Afterpay

Morgan Stanley is the first big broker to provide an update for Afterpay shares in April. The broker has assessed the entry of CBA into the Australian BNPL market.

CBA will attempt to become the preferred BNPL partner for merchants, charging them a significantly lower fee compared to Afterpay. The broker believes that this will result in a more competitive pricing landscape in Australia. This will translate to lower Australian merchant fee estimates for Afterpay. 

Despite a more competitive pricing environment, the broker believes that Afterpay will maintain a premium to other payment methods. While its fees might be high for a payment solution, it is still relatively low for the marketplace. 

Morgan Stanley reduced the group’s merchant margins by 13 basis points for FY23 estimates and Australian merchant margins by 60 basis points. It reduced its target price from $159 to $149, but retained an overweight rating. Afterpay shares opened higher on Thursday, currently trading at $120.28, up 1.5%. 

More reading

• ASX 200 up 1%: Big four banks and miners take ASX 200 above 7,000 points
• Brokers name 3 ASX shares to buy today
• CommBank (ASX:CBA) cops massive fine for deceptive conduct
• Tesla and GameStop were some of the most popular US shares last week
• Why the Bubs (ASX:BUB) share price is up 5% today

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

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The Worley Ltd (ASX: WOR) share price is edging lower in mid-morning trade despite announcing a new contract award.

At the time of writing, the global engineering company’s shares are fetching $10.79, down 1.1%.

New contract

Investors appear to be unfazed by the company’s latest update, sending Worley shares in negative territory.

According to its release, Worley advised it has won a front-end engineering services contract with Phillips 66 Company (Phillips 66).

The new deal will see Worley provide services to transform Phillips 66’s San Francisco refinery into a renewable fuels-manufacturing facility. Located in Rodeo, California, the project once completed is expected to produce 2.5 billion litres annually of renewable transportation fuels. The facility will be fed from cooking oils, fats, greases and vegetable oils and convert them into clean energy.

Worley noted that the renewable fuels-manufacturing facility is set to be one of the world’s largest of its kind.

The project will be managed by Worley’s North America West team, with support from its Global Integrated Delivery team.

Worley CEO, Chris Ashton welcomed the deal, saying:

As a global company headquartered in Australia, this project aligns with our strategic focus on sustainability and delivering a more sustainable world. We are pleased that Phillips 66 has engaged Worley in this important renewable fuels project and look forward to supporting Phillips 66’s energy transition goals, while also supporting Worley’s strategic focus on future fuels.

Worley share price summary

Over the past 12 months, the Worley share price has moved over 50% higher after hitting multi-year lows during COVID-19. Since the beginning of this calendar year, however, the company’s shares have dropped around 6%. Worley shares are currently sitting in the mid-range of the 52-week performance, between its low of $6.36 and high of $14.01.

On valuation grounds, Worley presides a market capitalisation of approximately $5.63 billion, with more than 522 million shares on issue.

More reading

• Why the Worley (ASX:WOR) share price will be on watch this morning
• The Worley (ASX:WOR) share price is lifting today. Here’s why

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

The post Worley (ASX:WOR) share price edges lower despite contract award appeared first on The Motley Fool Australia.

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