Tag: Motley Fool

South32 Ltd (ASX: S32), IGO Ltd (ASX: IGO), and Nickel Mines Ltd (ASX: NIC) share prices are all crashing today.

At the time of writing, South32’s share price is $2.835, down 1.9%. IGO’s share price is currently trading at $6.26, down 3.9%. And Nickel Mines comes in at $1.25, down $4.60. These falls are greater than the S&P/ASX All Ordinaries Index lag of 1.14%.

Nickel Mines has made a slight recovery this afternoon as the company announced it may enter the electric vehicle battery market. Its current share price is $1.265.

Let’s take a closer look at why these ASX mining companies are all tumbling today.

ASX mining shares rise and fall with commodity prices

As previously reported, the share price of ASX mining companies rises and falls with fluctuations in the commodities market. Today nickel enters the spotlight as its price takes a turn for the worse.

Currently, nickel is trading at US$16,088.50 a tonne. Yesterday, the metal was selling at approximately US$17,370 and last week it swapped hands for around US$19,160. A fall of more than US$3,000 (16%) in the space of a week!

In fact, nickel is one of the few minerals that is priced lower now (10% down) than this time last year.

The Australian Financial Review (AFR) reports that the price of nickel is sliding, and will continue to fall, as the nickel supply increases.

In economic theory – as supply increases, the price will decrease. This does not bode well for investors in nickel extraction companies.

South32’s share price is not falling as steeply as the other 2 ASX mining companies, possibly because it is not as reliant on nickel as IGO and Nickel Mines.

Share price snapshots

While South32’s share price is down today, it’s coming off a 52-week high of $2.90 from yesterday. In fact, if you had bought shares in the company during the COVID-19 market rout in March last year, you would be looking at a 70.7% return on investment.

IGO share price is much the same. While it has been falling since hitting its 52-week high at the beginning of 2021, its share price is 92% higher than at the end of March last year.

Nickel Mines is no exception to the trend. The company did hit its 52-week high 2 weeks ago. Even still, if an investor bought shares in the company at its low of 29 cents (again, at the height of COVID), they would be sitting on a whopping a 320.7% uplift.

The market capitalisations of South32, IGO, and Nickel Mines are $13.6 billion, $4.7 billion, and $3.1 billion respectively.

More reading

• ASX lithium shares to get price shock as commodities supercycle charges up
• These ASX silver shares fell today, along with the price of silver
• Sandfire (ASX:SFR) share price hits year high on profit result and supercycle hopes
• South32 (ASX:S32) posts 46% drop of HY21 profit
• Will ASX silver shares ride the commodity super cycle to new highs?

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 Why these 3 ASX mining shares are crashing today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3uW3R4U

Chalice Mining Ltd (ASX: CHN) shares have tanked 6.25% at the time of writing to presently sit at $4.05.

Furthermore, since Wednesday’s close, the Chalice share price has fallen by around 11%, significantly more than the 1.7% fall seen in the All Ordinaries Index (ASX: XAO) over the past two days.

Let’s take a look at what the company has been up to.

Chalice Mining share price falls after latest presentation

On Monday, the Chalice Mining share price fell by nearly 4% after the miner released its latest investor presentation.

The ASX miner lists its Julimar site as Australia’s first “major” palladium discovery.

Palladium is used to create catalytic converters that are said to be more environmentally friendly than other types of converters. In February 2020, palladium reached its record price of US$2,856 per ounce.

Chalice believes that the heavy transport industry and energy storage sectors are rapidly growing areas but future palladium demand will increase even more.

According to Chalice, the palladium market has been in deficit for nine consecutive years.

The presentation draws further attention to some of the company’s gold operations and the Hawkstone nickel-copper project, noting that each of these areas has delivered compelling results.

What’s ahead for Chalice?

Chalice Mining continues to progress the Julimar Project, specifically, the major PGE-NI- Cu-Co-Au discovery.

In 2020, the ASX miner raised approximately $130 million to move the Julimar Project forward.

The miner also highlighted in its presentation that it is building trust with the key stakeholders of the Julimar Project, including indigenous and local communities, landowners and government parties.

The company plans to continue progressing with building its team and maintaining a pipeline of discoveries. Chalice will also continue pursuing its other projects including the Pyramid Hill Gold Project, Hawkstone Nickel-Copper-Cobalt Project, South West Nickel-Copper-PGE Project, and Viking Gold Project, among others. 

Chalice Mining share price snapshot

Over the past year, the Chalice Mining share price has exploded more than 1,500% higher. Year to date, Chalice shares have fallen by around 6%.

The ASX miner has a market capitalisation of $1.5 billion and 341.8 million shares outstanding.

More reading

• Why these 3 ASX mining shares are crashing today
• Why ASX uranium shares could run even hotter in 2021
• Why it could be a good time to buy Domino’s (ASX:DMP) shares
• Brokers name 3 ASX shares to buy right now
• Why the Nova Eye (ASX:EYE) share price is surging 7% higher

Motley Fool contributor Gretchen Kennedy 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 Chalice Mining (ASX:CHN) share price tanks 11% in 2 days appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3c3wi8j

There’s no arguing with the numbers.

The past year (and then some) has seen the leading ASX uranium shares truly light up.

The Paladin Energy Ltd (ASX: PDN) share price, for example, is up 415% over the past 12 months. ASX uranium miner Deep Yellow Ltd (ASX: DYL)’s share price is up 246% over that same time.

Things have continued apace in 2021, with Deep Yellow shares up 24% in the calendar year and Paladin shares up 54%.

That more than handily outpaces the one-year 7% gains posted by the broader All Ordinaries Index (ASX: XAO), not to mention the 0.4% loss on the All Ords so far in 2021.

But the run higher for ASX uranium shares like these could only just be getting started.

Why ASX uranium shares may have a bright future

Australia may not opt to use uranium for its own power sources. Though Australia – both fortuitously and somewhat ironically – has among the world’s largest accessible uranium deposits buried beneath its soil.

And demand for uranium in other parts of the world is picking up as the globe attempts to wean itself away from carbon-based fuels. This is an increasingly important focus for environmental, social and governance (ESG) investments.

As Bloomberg reports, “Uranium producers are reaping rewards from the flood of money pouring into electrification and environmental, social and governance investing themes”. That’s seeing demand begin to outpace supply for the first time in a decade.

According to GJL Research analyst Gordon Johnson, “Uranium sector supply/demand balance is the tightest we’ve seen since pre-Fukushima.” Fukushima was the site of the post earthquake nuclear meltdown in Japan in 2011.

Pointing to the rising importance of ESG, Johnson says:

When you add to this, uranium stocks are now gaining attention from ESG investors due to their low GHG [greenhouse gas emissions] footprint and quintessential role as a clean energy alternative, we see the set-up for incremental/new Uranium investments as opportune.

Johnson said another potential tailwind for uranium shares is that institutional funds may be looking to increase their exposure to the sector. “If true, this could go on for a long time as they build significant positions ahead of the inevitable price rise in the commodity.”

Today’s share price moves

Both Paladin and Deep Yellow shares are selling off today. While the All Ords is down 1.1% in late afternoon trading, the Paladin share price has fallen 4.1% and the Deep Yellow share price is down 7% at the time of writing.

More reading

• Why is the Paladin Energy (ASX:PDN) share price heating up today?

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.

The post Why ASX uranium shares could run even hotter in 2021 appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2O6XGdw

While the recent volatility has been disappointing, one positive is that it has dragged a number of growth shares down meaningfully from their recent highs.

One ASX growth share that could be in the buy zone now is Domino’s Pizza Enterprises Ltd (ASX: DMP).

Why Domino’s?

This pizza chain operator could be a great option for growth investors. Since the Domino’s share price hit a record high of $115.97 in February, it has pulled back by approximately 25%.

This appears to have left its shares trading at an attractive level for long term focused investors. This is due to its bold expansion plans, strong market position, and long track record of same store sales growth.

In respect to its expansion plans, at the end of the first half of FY 2021, Domino’s operated a total of ~2,800 stores across the ANZ, European, and Japanese markets.

It is aiming to grow its network to ~5,500 stores in these markets alone in the coming years. There’s also a reasonably high chance that the company could expand into other markets, giving it an even larger runway for growth. In fact, with its half year results, management stated that it “remains active in pursuing suitable Domino’s acquisitions.”

One broker that is positive on the company is Goldman Sachs. A recent note out of the investment bank reveals that its analysts have put a buy rating and $112.60 price target on its shares.

Based on the current Domino’s share price, this implies potential upside of over 30%.

Why does Goldman think the Domino’s share price is good value?

There are a number of reasons the broker is a fan of Domino’s. One of those is its growth potential in the European and Japan markets.

It commented: “Although short term performance has been positively impacted by the pandemic, DMP is in an increasingly strong position as it builds on recent momentum and takes advantage of opportunities in the market. We forecast both Japan and Europe to deliver significant store and earnings growth over the next three years, amounting to 24% and 23% EBITDA CAGR to FY23.”

Goldman expects this to lead to net profit after tax of $197.5 million in FY 2021, $241.8 million in FY 2022, and $284.6 million in FY 2023.

Based on this, the Domino’s share price is changing hands for 26x FY 2023 earnings. Goldman believes this represents good value given its current growth profile.

More reading

• The Domino’s (ASX:DMP) share price gave back all its gains in February
• Leading brokers name 3 ASX shares to sell today
• Will Wall Street’s overnight tumble send ASX 200 shares down today?
• What’s happening with ASX 200 tech shares today?
• ASX 200 goes higher, Afterpay sinks, Adbri impresses

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises 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 it could be a good time to buy Domino’s (ASX:DMP) shares appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3c2ihrA

Australia’s top brokers have been busy adjusting their estimates and recommendations again, leading to the release of a number of broker notes.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Nextdc Ltd (ASX: NXT)

According to a note out of Citi, its analysts have retained their buy rating but trimmed the price target on this data centre operator’s shares slightly to $14.45. The broker was pleased with NEXTDC’s half year results last month. Looking ahead, Citi notes that a good portion of its future earnings are already contracted. Furthermore, with the shift to the cloud accelerating, demand looks set to continue to grow in the coming years. The NEXTDC share price is fetching $10.51 on Friday afternoon.

Wesfarmers Ltd (ASX: WES)

A note out of Macquarie reveals that its analysts have retained their outperform rating but cut the price target on this conglomerate’s shares to $56.60. The broker has been looking at recent sales data and notes that the household goods sector continues to perform very strongly. In addition to this, the broker points out that with household savings at a record high, strong retail spending should be sustainable over the medium term. The Wesfarmers share price is trading at $49.45.

Westpac Banking Corp (ASX: WBC)

Analysts at Citi have also retained their buy rating and $26.00 price target on this banking giant’s shares. According to the note, after speaking with management, the broker believes Westpac’s Institutional Bank business is well-placed to overcome cost pressures and a moderation in volumes thanks to its asset quality. Outside this, the broker is positive on the company due to its balance sheet and expects this to underpin solid returns in the future. The Westpac share price is trading at $24.73 on Friday afternoon.

More reading

• Why is everyone talking about bond yields?
• The NextDC (ASX:NXT) share price just hit a 9-month low despite broker upgrades
• ANZ (ASX:ANZ) share price outperforms on broker “buy” upgrade
• What do big brokers think about the Afterpay (ASX:APT) share price this week?
• The ANZ (ASX:ANZ) share price just hit a 52-week high

Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited and Westpac Banking. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Brokers name 3 ASX shares to buy right now appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/38eBcym

The Nova Eye Medical Ltd (ASX: EYE) share price is in the green today. This comes after the company released positive results showing the efficacy of its 2RT treatment.

During mid-afternoon trade, the medical technology company’s shares are up 7.58% to 36 cents.

What were the results?

In today’s release, Nova Eye advised that it has published the results of its 5-year patient follow-up data from the LEAD trial in a recent publication of Ophthalmology Retina. The article discusses the long-term effect of subthreshold nanosecond laser (SNL) treatment on progression to late age-related macular degeneration (AMD).

The company said the LEAD trial was a randomised, controlled multi-centre study involving 292 patients over a 6-year period (2012 to 2018). The program assessed the efficacy of 2RT at the 3-year mark in patients suffering from intermediate AMD.

Of the enrolled patients that completed the 5-year review (222 patients), two groups were equally split. This consisted of the 2RT treatment group, and the other being the non-treatment group.

The published article states that when factoring the trial participants and additional data observed during the five-year post-LEAD review, the results are promising. It showed strong evidence of a reduction in the rate of progression in AMD when treated with 2RT.

What did management say?

Nova Eye Medical director Tom Spurling hailed the results, saying:

While these data have been calculated by the authors using post-hoc analysis, the improvement in the clinical response in patients without RPD at five years using is very exciting, particularly given these patients did not receive further 2RT treatment during the last two- year observation period.

Overall, there was a significant reduction in the rate of progression to late-stage AMD in these patients. This is of significant benefit to patients in deferring disease progression and thus maintaining their quality of life. It also supports our previously stated position that 2RT offers the potential to meet a major global unmet need to delay onset of blindness.

About the Nova Eye share price

The Nova Eye share price has lost almost half of its value since this time last year. The company’s shares have been impacted by COVID-19, which has affected its medical equipment and devices business.

Based on the current share price, Nova Eye Medical commands a market capitalisation of close to $50 million.

More reading

• Brokers name 3 ASX shares to buy right now
• 2 high quality ASX ETFs to buy this month
• Fundie tips this ASX 200 retail share to prosper in 2021
• 4 ASX retail shares that Morgans thinks are a ‘Buy’
• Why the Cadence Capital (ASX:CDM) share price is zipping 9% ahead

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Nova Eye Medical 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 Nova Eye (ASX:EYE) share price is surging 7% higher appeared first on The Motley Fool Australia.

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

Exchange-traded funds (ETFs) can be useful additions to any ASX portfolio. An ETF doesn’t represent a single ASX share, but rather a collection of different shares, all in one fund.

As such, ETFs can be a useful tool to increase diversification and exposure to hard-to-reach areas in one’s portfolio. To that end, let’s take a closer look at two ASX ETFs.

BetaShares Asian Technology Tigers ETF (ASX: ASIA)

Many ASX investors choose to buy US shares directly, which isn’t that hard these days. But Asian markets remain rather difficult for Aussies to directly participate in.

That’s why this ETF from BetaShares can come in handy. Asian Technology Tigers holds within it 50 of the largest technology companies from the Asian region (excluding Japan).

These include some names you might have heard of, such as Samsung Electronics and Tencent Holdings, to some you may not be as learned in, like JD.com and Baidu. This ETF is heavily dominated by Chinese and Hong Kong-listed companies. But it also offers handy exposure to the Taiwanese, South Korean, and Indian markets.

Asian Technology Tigers has been on an absolute tear over the past year, rising an eye-watering 61%. But, this ETF has also lost a bit of steam in recent weeks and is now down around 14% since 15 February.

It charges a management fee of 0.67% and offers a trailing distribution yield of 0.9%.

VanEck Vectors Wide Moat ETF (ASX: MOAT)

Changing lanes to this ETF from VanEck now. The Wide Moat ETF aims to hold a basket of US shares that all have characteristics that indicate the presence of an economic moat. A moat is a concept pioneered by the great Warren Buffett.

It demonstrates that a company has an intrinsic competitive advantage, such as a strong brand, pricing power or switching costs. This theoretically helps to ‘protect’ the business from competitors in the same way a medieval moat protected a castle from invaders.

No surprises then that the Wide Moat ETF holds Buffett’s Berkshire Hathaway Inc (NYSE: BRK.A) (NYSE: BRK.B) among its holdings. Other names you might know in this ETF include Amazon.com Inc (NASDAQ: AMZN), American Express Company (NYSE: AXP), Microsoft Corporation (NASDAQ: MSFT) and McDonald’s Corporation (NYSE: MCD).

The Wide Moat ETF charges a management fee of 0.39% per annum and has a trailing distribution yield of 1.35%. It has also managed to deliver an average return of 17.31% per annum over the past five years.

More reading

• Brace for even more new ETFs to hit the ASX
• 2 top ETFs to buy in March
• 2 tech ETFs for ASX investors to buy after the market selloff
• 2 top ETFs to buy and hold
• 2 high quality ETFs for ASX investors to buy in February

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of American Express, McDonalds, and VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Baidu, Berkshire Hathaway (B shares), JD.com, and Microsoft and recommends the following options: short January 2023 $200 puts on Berkshire Hathaway (B shares), short March 2021 $225 calls on Berkshire Hathaway (B shares), long January 2022 $1920 calls on Amazon, short January 2022 $1940 calls on Amazon, and long January 2023 $200 calls on Berkshire Hathaway (B shares). The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended Amazon, Berkshire Hathaway (B shares), JD.com, and VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 high quality ASX ETFs to buy this month appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3eai08L

S&P/ASX 200 Index (ASX: XJO) retail shares have been enjoying some strong tailwinds from cashed-up consumers.

In 2020, Australian households saved $187 billion. That’s more than Aussie households managed to sock away in 2017, 2018, and 2019…combined.

The combination of cashed-up consumers with pent-up demand after enduring months of social distancing and lockdowns is good news for ASX 200 retail shares. Especially with consumer spending comprising some 65% of the Australian economy.

While that’s good for all types of ASX retail shares, discretionary retail shares (those selling items we don’t necessarily need but want to own anyhow) are tipped to outperform.

So which ASX 200 retail shares stand out?

Dermot Ryan is a portfolio manager at AMP Capital.

As the Australian Financial Review reports, Ryan believes Harvey Norman Holdings Limited (ASX: HVN) is among the ASX 200 retail shares “set to prosper as consumer spending strengthened through the economic recovery”.

Why?

According to Ryan:

We’ve been very keen on the retail space. We’ve been playing really strongly in that discretionary spend and we’ve seen very strong dividends from that sector… Australia has had a massive rebound because we’ve had one of the biggest stimulus programmes in the world and we haven’t really had that much COVID.

Harvey Norman share price snapshot

Harvey Norman shareholders have been well rewarded over the past 12 months, with shares up 43%. By comparison, the ASX 200 is up 4% in that same time

Though shares are slipping today, down 2.17% in early afternoon trading, the Harvey Norman share price is up 9% in 2021, while the ASX 200 is down just under 1%. The company has a market capitalisation of $6.6 billion.

Harvey Norman pays an annual dividend yield of 7.15%, fully franked.

More reading

• 3 ASX 200 shares that doubled profits this reporting season 
• These are the latest ASX shares to be hit by broker downgrades
• Leading brokers name 3 ASX shares to buy today
• Has the Harvey Norman (ASX:HVN) share price peaked?
• The Harvey Norman (ASX:HVN) share price slips despite soaring profits

The post Fundie tips this ASX 200 retail share to prosper in 2021 appeared first on The Motley Fool Australia.

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

February reporting season was a mixed bag for ASX retail shares despite strong half-year results across the board.

Morgans has run the ruler over a number of ASX retail shares, citing the rising Australian dollar, ongoing vaccine roll out and strong household savings as factors that will support retailers. 

Here are four ASX retail shares that received an “Add” rating by Morgans on 3 March. 

1. Adairs Ltd (ASX: ADH) 

The Adairs share price topped out and hit a record all-time high on the day its half-year results were released. The company delivered outstanding growth with a 34.8% increase in sales to $243.0 million while statutory net profit after tax surged 233.4% to $43.9 million. 

Morgans believes that, while retail sales will moderate in a post-COVID world, Adairs’ earnings will normalise at a materially higher level. Earlier this week, the broker retained a $4.50 price target for Adairs, which represents a 20% upside from today’s prices. 

2. Baby Bunting Group Ltd (ASX: BBN) 

The Baby Bunting share price took a 6% dive on the announcement of the company’s half-year results. Baby Bunting announced a 16.6% increase in sales to $217.3 million and pro forma net profit after tax of $10.8 million, a 43.5% increase on the prior corresponding period. 

Morgans is bullish on the company’s expansion plan to establish a multi-channel retail proposition in New Zealand, with its first store anticipated to open in FY22. 

On 3 March, the broker retained its $6.39 share price target for Baby Bunting. This represents an almost 24% premium to today’s Baby Bunting share price 

3. Breville Group Ltd (ASX: BRG) 

The Breville share price also experienced a similar effect as Adairs on the day its own half-year results were announced on 16 February. Breville shares briefly hit an all-time record high of $32.85 following the company’s update.

Breville’s revenues increased 28.8% to $711.0 million for the half while net profit after tax grew 29.25% to $64.2 million. The company noted that assuming no significant change in economic conditions in its major trading markets, it expects FY21 EBIT to be approximately $136 million. This represents an increase of 34.8% on FY20 EBIT guidance and is also higher than the FY21 guidance of $128 million to $132 million provided at its November AGM. 

Morgans retained a $33.90 share price target, around 27% higher than the current Breville share price.

4. Lovisa Holdings Ltd (ASX: LOV) 

The Lovisa share price surged 19% on the back of the company’s half-year results. But while the other ASX retail shares mentioned here delivered double-digit, and in some cases triple-digit, growth across the board, Lovisa was significantly impacted by worldwide store lockdowns. 

As a result, Lovisa’s revenue took a 9.8% hit while net profit after tax slumped 22.6%. Despite a weak performance at face value, Morgans is bullish on the company’s reopening leverage and believes it could see an uplift in growth in the short term. 

The company’s results noted that the first seven weeks of the second half has seen a strong performance from the Southern Hemisphere markets and challenging trading conditions in the Northern Hemisphere, with comparable store sales up 12% overall. 

Morgans retained a target price of $17.95, a 29% premium to the current Lovisa share price.

More reading

• Top brokers name 3 ASX shares to buy today
• How Aldi plans to disrupt many ASX retail shares
• 3 ASX shares that doubled their profit in reporting season
• 2 ASX shares rated as strong buys by brokers for March
• These ASX retail shares are smashing sales expectations

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends ADAIRS FPO. The Motley Fool Australia has recommended ADAIRS FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 4 ASX retail shares that Morgans thinks are a ‘Buy’ appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3bfP7py

The Cadence Capital Limited (ASX: CDM) share price is really finding its rhythm today, as it pulls ahead of most of the ASX. This move comes after the international equities’ manager provided an update on one of its investments.

At the time of writing, Cadence Capital is trading at $1.00, an increase of 8.65% from yesterday’s closing price.

Metal is going green, going DeepGreen

Cadence’s update relates to an investment it made several years ago in a private company by the name of DeepGreen Metals. Before we jump into the recent developments, what is ‘DeepGreen Metals’?

DeepGreen Metals is quite an interesting business. The company’s focus is to produce metals from polymetallic rocks to power electric vehicles (EVs). Now that might not mean much unless you’re a geologist, so let’s crack it open.

Polymetallic rocks or nodules are rock formations containing iron and manganese hydroxides. These rocks happen to be abundant on the sea-bottom of most oceans of the world. As the formation contains a broad composition of copper, cobalt, nickel, and other elements, these nodules have the materials necessary for EV battery production.

The best part, they are just sitting on the ocean floor. That means no tearing up landscapes, impacting flora and fauna; it’s a ‘green’ way of harvesting these resources.

We’re building a world where metals are not mined and dumped, but rented and returned.#BetterMetals #RenewableEnergy #ElectricVehicles pic.twitter.com/rQNgA0iVmb

— DeepGreen Metals Inc. (@DeepGreenMetals) December 11, 2020

https://platform.twitter.com/widgets.js

Why is DeepGreen driving up the Cadence Capital share price?

Announced overnight, DeepGreen Metals is set to go public on the New York Stock Exchange via SPAC. This will be done via the merger with the blank-check listed Sustainable Opportunities Acquisition Corp (NYSE: SOAC).

Once merged, the trading company will be known as The Metals Company under the ticker TMC.

Cadence Capital notes that the DeepGreen Metals investment is roughly 2.8% of the company’s portfolio. The proposed listing value of US$2.9 billion is far greater than the company’s current valuation. The most recent raising for the merger was priced at US$10 per share, whereas Cadence’s current investment is valued at US$1.38 per share. Based on this information, the reevaluation would lift Cadence’s overall portfolio value by approximately 20%.

The transaction is still subject to shareholder and court approval.

More reading

• Why the Peppermint (ASX:PIL) share price is bouncing today
• ASX energy shares are booming as OPEC cuts production
• Crown (ASX:CWN) share price facing double Royal Commission trouble
• The risky nature of Robinhood style day trading revealed
• What’s with the Weebit (ASX:WBT) share price sinking 6% today?

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

The post Why the Cadence Capital (ASX:CDM) share price is zipping 9% ahead appeared first on The Motley Fool Australia.

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