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The Lycopodium Limited (ASX: LYL) share price shot up over 6% earlier today, before pulling back slightly. At the time of writing, Lycopodium shares are trading at $5.05, up 3.48%. 

Let’s take a look at what Lycopodium has been up to and what might be lifting the share price.

The Orezone Gold Corporation Project

Lycopodium is an engineering and project management consultancy company with a focus on the Minerals sector. The company’s target markets extend across the Asia Pacific region, North America and Africa.

Earlier this week, Lycopodium announced that the company had been awarded a contract to provide engineering, procurement and construction management services for Orezone Gold Corporation’s State 1 Oxide Process Plant for the Bomboré Gold Project.

Responding to this win, Lycopodium’s Managing Director Peter De Leo said:

Having supported the initial study work and Front End Engineering Design for the project out of our Toronto office, we are very pleased to continue to support Orezone in the development of Bomboré. With vast experience in successfully designing and constructing gold projects in Africa, we will draw on our specialist expertise in Australia, Canada and Burkina Faso to deliver this significant project.

How has Lycopodium performed recently?

In the last released shareholder report, the company noted that regardless of the growing impact of COVID, its projects have been generally unaffected. The report goes on to boast FY20 highlights including a $211.1 million revenue and $11.8 million in earnings before interest, tax, depreciation and amortisation (EBITDA).

While COVID didn’t strike too hard against the company’s current projects, the Lycopodium shareholder report further notes that “the pandemic has significantly impacted the award and commencement of new opportunities coming to market”. 

Despite this impact, in December Lycopodium also announced that it was awarded the contract to provide engineering and procurement services for the Sandfire Resources Motheo Project located in Botswana’s Kalahari Copper Belt.

Lycopodium shares are up more than 8% this week. On the current Lycopodium share price, the company has a market capitalisation of $193.93 million.

More reading

• The Bingo (ASX:BIN) share price is up 8% today, 38% in 6 months
• Why the Firefinch (ASX:FFX) share price has surged 12% today
• Citi picks the best international share markets that can beat the ASX in 2021
• Why the IGO (ASX:IGO) share price is dropping lower
• The Energy Resources (ASX:ERA) share price is falling. Here’s why.

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.

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Bingo Industries Ltd (ASX: BIN) shares have risen by nearly 8% today amid a broader rise in the ASX, despite no news coming out of the waste management company. Over the last six months, the Bingo share price has also climbed by a healthy 37.6%. This was underpinned by strong net profit results in FY20, which rose by almost 200% on FY19’s numbers.

Here’s a quick rundown on Bingo Industries.

What happened in 2020?

Despite admitting that its business was disrupted by the COVID-19 outbreak, the company still posted healthy full-year results for FY20 in August last year.

Bingo reported a 21% increase in revenue of $486.7 million in FY20, and net profit after tax (NPAT) of $66 million, up by 196%.

Importantly, Bingo reported an operating free cash flow of $160.1 million, up 37.4%, which the company said will allow it to execute its strategies going into 2021.

Bingo issued FY20 dividend payments of 3.70 cents per share, down from 3.72 cents in FY19.

Outlook for 2021

During its annual general meeting (AGM) in November, Bingo advised that it expected COVID-19 headwinds to continue into 2021, with the potential for business interruption.

As a result, Bingo forecast that its group earnings before interest, tax, depreciation, and ammortisation ( EBITDA) margin will decline in FY21 by approximately 2% to 3%, before rebounding to its longer-term target of 30%.

Notwithstanding this, Bingo believes that medium-term tailwinds will still outweigh the short-term headwinds faced by the company.

In an earlier October trading update, Bingo revealed it is set to benefit from the strong government stimulus spending in infrastructure. More importantly, management expected that changes in government policy related to waste management is pivoting towards the company’s business model over the long run.

In particular, the Recycling Modernisation Fund and the Modern Manufacturing Strategy introduced by the federal government will encourage recycling as we move towards a circular economy. According to Bingo, all these changes bode well for its business.

Brief take on Bingo

Bingo is a recycling and waste management company that provides solutions across the entire waste management supply chain.

In the waste management industry, there are three major market segments: construction and demolition (C&D), commercial and industrial (C&I), and municipal waste.

The majority of Bingo’s business is in the C&D segment, and it does not participate in the municipal segment.

C&D waste collection, however, is cyclical, being closely tied to construction activity.

This contrasts with the municipal and C&I waste management segments, in which volumes are relatively stable through economic cycles.

In 2019, Bingo acquired competitor Dial-a-Dump in a $578 million deal that attracted scrutiny from the competition watchdog, the ACCC.

How has the Bingo share performed in 2020?

The Bingo share price has dropped by around 6% over the past year but, as mentioned, it has built momentum over the last 6 months, rising by nearly 38%.

At the current Bingo share price, the company has a market capitalisation of $1.65 billion.

More reading

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Motley Fool contributor Eddy Sunarto 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 Firefinch Ltd (ASX: FFX) share price has rocketed today after the company released a positive quarterly gold production report.

During late-morning trade, the mineral exploration company’ shares rose to a high of 25.5 cents. However, the Firefinch share price has since given back some of those gains, retreating to 22 cents, up 12.5% at the time of writing.

What’s driving the Firefinch share price up today?

For the December quarter, Firefinch reported that it had previous forecasts by producing 4,228 ounces of gold last month. The positive result was attributed to processing tailings of the previous metal from the Morila gold mine.

In total, 7,683 ounces of gold has been extracted and processed from the open gold pit since 11 November, 2020 – when Firefinch acquired an 80% interest in the Morila gold mine.

To further develop the main gold pit, the company has been evaluating new potential ore feeds, plant and infrastructure refurbishment, as well as costings. Currently, two reverse circulation drill rigs are executing infill drilling, which will expand coverage to exploit additional gold.

Looking ahead, Firefinch reaffirmed its production guidance of 10,000 to 15,000 ounces of gold for the first quarter of 2021.

The company revealed a healthy balance sheet with cash on hand standing at $33 million at the end of December.

What did management say?

Commenting on the performance, Firefinch executive chair Alistair Cowden said:

We are delighted with the gold production and overall progress at Morila. In just two months, the Firefinch team have safely achieved above forecast production. Significant progress has been made on mine plans, costs and timelines and we very much look forward to updating our shareholders further as plans are finalised.

At the same time, we are in a very fortunate position with our Goulamina lithium asset. Recent strong interest in lithium equities has improved the standing of the Goulamina Lithium Project, one of the world’s best undeveloped and uncommitted lithium assets.

More reading

• Citi picks the best international share markets that can beat the ASX in 2021
• Why the IGO (ASX:IGO) share price is dropping lower
• The Energy Resources (ASX:ERA) share price is falling. Here’s why.
• Stock market recovery: Is it too late to find cheap shares to buy right now?
• Harvey Norman (ASX:HVN) share price hits multi-year high: Can it go higher?

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.

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The ASX is starting 2021 on a positive footing as it builds on last year’s gains, but those looking for the best returns may need to look offshore.

The S&P/ASX 200 Index (Index:^AXJO) is up by more than 2% since the start of the year and has rebounded by nearly 50% from last March’s COVID‐19 low.

There are reasons to think ASX stocks can keep delivering over the next few months with record low interest rates and the earnings recovery. But Citigroup believes you will need to look overseas if you want the best bang for your investment dollar.

International stock markets best placed to outperform

The broker is forecasting a flat return for the MSCI ACWI Index. This index measures the performance of large- and mid-cap stocks across 23 developed and 27 emerging markets.

But within the index, Citi is expecting emerging markets (EM) and the UK share markets to outperform.

It upgraded EM to “overweight” along with the UK, but downgraded US shares to “neutral” due to valuation concerns.

Valuation a growing concern

“Global equities are currently trading on 20x 2021 consensus EPS [earnings per share], well above the 15x long-term median,” said Citi.

“The US looks most expensive on 23x. The UK is cheapest on 14x. Valuations constrain our bullishness, but can partly be justified by low bond yields and ongoing [quantitative easing].”

If you are wondering where the ASX sits, the broker rates it “neutral” as well but is urging investors to go underweight on Japanese and European (ex UK) stocks.

Three stock market predictions for 2021

There are also three themes that Citi is predicting for 2021. This includes a weak US dollar, rotation into value stocks and increasing capital flows into Environmental, Social and corporate Governance (ESG) funds.

“Ongoing fiscal expansion should drive the US$ lower, so helping EM equities and commodity stocks,” explained Citi.

“10y US treasury yields are expected to rise, which could drive further value rotation. Increasing flows into ESG funds should help more compliant markets and sector.”

Best and worst sectors

As for the sectors that are best placed to perform in the current year, the broker upgraded Materials to “overweight”. Other sectors that also have an overweight rating include Health Care, Energy and Information Technology.

On the flipside, the sectors that have the dimmest outlook in Citi’s opinion include Utilities, Financials, Consumer Discretionary and Consumer Staples.

More reading

• The Energy Resources (ASX:ERA) share price is falling. Here’s why.
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• ASX 200 up 0.4%: Afterpay & Zip charge higher, NAB rises, Harvey Norman hits new high
• 5 things to watch on the ASX 200 on Friday
• ASX 200 rose 1.6%

Motley Fool contributor Brendon Lau 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 IGO Ltd (ASX: IGO) share price has come under pressure on Friday and looks set to end the week in the red.

In afternoon trade the gold, lithium, and nickel producer’s shares are down approximately 1% to $7.50.

Despite this, the IGO share price is still up over 60% since the start of December.

Why is the IGO share price under pressure?

Investors have been selling the company’s shares on Friday despite the release of a positive announcement.

That announcement was in relation to the recently announced transaction with Tianqi Lithium and the company’s ongoing strategic review of its 30% ownership of the Tropicana Gold Operation.

In respect to the Tianqi Lithium joint venture, the company’s acquisition of an interest in a global lithium joint venture with Tianqi is progressing well.

According to the release, the company has confirmed that Tianqi Lithium received approval for the transaction from its shareholders on 5 January 2021.

Of the shareholders present and entitled to vote at its shareholder meeting, 99.97% voted in favour of the transaction between Tianqi and IGO. Management believes this is a strong validation of the “win-win” the transaction has created for the shareholders of both companies.

IGO’s Managing Director and CEO, Peter Bradford, commented: “The resounding vote of support which Tianqi has received from its shareholders further validates the value creation from this transaction for the shareholders of both companies.”

“Tianqi and IGO continue to progress the completion workstreams and we will provide further updates to the market as the remaining conditions precedent required to complete the transaction are progressed,” he added.

And in respect to its strategic review of the Tropicana Operation, the company revealed that the review of its 30% interest in the operation is ongoing. It intends to update the market on the outcome when it is appropriate to do so.

More reading

• ASX 200 rose 1.6%
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• ASX 200 Weekly Wrap: ASX 200 hits a 6! Thank iron ore
• These were the best performing ASX 200 shares last week
• UBS just downgraded these outperforming ASX mining stocks

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 Energy Resources of Australia Limited (ASX: ERA) share price has fallen after an announcement the miner will cease production at its Northern Territory Ranger uranium mine today. The company also released an update this morning on its quarterly production figures.

After lifting more than 3% in morning trading, the Energy Resources share price has since dropped 1.59% to trade at 31 cents, at the time of writing.

What did Energy Resources report this morning?

Energy Resources of Australia advised that uranium oxide processing at its 100% owned Ranger mine will cease today, as required by the Ranger authority.

The miner started uranium mining at Ranger in 1980. Since then, the mine has produced more than 132,00 tonnes of uranium oxide. The mine is located 260km east of Darwin, near the town of Jabiru, which was originally constructed for the mine’s employees.

Energy Resources reported that progressive rehabilitation activities on the Ranger Project Area are continuing. These include the transfer of tailings from its Tailings Storage Facility to Pit 3. The company forecasts bulk dredging works will be finished by late January. Tailings Storage Facility floor cleaning activities are expected to occur through the first half of 2021.

In its operations review, the company revealed it had produced 390 tonnes of uranium oxide in the December 2020 quarter. That brings uranium oxide production for the full year to 1,574 tonnes, which comes in at the upper end of its production guidance.

Energy Resources share price and company snapshot

Energy Resources is one of Australia’s largest uranium producers. The company mines, processes, and sells uranium oxide. Shares first began trading on the ASX in November 1980.

The first 11 months of 2020 were fairly uneventful for Energy Resource’s shareholders. Especially when you consider the remarkable COVID-driven volatility witnessed across most S&P/ASX 200 Index (ASX: XJO) shares last year. The Energy Resources share price was not immune to the wider selloff, however, with shares falling 17% from late February through to 23 March.

The share price really began lifting off on 10 December. Shares are up more than 103% since then. In a query from the ASX on 15 December, the company stated it was unaware of any specific reasons for the share price surge.

More reading

• Brokers just upgraded the Sonic (ASX:SHL) share price and this other ASX stock to “buy”
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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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The stock market recovery after the 2020 market crash does not mean cheap shares are now extinct. In fact, many sectors continue to trade on low valuations as a result of their weak short-term outlooks.

This provides an opportunity for investors to buy stocks at low prices. In the long run, this can mean there is greater scope for capital growth.

However, it remains important to focus on the quality of companies as well as their price. Similarly, diversifying could be crucial in today’s uncertain economic environment.

Finding cheap shares to buy right now

It is still possible to build a diverse portfolio made up of cheap shares. The stock market recovery has, to some extent, been focused on companies and sectors that have upbeat financial forecasts for 2021, or that can easily adapt to major changes caused by coronavirus.

Therefore, sectors such as financial services, hospitality, travel and some retailers contain companies that trade at low prices. In some cases, their valuations are significantly lower than their long-term averages – even after the stock market recovery has lifted them from their lowest levels in the past 12 months.

This could mean that they provide scope for capital growth, since company valuations have historically reverted to their long-term averages as a sustained stock market rally takes hold.

Similarly, cheap shares could become increasingly popular among investors. Their operating conditions are unlikely to be as weak as they have been in recent months over the long run. As such, their financial performances may improve versus their 2020 and even 2021 levels so that they can command higher share prices in the coming years.

Focusing on high-quality stocks

Of course, it remains important to manage risk when buying cheap shares. Sometimes, the lowest-priced companies can be the most unattractive businesses because of risks such as weak financial positions or a stale growth strategy.

Therefore, assessing the quality of a company prior to purchase could be a worthwhile move. It may enable an investor to avoid value traps, which are cheap stocks that are priced at low levels for good reason. Avoiding such companies can reduce the risk of loss within a portfolio and produce higher returns in the long run.

So, too, can diversifying among cheap shares. The weak economic outlook for the early part of 2021 and the potential for a volatile stock market mean that holding a wide range of companies is likely to be a sound move.

Doing so will reduce an investor’s reliance on a small number of businesses for their returns. A diverse portfolio could be especially useful given the likely imbalance in performance between different regions and industries in 2021, as some places and sectors are affected to a greater degree by coronavirus and political threats.

More reading

• The Energy Resources (ASX:ERA) share price is falling. Here’s why.
• Harvey Norman (ASX:HVN) share price hits multi-year high: Can it go higher?
• Why the G8 Education (ASX:GEM) share price is down 35% in a year
• Here’s what 1 broker thinks about the Chalice (ASX:CHN) share price
• Leading broker names the ASX tech shares to buy in 2021

Motley Fool contributor Peter Stephens 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 Harvey Norman Holdings Limited (ASX: HVN) share price is on form again on Friday and is pushing higher.

In afternoon trade, the retail giant’s shares are up 3.5% to a multi-year high of $4.93.

This latest gain means that the Harvey Norman share price is now up 41% over the last six months.

As a comparison, the S&P/ASX 200 Index (ASX: XJO) is up a solid 13.8% over the same period.

Why is the Harvey Norman share price at a multi-year high?

Investors have been buying Harvey Norman’s shares over the last few months thanks to its strong performance during the pandemic.

In November, the retailer released a trading update which revealed stellar sales growth so far in FY 2021.

According to the release, aggregated sales revenue increased by 28.2% between 1 July and 21 November compared to the prior corresponding period.

Management advised that this was driven by strong same store sales growth across almost all regions and particularly in the ANZ market.

Harvey Norman’s Australian franchisees delivered a 30.4% increase in comparable store sales and its New Zealand stores reported a 20.4% lift in comparable store sales. This includes stores that were temporarily closed due to COVID-19.

Pleasingly, Harvey Norman’s profit growth has been even stronger in FY 2021 thanks to margin expansion. Between 1 July and 31 October, the company reported unaudited profit before tax growth of 160.1% on the prior corresponding period.

Can the Harvey Norman share price go even higher?

Two brokers that believe Harvey Norman’s shares can still go higher are Citi and Credit Suisse.

Citi has a buy rating and $5.50 price target on its shares, whereas Credit Suisse has an outperform rating and $5.30 price target on its shares.

Citi’s price target implies potential upside of over 11% even from the multi-year high it reached today. That doesn’t include the very generous 45 cents per share fully franked dividend it is forecasting.

More reading

• ASX 200 up 0.4%: Afterpay & Zip charge higher, NAB rises, Harvey Norman hits new high
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• Citigroup picks the best ASX retail stocks to own for 2021
• Could ASX retail shares be the best ASX shares to own right now?

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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Non-cyclical shares, like those in the education sector, are usually spared the worst of an economic downturn. But the 2020 downturn was not like any other. It forced the closure of shops, educational facilities and many other services we previously took for granted.

Educational childcare company G8 Education Ltd (ASX: GEM) was one such company which experienced significant fallout from the government-ordered closures of childcare centres during the year.

As a result, the G8 Education share price tumbled by nearly 35% over the past year.

Let’s take a look at what’s been happening with G8 Education.

Recap of G8 Education’s performance in 2020

In its half-year results ending 30 June 2020, G8 Education reported operating earnings before interest and tax (EBIT) of $29 million, down 44% on the prior corresponding period. This was on the back of $308 million in revenue, which was down 28% on the prior period. 

The company then followed this up with a trading update in November, announcing that its year-to-date EBIT stood at $98 million, which included current year wage costs relating to the employee payment remediation program.

The employee remediation program refers to the amount the company said it owed to employees between 2014 to 2020, after a self-review identified inadvertent non-compliance issues. That amount will be between $50 million and $80 million, and has been reported to the Fair Work Ombudsman.

Quick take on G8 Education

G8 Education operates a portfolio of around 500 childcare centres in Australia, with a further 17 centres in Singapore.

In Australia, around 60% of childcare costs are borne by federal government subsidies, which have consistently increased in recent decades. For example, subsidies increased in 2018 under the federal government’s Jobs for Families legislation.

Looking at G8 Education’s balance sheet, the company has a strong cash flow due to the working capital model inherent in the business. Parents pay for their children’s fees one month in advance, while staff are paid one month in arrears.

Over the past decade, G8 has grown via a series of acquisitions, which have been funded mainly via the issuance of debt. It’s worth noting that leveraged acquisitions are not without risks. This is evidenced by the collapse of ASX-listed ABC Learning – once the world’s biggest early childhood education company – in 2008 due to excessive debt as it tried to expand. 

Outlook

In its presentation to investors in November, G8 Education said it expected 2021 to be a recovery year, given the absence of additional government subsidies and the ongoing impacts of COVID-19.

The company reported that, in 2021, it will focus on the divestment of its impaired centres, and the rollout of its new “greenfield” centres. Approximately 10 new greenfield centres are expected to open in 2021 with a capital outlay of approximately $4 million.

Approximately $10 million in capital expenditure will also be used in 2021 to execute the company’s strategy.

G8 Education share price snapshot

As mentioned, the G8 Education share price has lost around 35% over a year, however it has risen by around 36% over the last six months.

At the time of writing, the G8 Education share price is trading 0.86% higher for the day so far at $1.16. At this share price, the company commands a market capitalisation of around $983 million.

More reading

• ASX 200 shares hardest hit by COVID-19 in 2020

Motley Fool contributor Eddy Sunarto 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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2020 was a breakthrough year for ASX mining shares, with commodities including gold, iron and copper running to multi-year highs.

Higher commodity prices brings to life many more prospective exploration projects, with a number of ASX mining shares delivering 1,000% returns last year . 

Chalice Mining Ltd (ASX: CHN) was one of the best performing ASX mining shares, running from 20 cents to close at almost $4.00 in 2020.

On 5 January 2021, Bell Potter upgraded the Chalice Mining share price target from $5.35 to $5.60. Here’s why the broker sees significant upside in the exploration company. 

The Chalice growth story so far 

Chalice is a Perth-based exploration company, focused on base and precious metals. It has an experienced management and geological technical team whose members are recognised for their exploration success.

The company’s strategy is to target tier-1 scale (net present value greater than US$1 billion) mineral projects. This by actively managing its exploration portfolio and undertaking high impact activity on its projects. 

Chalice advanced two gold projects to the point where they were sold for $107 million – far more than the cost of exploration – to larger companies for subsequent development. Chalice returned $25 million to its shareholders and retained significant funds for further exploration. 

Today, the company’s assets comprise 2 new and significant discoveries, the Julimar project in Western Australia and the Pyramid Hill gold project in Central Victoria. Chalice also owns a number of minor exploration projects and royalty interests for a range of metals including gold, nickel, copper and vanadium. 

Chalice share price upgraded with buy rating 

The Chalice share price was upgraded from $5.35 to $5.60, or a 25% upside to its current share price. Bell Potter believes the company is well-funded to continue its major exploration program at Julimar, plus drilling programs at Pyramid Hill gold project and limited exploration on its other projects with cash currently estimated at ~$120 million. 

This funding will support even higher levels of drilling activity and associated economic studies at Julimar. The broker continues to regard the Julimar proejct as a world ranking one with potential to become a major new Tier-1 source of platinum-group elements. 

Foolish takeaway

ASX mining shares across the board, from giants such as BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) to microcaps, have all benefited from higher commodity prices. 

Chalice’s recent capital raising was well-received by the market, and places the company in a position to deliver further drillings activity and economic studies for its two core projects in 2021. 

At the time of writing, the Chalice share price is trading up 3.57% at $4.64.

More reading

• Which 2 ASX shares have rocketed up more than 200% in 6 months?
• Why the Chalice Mining (ASX:CHN) share price is surging 11% higher today
• Here are the best All Ordinaries performers of 2020

Motley Fool contributor Lina Lim 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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