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The market is in retreat today but there are two ASX stocks bucking the downtrend after getting upgraded by leading brokers.

The S&P/ASX 200 Index (Index:^AXJO) shed 0.5% ahead of the close with most sectors slumping into the red on weak offshore leads.

Upgraded on attractive valuation

However, the Perpetual Limited (ASX: PPT) share price moved in the opposite direction as it surged 5.5% to $35.91. This makes the wealth manager the second top performer on the ASX 200 after the Aurumin (ASX: AUN) share price.

The Perpetual share price got a boost as Credit Suisse upgraded it to “outperform” from “neutral”.

The broker thinks now is the time to buy the stock. It’s trading on a FY22 forecast price-earnings multiple of 13 times.

Why the Perpetual share price is now a buy

That’s attractive given that the risk of clients leaving Perpetuals recently acquired business Barrow Hanley is reduced.

“Outflows likely to moderate and could shift to neutral/positive with the recent rotation into value, improved fund performance and exposure to higher growth ESG markets,” said the broker.

“[It’s] our view that PPT should trade on ~15x 24‐month EPS, offering investors not only earnings growth but also a re‐rating.”

Credit Suisse’s 12-month price target on the stock is $39 a share.

The ASX stock that got upgraded due to M&A

Meanwhile, the GUD Holdings Limited (ASX: GUD) share price jumped 1.1% to $11.31 on Thursday.

Its outperformance coincides with Macquarie Group Ltd’s (ASX: MQG) decision to upgrade it to “outperform” from “neutral”.

The broker is excited about the stock following GUD’s acquisition of Automotive Components and Accessories Division (ACAD) from AMA Group Ltd (ASX: AMA).

“The ACAD acquisition further diversifies GUD’s customers and channels to now include OEMs, fleets, car dealerships and specialist 4WD resellers,” said Macquarie.

“Overlapping GUD/ACAD customers represent only ~7% of revenue.”

Strong outlook for GUD share price

The transaction also gives GUD an entry point into the fast-growing four wheel drive (4WD) accessories market.

Macquarie also pointed out that the GUD share price is trading on undemanding valuations, particularly given the high visibility of GUD’s revenues and strong outlook.

The broker’s 12-month price target on GUD is $12.60 a share.

More reading

• Why Asaleo Care, Fortescue, Perpetual, & Starpharma shares are storming higher
• The two ASX stocks most impacted by the dangerous rise of the Aussie dollar
• ASX 200 down 0.4%: Appen downgrades guidance, Fortescue hits a record high
• Why the Michael Hill (ASX:MHJ) share price is leaping 11% higher
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group 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 Adbri Ltd (ASX: ABC) share price is trading slightly lower today after this morning’s announcement of a major shakeup of the company’s senior management roster.

At the time of writing, the Adbri share price is down 0.62% at $3.20.

Shakeup at the top

The Adelaide-based constructions material manufacturer made quite a few changes to its executive leadership team today as part of the company’s restructuring efforts.

Adbri says the changes consolidate the current 3 operating divisions into 2. The 2 new divisions will be Cement and Lime; and the newly formed Concrete, Aggregates & Masonry, which combines the previous Concrete & Aggregates, and Concrete Products divisions.

As a result of these divisional changes, the company has made a number of executive rotations, including the redundancy of Cement and Lime general manager, Brad Lemmon. 

A major client lost

The restructuring is part of a major strategy to get the company back to strength following this year’s bushfires and the COVID-19 pandemic. In its half-year FY20 results, Adbri reported a 14% drop in profits to $47.6 million. 

The company was also rocked in July when Alcoa Corp (NYSE: AA), one if its biggest American clients, decided not to renew a long-standing supply contract with Adbri-owned Cockburn Cement.

That decision saw more than $515 million stripped from the value of the company, with Adbri’s share price plunging by more than 30% at the news. 

The announcement also saw the termination of a $70-million a year contract, as well as a 50-year relationship between the two companies. 

In September however, Adbri got some of its shine back after announcingit had won a four-year contract extension to supply cement and lime to BHP Group Ltd‘s (ASX: BHP) Olympic Dam mine. That contract is worth $160 million over the full term.

About the Adbri share price

Overall, the Adbri share price has lost about 9% in 2020. As mentioned, the share price dropped to as low as $2.14 following the termination of the Alcoa deal in July. However the Adbri share price has regained momentum after the BHP deal was announced, rising steadily since September to today’s level. 

Adbri commands a market cap of $2.1 billion.

More reading

• ASX mining shares boosted today after broker upgrades
• Iron ore exports unlikely to slow down amid Australia–China trade tension: experts
• The Aussie dollar just hit a new 2-year high. Here’s what that means
• This dividend share has the most franking credits on the ASX
• The BHP (ASX:BHP) share price has just hit a multi-year high

Motley Fool contributor Eddy Sunarto owns shares of BHP Billiton Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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There are some ASX shares that fund managers believe are opportunities to buy.

Here are three of those opportunities:

Reject Shop Ltd (ASX: TRS)

Eley Griffiths Group is a fund manager that likes Reject Shop as an opportunity. The Eley Griffiths fund that invests in ASX shares has outperformed the S&P/ASX Small Ordinaries Accumulation Index by more than 10% per annum in recent years.

The fund manager believes that the global economy is now in a recovery phase, starting in China and spreading outwards.

Regarding Reject Shop, Eley Griffiths said in an ASX release of Future Generation Investment Company Ltd (ASX: FGX): “the ASX share sits at the early stages of a planned multi-year turnaround. New management have a reset balance sheet, strong brand and an operating model awaiting refinement. We have identified several levers where value for shareholders should be unlocked.”

Despite COVID-19, Reject Shop actually reported growth in FY20 with total sales growth of 3.4% and comparable sales growth of 3.5%. Before AASB 16, FY20 earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 30.1% to $23.7 million. It also generated $61.6 million of free cashflow, up from a $1.9 million outflow in the prior corresponding period.

Reject Shop is now focused on earnings before interest and tax (EBIT) growth with business simplification and operational efficiency.

Sonic Healthcare Limited (ASX: SHL)

Sonic Healthcare is a globally pathology business which is one of the main businesses involved in diagnosing COVID-19 cases in the countries that it operates in.

This business is liked by fund manager Clime Capital Ltd (ASX: CAM). Sonic actually reported that it had achieved positive growth in the base laboratory business compared to last year, apart from the US and the UK. The large numbers of COVID-19 tests are extra growth on top of that. Sonic recently announced that in the first quarter of FY21 for the three months to 30 September 2020 it achieved total revenue growth of 29%. By cutting costs Sonic was able to achieve EBITDA growth of 71% for the quarter.

Clime thinks that COVID-19 testing is likely to remain particularly strong during the winter for the US and European countries.

Sonic also has one of the longest consecutive dividend growth streaks on the ASX.

Bapcor Ltd (ASX: BAP)

Bapcor is the largest auto parts business in Australia and New Zealand.

It has its trade division, which includes Burson Auto Parts. The ASX share has a retail division which includes Autobarn. Bapcor has a service business which owns Midas and ABS. The auto parts business owns various specialist wholesale businesses and it also added a commercial truck parts group too. Finally, it has a small but growing Burson network in Thailand.

Bapcor is a favourite share idea of Wilson Asset Management (WAM) at the moment, with it being a holding across more than one of the listed investment companies (LICs).

WAM Research Limited’s (ASX: WAX) investment team pointed out that in the quarter for the three months to 30 September 2020 Bapcor grew revenue by 27% compared to the prior corresponding period, with retail revenue rising 47% and specialist wholesale revenue going up 45%.

Bapcor has benefited from an increase in domestic travel, reduced usage of public transport and increased second-hand car sales according to WAM. The fund manager said that Bapcor has a strong balance sheet and believes it’s well placed to make earnings accretive acquisitions.

In the recent trading update, Bapcor CEO Darryl Abotomey spoke of the company’s defensive qualities: “The automotive market is a resilient industry and historically has performed strongly in difficult economic circumstances. Recent trading is another example of its resilience assisted by the increase in sales on second hand cars, reduction in use of public and shared transport modes as well as government stimulus.”

More reading

• The Aussie dollar just hit a new 2-year high. Here’s what that means
• Why Bapcor, Event, Money3, & Tyro shares are dropping lower
• Got money to invest? Here are 3 ASX dividend shares to buy
• 2 turnaround ASX shares to buy
• 2 fantastic blue chip ASX shares to buy today

Motley Fool contributor Tristan Harrison owns shares of Future Generation Investment Company Ltd. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended Sonic Healthcare 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 Shriro Holdings Ltd (ASX: SHM) share price is rocketing higher today. This comes after the company released a positive trading update and outlook for its full-year results.

During afternoon trade, the Shriro share price hit a multi-year high of $1.02. Although its shares have since retreated somewhat, the Shriro share price is up 15% to 92 cents in today’s session. In comparison, the All Ordinaries Index (ASX: XAO) is 0.6% lower to 6,922 points.

Quick take on Shriro

Shriro is a leading kitchen appliances and consumer products group that markets and distributes throughout Australia and New Zealand. The company operates in an array of consumer goods sectors including electronics, BBQ’s and outdoor products, kitchen appliances, musical instruments, and personal effects.

Shriro’s company-owned brands include Omega and Robinhood kitchen appliances and it also distributes third-party brands such Blanco and Casio in Australia and New Zealand.

Trading update and outlook

Today’s soaring Shriro share price is testament that investors are excited about the company’s progress to date.

According to its release, Shriro is continuing to see strong demand in its household-related goods for the fourth quarter. This follows communication to shareholders in an October trading update that advised revenues had increased 14% on the prior corresponding period.

Based on the current projections, Shriro is forecasting full-year revenue to be in the range of $180 million to $185 million.

Earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be between $29 million to $31 million. And, net profit after tax is forecast within the vicinity of $15 million to $17 million.

Management said the strong result has benefitted from a number of payments and cost-cutting measures due to COVID-19. These included government wage subsidies of $3.7 million, and a head office lease exit benefit of $2.3 million. In addition, decisions were made by the company to reduce spend on marketing activities and decrease staff hours and travel. Furthermore, Shriro delayed the move to its new head office, which won’t be completed until 2021.

In total, Shriro reported that these initiatives saved the business approximately $4 million. This offset the fall in revenue in March and April as a result of the COVID-19 lockdowns.

Shriro moved against providing a forecast of earnings for FY21, given the uncertain economic climate.

About the Shriro share price

The Shriro share price hit a multi-year high today of $1.02, strongly rebounding from its lows of 39 cents reached in March. Although, the company’s shares have retreated slightly from this high, the Shriro share price is still up 33% since the start of 2020.

Shriro has a market capitalisation of $85.5 million and a price-to-earnings (P/E) ratio of 10.2.

More reading

• Why the Adbri (ASX:ABC) share price has dipped in trading today
• 3 top ASX shares rated as buys by fund managers
• Broker upgrades the IGO (ASX:IGO) share price on game changing acquisition
• Strong growth potential for Mineral Resources (ASX:MIN) share price: fundie
• Top brokers name 3 ASX shares to sell today

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 IGO Ltd (ASX: IGO) share price could find favour with investors when it resumes trading after a broker upgraded the stock.

The IGO share price last traded at $5.10 when it went into a trading halt on Monday to announce a $766 million capital raise to fund an acquisition.

ASX shares that go cap in hand to investors tend to come under pressure from the discounted new share sale.

IGO share price upgraded

But IGO get just get a warmer reception as Jarden upgraded the nickel miner to “outperform” from “neutral”.

The broker turned bullish on the IGO share price despite the large dilution from the raise as it believes IGO’s expansion into lithium is a “game changer” for the miner.

IGO said it would buy a 49% stake in Tianqi Lithium Energy Australia Pty Ltd from China-listed Tianqi Lithium Corporation.

IGO acquisition details

The acquisition comes with a US$1.4 billion ($1.9 billion) price tag and will give IGO a 24.99% indirect interest in the Greenbushes Lithium Mining and Processing Operation (Greenbushes) and a 49% indirect interest in the Kwinana Lithium Hydroxide Plant (Kwinana). Both assets are located in Western Australia.

Jaden listed seven reasons why it likes the deal as it upgraded the IGO share price.

“Transacting at the bottom of the cycle from a forced seller [and] buying into a sector with a strong structural growth thematic,” said the broker.

Reasons to like the IGO transaction

It also removes the uncertainty around what IGO will acquire to drive growth. The sector doesn’t have a good track record in making value accretive mergers and acquisitions.

The deal will also address the short mine life of its flagship asset, the Nova nickel mine, which can only produce for another six-odd years. Miners with limited life assets tend to trade at a discount to the market.

IGO is also buying into a world class asset that has scale, grade, low cost and growth potential.

Buying knowhow at a bargain price

Jarden also pointed out that the ASX miner will be partnering with lithium industry heavyweights that can teach IGO a thing or two in operating lithium assets.

Further, the assets offer fully integrated lithium hydroxide production that maximises margin potential across the supply chain.

Finally, Jarden believes IGO paid a very attractive price for a stake the assets.

IGO target price upgraded

“Under a scenario of ramped‐up ~2025 production, ‘normalised’ lithium pricing, and IGO’s value attribution among the assets based on Kwinana at sunk capital (US$700mn, 100%), the acquisition prices Greenbushes at ~8.0x EV/EBITDA and Kwinana at ~3.3x,” explained Jarden.

“These multiples are below global peers(FY22E ~7‐78x), while also inherently conservative in that they are based on committed near term expansions, not long term expansion aspirations supported by Resource, offering further earnings and value accretion.”

The broker lifted its IGO share price target to $6 from $4.90 a share even after it accounted for the dilution from the cap raise.

More reading

• ASX 200 up 0.7%: CBA update, IGO enters lithium market, Healius jumps
• IGO (ASX:IGO) enters lithium market, shares on trading halt
• What do big brokers think about soaring commodity prices and ASX mining shares?

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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Mineral Resources Limited (ASX: MIN) shares have soared 111% higher so far in 2020. And this is no mining minnow we’re talking about. Based on the current Mineral Resources share price, the company has a market capitalisation of $6.6 billion.

Though slipping today, down 1% in afternoon trading, Mineral Resources shares hit a new all-time high yesterday, closing at $35.07. That’s a remarkable 176% higher than the $12.71 per share the stock was trading at on 23 March following the COVID-19 market panic.

Yet despite that meteoric rise, Montgomery Lucent Investment Management’s Dominic Rose sees strong growth potential ahead.

We’ll look at why below. But first…

What does Mineral Resources do?

Mineral Resources is a mining services company with a portfolio of mining operations across lithium and iron ore. The business consists of three core pillars: mining services, commodities, and innovation and infrastructure.

Mineral Resources’ subsidiary businesses offer a range of general mine services, contract crushing, infrastructure provision and recovery of base metals concentrate for export. Mineral Resources is part of the S&P/ASX 200 Index (ASX: XJO).

Why this fundie sees upside to the Mineral Resources share price

Dominic Rose is portfolio manager of the Montgomery Small Companies Fund.

Writing in Livewire, Dominic notes Mineral Resources is a “highly entrepreneurial company with strong growth potential from its iron ore and lithium operations and a proven track record of value creation”.

One of the company’s two pillars is iron ore. And it’s no secret that iron ore prices have gone through the roof. With Brazilian supply issues hitting just as Chinese demand for the metal rockets, iron ore is trading at multi-year highs, above US$140 per tonne. And, as Dominic writes, Mineral Resources is planning major expansions of its iron ore production.

MIN [Mineral Resources] plans to grow its iron ore business significantly over the next three to five years, targeting production expansion from c.20 million tonnes per annum to 90 million tonnes per annum via a multi-stage hub strategy.

Lithium, Mineral Resources’ second pillar, also looks to have a strong growth demand ahead. According to Dominic:

After a tough few years, the outlook for lithium also appears to be improving on the back of favourable ‘green’ stimulus support in Europe and a potentially more climate friendly regime in the US. We view battery materials as an attractive long-term theme (green energy, decarbonisation) and MIN is particularly well positioned to benefit from a market recovery.

With both iron ore and lithium in the spotlight, it will be interesting to see how the Mineral Resources share price performs moving forward.

More reading

• Top ASX shares making record all-time highs
• The sector that’ll explode in February: fundie
• Why the Afterpay (ASX:APT) share price and these ASX stocks could get a boost next week

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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On Wednesday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three ASX shares that have just been given sell ratings by brokers are listed below.

Here’s why these brokers are bearish on them:

Champion Iron Ltd (ASX: CIA)

According to a note out of Citi, its analysts have downgraded this iron ore producer’s shares to a sell rating but lifted the price target on them to $4.40. While the broker expects Champion Iron to benefit greatly from strong iron ore prices and has upgraded its earnings forecasts materially to reflect this, it isn’t a fan of its current valuation. Citi believes the strong gain in the Champion Iron share price has left its shares overvalued, hence the downgrade. The Champion Iron share price is fetching $5.12 this afternoon.

Commonwealth Bank of Australia (ASX: CBA)

Analysts at Morgan Stanley have retained their underweight rating and $68.50 price target on this banking giant’s shares. This follows news that Commonwealth Bank has been given Chinese regulatory approval to sell its stake in BoCommLife to MS&AD Insurance Group. While this sale will give its CET1 ratio a nice boost, it doesn’t expect it to lead to a share buyback anytime soon. In light of this and its lofty valuation, the broker isn’t in a rush to change its rating. The CBA share price is trading at $83.00 on Thursday.

Scentre Group (ASX: SCG)

A note out of Macquarie reveals that its analysts have downgraded this shopping centre operator’s shares to an underperform rating but lifted the price target on them to $2.68. Macquarie believes that the percentage of retail sales made online will double from pre-pandemic levels by 2025. And while Scentre has some high quality assets, it believes this could weigh on its performance over the medium term and stifle its growth. The Scentre share price is changing hands for $2.83 this afternoon.

More reading

• The CBA share price ticks green for year-to-date returns
• ASX 200 up again on Wednesday
• Citigroup downgrades these ASX mining stocks after a big rally
• ASX 200 up 0.7%: CBA update, IGO enters lithium market, Healius jumps
• Commonwealth Bank (ASX:CBA) share price higher on divestment update

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 Creso Pharma Ltd (ASX: CPH) share price is on course to end its remarkable run on Thursday with a sizeable decline.

The cannabis company’s shares were down as much as 33% at one stage to 20 cents this afternoon.

The Creso Pharma share price has since recovered slightly but remains down 27% to 22 cents at the time of writing.

What is happening with the Creso Pharma share price?

It appears as though some investors have decided to take a bit of profit off the table after a stunning gain in December.

Prior to today, the Creso Pharma share price was up an incredible 500% month to date.

Investors have been scrambling to buy its shares on the belief that a couple of recent developments will have a material impact on its future performance.

These developments were the UN announcing a landmark decision to reclassify cannabis as a less dangerous drug and the US House of Representatives voting to decriminalise cannabis.

Management commented that it believes these decisions have the potential to create significant growth opportunities in the industry.

Market expansion.

In addition to this, investors responded positively to an announcement on Wednesday which revealed that Creso Pharma has entered the largest recreational cannabis market in Canada. This was achieved following the receipt of orders worth ~C$230,000 from the Province of Ontario.

It also noted a maiden purchase order from the Yukon Liquor Corporation, which is another key market for recreational cannabis. According to the release, the Ontario and Yukon markets have recorded combined sales for recreational cannabis of over C$300 million year to date.

Management commented: “We are proud to announce that Mernova has been chosen to become part of a very select group of licensed producers with cannabis products for sale in the Yukon. This is a major achievement for us, and we expect growth to continue across Canada and, with our pending entry into Ontario, Canada’s largest recreational market, we expect rapid growth to continue.”

Though, with a market capitalisation heading beyond $300 million on Wednesday, time will tell if it delivers on the enormous growth being factored into its share price.

More reading

• Why the Creso Pharma (ASX:CPH) share price is rocketing 96% higher today
• Why Afterpay, Creso Pharma, Healius, & Resonance Health shares are storming higher
• Why Creso Pharma and these ASX shares just hit 52-week highs or better
• Zip and Creso Pharma were among the most traded shares on the ASX last week
• Why the Creso (ASX:CPH) share price is rocketing 30% today

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 Asaleo Care Ltd (ASX: AHY) share price was on fire this morning, rising 21.78% to $1.23 before being placed in a trading halt. Asaleo shares opened at $1.01 this morning and stayed pretty much at that level until just past 11:00 am.

Then, they shot the moon and rapidly climbed as high as $1.24. At 11:31 am, Asaleo released an announcement to the markets which informed investors that trading would be “temporarily paused pending a further announcement”.

At 12:32 pm, the ASX issued another announcement advising the markets the shares would be “placed in a trading halt at the request of AHY [Asaleo Care], pending it releasing an announcement.” We have not yet received this announcement directly from Asaleo.

So what’s going on here with Asaleo Care? This company is a large manufacturer of personal paper products. It owns well-known household brands like Libra, Sorbent, Handee and Purex.

What’s driving the Asaleo Care share price?

Well, the recent run of ASX takeovers looks set to add another chapter to its story today. Asaleo is reportedly the latest ASX company to be subject to a takeover offer. This follows in the footsteps of other recent targets such as Coca-Cola Amatil Ltd (ASX: CCL).

According to reporting in the Australian Financial Review (AFR) today, Asaleo’s board has “called in defence adviser Luminis Partners to assess and handle potential interest in the company”. The AFR asserts that “it is understood there’s an indicative proposal on the table at $1.26 a share, which would be a 24 per cent premium to Asaleo’s last traded price”.

The suitor? According to the report, it is “believed to be” an existing major shareholder in Asaleo – Essity Group. Essity is a large Swedish company, and already reportedly has a 36.2% stake in Asaleo.

However, the report also states that “market sources reckon that’s unlikely to be enough to win over Asaleo’s board and shareholders”.

Even so, the two companies are apparently already rather intertwined, especially if we consider the large stake that Essity already has in Asaleo. The AFR tells us that Essity already licenses several brands to Asaleo, including ‘Tork’ and ‘Tena’ until 2027. These two brands alone reportedly made up “the majority” of Asaleo’s earnings last financial year. 

More reading

• Why Asaleo Care, Fortescue, Perpetual, & Starpharma shares are storming higher
• Leading ASX fund manager names 3 US value stocks to buy in December
• Meet the latest ASX stock to come under the takeover spotlight
• Can these fund managers drive the Coca-Cola Amatil (ASX:CCL) share price 10% higher?
• BlueScope (ASX:BSL) share price on watch as takeover rumours swirl

Motley Fool contributor Sebastian Bowen 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 Renergen Ltd (ASX: RLT) share price is climbing higher today. This comes after the company announced a helium powered transport solution for vaccines. At the time of writing, the Renergen share price is up 4.5% to $1.40. In comparison, the All Ordinaries Index (ASX: XAO) is down 0.7% to 6,923 points.

Renergen is a renewable energy business that invests in early-stage alternative energy projects across Africa and other emerging markets. Its focus is on the commercialisation of its Virginia Gas Project which has reserves of both helium and natural gas.

What’s moving the Renergen share price higher?

While the broader market falls, the Renergen share price is on the rise as investors welcome the company’s positive update.

According to the release, Renergen has created a new vaccine storage solution which effectively simplifies the process of transferring immunisations.

Named ‘Renergen Cryo-Vacc’, the device enables a minimum of 100 doses to be transported at temperatures between -70 and -150 Celsius. Encased in aluminium, the Renergen Cryo-Vacc utilises liquid helium which is boiled and released over a period of 30 days, without any power supply. This permits vaccines to be transported over long distances, ensuring the doses aren’t comprised by heat.

In addition, Renergen noted that the density of liquid helium is significantly lighter than liquid nitrogen. This makes the device easy to carry with an overall weight of just 20 kilos.

The company has filed for patent rights to the design, and is calling on its partners to adopt the ground-breaking solution.

Renergen has reported that not only does its device offer a cost-effective solution, but also allows vaccines to be delivered to remote areas.

What did management say?

Renergen CEO and managing director Mr Stefano Marani commented on the milestone achievement, saying:

As an emerging helium producer, we are proud to have developed this innovative concept, at a time when the world is seeking solutions on how to overcome the COVID-19 pandemic.

…we are inviting partners with the resources to roll-out large-scale manufacture of the Renergen Cryo-Vacc… Importantly, with the devices in circulation, transportation can be completed in a cost-effective manner, given the relatively small size and weight of the devices. Depending on where the helium is sourced, the operating cost of the device should be under US$0.07 per dose per day for the smallest device.

Renergen share price summary

The Renergen share price has had a bumpy ride over the last year. The company’s shares reached as high as $1.72 in February, before falling to 52-week low of 84 cents in March.

Renergen shares have, however, been performing better of late and have increased more than 28% over the last 30 days.

More reading

• Better buy: Amazon vs. Peloton
• No savings at 40? I’d follow Warren Buffett’s advice to retire early
• Why the ASX tech share rally can run well into 2021
• WAM Global (ASX:WGB) share price jumps on dividend guidance
• Why the Appen (ASX:APX) share price is sliding 11% today

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 Why the Renergen (ASX:RLT) share price is climbing higher today appeared first on The Motley Fool Australia.

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