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ASX iron ore stocks are surging and could be heading higher. The question is whether the Rio Tinto Limited (ASX: RIO) share price or BHP Group Ltd (ASX: BHP) share price is the better buy?

Australia’s largest listed iron ore producers have each surged between 4% and 5% in after lunch trade as they are likely to be upgraded by analysts.

A jump in the iron ore price after Brazilian rival Vale SA downgraded its 2020 and 2021 production guidance is driving these stocks higher.

The big rally among ASX iron ore miners is largely responsible for the 0.5% increase in the S&P/ASX 200 Index (Index:^AXJO) today.

BHP share price vs. Rio Tinto share price

The best way to gain exposure to this thematic is to buy a basket of ASX iron ore stocks. But if you can’t or would just like to know which side you should stand on in the BHP share price versus Rio Tinto share price debate, Citigroup may have the answer.

The broker weighed up both stocks and believes that the Rio Tinto share price is the one to back. There are two key reasons for this.

“We compare BHP and RIO on a number of measures ranging from portfolio exposure, growth pipeline, strategic direction and potential shareholder returns,” said Citi.

“We found more similarities than differences – though from here the strategic direction looks very different for both.”

Rio wins in ESG ranking

The strategic difference here is Rio Tinto’s exposure to aluminium and BHP’s leverage to oil.

Citi believes that aluminium improves Rio Tinto’s green credentials. This means the RIO share price will be more appealing from an Environmental, social and governance (ESG) perspective.

Investors are focusing more on ESG as compared to the past as the impact of global warming cannot be ignored. There’s also a growing body of evidence that shows ASX stocks that score higher in ESG tend to perform better over the longer-term.

BHP share price influenced by oil

“BHP’s green growth option is potash but mid-term growth is driven by oil and gas with additional price leverage to coking coal,” explained the broker.

“Both will face increasing scrutiny around iron ore Scope 3 CO2 emissions.”

Rio Tinto generates a higher yield

But there’s also a more practical reason why Citi prefers the Rio Tinto share price. Citi pointed out that production growth for both miners are modest at best.

This is in part due to scale as these giants are so big that getting any meaningful increase in production is more difficult.

Also, Citi noted that BHP’s and Rio Tinto’s more recent efforts to increase production have been wanting.

This is why it may be more appropriate to view these stocks are income instead of growth.

“[The] near term dividend/capital management capacity favours RIO with a CY21 dividend yield of ~8% versus BHP at ~6%,” added Citi.

More reading

• Here are the ASX bank shares rated as a buy today
• Can OPEC deliver more share price gains for Santos (ASX:STO) and Woodside (ASX:WPL)?
• Why ASX iron ore stocks like the Fortescue (ASX:FMG) share price are surging today
• ASX 200 up 0.3%: Fortescue rockets, Afterpay sales explode, Westpac APRA update
• Macquarie (ASX:MQG) share price lags on $2.3bn takeover

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited and Rio Tinto Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Baby Bunting Group Ltd (ASX: BBN) share price is on the rise today as the company announced a partnership with fellow ASX share Forbidden Foods Ltd (ASX: FFF). At the time of writing, the Baby Bunting share price has edged 0.69% higher on the news. As a result, shares in the baby goods provider are currently trading at $4.37.

It has been a strong year for the Baby Bunting share price which has risen by 34% in 2020. This is despite the global pandemic, which saw multiple Baby Bunting stores close earlier in the year. For comparison, the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) has increased by 8.18% over the same period. 

What’s driving the Baby Bunting share price?

The Baby Bunting share price is inching higher following the news the company’s stores will begin stocking Forbidden Foods ‘Funch’ baby foods. The agreement will see the baby retailer ranging seven Funch products nationally from January 2021. Moreover, the release noted that there may be scope to grow the partnership moving forwards.

The CEO of Forbidden Foods, Jarrod Milani, commented on the agreement, noting:

Baby Bunting is at the forefront of baby products and has unprecedented access to new parents, we couldn’t be more pleased to have such a strong retail partner like Baby Bunting supporting the FUNCH Australian plant-based baby foods range.

Our arrangement with Baby Bunting shows there is strong demand for innovative and also 100% Australian sourced baby foods catering to the growing next generation of millennial parents.

What is Forbidden Foods?

Forbidden Foods is a multi-brand food, beverage and ingredients company focusing on baby food and wellness and organic markets. The company made its debut on the ASX in August this year, with its shares rocketing 55% since then. 

On the Forbidden Foods website, it states:

The Company was established in 2010 with a vision to provide Australia with the very best health foods and to meet growing consumer demand for differentiated, plant-based and health-oriented products.

More about Baby Bunting

Baby Bunting is Australia’s largest specialty baby goods retailer with 58 stores nationally and a strong online presence.

It is Baby Bunting’s online business that has been critical to its ongoing success throughout the COVID-19 pandemic, with click and collect sales growing by over 200% in the first quarter of FY21. Online sales growth was also up an impressive 126%.

More reading

• Best and worst ASX retail stocks to own in the COVID recovery
• Baby Bunting (ASX:BBN) share price stays flat on update

Motley Fool contributor Daniel Ewing owns shares of Baby Bunting. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The MyFiziq Ltd (ASX: MYQ) share price is out of its trading halt and racing higher this afternoon.

The image capture and dimensioning technology provider’s shares are currently up 13% to $1.08.

Why is the MyFiziq share price racing higher?

The catalyst for this strong gain has been the announcement of an agreement with Canada-based Triage Technologies.

This agreement will see the company take a strategic equity stake in Triage and license the use of its artificial intelligence (AI) health assistant technology for integration into MyFiziq’s CompleteScan software offering.

What is Triage Technologies?

According to the release, Triage has developed the world’s most advanced dermatological AI system which can accurately identify 588 skin conditions from a photo in only seconds. This includes all categories of skin cancers.

The accuracy of the engine has been tested against dermatologists and has proven to be more accurate more often than a dermatologist.

Management notes that the technology was created using a proprietary database that is not only the largest of its kind in the world, but also larger than those of IBM and Google combined. Triage expects to receive a USA patent for its system in 2021, with further jurisdictions to follow.

MyFiziq’s Chief Executive Officer, Vlado Bosanac, commented: “Over the past 6 months, I have been developing a multiplatform strategy for MyFiziq. I first obtained the NuraLogix capabilities with the integration of Facial Scan using Transdermal Optical Imaging, which quickly proved to be a very attractive and complementary addition to the deep suite of image captures that MyFiziq has been releasing to the world.”

“I have identified Triage as a natural fit for the platform and for the expanded interest which MYQ has developed from the medical and remote care communities for triaging users not only in the current COVID situation but also in normal times. Triage brings a complementary offering to our CompleteScan platform, which is assisting in the completion of my vision in creating the “Tricorder” of digital health screening in your hand,” he added.

More reading

• Why Fisher & Paykel Healthcare, Mesoblast, Splitit, & WiseTech are dropping lower
• Here are the ASX bank shares rated as a buy today
• Booktopia (ASX:BKG) share price jumps 15% on IPO today
• Amazon grew even more dominant in 2020
• Can OPEC deliver more share price gains for Santos (ASX:STO) and Woodside (ASX:WPL)?

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to record a solid gain. At the time of writing the benchmark index is up 0.4% to 6,616.2 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

The Fisher & Paykel Healthcare share price is down 2.5% to $32.09. This appears to have been driven partly by the medical device company’s shares trading ex-dividend this morning. Eligible shareholders can now look forward to being paid its 15.2 cents per share dividend in a couple of weeks on 16 December.

Mesoblast limited (ASX: MSB)

The Mesoblast share price is down 3% to $4.29. Investors may be taking profit after a strong gain on Wednesday following the release of another positive update. That update was related to its remestemcel-L product and revealed that the United States Food and Drug Administration has granted it Fast Track designation in the treatment of acute respiratory distress syndrome (ARDS) due to COVID-19 infection.

Splitit Ltd (ASX: SPT)

The Splitit share price is down over 2.5% to $1.28. This morning the buy now pay later provider released its November update and revealed record merchant sales volume (MSV) during the Black Friday and Cyber Monday promotional period. Over the shopping event, the company reported MSV of US$15.3 million. This was an increase of 216% on the same period a year earlier. This strong finish to the month led to the company reporting year-on-year November MSV growth of 255%. Investors appear to have been expecting even stronger growth.

WiseTech Global Ltd (ASX: WTC)

The WiseTech Global share price is down 1.5% to $30.41 on the day of its investor day event. This is despite the company reaffirming its guidance for revenue of $470 million to $510 million and earnings before interest, taxes, depreciation and amortisation (EBITDA) of $155 million to $180 million. The latter represents year on year growth of 22% to 42%.

More reading

• WiseTech (ASX:WTC) share price steady after earnings guidance
• Splitit (ASX:SPT) share price lower despite record November performance
• The Mesoblast (ASX:MSB) share price jumped 33% in November and could go even higher
• ASX 200 flat on Wednesday
• Why the Afterpay (ASX:APT) share price continues to dominate

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of WiseTech Global. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The ASX banking sector has had a troubled year, as most ASX investors would be aware. Given the big four banks provide the foundation of the S&P/ASX 200 Index (ASX: XJO), with a weighting of close to 20%, their share price movements influence the broader market in a major way, like it or not.

That’s why we can thank the banks for a large part of the ASX 200’s stellar rise over the month of November. I discussed this earlier in the week, and we determined that National Australia Bank Ltd (ASX: NAB) was the standout performer, having appreciated more than 24% in value over November (although all four of the majors were up more than 10% over the month). November was reportedly the best month for ASX 200 shares since the 1980s, and this was a big reason why.

But since the ASX banks had such a strong month, are any of them still buys today? Remember, the bank sector is still facing some structural issues, such as record low interest rates.

Well, one broker thinks so. Goldman Sachs Group Inc (NYSE: GS) is one of the most followed investment banks in the world. Its recommendations are closely monitored by many investors.

So what does Goldman think of the ASX bank shares today?

A broker rates the ASX banks

Goldman is not too keen on Commonwealth Bank of Australia (ASX: CBA) for one. It is currently rating CBA as a ‘sell’ and giving CBA shares a price target of $65.55, stating “the market continues to ignore the earnings impact of lower rates and focuses on dividend yield”.

It’s not wild on Australia and New Zealand Banking Group Ltd (ASX: ANZ) either, giving ANZ a ‘neutral’ rating and a price target of $20.58.

However, Goldman is bullish on both NAB and Westpac Banking Corp (ASX: WBC). In regards to Westpac, Goldman is approving of the bank’s recent decision to sell its insurance arm to Allianz for $725 million, which it views as “entirely consistent” with Wetpac’s goals of exiting “non-core activities”. It has a price target of $20.34 on Westpac shares.

But Goldman views NAB as “our preferred major bank exposure”. Goldman states that “our view is that it will deliver better than peer revenue growth, supported by its superior management of the volume/margin trade-off,… [as well as] its investment spend which appears further progressed relative to peers allowing it to be more selective towards where resources are directed”.

Goldman has a price target of $22.96 on NAB shares at the current time.

However, Goldman also issues a caveat. The broker says that, ” we… believe that for the bank’s run to continue, it will rely on a recovery in dividends and a re-rating of yields, in light of very low interest rates.”

Something for ASX bank investors to keep in mind!

More reading

• Can OPEC deliver more share price gains for Santos (ASX:STO) and Woodside (ASX:WPL)?
• Why ASX iron ore stocks like the Fortescue (ASX:FMG) share price are surging today
• ASX 200 up 0.3%: Fortescue rockets, Afterpay sales explode, Westpac APRA update
• Macquarie (ASX:MQG) share price lags on $2.3bn takeover
• Westpac (ASX:WBC) share price lower on APRA enforceable undertaking news

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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E-commerce book retailer Booktopia Group (ASX: BKG) has made its debut on the ASX today, after raising $43.1 million through an initial public offering (IPO) at a price of $2.30.

The Booktopia share price jumped to as high as $2.86 just minutes after listing, but has since retreated to $2.69 at the time of writing.

Booktopia provides market update

Booktopia issued a trading update after the shares listed, saying that its November figures were closely tracking forecasts made on its IPO prospectus. 

The company also advised that the first stage of its $20 million Sydney distribution centre is complete, and will be fully operational in time for Christmas trading.

This stage one completion has increased its potential capacity from 30,000 units to 60,000 units per day of outbound handling. Stage two meanwhile, will trial autonomous robots and reach shelves of up to 5m high – allowing more high-density shelving.

Commenting after the IPO, Booktopia chief executive Tony Nash said:

We are expecting our biggest Christmas ever, and with the ability to process up to 60,000 book sales a day, we will be able to satisfy more customers.

More about the Booktopia IPO

The decision to float Booktopia, which also owns the Angus & Robertson brand, was made after the company experienced a sales boom during the lockdown restrictions caused by COVID-19. 

The company had delivered a full-year FY20 sales of $165 million, a 28% increase over FY19. Earnings before interest, taxes, depreciation and amortization (EBITDA) also rose strongly by 67% to $6 million.

In its prospectus, Booktopia says that its forecast total sales for the year ending 30 June 2021 will be $204.5 million, with an EBITDA of $9.4 million.

The Booktopia IPO raised $43.1 million, with the company offering 10.9 million new shares and 7.9 million existing shares at $2.30 per share – giving it a market value of $315.8 million.

Of the $43.1 million raised, Booktopia says it will use $25.1 million to boost resources at the company’s 14,000sq m warehouse, as well as pay down debt.

During the IPO book buildup, chief executive Nash said that online consumer book sales made up 15% of overall book sales in Australia.

More reading

• Amazon grew even more dominant in 2020
• Can OPEC deliver more share price gains for Santos (ASX:STO) and Woodside (ASX:WPL)?
• Why ASX iron ore stocks like the Fortescue (ASX:FMG) share price are surging today
• AppsVillage (ASX:APV) share price rockets 134% higher on TikTok agreement
• 3 reasons why Brickworks (ASX:BKW) shares are a buy for dividends

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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

More people are doing more online shopping than they’ve ever done before in 2020. As shoppers flock to online outlets, Amazon.com Inc (NASDAQ: AMZN) has stood out from the crowd in 2020. Despite already dominating online sales, the company has seemingly increased its standing at the top of e-commerce despite strong performances from competitors such as Walmart Inc (NYSE: WMT), Target Corporation (NYSE: TGT), and eBay Inc (NASDAQ: EBAY).

Where most people begin their product search

Fifty-three percent of online shoppers begin their product search on Amazon.com, according to a recent survey from ChannelAdvisor. About six months ago, a survey from CivicScience found just 47% of of internet users started their product search on Amazon.com.

While the surveys aren’t perfectly comparable, the recent results show a positive trend for Amazon. That trend also shows up when asking people where they go to research potential purchases. Sixty-five percent of respondents said Amazon, 45% said Alphabet Inc‘s (NASDAQ: GOOG) (NASDAQ: GOOGL) Google, and 25% said another online marketplace such as Walmart, Target, or eBay. A similar question in a January 2018 survey saw more people select search engines (69%) versus Amazon (61%).

The increased interest in searching on Amazon bodes well not just for Amazon’s retail and marketplace sales, but for its advertising business as well. The vast majority of Amazon’s ad revenue comes from sponsored listings in its search results. As Amazon’s search traffic grows faster than the rest of the industry, it stands to take an increased share of marketing spend in e-commerce channels.

Shoppers are finding more reasons to use Amazon

Not only are people starting their product searches on Amazon.com, but they’re also spending more. Forty-five percent of respondents to the ChannelAdvisor survey said they’re spending more time on Amazon than they did before March. That compares with just 35% for other marketplaces.

While Amazon’s sales growth hasn’t kept up with the online sales booms at Walmart and Target, it’s still outpacing the broader e-commerce market. Its online store revenue increased 38% last quarter, third-party seller services increased 55%, and North American revenue increased 39%. U.S. e-commerce sales grew about 37%, according to data from the U.S. Census Bureau.

While a couple of percentage points of outperformance might not seem like much, investors should consider how much Amazon already dominates the market. Continued gains in market share when Amazon already accounts for about 40% of online sales is quite impressive. It’s billions of dollars in absolute terms, which would amount to a considerable amount of growth at most of Amazon’s competitors.

The future favors Amazon

Consumers are planning to maintain their new online shopping habits in the future. Fifty-two percent of respondents said they plan to do more online shopping in the future than they did before the pandemic. That compares with 38% of respondents who expected to continue shopping more online in May.

More younger people expected to shop online more frequently in the future than older people. And younger people have also favored Amazon since the start of the pandemic. That should lead to continued share gains for Amazon over the next few years.

Most importantly, the response indicates a permanent acceleration in the shift to online commerce from in-store retail. That also bodes well for the future of Amazon.

While investors can’t expect total U.S. e-commerce to grow over 30% in 2021 and beyond, they should see Amazon’s gross merchandise volume continue to outpace the broader market, which historically grew around 15% per year. And as its marketplace services become more important and more people use its search engine more, it should see its high-margin businesses grow even faster than its retail operations. 

Amazon’s already producing strong profits amid the pandemic despite massive investments in safety protocols, personnel, and warehouses. When it can curb those investments, but sustain its outsize growth, it’ll reward investors with some massive operating profits.

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

More reading

• Amazon’s holiday sales jump 60%
• Cyber Monday sales hit a record $10.8 billion
• 2 reasons Amazon will keep taking ad sales from Google
• How the biggest companies are the worst investments
• 10 most searched shares in Australia

Adam Levy owns shares of Alphabet (C shares) and Amazon. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends eBay and recommends the following options: short January 2021 $37 calls on eBay, long January 2022 $1920 calls on Amazon, long January 2021 $18 calls on eBay, and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Amazon. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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When the coronavirus morphed into a global pandemic earlier this year, virtually no ASX shares were spared.

Among the hardest hit in the February and March panic selling were ASX energy shares. With airplanes stuck on the tarmac, ships anchored in port, and cars parked in garages, the global demand for oil and gas evaporated. And investors tripped over each other to sell their energy shares.

Woodside Petroleum Limited (ASX: WPL), Australia’s largest independent dedicated oil and gas company, saw its share price crash 56% from the beginning of the year through to the 23 March lows.

Santos Ltd (ASX: STO), Australia’s second largest oil and gas company, fared even worse. Santos’ share price plummeted 67% from 2 January through to its own low on 19 March. That’s more than twice the losses of the broader S&P/ASX 200 Index (ASX: XJO), which fell 32% from the start of the year through to 23 March.

The first share price turnaround

While company management and the assets they own play a large role, ASX energy shares like Santos and Woodside are also highly correlated to the price of oil and gas. So, it’s no surprise that their shares were tumbling as Brent crude prices also fell to multi-year lows.

On 2 January, Brent crude was trading for US$66.25 (AU$90.30) per barrel. By 23 March, that had dropped to US$27.03 per barrel. And Brent would continue to sell off until 21 April, when it bottomed at US$19.33 per barrel.

From there Brent climbed rapidly. The black gold hit US$43.08 per barrel by 22 June as Europe and the US reopened for northern summer, and OPEC kept the brakes on any output hikes.

By 9 June, Santos’ share price was up 124% from its 19 March low. Woodside’s share price also soared into 9 June, up 64% from its 23 March trough.

From there, both shares lost ground through to the end of October, with Santos’s slipping 23% through to 1 November and Woodside shares falling 29%.

Meanwhile, Brent crude prices had fallen 13%, ending October back down at US$37.46 per barrel.

The second share price turnaround

Then came the announcements of not 1 but multiple likely effective vaccines.

With the prospect of a global reopening seemingly within sight, energy prices rallied. Brent crude has leapt 29% since 30 October, currently trading for US$48.25 per barrel.

As for our top ASX energy shares?

Woodside’s share price is up 30% since the beginning of November. And Santos’ share price is up 33%.

Now all eyes are on the Organisation of the Petroleum Exporting Countries (OPEC).

Will OPEC+ deliver more share price gains for Santos and Woodside?

OPEC+ (which includes Russia) is currently debating a new deal on its oil production limits in 2021.

Battling a surge in US shale oil production, OPEC+ had introduced significant production cuts before the pandemic struck. And the group has since extended those cuts, helping stem the oversupply during a time of much weaker demand.

The future of those cuts should be known by the weekend, as members meet again today (overnight Aussie time). And their decision is likely to have a significant impact on crude prices, and therefore the share prices of ASX 200 energy majors like Santos and Woodside.

As Tariq Zahir, managing member of the global macro program at Tyche Capital Advisors LLC, puts it (quoted by Bloomberg):

At least in the short- to medium-term, it’s all been about OPEC. Demand is going to be hit for at least the next few months. If OPEC does not get an extension on the cuts and compliance of these cuts, oil could head a lot lower.

With both the Santos and Woodside share prices trending higher today, ASX investors will be keeping a close eye on OPEC’s pending announcement.

More reading

• Why ASX iron ore stocks like the Fortescue (ASX:FMG) share price are surging today
• ASX 200 up 0.3%: Fortescue rockets, Afterpay sales explode, Westpac APRA update
• Macquarie (ASX:MQG) share price lags on $2.3bn takeover
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 flat on Wednesday

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX iron ore stocks are on fire today and we can thank their Brazilian counterpart for this.

The Fortescue Metals Group Limited (ASX: FMG) share price surged 11.7% to a record high of $20.36 and is the best performing stock on the S&P/ASX 200 Index (Index:^AXJO) at the time of writing.

The BHP Group Ltd (ASX: BHP) share price and Rio Tinto Limited (ASX: RIO) share price aren’t far behind. They both gained more than 4% each!

ASX iron ore stocks benefiting from Vale’s downgrade

A production forecast downgrade by rival Vale SA sparked the bullish optimism. The Brazil-based miner said it will only management to produce between 300 million and 305 million tonnes of iron ore in 2020.

This compares to its earlier forecasts of 310 million to 330 million, reported the Australian Financial Review.

Next year’s output is also lower than expectations with Vale predicting it will produce 315 million to 335 million tonnes.

Production cut triggers price rally

The production cut was doubly disappointing for Vale shareholders as some analysts were expecting it to upgrade production. It’s recent quarterly updates had pointed to rising volumes as Brazil tries to recover from the COVID‐19 disruptions.

The news sent the iron ore price jumping nearly 3% to over US$134 a tonne. The price of the commodity is up by 52.7% over the past 12 months.

The most-traded iron ore contract for January delivery on China’s Dalian Commodity Exchange surged as much as 3.5% to a record high of 934.50 yuan ($US142.44) a tonne, before ending daytime trade at 934 yuan, reported Reuters.

ASX iron ore miners are cum-upgrade

Experts think the price could keep rising into 2021 too as the iron ore market is expected to remain tight for at least six months.

We are likely to see consensus earnings upgrades for our iron ore majors too. Analysts have been assuming iron ore prices will fall from current levels.

Even at the prevailing spot price, the three majors would see substantial valuation uplifts.

It isn’t only the three ASX iron ore giants that’s running hot today too. The latest ASX iron ore exposed stock, the Deterra Royalties Ltd (ASX: DRR) share price, jumped 4.3% to a high of $4.96 during lunch time trade.

Geo-political implications

The misfortunes of Vale come at a time when relations between China and Australia is the worst it has ever been too.

This could put some power back into the hands of the Morrison government in the wake of China’s tariff war on Aussie coal, wine, barley and timber.

More reading

• Why Flight Centre, Fortescue, Kogan, & Telix shares are racing higher
• ASX 200 up 0.3%: Fortescue rockets, Afterpay sales explode, Westpac APRA update
• Macquarie (ASX:MQG) share price lags on $2.3bn takeover
• 2 high yield ASX dividend shares to buy
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, Deterra Royalties Ltd and Rio Tinto Ltd. Connect with me on Twitter @brenlau.

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The AppsVillage Australia Ltd (ASX: APV) share price has been on fire on Thursday after returning from its trading halt.

At one stage today, the Software-as-a-Service (SaaS) solutions provider for small and medium sized businesses saw its shares rise a remarkable 134% to 22.5 cents.

The AppsVillage share price has since given back a good portion of these gains, but is still up 87.5% to 18 cents currently.

Why is the AppsVillage share price rocketing higher?

Investors have been scrambling to buy the company’s shares after it announced an agreement with leading video-sharing social networking platform TikTok.

This deal will allow its small to medium sized business customers to advertise on the TikTok platform via AppsVillage’s advertising campaign manager, JARVIS.

According to the release, JARVIS for TikTok will provide an optimised solution for small businesses to quickly and easily create and manage intelligent online advertising and promotion campaigns in a matter of minutes.

This follows TikTok’s decision to launch its self-serve advertising platform in July, which is focused on encouraging and increasing the advertising spend and reach of small and medium businesses.

What will AppsVillage earn from this?

AppsVillage currently has approximately 4,500 small businesses as paying customers. They will now have the ability to advertise on the TikTok platform via JARVIS.

Though, it is worth noting that these businesses already had the ability to advertise via TikTok by going direct. The JARVIS campaign manager merely makes the process easier.

Management expects to achieve a gross profit on every advertisement made via JARVIS on TikTok. And while it couldn’t reveal the exact terms for commercial reasons, it expects to add “between 15-30% of the amount charged by TikTok to the Company.”

It added: “The actual revenue the Company will receive is based on TikTok advertising by APV’s current and new customers (SMBs). However, given the popularity of TikTok and as such, its ability to drive revenue for SMB’s, the Company expects that it will see material revenue over time from this new strategic partnership.”

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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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post AppsVillage (ASX:APV) share price rockets 134% higher on TikTok agreement appeared first on Motley Fool Australia.

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