Tag: Motley Fool

On Monday the S&P/ASX 200 Index (ASX: XJO) started the week on a positive note and recorded a strong gain. The benchmark index rose 0.85% to 6,229.4 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 expected to fall.

The Australian share market is set to give back some of yesterday’s gain after a poor start to the week on global markets. According to the latest SPI futures, the ASX 200 is poised to fall 40 points or 0.65% at the open. In late trade on Wall Street the Dow Jones is down 1.4%, the S&P 500 has dropped 1.6%, and the Nasdaq is 1.6% lower. Concerns that a stimulus deal in the U.S. won’t be signed is weighing on markets.

Oil prices drop lower.

It could be a poor day for energy shares such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) on Tuesday. According to Bloomberg, the WTI crude oil price has dropped 0.6% to US$40.64 a barrel and the Brent crude oil price is down 1.15% to US$42.44 a barrel. Oil prices dropped lower amid concerns over the stimulus package and on Libya’s plan to boost its output.

CSL R&D Investor Briefing.

The CSL Limited (ASX: CSL) share price could be on the move when it holds its annual research and development (R&D) investor briefing. One treatment of interest is EtranaDez, which was acquired from uniQure this year for US$450 million. It is a new gene therapy undergoing phase 3 trials as a treatment for haemophilia B. In FY 2020, the biotherapeutics giant invested US$922 million in its R&D. This doesn’t include the EtranaDez acquisition.

Gold price edges lower.

Gold miners Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) will be on watch after a subdued start to the week for the gold price. According to CNBC, the spot gold price has dropped 0.1% to US$1,905.50 an ounce. Once again, this appears to have been driven by concerns that a U.S. stimulus package is still a long way from being agreed.

BHP quarterly update.

The BHP Group Ltd (ASX: BHP) share price will be on watch today when it releases its first quarter update. According to a note out of Goldman Sachs, it expects the mining giant to report Petroleum production of 26Mboe, Copper production of 365kt, and iron ore shipments of 71.5Mt. The latter represents a 7% quarter on quarter decline in shipments

More reading

• 3 high quality blue chip ASX shares to buy now
• ASX 200 rises 1%, Cimic (ASX:CIM) up 8% on sale
• How these 3 letters could see your ASX shares outshine
• Brainchip (ASX:BRN) share price jumps on quarterly update
• How I’d position my ASX share portfolio for the next market crash

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL 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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Rare earth minerals explorer and mine developer Pensana Metals Ltd‘s (ASX: PM8) share price gained 1.6% today to close at $1.55 per share. This comes following the company’s update this morning on exploration activities at its new Coola Project in Angola.

Today’s 1.6% gains are roughly double the performance of the All Ordinaries Index (ASX: XAO), which closed up 0.8% for the day. But the Pensana Metal’s share price has done far more than return double the index’s gains in 2020.

Year-to-date the company’s share price is up a staggering 761%. And those gains come despite shares falling by 48% from 24 February through to 24 March during the COVID-inspired market selloff.

In case you’re wondering, if you’d picked up some shares on 24 February, today you’d be sitting on gains of 1,192%.

What did Pensana announce to keep its share price moving higher?

This morning Pensana announced that it had commenced initial field tests at its new Coola Project – 16 kilometres north of its advanced stage Longonjo Project.

The company is testing defined prospective targets for a range of heavy rare earths, light rare earths, scandium, niobium, tantalum, hafnium and fluorspar. (Don’t worry, I had to look a few of those up myself!)

The European Commission has listed these commodities as critical. And Pensana believes Coola will complement the future production of magnet metal raw materials from Longonjo.

The first assay results from early reconnaissance work confirm rare earth mineralisation in rocks and soils top 2.99% rare earth oxides.

The company also reported locating outcropping fluorspar mineralisation, stating this is of direct interest as well as being a positive sign for the presence of additional technology metals.

What Pensana’s Chief Operating Officer said

Commenting on the updated results, Dave Hammond, Pensana’s Chief Operating Officer said:

The early reconnaissance sampling results are a great start in already confirming the Coola complex as a fertile mineralised system… Systematic sampling of the 6 kilometre by 2.5 kilometre complex has now been completed and samples despatched for assay.

Exploration programs are currently in progress over 2 other prospective alkaline-carbonatite geological systems together with stream sediment sampling and geological reconnaissance of key geophysical anomalies.

We look forward to reporting further results from this exciting new exploration region on Longonjo’s doorstep.

With 2020’s share price gains of 761% in mind, Hammond surely isn’t the only one looking forward to the next set of results.

More reading

• 2 big challenges as Tesla (NASDAQ:TSLA) aims for a $25,000 car
• 3 high quality blue chip ASX shares to buy now
• Why did the Forbidden Foods (ASX:FFF) share price tumble 5% today?
• Quickstep (ASX:QHL) share price edges up on positive FY20 results
• ASX 200 rises 1%, Cimic (ASX:CIM) up 8% on sale

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.

The post Here’s why the Pensana Metals (ASX:PM8) share price, up 761% in 2020, edged higher today appeared first on Motley Fool Australia.

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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.

Tesla Inc (NASDAQ: TSLA) has set its sights on building an affordable car with a $25,000 starting price — again. At the company’s Battery Day last month, Tesla announced a slew of innovations designed to reduce battery production costs by up to 56% while also increasing range and power. As my Foolish colleague noted at the time, a new “tabless” cell design was the biggest breakthrough, but Tesla also discussed changes to the cells’ form factor, battery chemistry, and manufacturing process, among other things.

Working to bring down prices is the right strategic focus for Tesla. However, its stated goal of offering a $25,000 car within three years seems far-fetched. Additionally, with better, cheaper batteries on the way, it will be increasingly difficult for Tesla to meet its volume growth goals over the next few years.

Can it be done profitably?

There are two facets to the first major challenge Tesla faces. The first relates to whether it will be able to reduce costs enough to earn a reasonable profit on a $25,000 car. After all, when Tesla ramped up deliveries of the cheaper (sub-$40,000) Model 3 variants last spring, its gross margin plunged to 18.9% in Q2 2019 — and closer to 17% excluding regulatory credits — down from around 25% in the second half of 2018. It quickly made the $35,000 standard-range Model 3 an “off-menu” option to push buyers to pricier versions that it could produce profitably.

The cheapest version of the Model 3 available on Tesla’s website is the “standard range plus” option, which has a starting price of $37,990. This variant has a 54-kWh battery. Third-party sources have put Tesla’s 2019 battery costs between $127 per kWh and $158 per kWh. Even at the high end of that range, the battery for a standard range plus Tesla 3 would cost less than $9,000.

Thus, even if Tesla succeeds in all of its cost-reduction objectives related to batteries, the savings might be on the order of $5,000. That alone wouldn’t get Tesla close to being able to make a $25,000 car profitably.

The second issue relates to timing. Tesla did not bring a prototype of its new battery design to the Battery Day event. This raises questions about how far along it is in the development process, which requires solving some tricky problems. Moreover, Musk has frequently talked about how difficult it is to scale up manufacturing of new technologies, relative to just building a prototype.

This makes it unlikely that a $25,000 vehicle could be available in as little as three years. Another reason to take this projection with a grain of salt? CEO Elon Musk said more than two years ago that a $25,000 Tesla could come to market in about three years (i.e. 2021). That obviously isn’t happening.

Getting from here to there

Another big challenge for Tesla is driving sales of its current products before the new battery technology becomes available. Musk has previously talked about targeting 50% annual growth in vehicle deliveries. At that pace, Tesla would deliver over 1.2 million vehicles in 2022 and more than 1.8 million vehicles in 2023.

Achieving that level of growth would be difficult under any circumstances. It requires moving well beyond the early adopters and enthusiasts. Additionally, there appears to be only one high-volume product on the way to help Tesla reach these numbers (the Cybertruck).

This task will be complicated if people believe that Tesla will soon have vehicles on the market offering 50% or more additional range at significantly lower prices. Whereas early Model 3 buyers have seen their cars depreciate very little over the past few years, future buyers won’t be so lucky if Tesla puts new products that are better and cheaper on the market by 2025.

Of course, this isn’t to say that Tesla shouldn’t pursue advancements that will eventually reduce battery costs and improve performance. It is much better to disrupt your existing products than to wait for a competitor to do so. But investors shouldn’t ignore the impact of this coming disruption to Tesla’s products and pricing, either.

Tesla is on the right track

All in all, Tesla’s Battery Day presentation showed that the company is focused on the right goal: driving down costs to make its vehicles more affordable. Tesla wouldn’t be able to meet its long-term growth goals or fulfill its mission “to accelerate the world’s transition to sustainable energy” with its current product portfolio.

Furthermore, while Tesla has plenty of work to do to achieve the specific target of a $25,000 car, it has a more credible game plan for reducing costs than it did when Musk talked about this goal back in 2018.

However, while Tesla appears to be on the right track, it’s not clear how far down the track — and thus, how far ahead of competitors — the electric vehicle pioneer is right now. As a result, I would be wary of investing in Tesla at its premium valuation of more than $400 billion.

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

More reading

• Is Tesla Inc (NASDAQ:TSLA) stock a buy ahead of earnings?
• How this fund manager’s 60% UP in the year of COVID-19
• Billionaire investor says Tesla (NASDAQ:TSLA) is a $2 trillion stock
• Short-sellers are stepping up their attack on these ASX stocks
• Could these US-based ASX lithium shares land a deal with Tesla (NASDAQ:TSLA)? 

Adam Levine-Weinberg has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. 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 2 big challenges as Tesla (NASDAQ:TSLA) aims for a $25,000 car appeared first on Motley Fool Australia.

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

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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.

Tesla Inc (NASDAQ: TSLA) has set its sights on building an affordable car with a $25,000 starting price — again. At the company’s Battery Day last month, Tesla announced a slew of innovations designed to reduce battery production costs by up to 56% while also increasing range and power. As my Foolish colleague noted at the time, a new “tabless” cell design was the biggest breakthrough, but Tesla also discussed changes to the cells’ form factor, battery chemistry, and manufacturing process, among other things.

Working to bring down prices is the right strategic focus for Tesla. However, its stated goal of offering a $25,000 car within three years seems far-fetched. Additionally, with better, cheaper batteries on the way, it will be increasingly difficult for Tesla to meet its volume growth goals over the next few years.

Can it be done profitably?

There are two facets to the first major challenge Tesla faces. The first relates to whether it will be able to reduce costs enough to earn a reasonable profit on a $25,000 car. After all, when Tesla ramped up deliveries of the cheaper (sub-$40,000) Model 3 variants last spring, its gross margin plunged to 18.9% in Q2 2019 — and closer to 17% excluding regulatory credits — down from around 25% in the second half of 2018. It quickly made the $35,000 standard-range Model 3 an “off-menu” option to push buyers to pricier versions that it could produce profitably.

The cheapest version of the Model 3 available on Tesla’s website is the “standard range plus” option, which has a starting price of $37,990. This variant has a 54-kWh battery. Third-party sources have put Tesla’s 2019 battery costs between $127 per kWh and $158 per kWh. Even at the high end of that range, the battery for a standard range plus Tesla 3 would cost less than $9,000.

Thus, even if Tesla succeeds in all of its cost-reduction objectives related to batteries, the savings might be on the order of $5,000. That alone wouldn’t get Tesla close to being able to make a $25,000 car profitably.

The second issue relates to timing. Tesla did not bring a prototype of its new battery design to the Battery Day event. This raises questions about how far along it is in the development process, which requires solving some tricky problems. Moreover, Musk has frequently talked about how difficult it is to scale up manufacturing of new technologies, relative to just building a prototype.

This makes it unlikely that a $25,000 vehicle could be available in as little as three years. Another reason to take this projection with a grain of salt? CEO Elon Musk said more than two years ago that a $25,000 Tesla could come to market in about three years (i.e. 2021). That obviously isn’t happening.

Getting from here to there

Another big challenge for Tesla is driving sales of its current products before the new battery technology becomes available. Musk has previously talked about targeting 50% annual growth in vehicle deliveries. At that pace, Tesla would deliver over 1.2 million vehicles in 2022 and more than 1.8 million vehicles in 2023.

Achieving that level of growth would be difficult under any circumstances. It requires moving well beyond the early adopters and enthusiasts. Additionally, there appears to be only one high-volume product on the way to help Tesla reach these numbers (the Cybertruck).

This task will be complicated if people believe that Tesla will soon have vehicles on the market offering 50% or more additional range at significantly lower prices. Whereas early Model 3 buyers have seen their cars depreciate very little over the past few years, future buyers won’t be so lucky if Tesla puts new products that are better and cheaper on the market by 2025.

Of course, this isn’t to say that Tesla shouldn’t pursue advancements that will eventually reduce battery costs and improve performance. It is much better to disrupt your existing products than to wait for a competitor to do so. But investors shouldn’t ignore the impact of this coming disruption to Tesla’s products and pricing, either.

Tesla is on the right track

All in all, Tesla’s Battery Day presentation showed that the company is focused on the right goal: driving down costs to make its vehicles more affordable. Tesla wouldn’t be able to meet its long-term growth goals or fulfill its mission “to accelerate the world’s transition to sustainable energy” with its current product portfolio.

Furthermore, while Tesla has plenty of work to do to achieve the specific target of a $25,000 car, it has a more credible game plan for reducing costs than it did when Musk talked about this goal back in 2018.

However, while Tesla appears to be on the right track, it’s not clear how far down the track — and thus, how far ahead of competitors — the electric vehicle pioneer is right now. As a result, I would be wary of investing in Tesla at its premium valuation of more than $400 billion.

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

More reading

• Is Tesla Inc (NASDAQ:TSLA) stock a buy ahead of earnings?
• How this fund manager’s 60% UP in the year of COVID-19
• Billionaire investor says Tesla (NASDAQ:TSLA) is a $2 trillion stock
• Short-sellers are stepping up their attack on these ASX stocks
• Could these US-based ASX lithium shares land a deal with Tesla (NASDAQ:TSLA)? 

Adam Levine-Weinberg has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. 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 2 big challenges as Tesla (NASDAQ:TSLA) aims for a $25,000 car appeared first on Motley Fool Australia.

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

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The Australian share market has been on fire in October and is pushing notably higher month to date.

I’m optimistic that this strong form can continue over the next 12 months and the S&P/ASX 200 Index (ASX: XJO) could make a push for 7,000 points again.

In light of this, I think now would be a good time to pick up some blue chip ASX shares before it is too late. 

But which ones should you buy? Three blue chips I think could generate strong returns in the coming years are listed below:

BHP Group Ltd (ASX: BHP)

If you’re looking for exposure to the resources sector, then I think BHP shares could be a great way to do this. With iron ore prices trading north of US$120 a tonne and copper prices close to a two-year high, the Big Australian is in a strong position to generate bumper free cash flows again in FY 2021. I expect this to lead to generous dividend payments over the next 12 months at least. Looking further ahead, I’m positive on BHP due to its growth opportunities, particularly in respect to its Energy division.

SEEK Limited (ASX: SEK)

Another blue chip ASX share to consider buying is SEEK. I continue to believe that the job listings company is one of the best long-term options on the Australian share market. This is because of its dominant ANZ business, its investment in future growth opportunities, and its rapidly growing Zhaopin business in China. All in all, I believe SEEK is capable of achieving its ambitious aspirational revenue target of $5 billion later this decade. This is more that triple what it recorded in FY 2020.

Telstra Corporation Ltd (ASX: TLS)

A final blue chip ASX share to consider buying is Telstra. I think the telco giant is a great option due to its attractive valuation and the positive progress it is making with its T22 strategy. This strategy is creating a much leaner business and one which could return to growth in the not so distant future. Especially given the easing NBN headwind and the arrival of 5G internet. I expect the latter to give Telstra’s mobile revenues a major boost in the coming years as adoption increases.

More reading

• Here’s why I think these 2 ASX shares are bargain buys right now
• Is Apple’s iPhone 12 good news for the Telstra (ASX:TLS) share price?
• How these 3 letters could see your ASX shares outshine
• 3 small cap ASX dividend giants
• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended SEEK Limited. 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 Forbidden Foods Limited (ASX: FFF) share price has tumbled today following an announcement of a new partnership with FoodWorks/Australian United Retailers Limited (AUR).

At the time of writing, the Forbidden Foods share price is down 5.97%. This compares with the All Ordinaires Index (ASX: XAO) which is up 0.9% to 6,444 points.

What does Forbidden Foods do?

Forbidden Foods is a multi-brand food, beverage and ingredients company that focuses on baby food, wellness and organic markets. Established in 2010, the business has over 50 different products falling into three brands – Forbidden, Sensory Mill and Funch.

The company operates through national and international sales channels through distribution partners and via e-commerce.

New range stocked

According to the release, Forbidden Foods has secured ranging with FoodWorks stores nationally.

The new agreement will see the company supply a number of its products to over 500 independent supermarkets across Australia. This includes Funch Baby Foods, Funch Health Snacks Mixes, Sensory Mill Plant-Based Flours and Sensory Mill Organic Apple Cider Vinegar.

The range is expected rollout out to all stores from January 2021.

Forbidden Foods estimates the initial revenue from the new deal to be around $1.8 million annually.

The company highlighted that FoodWorks is one of Australia’s largest independent retail supermarkets groups. The giant supermarket group produces approximately $2 billion in sales per year, and presents a growing opportunity.

Management commentary

Forbidden Foods co-founder and COO Jarrod Milani commented:

FoodWorks / AUR’s 500+ strong network of locally and community focused supermarkets gives us a significant opportunity with our FUNCH & Sensory Mill brand to engage shoppers and build trust, in particular in baby foods and plant-based foods where we have 100% Australian Made and can talk to the provenance of our ingredients.

AUR direct manager Nic Ciampa also spoke about the new partnership:

We think Forbidden Foods has a range of innovative and quality products our stores and customers will love. We also think the 100% Australian Made ingredients will resonate strongly with our customers. The support Forbidden Foods provide from their national sales force in the form of store education and engagement is key to a successful store ranging.

Despite the news, investors sent the Forbidden Foods share price tumbling to 32 cents per share at the closing bell.

More reading

• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• Why the Nickel Mines (ASX:NIC) share price is up 16% today
• Why the MyFiziq (ASX:MYQ) share price is falling today
• Medusa (ASX:MML) share price edges higher on quarter update
• Why the Aspen (ASX:APZ) share price is charging 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. 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 Quickstep Holdings Limited (ASX: QHL) share price edged up slightly by 1.32% today after publishing its annual report, which highlighted an increase in net profit after tax (NPAT) of 44% compared with FY19. 

How did Quickstep perform in FY20?

Quickstep is a global provider of advanced composite solutions to the aerospace, defence, automotive and other advanced manufacturing sectors. This year’s significant growth was due to contributions from many existing clients and projects. 

For instance, the company provided increased volumes on the Lockheed Martin C-130J Hercules wing flaps, as well as securing additional market share on F-35 Vertical Tail and a new order for 10 additional F-35 centre fuselage parts. This was combined with new orders in rail and medical devices. FY20 also saw Boeing emerge as an increasingly important partner for the company. 

As well as the headline 44% increase in NPAT, financial results were strong throughout FY20. For instance, Quickstep saw an increase in total sales of 12% compared with FY19, and was able to achieve a statutory earnings before interest and taxes margin of 10.1%.

The company also continued its efforts to increase efficiency. In FY20, this included beginning the move to a paperless workshop floor, new Eastman cutting machines, and optimised materials cutting. The latter has lead to $100,000s in savings per annum.

Optimistic future outlook

In addition, the company disclosed an optimistic view of the future. For example, recently announced increases to Commonwealth defence expenditure, and changes to procurement regulations, represent potential significant additional tailwinds.

Moreover, Quickstep highlighted the opportunity in sectors like unmanned aircraft, guided weapons and aircraft maintenance, repair and overhaul. Accordingly, the company expects to make further investments in domestic business development.

At the time of writing, the Quickstep share price is 1.32% up for the day at 7.7 cents per share.

More reading

• ASX 200 rises 1%, Cimic (ASX:CIM) up 8% on sale
• Brokers believe these record high ASX stocks can run higher
• Vection (ASX:VR1) share price lifts on partnership deal
• Here’s why I think these 2 ASX shares are bargain buys right now
• Why the Crown (ASX:CWN) share price crashed 10% lower today

Motley Fool contributor Daryl Mather 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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The S&P/ASX 200 Index (ASX: XJO) went up by around 1% today to 6,229 points.

Here are some of the highlights from the ASX:

Cimic Group Ltd (ASX: CIM)

The engineering business announced today that it was selling half of its Thiess business to Elliot.

Thiess is described as the world’s largest mining services provider. It delivers open cut and underground mining in Australia, Asia, Africa and the Americas. It provides services to 25 projects across a range of commodities with 14,000 employees and annual revenue of more than $4.1 billion.

Cimic and Elliot will jointly control Thiess after it passes the usual conditions including financing and relevant regulatory approvals.

The sale price implies an enterprise value of approximately $4.3 billion for Thiess.

The money will be used to strengthen Cimic’s balance sheet with cash proceeds of between $1.7 billion to $1.9 billion as well as reducing Cimic’s factoring balance by approximately $700 million and Cimic’s lease liability balance by approximately $500 million.

Cimic expects the transaction to generate a pre-tax gain for Cimic of around $2.2 billion and a post-tax gain of around $1.4 billion.

Cimic Group’s executive Chair Marcelino Fernandez Verdes said: “The sale agreement reflects Thiess’ ongoing strategic importance as a core activity for Cimic. It capitalises on the robust outlook for the mining sector and, together with Elliot, we will pursue market opportunities in line with Thiess’ growth and diversification strategy.”

The Cimic share price rose around 8% today. It was the best performer in the ASX 200.

Crown Resorts Ltd (ASX: CWN)

The large casino operator announced an AUSTRAC enforcement investigation today.

Crown said today it had been informed by AUSTRAC’s regulatory operations branch that it has identified potential non-compliance by Crown Melbourne Limited with anti-money laundering and counter-terrorism financing laws.

The ASX 200 casino operator said that the potential non-compliance includes concerns in relation to ongoing consumer due diligence, and adopting, maintaining and complying with an anti-money laundering and counter-terrorism financing program.

These concerns were identified in the course of a compliance assessment that commenced in September 2019 and focused on Crown Melbourne’s management of customers identified as high risk and politically exposed persons.

This matter has been referred to AUSTRAC’s enforcement team, which has initiated a formal enforcement investigation into the compliance of Crown Melbourne. Crown said that it will respond to all information requests in support of the investigation and fully co-operate with AUSTRAC.

The Crown share price dropped around 8% in response to this news.

Dicker Data Ltd (ASX: DDR)

IT wholesaler business Dicker Data announced its FY20 third quarter update today.

Dicker Data said that in the nine months to 30 September 2020, its revenue increased by 14.9% to $1.48 billion and its profit before tax rose by 28.3% to $60.8 million.

Gross margins were maintained in line with the half year results and some operating cost leverage was achieved, according to the company. It said that it continues to prove resilient to the negative economic impacts of COVID-19.

Management said that the company is experiencing better-than-forecast revenue growth off the back of a significant mobilisation to working from home. However, growth is stabilising in the second half to expected levels.

Dicker Data will also be able to help businesses with back-to-work strategies. It’s seeing increased quoting activity and the resumption of larger infrastructure projects which were previously put on hold.

Looking ahead to the next year or two, Dicker Data said that the rollout of 5G will have a revolutionary effect within the technology industry. Management think this is a tremendous opportunity to service the small and medium business market.

Dicker Data said that its new distribution centre is on track to be completed by the end of the year. It will increase capacity by around 80%.

The Dicker Data share price went up around 7% in reaction to this news.

More reading

• Why the Crown (ASX:CWN) share price crashed 10% lower today
• Dicker Data (ASX:DDR) share price reaches all-time high. Here’s why
• How these 3 letters could see your ASX shares outshine
• Brainchip (ASX:BRN) share price jumps on quarterly update
• How I’d position my ASX share portfolio for the next market crash

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia has recommended Crown Resorts Limited. 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 ASX 200 rises 1%, Cimic (ASX:CIM) up 8% on sale appeared first on Motley Fool Australia.

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There are a number of ASX stocks that are testing their record highs. While some look like they’ve overshot fundamentals, top brokers think some are still good value.

These well priced overachievers aren’t in the overheated tech space – so it doesn’t include the rocketing Afterpay Ltd (ASX: APT) share price.

The one that sticks out in my view is the James Hardie Industries plc (ASX: JHX) share price, which is hovering close to its record high.

Remodelling upside pushes James Hardie’s valuation

The building materials supplier’s recent positive update is driver, but it isn’t the only one. US data on home remodelling points to further potential gain for James Hardie.

“New data points from the NAHB Remodeling Market Index(RMI) and the Harvard Leading Indicator of Remodeling Activity (LIRA) suggest continued growth in the US remodeling sector,” said Morgan Stanley.

“In the third quarter, all components and subcomponents of the RMI were 77 or above (>50 equals a positive stance).”

Best placed ASX stock to buy

This is true across all project sizes, whether its for remodelling work worth over US$50,000 to those under US$20,000.

The LIRA was revised upward and is signalling a steady expansion through to the third quarter of 2021.

James Hardie is the best placed among ASX stocks to benefit from this thematic.

Woolworths share price to retest highs

Meanwhile, if you thought the Woolworths Group Ltd (ASX: WOW) share price is running out of puff after hitting its record high of $40.58 back in August, think again!

Shares in our largest supermarket chain may have pullback from its peak, but it’s returned to within striking distance to the high at $39.50.

It’s only a matter of time before it sets a fresh record, according to UBS. The broker listed five reasons why the Woolworths share price can head higher.

Five reasons to buy the WOW share price

The first is industry feedback, which suggests Woolies’ trading condition is better than what the market is expecting.

The second is the supermarket’s potential to deliver above consensus estimates. Brokers on average are tipping around a 4% like-for-like sales increase in the December quarter, but UBS thinks this is too conservative.

Further, Woolworths may also surprise on margins. While the group has shown little operating leverage during the COVID‐19 panic buying spree, this could change. UBS believes that lower wages growth and costs will enable the group to positively surprise.

The last two are UBS’s 12% plus forecast growth in Food earnings before interest and tax (EBIT) and possible capital management enticements. Management may have the spare cash to fund some capital management initiatives from the expected demerger of the Endeavour drinks business.

UBS is recommending the stock as a “buy” with a 12-month price target of $44 a share.

More reading

• Leading brokers name 3 ASX shares to buy today
• Brainchip (ASX:BRN) share price jumps on quarterly update
• 4 ASX shares to buy for a rare Christmas surprise
• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• Will you regret calling the Afterpay Ltd (ASX: APT) share price too expensive? 

Motley Fool contributor Brendon Lau owns shares of James Hardie Industries plc and Woolworths Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of AFTERPAY T FPO and Woolworths Limited. 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 Vection Technologies Ltd (ASX: VR1) share price has been on the rise today after the company announced a distribution partnership with Nuovamacut Automazione Spa from Italy. Vection Technologies develops Mindesk, the first native virtual reality interface for Solidworks. Nuovamacut is a global company and one of the top 10 largest CAD/PLM partners of Solidworks, a product built by Dassault Systèmes.

At the time of writing, the Vection share price is up by 3.03% to 17 cents. The Vection share price has risen by more than 110% over the past month.

What moved the Vection share price?

Investors have today driven the Vection share price higher following the company’s partnership announcement with Nuovamacut, which has over $68 million in annual revenue and 160 employees across nine offices. In addition, it distributes Solidworks software to 8,600 company clients and 26,000 users. This makes it the biggest designer community in the Italian territory. Its diverse client portfolio includes sectors ranging from industrial machinery, engineering and construction to aerospace and education.

The Solidworks product is one of the most widely used mechanical CAD software packages in the world. It is used by more than 6 million users worldwide, primarily for industrial design. The software allows designers to quickly sketch out ideas, experiment with features and dimensions, and produce models and detailed drawings.

This agreement represents an opportunity for Vection to accelerate market share growth for its virtual reality software, Mindesk. It aligns with the company’s goal to achieve strong annual recurring revenue growth. Although Vection Technologies advised that the financial impact of the agreement is not determinable, the company did say it anticipated the partnership to be “material for the company”.

Management commentary

Gianmarco Biagi, Managing Director of Vection Technologies, commented on the partnership, stating:

We are very pleased to have partnered with one of the largest Dassault Systèmes Solidworks partners globally. This relationship is a key step forward in our global distribution strategy, aligned with the June 2022 50% ARR goal. Vection Technologies’ management is confidently delivering on its long-term strategy, with a clear roadmap to strong revenue generation during the second half of the current financial year.

The Vection share price has grown quickly over the past two months following a range of positive ASX announcements. These have included the product’s first medical trial, integration with Dell Technologies Inc (NYSE: DELL) products, and the lodgement of patents in the healthcare sector. 

More reading

• 3 ASX shares I think could be the next Afterpay (ASX:APT)
• Top ASX tech shares to buy in October 2020

Motley Fool contributor Daryl Mather 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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