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The Newcrest Mining Ltd (ASX: NCM) share price is up 3.6% during the lunch hour on Tuesday.

Shares in the S&P/ASX 200 Index (ASX: XJO) gold miner closed yesterday trading for $24.02 each. They are currently trading for $24.89 apiece.

That puts the Newcrest share price up 7.1% since last Wednesday’s closing bell.

For some context, the ASX 200 is down 4.6% over that same period.

What are ASX 200 investors considering?

First, it’s not just the Newcrest share price that’s outperforming over the past four trading days.

Since last Wednesday’s close, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) has rocketed 7.8%.

That tremendous rally has been driven by a 5.4% boost in the gold price over this short period, with gold currently fetching US$1,911 per troy ounce.

The rally in the yellow metal helping drive the Newcrest share price higher has in turn been fuelled by investor angst over last week’s implosion of United States-based SVB Financial Group (NASDAQ: SIVB). With the market concerned over more potential bank insolvencies, gold is shining brightly thanks to its classic haven status.

What else is helping lift the Newcrest share price?

Atop the fast-rising gold price, the Newcrest share price could be receiving some helpful tailwinds from reports the ASX 200 gold miner has resumed takeover talks with US gold mining giant Newmont.

On 16 February, the Newcrest board unanimously rejected the offer, valued at some $22 billion, saying it didn’t “represent sufficient value” for its shareholders.

According to The Australian Financial Review, Newmont has agreed to the non-disclosure and standstill agreements Newcrest requested as the next step to continuing negotiations.

Last week, Newcrest interim CEO Sherry Duhe wouldn’t be pinned down on what the board would deem a reasonable valuation for the Newcrest share price.

According to Duhe:

There’s not an absolute number out there… We have been very clear, and our board’s been unanimous, in the rejection of both the offers Newmont has made to date.

We have a fantastic company with a really strong balance sheet, we have a pretty unparalleled portfolio out there with very long life assets that are low cost, and increasingly we’ve got a huge amount of copper in the portfolio which is essential for electrification and net zero.

Exploration update

Investors may also be bidding up the Newcrest share price today following an exploration update at its Red Chris project, located in British Columbia, Canada.

Red Chris is a joint venture between Newcrest (70%) and Imperial Metals Corporation (30%). Newcrest is the operator.

According to this morning’s release, successful exploration at Red Chris has expanded the East Ridge Exploration Target delivering additional mining potential.

“The scale of East Ridge and its proximity to our existing infrastructure means it has the potential to play a significant role in the long-term future of Red Chris,” Duhe said. “We believe East Ridge represents a considerable opportunity for Newcrest as we continue to pursue further options to unlock value at Red Chris.”

Newcrest share price snapshot

Buoyed by the strong run this past week, the Newcrest share price – pictured below – is up 21% so far in 2023.

The post Why has the Newcrest share price leapt 7% in under a week? appeared first on The Motley Fool Australia.

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More reading

• ASX 200 dives 2%, wiping out last of 2023 gains
• Why is everyone suddenly talking about ASX 200 gold stocks again?
• Top ASX 200 tech shares to buy right now: Morgans
• 5 things to watch on the ASX 200 on Tuesday
• 3 ASX 200 shares trading ex-dividend on Tuesday

SVB Financial provides credit and banking services to The Motley Fool. Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended SVB Financial. The Motley Fool Australia has recommended SVB Financial. 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 Rio Tinto Ltd (ASX: RIO) share price is down 0.9% today to $117.44 as the company prepares to launch production at its enormously expanded Mongolian copper mine.

It appears that the Rio Tinto share price is falling along with the S&P/ASX 200 Index (ASX: XJO).

ASX 200 shares are having a shocker all around today. The index is down 2% at the time of writing, with every one of the 11 market sectors in the red.

Rio Tinto share price down amid copper mine launch

According to reporting in The Australian, Rio Tinto CEO Jakob Stausholm is in Mongolia for the official commencement of production from the new underground section of the Oyu Tolgoi copper mine.

According to Stausholm, the mine is “on track to be the fourth-largest copper mine in the world”.

The Oyu Tolgoi copper mine already produces 130,000 tonnes of copper annually from its open pit.

But when you add in the richer production expected from the underground section, Rio reckons average annual output will rise to 500,000 tonnes from 2028 to 2036.

Production will then slow to an average of 350,000 tonnes of copper per year for a further five years.

It hasn’t been a smooth road to this point due to friction between Rio Tinto and the Mongolian Government, which owns 33% of the project.

At one point, the parties reached an impasse over investment and revenue sharing that resulted in a near two-year delay in construction.

When Stausholm took over as CEO in January 2021, he made it a personal mission to get Oyu Tolgoi sorted.

Things appear to be going swimmingly now.

The Mongolian Prime Minister Oyun-Erdene Luvsannamsrai is with Stausholm at the site for the launch.

What’s the significance of Oyu Tolgoi?

For Mongolia, the significance is huge. According to the article, the mine will eventually deliver as much as half of the country’s total gross domestic production (GDP).

For Rio Tinto, the mine will do a couple of big things for the company.

Firstly, it will diversify its earnings a bit more.

Rio has four key mining segments — iron ore, aluminium, copper, and other minerals.

In 2022, copper contributed US$2.376 billion in underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA). This represented 8.8% of total EBITDA, making copper the smallest contributing segment overall.

Iron ore was the largest, contributing US$18.612 billion in EBITDA or 69% of the earnings pie.

To put Oyu Tolgoi into perspective, at peak capacity, Rio’s share of production will equate to 330,000 tonnes (66% ownership).

That represents a huge increase in copper production overall for the company. In 2022, Rio achieved total mined copper production of 521,000 tonnes and refined copper production of 209,200 tonnes.

Secondly, Oyu Tolgoi will enhance Rio’s ability to capture the rising demand for minerals critical to the global energy transition.

Copper is used in electric vehicles and wind turbines.

In Rio’s 2022 Strategic Report released to the ASX on 23 February, Stausholm said:

We expect the energy transition will add as much as 25% in additional demand above traditional sources across our key products by 2035.

That is why our strategy is about growing in the materials required to achieve the energy transition, such as copper, lithium and high-quality iron ore.

A highlight this year was resetting our relationship with the Mongolian Government and successfully executing our first significant M&A in a decade through our acquisition of Turquoise Hill Resources Ltd. This doubled our interest in Oyu Tolgoi to 66% …

The location of the mine in the Gobi Desert is about 100km north of the Chinese border. That’s pretty convenient considering China consumes almost half of the world’s copper output.

Broker Goldman Sachs is backing the Rio Tinto share price for significant growth over the next year.

It has a conviction buy rating on the mining share and has upped its price target on Rio to $140.40.

The post Rio Tinto share price dips despite copper mega-mine milestone appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• Why 29Metals, BHP, Helia, and Rio Tinto shares are dropping today
• Why is the Rio Tinto share price tumbling 4% on Thursday?
• 5 things to watch on the ASX 200 on Thursday
• Last chance to snag the next dividend from these 4 ASX 200 mining shares

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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The Woodside Energy Group Ltd (ASX: WDS) share price has been through plenty of pain in the past week, it has dropped around 12%. But, can the gas and oil ASX share turn things around?

Over the past year, the business has been through a lot. It has benefited from the higher energy prices amid the Russian invasion of Ukraine.

It’s down more than 3% today. Despite all of the elevated profit generation, it’s now only 3% higher than it was 12 months ago.

What’s going on, and will the Woodside share price be able to recover?

Uncertainty rattles markets

The ongoing volatility in the US after the collapse of the bank Silicon Valley Bank (SVB) has caused some uncertainty.

The Australian Financial Review reported on a decline in the oil price yesterday. The Brent crude oil price declined US$2, or 2.4% to US$80.77. This decline was attributed to fears of a new financial crisis, though a “recovery in Chinese demand provided support.”

The newspaper reported that “worries about further Federal Reserve monetary tightening have been exacerbated by high US crude oil inventories.”

The relationship between supply and demand can have a noticeable impact on a resource price. It was noted by the AFR that “crude oil production in the seven biggest US shale basis is expected to rise in April to its highest since December 2019″, according to the Energy Information Administration.

What to make of this for the Woodside share price?

Clearly, investors don’t think it’s a positive. If Woodside’s production volume and production costs don’t change, then a reduction of the revenue per barrel of oil equivalent will largely be a cut to net profit after tax (NPAT) as well.

An investing opportunity can be opened up if a business keeps getting cheaper. But, it’s a bit trickier when it comes to resource shares, particularly when it comes to oil, gas and coal ASX shares. We don’t know what resource prices are going to do next.

Last week, JP Morgan cut its price target on Woodside shares to $34, according to reporting by The Australian. A price target implies where the share price could be in 12 months. At the time of the price target, that implied a decline. But, now it would suggest a small rise in the low-single-digits.

In the short term, movements of energy prices could dictate which way the Woodside share price goes from here.

The post Down 12% in a week, has the Woodside share price got further to fall? appeared first on The Motley Fool Australia.

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More reading

• ASX 200 dives 2%, wiping out last of 2023 gains
• Top ASX 200 tech shares to buy right now: Morgans
• 5 things to watch on the ASX 200 on Tuesday
• 3 ASX 200 shares trading ex-dividend on Tuesday
• Why are ASX 200 gold stocks like Northern Star having such a stellar run today?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) has had a sobering week thus far, to say the least. And it’s only Tuesday. At the time of writing, the ASX 200 has shed a nasty 2% so far today. Together with yesterday’s loss of 0.5% and Friday’s loss of 2.3%, the ASX 200 has now lost around 5.6% of its value over the past week or so.

I guess we knew it couldn’t last. The ASX 200 had an absolutely cracking start to 2023 over January and the first part of February. The ASX’s flagship index closed out 2022 at 7,038.7 points.

But by early February, the ASX 200 had climbed as high as 7,558 points. That represented a 2023 gain of 7.8%. That’s an extraordinary run, considering that is rather close to the average gain ASX 200 shares make in a year, not a month.

Most investors would have been shocked if the Index had continued on that trajectory for the rest of 2023.

Alas, this run seems to have come to a screeching halt over the past few trading days. This dramatic loss of value that we’ve seen over the past week pulls the ASX 200 back below where it started in 2023.

So all of those healthy gains that we saw over the first month or so of the calendar year have now been wiped out, and then some:

Consider the stubborn nature of the inflation that most economies, including Australia, have been enduring over the past year or so. And consider those rapid-fire interest rate rises we’ve all witnessed the Reserve Bank of Australia execute every single month for 10 months as well.

Putting these two factors together, it’s arguable that investors were due a reality check.

But it has come swiftly and brutally.

Why are ASX 200 shares back to the start of 2023?

The losses investors have seen over the past week or so have clearly been sparked by one event though. That would be the collapse of the US tech-focused bank SVB Financial Group (Silicon Valley Bank). As we’ve covered extensively here at the Fool, the woes of SVB have set off fears of financial contagion.

These have rattled the markets severely, with most of the ASX 200’s losses coming after SVB’s woes were made public. ASX banks and tech stocks have been hit hard. As have many others. In fact, the only shares that seem to be benefitting from the current environment are ASX 200 gold stocks.

So until this ruckus with SVB dies down, we can probably expect the extreme volatility we are currently witnessing in the share market to continue. It might be time to put on the proverbial seatbelt.

The post ASX 200 dives 2%, wiping out last of 2023 gains appeared first on The Motley Fool Australia.

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More reading

• ASX 200 bank shares punished again on US bank fallout
• Why is everyone suddenly talking about ASX 200 gold stocks again?
• Top ASX 200 tech shares to buy right now: Morgans
• 5 things to watch on the ASX 200 on Tuesday
• 3 ASX 200 shares trading ex-dividend on Tuesday

SVB Financial provides credit and banking services to The Motley Fool. Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended SVB Financial. The Motley Fool Australia has recommended SVB Financial. 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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S&P/ASX 200 Index (ASX: XJO) bank shares are taking another beating today.

Here’s how the big four bank stocks are tracking in midday trading on Tuesday:

Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares are down 2.2%.

National Australia Bank Ltd (ASX: NAB) shares are down 2.4%.

The Westpac Banking Corp (ASX: WBC) share price is down 1.8%.

And Commonwealth Bank of Australia (ASX: CBA) shares are down 1.6%.

Today’s losses now see all of the big four ASX 200 bank shares down more than 5% since last Thursday’s close.

Why are ASX 200 bank shares falling again today?

The reason, as you’re likely aware, is investor angst over financial shares following last week’s collapse of United States-based SVB Financial Group (NASDAQ: SIVB), or Silicon Valley Bank if you prefer.

I won’t rehash all of the details here.

In short, it came down to a good old-fashioned (or bad old-fashioned) run on what was the 18th largest bank in the US. SVB was heavily dependent on its business with tech companies. And fast-rising interest rates over the past year have seen many of those indebted companies scrambling for cash.

As ever more customers began to withdraw money from SVB, and word got out that the bank was suffering a liquidity crisis, the whole business snowballed towards insolvency.

That’s resulted in heavy losses over the past three trading days, not just for ASX 200 bank shares, but for banks the world over.

Regional banks in the US have taken a particular bruising. Yesterday (overnight Aussie time) saw shares in First Republic Bank (NYSE: FRC) crater by 62%.

While the US government is guaranteeing that all of SVB’s depositors will see their money back, there are no such guarantees for shareholders.

“The thought process is that the government agencies are willing to protect the depositors, but that seems to be it,” said RJ Grant, trading manager at KBW (quoted by Bloomberg). “Based on their actions, it signals that they don’t care about the equity of these banks.”

The post ASX 200 bank shares punished again on US bank fallout appeared first on The Motley Fool Australia.

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More reading

• ASX 200 bank shares: Are they better prepared than Silicon Valley Bank?
• S&P 500 futures lift as regulators shore up SVB deposits
• 3 reasons the 8% NAB dividend yield looks safe to me
• Understanding the collapse of Silicon Valley Bank
• 5 things to watch on the ASX 200 on Monday

SVB Financial provides credit and banking services to The Motley Fool. Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended SVB Financial. The Motley Fool Australia has recommended SVB Financial and Westpac Banking. 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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Well, it’s another day, another fall for the S&P/ASX 200 Index (ASX: XJO) so far this Tuesday. And not just any fall. At the time of writing, the Index has cratered by a depressing 2%, which drags the ASX 200 back below 7,000 points for the first time since early January.

Since the 2023 peak that we saw for ASX 200 shares in early February, the markets have now fallen a nasty 7.8%. So why is everyone focused on ASX 200 gold stocks then?

Well, in a pattern that is emerging this week, ASX gold stocks are shining brightly today. Companies that mine the precious metal are amongst the few ASX 200 shares that have recorded gains so far this week. And what gains they have been.

Today, we have Ramelius Resources Ltd (ASX: RMS), Perseus Mining Ltd (ASX: PRU) and Northern Star Resources Ltd (ASX: NST) shares all climbing by more than 3% at the time of writing.

The ASX 200’s largest gold miner – Newcrest Mining Ltd (ASX: NCM) – is currently up by a pleasing 3.75% at just under $25 a share. And the ASX 200’s leading gainer so far today is none other than Silver Lake Resources Limited (ASX: SLR). As it currently stands, Silver Lake shares have rocketed a happy 5.9% to $1.12 each.

Yesterday, we also saw not one, but two gold exchange-traded funds (ETFs) hit new record highs.

So no wonder everyone is talking about ASX 200 gold stocks this Tuesday.

But what’s behind this pointed defiance of the broader markets? Why is everything except for gold seem to be falling?

Why is everyone buying ASX 200 gold stocks?

Well, let’s start at the beginning. These gains seem like a direct consequence of the price of gold itself. Over the past week, gold has been on fire. The yellow metal was asking as little as US$1,820 per ounce last week. But, as my Fool colleague flagged this morning, last night’s international trading saw gold prices spike as high as US$1,915 per ounce.

Gold has always been viewed as a defensive, ‘safe haven’ asset by many investors. As such, there is a belief that the precious metal is a safe place to park capital in times of economic or financial stress. Well, we appear to be fulfilling some of these criteria at the moment.

The collapse of the US tech-focused bank SVB Financial Group (Silicon Valley Bank) late last week has clearly led to some panic in the markets. ASX banks are being walloped today, as are most bank shares around the world. Tech shares are also feeling the pinch.

There are clear fears that the woes from the SVB saga might spill over into other parts of the US (and thus, global) financial system.

Whether these fears are well-founded is a topic for another time. But we can’t deny that there are fears. This is the most likely explanation as to why the gold price has so suddenly gone through the roof. And, by extension, why everyone is talking about ASX 200 gold stocks this Tuesday.

The post Why is everyone suddenly talking about ASX 200 gold stocks again? appeared first on The Motley Fool Australia.

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More reading

• Top ASX 200 tech shares to buy right now: Morgans
• 5 things to watch on the ASX 200 on Tuesday
• 3 ASX 200 shares trading ex-dividend on Tuesday
• Why are ASX 200 gold stocks like Northern Star having such a stellar run today?
• Here are the 3 most heavily traded ASX 200 shares on Monday

Motley Fool contributor Sebastian Bowen has positions in Newcrest Mining. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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The Arafura Rare Earths Ltd (ASX: ARU) share price is under pressure on Tuesday.

At the time of writing, the rare earths developer’s shares are down 5% to 53.5 cents.

This means the Arafura share price has now dropped almost 24% since hitting a 52-week high less than a month ago.

This has been driven by concerns over comments out of electric vehicle giant Tesla, which revealed plans to phase out rare earths from future vehicles.

And while this decline is disappointing, it could prove to be a great buying opportunity for investors.

Broker tips major upside for Arafura share price

According to a recent note out of Bell Potter, its analysts have described the Tesla-induced selloff as “a knee jerk reaction.”

As a result, it recently upgraded its shares to a speculative buy rating with a 72 cents price target. Based on the current Arafura share price, this implies potential upside of almost 35% over the next 12 months.

The broker commented:

The recent 16% sell-off in ARU in reaction to the Tesla Investor Day presentation was a knee jerk reaction and in our view, was overdone. We maintain our valuation for ARU of $0.72/share and return to a Speculative BUY recommendation.

Bell Potter continues to believe that demand for rare earths will grow materially and support strong prices even without Tesla in the equation. It explains:

The result reduced our NdPr demand estimates by 10ktpa, which would still require the addition of 4.3x of Nolans capacity over the next 7 years. Given the scale, grade and advanced nature of the Nolans project we would still view this as a difficult task to achieve thus concluding price support for NdPr should be maintained.

The post Arafura stock sell-off continues, broker tips 35% upside appeared first on The Motley Fool Australia.

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More reading

• Why Atlantic Lithium, Arafura, Brainchip, and Core Lithium shares are falling
• Tesla-induced sell-off of ASX rare earths shares like Lynas overblown: experts
• Why Arafura, Myer, Volpara, and Xero shares are zooming higher
• Are Arafura shares still a buy if Tesla ditches rare earths?
• 4 ASX mining shares that have soared over 150% in a year

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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Oh man. Politics, huh?

Here in NSW, where I’m based, there’s a state election coming up.

And so, of course, ads and announcements are wall-to-wall in the media.

One such announcement caught my eye this week.

Something that had elements of a plan I think is fantastic.

Not perfect. But it’s not far away from being great.

And it’s an investor’s dream – at least in theory.

Of course, most of the responses thus far have been political, or ideological, or both.

Because that’s what people seem to do these days: barrack for their team, no matter what.

But not here.

When I look at these things, I’m focused on policy, not politics.

So, let’s look at the idea, itself.

NSW Premier Dominic Perrotet has announced that every kid under 10 (and thereafter, every child at birth) will get $400 put away for their higher education or a house purchase.

Then, each year, the government will add $200 for kids whose parents are eligible for family tax benefit payments, or $400 per year for other kids, if those kids’ parents match it.

Parents and grandparents can contribute up to another $600 each year, unmatched.

The kicker is that the government has recognised that, with the power of 18 years of compounding, these amounts will be worth much, much more when the kids are eligible to withdraw it.

That observation (and the function of the plan) is smart.

Very smart.

It takes the idea of compounding – something that we all know, but too few people actually do – and applies it to help give kids a kick start when they turn 18.

And it might be no surprise that I like it – I’ve proposed a similar scheme to fund Superannuation with a small amount at birth, instead of relying on (much, much larger) employer contributions for 40-plus years of our working lives.

So I really like this idea… with two exceptions.

The first is that, as has been widely highlighted, this plan gives more help to those who don’t need as much help (because their families can afford to add between $400 and $1000 each year) and less help to those who actually do need it (and whose families can’t hit those numbers).

And a reminder: all of these numbers are for one child. Imagine a single mother on a modest income with three kids, and compare that to a wealthy double-income family with one child.

In the first example, the kids would get $200 per year saved for them. Which is good.

In the second, the kid gets $1,400 per year. And the government’s contribution to that child is double what each of the single mum’s kids get.

That is… tough to defend.

Some will – insisting that the government should only match what a parent is already sacrificing. I understand that view.

But let’s think about the kid, rather than the parent: if we truly want each child to get a head-start through this program, it makes no sense to penalise them, in a relative sense, based on the fact their parents may not be able to contribute.

Frankly, the solution is very, very easy. And not that expensive.

Just equalise the government contribution for all kids. Add $400, per year, to the account each year between birth and their 18th birthday.

Then let compounding do its thing.

The second concern? This does nothing to address high house prices.

To be fair, that’s not the aim of this policy. The alternative government has no serious policy to deal with it, either. And nor do our federal parliamentarians.

We should fix house prices.

But whether we do, or not, this policy – amended as I suggested – is a very good way to help kids as they reach adulthood.

It gives them a lump sum to kick start the next part of their lives, and – perhaps more importantly – demonstrates the power of compounding.

Now, if only I can convince Treasurer Chalmers to use it for Super, too!

Fool on!

The post So close, Premier. Let me fix it. appeared first on The Motley Fool Australia.

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More reading

• This ASX 200 director bought over $500k of his company’s shares just in time for the dividend!
• ‘Not sure if that’s the way we should go’: Why BHP shares are making news today
• 4 ASX 200 shares trading ex-dividend on Wednesday
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Motley Fool contributor Scott Phillips has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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A director of ASX 200 kitchen appliance manufacturer Breville Group Ltd (ASX: BRG), is in for a boosted dividend payout after buying 30,000 more shares a few days before the ex-dividend date.

The Breville share price is down 1.73% in early trading on Tuesday to $18.80.

A change of director’s interest notice lodged with the ASX last Friday reveals that non-executive director, Lawrence Myers, spent $577,785.49 buying more Breville shares through a family trust fund.

He made the purchase on Friday on-market.

How much will this ASX 200 director receive in dividends?

Breville shares begin trading ex-dividend tomorrow.

The ASX 200 share will pay investors 15 cents per share fully franked for 1H FY23 on 27 March. This is the same amount as the interim dividend for 1H FY22.

Before the purchase, Myers already had an indirect interest in 133,000 shares through his superannuation, family trust, and other investment vehicles.

His bumped-up investment will deliver $24,450 in dividends for 1H FY23.

Investors typically draw comfort from seeing board directors spend their own money buying more shares in the ASX 200 companies they run. It’s a clear sign of confidence in the company’s future.

A quick recap on Breville’s 1H FY23 results

In its 1H FY23 report, Breville revealed record sales with a 13.1% increase in earnings before interest, taxes, depreciation, and amortisation (EBITDA) to $141.9 million compared to the prior corresponding period (pcp) of 1H FY22.

Breville’s net profit after tax (NPAT) increased by 1.3%, and its gross margin improved by 1% to 35.1%.

The ASX 200 share’s return on equity (ROE) declined from 19.7% to 16.1% due to its acquisition of Italian prosumer coffee company, Lelit, in July 2022.

Breville Group CEO, Jim Clayton said:

The strength of our product portfolio, coupled with the maturity and agility of our underlying Acceleration Platform, cut through the macro-economic headwinds of the 1H23.

We grew Gross Profit by tacking into our areas of strength: we managed price to counter
material input and logistics cost inflation as well as negative currency swings; we leaned on our
geographic diversification to deflect the impact of EMEA retailers buying much less than they
were selling; we aligned our supply chain and go-to-market to take advantage of the trending
tailwinds of “air frying” and “café quality coffee at home”; we executed a much improved new
product launch process that accelerated revenue; and, we captured the benefit from the
investments we’ve made in our digital execution and geographic expansion.

Recent history on this ASX 200 share

The Breville share price is up 0.75% in 2023 compared to an 0.5% bump in the S&P/ASX 200 Index (ASX: XJO).

The ASX 200 share is down 31% over the past 12 months, compared to a 2.4% fall for ASX 200 shares overall.

The post This ASX 200 director bought over $500k of his company’s shares just in time for the dividend! appeared first on The Motley Fool Australia.

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More reading

• 4 ASX 200 shares trading ex-dividend on Wednesday
• Top brokers name 3 ASX shares to buy today

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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BHP Group Ltd (ASX: BHP) shares are down 1.2% in morning trade, joining the wider market sell-off. The S&P/ASX 200 Index (ASX: XJO) is currently down 1.8%.

The mining giant closed yesterday trading for $45.83 per share. Shares are currently swapping hands for $45.28 apiece.

This comes amid news that BHP’s plans to cut emissions by using renewable diesel made from Hydrotreated Vegetable Oil (HVO) may not be all that green.

What’s happening with the miner’s renewable diesel plans?

As The Motley Fool reported last month, BHP is trialling the use of renewable diesel, supplied by bp, at its Western Australian Yandi iron ore mine. The initial trial is set to run for three months.

Some 40% of BHP’s operational greenhouse gas emissions stem from diesel fuel.

“Ultimately, our aim is to have fully electric trucking fleets at our sites,” BHP Western Australia iron ore asset president Brandon Craig said. “But alternative fuels like HVO may help us reduce our emissions in the meantime while the electrification transition takes place.”

However, not everyone believes this is the best way forward.

In news unlikely to have a material impact on BHP shares this morning, University of South Australia professor and environmental engineer James Hopeward said he believes there are better ways for the ASX 200 miner to cut its emissions.

As ABC News reports, Hopeward said he understands why BHP is eager to do what it can to reduce emissions, stressing that the trial is “certainly not greenwashing”.

According to Hopeward:

I can certainly see why, when there is a tremendous amount of pressure to reduce greenhouse gas emissions as quickly as possible, there would be a tendency to say, ‘We need to green the fleet by greening the fuel while we wait for the technology to catch up in terms of the electrification.

However, Hopeward added, “I’m not sure if that’s necessarily the way that we should go.”

He pointed to the comparatively large negative impact the renewable diesel has on the environment compared to solar or wind-derived energy.

“They take an enormous amount of land, they take nutrients, they take water, and they just have a large footprint,” he said of the HVO type of fuels. “If we’re talking about a solar farm or a wind farm these things have an impact as well, but it’s a smaller impact in terms of space.”

It’s likely to be more than a decade before BHP’s hauling trucks make the switch to fully electric, with the technology still playing catchup to the reality in the field.

While the miner waits for that battery electric tech to evolve, Hopeward said BHP and other miners had superior options available to reduce their overall carbon footprint.

“To offset that carbon through environmentally beneficial activities like large scale revegetation … should certainly be in the mix of how we make this transition,” he said.

“We genuinely then reduce net carbon emissions while also having a positive impact on biodiversity and then transitioning, when the technology allows it, to an electric future.”

How have BHP shares been performing?

As you can see in the chart below, BHP shares are now trading right about where they started 2023.

Longer term, shares in the ASX 200 miner are up 56% over five years.

The post ‘Not sure if that’s the way we should go’: Why BHP shares are making news today appeared first on The Motley Fool Australia.

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More reading

• How to make $50,000 of retirement income with ASX shares
• How to generate $20k of passive income from BHP shares
• Here’s how I would secure monthly dividends in the 2024 financial year with these ASX stocks
• Why is the BHP share price taking a flogging on Friday?
• Here’s the BHP dividend forecast through to 2025

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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