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Analysts at Macquarie are not a fan of the valuations of the large S&P/ASX 200 Index (ASX: XJO) bank shares, having just given them a rating downgrade.

It may be a coincidence, but the share prices of all of the major banks are down today. The National Australia Bank Ltd (ASX: NAB) share price is down 3.5%, the Westpac Banking Corp (ASX: WBC) share price is down 4.1%, the ANZ Group Holdings Ltd (ASX: ANZ) share price is down 3.6% and the Commonwealth Bank of Australia (ASX: CBA) share price is down 1.7%.

What did Macquarie say about the ASX 200 bank shares?

Macquarie already rated CBA shares as underperform, and decided to call ANZ shares, Westpac shares and NAB shares as underperform too.

According to reporting by The Australian, the ANZ price target is now $27, NAB has a price target of $32.50, Westpac has a price target of $26 and CBA has a price target of $95.

A price target is a broker’s estimation of where a share price will be in 12 months.

Based on those numbers for the ASX 200 bank shares, ANZ shares are predicted to fall 6%, NAB shares are predicted to drop 2.3%, Westpac shares are projected to fall around 1% and CBA shares could drop 17%.

Macquarie analyst Victor German said:

Banks are trading at peak multiples without a clear fundamental reason. We downgrade all banks under coverage to Underperform.

We believe the economic and stock-specific settings that underpinned banks’ outperformance during previous rate cut cycles are not evident.

We see limited scope for banks to surprise in the medium term and hence see limited fundamental reasons for a structural re-rating.

Do ASX share deserve their higher valuation?

The broker UBS recognises that valuations are higher than they used to be, though the profit may also be higher quality. According to The Australian reporting, UBS analyst Richard Schellbach said:

Equity earnings have proved to be more secure, and of higher quality, than we had previously assumed.

Maybe investors no longer deserve, or require, the same level of compensation to take on equity risk. The reason for this is that equity earnings have shown themselves to be more dependable than we assumed.

Despite the possible higher quality of earnings, Schellbach doesn’t think we’re about to see a multi-year bull market, including for ASX 200 bank shares. He said:            

Bank PEs were under 8 times in early 1995 versus 16 times now. The reality is that the current rate hiking cycle never saw equities de-rate anywhere near to the extent which they did in 1994.

The post Buyer beware! Why Macquarie just downgraded the big four ASX 200 banks appeared first on The Motley Fool Australia.

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More reading

• Why Appen, Aussie Broadband, Core Lithium, and Westpac shares are dropping today
• How much could a $300,000 ASX share portfolio pay in dividends?
• Own Westpac shares? The bank may be looking for a new CEO
• 1 top ASX 200 dividend stock to buy now with $500
• Here is the profit forecast to 2026 for CBA shares

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 positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. 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 Sayona Mining Ltd (ASX: SYA) share price is pushing higher on Thursday.

At the time of writing, the lithium miner’s shares are up 7% to 4.4 cents.

This follows the release of the company’s half-year results this afternoon.

Sayona Mining share price higher despite loss

• Revenue of $118 million
• Underlying EBITDA of $9 million
• Loss after tax of $32 million
• Cash from operations of $8 million
• Cash balance of $158 million

What happened during the half?

For the six months ended 31 December, Sayona Mining reported maiden half-year revenue of $118 million. This reflects an average realised price of $1,640 per tonne and shipments of 72,152 dmt delivered to offtake and international customers.

Sayona Mining achieved its production with a unit operating cost of $1,286 per tonne. This ultimately led to the company generating underlying EBITDA of $9 million for the period.

However, it couldn’t stop the company from recording a $32 million loss after tax for the six months. This includes non-cash adjustments of $25 million for write down of inventories to net realisable value and $5 million write-off of capitalised project costs.

Nevertheless, the company ended the period with a hefty cash balance of $158 million.

Management commentary

Sayona Mining’s executive director and interim CEO, James Brown, said:

Sayona reached a significant milestone in the first half of the 2024 financial year as we generated first revenues following the commencement of shipments of spodumene concentrate from NAL in August 2023. In total, NAL shipped five cargoes of product this half, totalling 72.2 kt of spodumene concentrate.

Sayona is focused on continuing to ramp up production and optimise unit production costs at NAL. We are also taking important steps to streamline operations, conserve cash, deliver production efficiencies and preserve the value in our assets. We are confident that these initiatives will enable NAL to continue to produce lithium through the cycle and set the foundation for growth, delivering increased value for shareholders.

No guidance has been provided for the second half.

The post Sayona Mining share price jumps despite $32m half-year loss appeared first on The Motley Fool Australia.

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More reading

• Why are short sellers shifting into ASX blue chips and out of lithium losers?
• These are the 10 most shorted ASX shares
• Could the big short of ASX lithium stocks be nearing its end?
• Why are ASX lithium shares like Pilbara Minerals crashing on Tuesday?
• Guess which 4 shares are being dumped from the ASX 200 index

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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The ASX telecommunications space has been abuzz with rumours in recent days. And these rumours seem to be bleeding into ASX telo shares like Telstra Group Ltd (ASX: TLS).

As first reported by the Australian Financial Review (AFR), there are rumours that the Singaporean telco giant Singapore Telecommunications (Singtel) is considering offloading Optus. Optus is an Australian telco brand, but is wholly owned by Singtel.

The initial AFR report claimed that “Singtel is Singtel is in advanced discussions to sell Optus, Australia’s second-largest telecommunications group, to Toronto-headquartered private equity giant Brookfield in what would be a blockbuster deal worth some $16 billion”.

Following the release of this report, Singtel has attempted to pour a little cold water over these rumours. In an official stock market release, the Singapore telco stated the following:

There is no impending deal to offload Optus for the said sum, as reported [by the AFR]. Optus remains an integral and strategic part of the Singtel Group and we are committed to Australia for the long term…

Our current focus has been on improving network resilience and conducting a CEO search. That said, we regularly conduct strategic reviews of our portfolio to optimise the value of our assets and businesses and will explore all options to maximise shareholder value.

So no sale, at least for now (note that the company did leave the metaphorical door open a crack).

But what would a sale of Optus mean for other ASX telco shares like Telstra?

How would an Optus sale impact Telstra shares?

Well, it’s difficult to say.

For one, any potential buyer would need to satisfy regulators and the like.

But let’s assume they do. If Singtel did eventually offload Optus, what happens next will probably depend on the buyer.

If whoever buys Optus decides to invest a significant chunk of change towards expanding Optus’ mobile network, or towards increasing its market share by reducing prices, it could well have a massive impact on other telcos like Telstra.

Fierce competition in this space has occurred before and has resulted in lower profits across the board. If any new Optus owner decided to dramatically undercut Telstra and other telcos like TPG Telecom Ltd (ASX: TPG), we could see this happen again.

However, as a Telstra shareholder myself, I’m not too worried. Since its privatisation in the 1990s, Telstra has easily maintained its dominant role as the number one player in the Australian telco space. Its mobile network is simply far superior to that of any competitors.

Even if a new Optus owner threw money at expanding Optus’ network, I doubt whether it could overcome Telstra’s dominance, at least in the foreseeable future.

Optus is also struggling with its brand in the wake of the severe outage crisis we saw late last year. This resulted in the then-Optus CEO Kelly Bayer Rosmarin’s resignation.

In 2022, Optus also took a hit to its reputation thanks to a major cyberattack.

I think the damage to Optus’ reputation from these crises will take a long time for any new buyer to fix.

So all in all, as a Telstra shareholder, I’m not worried about any potential new owners of Optus. But it will be interesting to see if Optus does indeed depart from the Singtel stable, and what plans any new owner might have for the telco.

The post What might an Optus sale mean for Telstra shares? appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• Here’s why this broker just upgraded Telstra shares
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• Long-term investing: 3 top ASX stocks you can buy for under $20 a share

Motley Fool contributor Sebastian Bowen has positions in Telstra Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brookfield Asset Management. The Motley Fool Australia has positions in and has recommended Telstra Group. 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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Core Lithium Ltd (ASX: CXO) shares are deep in the red today.

Once more.

Shares in the S&P/ASX 200 Index (ASX: XJO) lithium stock closed yesterday trading for 20 cents. In afternoon trade on Thursday, shares are swapping hands for 19 cents apiece, down 5.0%.

For some context, the ASX 200 is down 0.1% at this same time.

As you can see on the five-year above chart, it’s been a very tough year for shareholders, with Core Lithium shares down 78% in 12 months.

And the ASX 200 lithium miner has crashed 89% since 11 November 2022, when shares were trading for $1.67.

With those painful losses already booked, the question now is whether the lithium miner has reached a bottom, or is it time to cut and run.

What now for battered Core Lithium shares?

The biggest headwind battering Core Lithium shares has been a massive fall in lithium prices.

The price of the battery critical metal reached all-time highs in November 2022 amid booming demand and limited supply. As more supply hit the markets in 2023 and demand growth slowed, the lithium price crashed by 80%.

Core isn’t the only ASX 200 miner to have come under selling pressure amid that massive price retrace. But the company’s share price losses over the past year have far exceeded those of its competitors.

And 2024 has thrown up more obstacles to any kind of rapid recovery.

On 5 January, management reported that the company would suspend all mining activity to preserve cash. And Core Lithium shares closed the day down 11.5%.

At the time, CEO Gareth Manderson said, “The team has moved at pace to ensure Core’s value is preserved in these tough market conditions.”

He added, “We are working to put the business in the best position possible to recommence mining and proceed with BP33 [underground mine development] when market conditions improve.”

Unfortunately for the company and its shareholders, improving market conditions could be some time away as global lithium supply growth continues to outpace demand growth over the medium term.

As for the most recent half-year report, that did little to lift my confidence in the near to medium-term outlook for the ASX 200 miner.

Core reported revenue of $135 million, but earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at a loss of $12 million. And the company posted an after tax loss for the six months of $168 million.

Topping off investor concerns, it was announced that Gareth Manderson was stepping down as CEO.

Goldman rates the ASX 200 lithium stock a ‘sell’

All up, I have to agree with the analysts at Goldman Sachs who rate the ASX 200 lithium stock as a ‘sell‘.

The broker has a 13 cent target price for Core Lithium shares, representing a potential additional 32% downside from current levels.

According to Goldman Sachs (courtesy of CommSec):

Following the suspension of mining in Jan-24, CXO announced mutual termination of the mining services agreement with Lucas in Feb-24.

Subsequently, CXO has also advised Primero that the operation and maintenance agreement for the DMS plant would end once the processing of the remaining ROM [Run of Mine] stocks is completed in mid-2024.

While CXO is restructuring its business in response to the decrease in the spodumene price, we note that with the mining contract terminated and notice given on the processing contract, we expect that a near-term restart of the Finniss operation is increasingly unlikely.

Core Lithium shares may well rebound down the road when the supply and demand dynamics come back into better balance in global lithium markets.

But for now, I’d cut and run.

The post Core Lithium shares: Is it time to cut and run? appeared first on The Motley Fool Australia.

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More reading

• Why Appen, Aussie Broadband, Core Lithium, and Westpac shares are dropping today
• 5 things to watch on the ASX 200 on Thursday
• Why Core Lithium, Jupiter Mines, Newmont, and Perpetual shares are dropping today
• Core Lithium shares crash 9% after posting massive half-year loss
• 5 things to watch on the ASX 200 on Wednesday

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 Goldman Sachs Group. 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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Vulcan Energy Resources Ltd (ASX: VUL) shares are rising again on Thursday.

In afternoon trade, the ASX 300 lithium stock is up 9% to $3.32.

This means that its shares are up 64% since this time last month.

Why is this ASX 300 lithium stock surging?

Investors have been scrambling to buy Vulcan Energy’s shares since the release of a big announcement in February relating to its Zero Carbon Lithium Project in Germany.

That announcement revealed that Vulcan’s Phase One project appears potentially suitable for European Investment Bank (EIB) financing. As a result, the project has advanced to the “Under Appraisal” stage.

Much like recent funding packages that have been announced for Arafura Rare Earths Ltd (ASX: ARU) and Liontown Resources Ltd (ASX: LTR), this will potentially be a significant cash injection.

The ASX 300 lithium stock advised that the proposed financing could amount to up to 500 million euros (~A$825 million), pending the completion of due diligence, credit approval and legal agreement, and subject to EIB’s governing bodies approval.

In response, Vulcan’s CEO, Cris Moreno, said:

We welcome the support of the EIB. This is a strong and tangible signal of confidence at the European level for the Zero Carbon Lithium Project, and of its capability to enable a secure, domestic lithium supply chain for electric vehicle batteries for Europe. This progression in EIB’s financial appraisal is a positive step forward in the sequence of our debt and project level equity financing for Phase One of the Project, which is anticipated to create millions of tonnes of carbon avoidance in the EV supply chain in the years to come.

Should you buy Vulcan shares?

Unfortunately, this ASX 300 stock isn’t covered by any of the major brokers.

But one broker that does cover the company is Alster Research in Germany. While it hasn’t released a note for a few months, it currently has a buy rating on its Frankfurt-listed shares with a price target of 12 euros. This is almost six times greater than its current share price 2.02 euros.

However, investors may want to take such a price target with a pinch of salt right now. Particularly given that for its “base case scenario, revenues are based on an average sales price at USD 25.00 thousand/ton of lithium hydroxide.” This compares to the latest spot price of US$9,658 per tonne for lithium hydroxide in China.

The post Guess which ASX 300 lithium stock is up 64% in a month appeared first on The Motley Fool Australia.

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More reading

• Why are Core Lithium shares jumping 12% on Friday?
• Why Aussie Broadband, Australian Ethical, Jumbo, and Vulcan are racing higher
• This ASX lithium share is charging 13% higher on $825m financing update

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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Arafura Resources Limited (ASX: ARU) shares came out of a trading halt and shot 60% higher on Thursday afternoon to 24 cents apiece.

The share price skyrocketing comes on the back of news the Federal Government has conditionally approved a US$533 million debt finance package to support Arafura’s flagship project.

That’s the Nolans Neodymium-Praseodymium (NdPr) Project in the Northern Territory. NdPr is used in electric vehicles (EVs).

Arafura shares have since slipped slightly to 22 cents per share, up 49.66% for the day.

The ASX rare earths developer returned to trading shortly after it released a statement to the market.

Let’s review the details.

Arafura shares on fire amid massive government support

The debt finance package includes a US$125 million limited-recourse senior debt facility made available through the A$4 billion Critical Minerals Facility (CMF), which is administered by Export Finance Australia (EFA).

There’s also A$150 million in limited-recourse senior debt facilities from the Northern Australia Infrastructure Facility (NAIF). Both facilities have a 15-year tenor.

EFA will also provide a subordinated Standby Liquidity Facility (SLF) of up to US$200 million under the CMF to help manage any increases in capital expenditure and operating costs during the project’s ramp-up.

EFA also has conditional approval to provide further funding of up to US$75 million on its Commercial Account to participate in the ECA-covered tranches and Cost Overrun Facility (COF).

NAIF has agreed to provide additional funding of up to A$50 million via a proportion of the COF.

Company says more funding to come

Arafura said the government support was part of a broader financing package it has been seeking.

The company says it currently has indicative interest from international and commercial financiers for a further US$550 million of senior debt facilities.

Biggest critical minerals investment to date

As we reported earlier today, this is the Labor Government’s largest single financial commitment in the critical minerals sector.

It brings taxpayers’ exposure to rare earths mining and processing to more than $2 billion.

Previously, the government has supported the development of the Eneabba project owned by Iluka Resources Limited (ASX: ILU) in Western Australia.

Arafura share price snapshot

Arafura shares have fallen 59.5% over the past year.

By comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) has increased by 10.9%.

The post Arafura shares rocket 60% on return to trading after major funding news appeared first on The Motley Fool Australia.

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More reading

• Why Arafura, Bubs, Clinuvel, and Superloop shares are racing higher today
• Arafura share price halted ahead of blockbuster funding news

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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a small decline. At the time of writing, the benchmark index is down slightly to 7,727.5 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Appen Ltd (ASX: APX)

The Appen share price is down 20% to 78 cents. Investors have been hitting the sell button today after the artificial intelligence data services company revealed that its takeover talks are over. Its suitor, Innodata Inc (NASDAQ: INOD), appears upset that news of its offer was leaked to the investment community. It told Appen that it was withdrawing the indicative proposal on the basis that it was intended to remain confidential.

Aussie Broadband Ltd (ASX: ABB)

The Aussie Broadband share price is down 17% to $3.58. This has been driven by news that its white label agreement with Origin Energy Ltd (ASX: ORG) has been terminated. Aussie Broadband revealed that the terms that Origin was seeking were not workable and wouldn’t have delivered value for shareholders.

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is down 4% to 19.2 cents. Investors have been selling the lithium miner’s shares since the release of its half-year results. Core Lithium reported revenue of $134.8 million and a loss after tax of $167.6 million. In response to the result, Citi has reaffirmed its sell rating with a reduced price target of just 11 cents.

Westpac Banking Corp (ASX: WBC)

The Westpac share price is down 3% to $26.57. This appears to have been driven by a broker note out of Macquarie this morning. Its analysts have called time on the banking sector rally and put the equivalent of sell ratings on all of the big four banks. Westpac is now rated as underperform with a $26.00 price target.

The post Why Appen, Aussie Broadband, Core Lithium, and Westpac shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• Why Arafura, Bubs, Clinuvel, and Superloop shares are racing higher today
• Why are Superloop shares jumping 34% and Aussie Broadband shares sinking 25%?
• Appen shares plunges 17% after takeover collapse
• Own Westpac shares? The bank may be looking for a new CEO
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen and Aussie Broadband. The Motley Fool Australia has recommended Aussie Broadband. 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) is having a subdued session on Thursday. In afternoon trade, the benchmark index is down 0.2% to 7,715.8 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are rising:

Arafura Rare Earths Ltd (ASX: ARU)

The Arafura share price is up 56% to 23 cents. Investors have been buying this rare earths developer’s shares after it announced that the Commonwealth Government has conditionally approved a US$533 million debt finance package to support the Nolans Project in the Northern Territory.

Bubs Australia Ltd (ASX: BUB)

The Bubs share price is up 7.5% to 14.5 cents. This is despite there being no news out of the infant formula company. Though, it is worth highlighting that Bubs has reported two instances of insider buying this month from its CEO. In total, Bubs CEO Reg Weine has bought a total of 250,000 shares through on-market trades for an average of 12 cents per share.

Clinuvel Pharmaceuticals Limited (ASX: CUV)

The Clinuvel share price is up 10% to $14.59. This morning, this biopharmaceuticals company announced an on-market share buyback. Clinuvel will aim to buy back up to 1.5 million shares over the next 12 months, which equates to approximately 3% of its outstanding share capital. This reflects its view that the recent decline of market valuation is no longer commensurate with the performance and expected outlook for the company.

Superloop Ltd (ASX: SLC)

The Superloop share price is up 23% to $1.29. This follows news that the telco has won a major wholesale contract with Origin Energy Ltd (ASX: ORG). It is an exclusive six-year contract that will see the migration of Origin’s broadband customer accounts, currently 130,000, onto Superloop’s network. The transition of Origin’s current subscriber base is expected to occur during FY 2025.

The post Why Arafura, Bubs, Clinuvel, and Superloop shares are racing higher today appeared first on The Motley Fool Australia.

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More reading

• Why are Superloop shares jumping 34% and Aussie Broadband shares sinking 25%?
• Arafura share price halted ahead of blockbuster funding news
• Long-term investing: 3 top ASX stocks you can buy for under $20 a share
• Key takeouts for ASX shares this earnings season: CBA analysis
• Passive income watch: The ASX stocks dishing out the biggest dividend boosts this earnings season

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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It can be useful for investors to keep an eye on which ASX 300 shares have experienced meaningful insider buying.

This is because insider buying is often regarded as a bullish indicator, as few people know a company and its intrinsic value better than its own directors.

If they are buying, it suggests that they are confident in the direction the company is heading. After all, if they thought things were going badly, they wouldn’t be buying.

With that in mind, listed below are a couple of ASX 300 shares that have reported meaningful insider buying recently. They are as follows:

Dicker Data Ltd (ASX: DDR)

This wholesale distributor has reported more insider buying this week.

According to a change of director’s interest notice, the company’s chief operating officer Vladimir Mitnovetski has been topping up his holding. He bought 5,000 shares through an on-market trade on 11 March for an average of $10.70 per share. This equates to a total consideration of $53,500.

Another notice reveals that its director Ian Welch snapped up 7,000 shares on the same day for a total consideration of $76,550. This equates to an average price of $10.94 per share.

The Dicker Data share price is currently trading at $10.98.

Evolution Mining Ltd (ASX: EVN)

Another ASX 300 share that has reported some insider buying is gold miner Evolution Mining.

A change of director’s interest notice reveals that its non-executive director Jason Attew bought 10,935 shares through an on-market trade on 11 March.

Attew paid an average of $3.30 per share for this parcel of shares, which equates to a total consideration of $36,085.50.

Investors can buy in at a similar price today. In afternoon trade, the Evolution Mining share price is trading at $3.38.

The post Insiders have been buying these ASX 300 shares this week appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• $200 million sell-down among ASX 300 insider sales and purchases over past week
• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Friday
• Why Life360, Evolution Mining, Magnetic Mining, and Zip shares are rising today

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 positions in and has recommended Dicker Data. The Motley Fool Australia has positions in and has recommended Dicker Data. 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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Cettire Ltd (ASX: CTT) shares have certainly taken investors on a bit of a roller coaster in recent years.

The swings and roundabouts of this ASX online luxury retail stock’s share price have become almost legendary on the stock market.

After all, this is a company that rose more than 700% in 2021, only to drop more than 90% at one point in 2022.

Its more recent share price performance has had a decidedly positive tilt though. Between 16 January and 16 February this year, Cettire shares have recorded an astonishing spike of more than 90%. This was spurred by an explosive earnings report that Cettire delivered on 7 February.

But then, last week, we saw the company slump 6% after news that Cettire founder and CEO Dean Mintz sold $127 million worth of shares became public. Just two days later, the company crashed by 27% following a media report that alleged its pricing didn’t include hefty customs duties.

However, following clarification from Cettire, its sales have begun to recover.

In the past two trading days alone, Cettire has gained a rosy 3.8% or so.

Perhaps news that a major ASX fund manager has piled into Cettire has boosted the company’s share price.

ASX fund manager piles into Cettire shares

Wilson Asset Management (WAM) is the fund manager behind popular listed investment companies (LICs) like WAM Capital Ltd (ASX: WAM).

We already knew that at least one WAM LIC owned Cettire shares, thanks to updates from WAM Microcap Ltd (ASX: WMI).

But according to a recent WAM webinar, the fund manager’s flagship WAM Capital LIC has also been piling in. Oberg did disclose that WAM funds had been selling Cettire shares following the company’s well-received earnings report last month.

At the time these earnings came out, Cettire shares rocketed more than 40% at one point, which reportedly prompted WAM to begin selling off some shares.

However, the fund managers changed their tune following the company’s subsequent share price dip.

WAM Capital manager Oscar Oberg stated in the webinar that:

When the article [regarding the customs duties] came out, we knew the stock was going to fall a lot… so we took the liberty to buy more stock, and we’ve been buying more stock every day since.

So this effectively means that at least one WAM fund has been buying Cettire shares nonstop for over a week.

No doubt WAM investors will be thankful that their manager has been ‘buying low’ and ‘selling high’. Let’s see if their conviction is rewarded going forward.

The post Why this ASX fund manager can’t stop buying Cettire shares appeared first on The Motley Fool Australia.

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More reading

• Why Cettire, GQG, Mesoblast, and Nine Entertainment shares are falling today
• Cettire shares recover after morning meltdown: What’s happening?
• Why Accent, Cettire, Dicker Data, and Iress shares are dropping today
• Why is the Cettire share price crashing 27% on Wednesday?
• Why Cettire, Fletcher Building, Lake Resources, and Nick Scali shares are falling today

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Cettire. 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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