Tag: Motley Fool

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.

The volatile and unpredictable cryptocurrency market has certainly made some bold and lucky investors rich, but it has caused some to lose a lot of money, too. That’s the nature of an industry that is fraught with uncertain regulations, outright scams, and the potential to upend entire industries. 

Despite the market’s troubles in 2022, investors might be looking to put some money to work while digital asset prices are down. One that stands out is Cardano (CRYPTO: ADA), which has fallen a whopping 73% this year (as of this writing). Should investors add ADA, Cardano’s native token, to their portfolios right now on the dip? 

Cautious development process 

Created in late 2017 by Ethereum co-founder Charles Hoskinson, Cardano is an innovative cryptocurrency that is often dubbed an “Ethereum killer.” That’s because Cardano tries to improve around the issue of scalability, which Ethereum lacked before The Merge upgrade. Investors seem to appreciate this focus, as Cardano has produced a monster return of 1,500% in the roughly five years it’s existed. And it is currently the eighth most valuable crypto in the world, with a market cap of $12 billion. 

Cardano is unique from other cryptos in that the development process can be characterized as slow and steady. Updates are researched thoroughly and peer-reviewed before being implemented, a process that definitely adds time but can improve the blockchain’s growth by ensuring mistakes are minimized. 

Right now, Cardano is undergoing the fourth phase, known as Basho, which works on scaling solutions. The fifth and final phase, called Voltaire, will introduce governance functions to the network, making Cardano fully self-sustaining. And recently, Cardano underwent the Vasil hard fork, an upgrade designed to boost transaction speeds while attracting more developers to the ecosystem. 

It’s nice to see cryptocurrencies continue to find ways to improve their networks to gain greater adoption over time. All of this activity bodes well for the future of Cardano. 

Where’s the utility? 

Despite being known mainly as a tool for financial speculation, I do believe that cryptocurrencies and blockchain technology have a future. But what matters to a particular cryptocurrency’s long-term viability is its potential to create real-world use cases. And Cardano looks promising in this department. Enterprise solutions like client onboarding in financial services and supply chain tracking for agricultural businesses are two areas in which Cardano’s technology can make a positive impact. 

What’s more, an exciting layer-2 solution, known as Hydra, could provide a major boost to the throughput of Cardano’s blockchain. Each “Hydra head” can process 1,000 transactions per second (TPS). With 1,000 of these running simultaneously, Cardano could process a whopping 1 million TPS. Hydra is set to be released by early 2023. 

The possibility of improved speed and scalability makes Cardano a potential disruptor in the world of decentralized finance (DeFi), challenging the dominance of Ethereum and Solana. According to DefiLlama, the total value locked on Cardano’s network, which measures the amount of money being held in various applications, was just $58 million, compared to $26 billion for Ethereum.

The planned launch of an algorithmic stablecoin called Djed provides another important catalyst for Cardano in the near term. Djed can be used to provide liquidity to certain DeFi protocols and can compete with popular stablecoins like Tether and USD Coin. 

The price of one ADA, Cardano’s native token, is just over $0.34 as of this writing. As the network continues its thoughtful and deliberate development process and finds ways to implement utility in various industries, its price could rise over time. And that might be enough of a reason for investors to allocate a small percentage of their portfolios to Cardano. 

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

The post Is Cardano going to make you richer? appeared first on The Motley Fool Australia.

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More reading

• Why Ethereum, Bitcoin, and Cardano are rocketing higher today

Neil Patel has positions in Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Cardano, Ethereum, and Solana. The Motley Fool Australia owns and has recommended Ethereum and Solana. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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The Pilbara Minerals Ltd (ASX: PLS) share price is among the S&P/ASX 200 Index (ASX: XJO)’s biggest success stories of this year so far.

The lithium producer’s stock has gained a whopping 55% year to date, outperforming the index by more than 60% in that time. Right now, the Pilbara Minerals share price has edged lower to $5.40 after hitting an intraday high of $5.60 earlier today.

With such a meteoric rise under its belt, market watchers might be forgiven for thinking they’ve missed the boat.

But one fundie disagrees. Let’s take a closer look at what Kardinia Capital portfolio manager Kristiaan Rehder likes about the lithium giant.

Is the Pilbara Minerals share price still cheap?

Rehder has picked Pilbara Minerals shares as a future winner, writing via Livewire that the stock offers “high-quality exposure to the green energy transition” and “attractive multiples”.

The company operates the Pilgangoora Project and a portfolio of exploration projects, all of which are located in Western Australia.

Its earnings have surged this year alongside lithium prices.

Pilbara Minerals posted its maiden profit in August, coming in at nearly $562 million. More recently, the company revealed its cash balance jumped $783.7 million over the first quarter of the 2023 financial year.

Rehder writes:

The company now sits on a cash balance of $1.4 billion and appears fully funded for all announced growth plans, which include spodumene plant expansions and a downstream joint venture with POSCO in South Korea to produce higher margin lithium hydroxide product.

Additionally, the fundie noted Pilbara Minerals shares still look notably cheap.

The stock trades with a price-to-earnings (P/E) ratio of around 8 times the forecasted financial year 2023 earnings. And that’s considering its whopping year-to-date gains.

That measure was explored by my Fool colleague Tristan last week. As he reported, the ratio does indeed make the Pilbara Minerals share price appear extraordinarily cheap.

However, its earnings are almost entirely dependent on the price of lithium. Thus, a fall in the battery-making material’s value would likely dent its bottom line and, in turn, its valuation.

The post Up 55% in 2022, why the Pilbara Minerals share price ‘still trades at attractive multiples’: fundie appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper 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 Westpac Banking Corp (ASX: WBC) share price has started the week in the red.

In afternoon trade, the banking giant’s shares are down almost 1% to $23.86.

Is the Westpac share price good value?

One leading broker that is likely to see today’s weakness as a buying opportunity is Goldman Sachs.

Last week, the broker retained its conviction buy rating with an improved price target of $27.60.

Based on the current Westpac share price, this implies a potential return of almost 16% for investors over the next 12 months before dividends. And including the ~6.2% dividend yield the broker is forecasting in FY 2023, the total potential return increases to over 22%.

Three reasons to buy the bank’s shares

There are three key reasons why Goldman believes the Westpac share price is great value at the current level.

These are the net interest margin (NIM) trajectory of Australia’s oldest bank, its cost reduction target, and its attractive valuation. The broker explained:

We remain Buy (on CL) rated on WBC given: i) while on the surface, the FY22 result suggested WBC’s NIM leverage was underwhelming relative to some peers, we think 2H22 was adversely impacted by late-in-the-half liquidity build, and management’s guidance on its FY23 NIM trajectory was better than we had previously anticipated, ii) despite WBC revising its FY24E cost target to A$8.6 bn (from A$8.0 bn), the bank’s performance on cost management remains strong in this inflationary environment with a 9% step down in costs expected over the next two years, and iii) the stock is trading at a 22% 12-month forward PER discount to peers (ex-dividend adjusted; historically has traded at a 2% discount), and our revised TP of A$27.60 offers 25% [now ~22%] TSR.

The post 3 reasons the Westpac share price is great value: Goldman Sachs appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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 Westpac Banking Corporation. 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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I think some ASX dividend shares have the potential to deliver solid shareholder returns in the coming years.

If a business pays a decent dividend then that ticks the investment income box.

But I’m also looking for companies with growth plans that can deliver growth and help drive the underlying value of the business from today’s lower levels.

The volatility that the ASX share market has seen this year has given us the potential to buy many companies at a cheaper price. If the price of something drops 50% and then returns to its previous level, that represents a rise of 100%.

Here are some ASX dividend share ideas that I think could double in seven years and pay income along the way.

Baby Bunting Group Ltd (ASX: BBN)

Baby Bunting is the country’s largest retailer of products for babies and their families. It sells things like prams, car seats, clothes, furniture, toys and more.

It has a national network of stores in Australia. One of the main reasons I think that it can deliver a lot of growth is because it plans to grow its store network from 65 to 110 stores in Australia, as well as at least 10 in New Zealand.

Adding scale can help Baby Bunting grow its profit margins. It’s also selling more private label and exclusive products, which come with a higher gross profit margin. In addition, the company can grow its online sales.

The company is also increasing its addressable market, meaning it will sell more products a child may need.

The Baby Bunting share price has dropped 55% in 2022, so I think it’s a very good, contrarian time to look at the business.

According to Commsec, it could pay a grossed-up dividend yield of 9.3% in FY24.

Accent Group Ltd (ASX: AX1)

Accent is one of the largest shoe retailers in Australia. It is the distributor for a number of popular brands such as CAT, Skechers and Vans. It also owns some brands like Glue Store and The Athlete’s Foot.

I think this ASX dividend share is one of the most promising retailers. It’s also growing its store network at a pleasing pace. In FY18, it was operating 446 stores. By FY22, that number has climbed to 762 stores. In FY23, it’s targeting 812 stores. I think this number can keep growing.

The company is growing sales of the brands it owns, which comes with a higher profit margin. Scale can also help increase profit margins for the business. There is also a long-term trend of the business growing its online sales.

If the ASX dividend share can keep growing its scale, adding strong brands to its portfolio and increasing profit, then it’s on course for an attractive future.

At the current Accent share price, the company could pay a grossed-up dividend yield of 9.6% in FY24, according to Commsec. That looks like good value after dropping almost 34% in 2022.

Bailador Technology Investments Ltd (ASX: BTI)

Bailador is a company that invests in technology businesses. It has a portfolio of investments spread across different sectors, including healthcare and e-commerce.

It starts out looking for companies run by their founders that have been in operation for two to six years. They must have a “proven business model with attractive unit economics”, international revenue generation, a “huge market opportunity”, and the ability to generate repeat revenue.

Two of Bailador’s long-term investments have listed on the ASX: Straker Translations Ltd (ASX: STG) and Siteminder Ltd (ASX: SDR), in which it still owns stakes.

Bailador says that it targets a 4% dividend yield of its pre-tax net tangible assets (NTA). At 30 September 2022, the NTA was $1.75 – 4% of this is 7 cents per share.

However, because the Bailador share price last traded at $1.28 (a 27% discount to the NTA), the current grossed-up dividend yield on the current NTA would be 7.8%.

The post Why I think these ASX dividend shares can double in 7 years AND pay income along the way appeared first on The Motley Fool Australia.

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More reading

• Goldman Sachs names the ASX retail shares to buy in the current environment
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• Analysts say these ASX dividend shares are buys

Motley Fool contributor Tristan Harrison has positions in Bailador Technology Investments Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bailador Technology Investments Limited and SiteMinder Limited. The Motley Fool Australia has recommended Accent Group, Baby Bunting, Bailador Technology Investments Limited, and Straker Translations. 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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$300 is a share price value that investors of CSL Limited (ASX: CSL) have seen before. Quite a few times actually. CSL shares first cracked the $300 mark way back in 2019. The healthcare giant even rose as high as $340 a share in February 2020.

But ever since, the CSL share price could be described as being stuck in the mud. The company is presently trading at $287.35 a share at the time of writing, the same pricing it was trading at in May 2020. The company has spiked above $300 a share a few times, most recently back in September this year.

But it never seems to last long. Today, the CSL share price remains down by 2.84% in the year to date. It’s also lost just over 7% over the past 12 months.

So could the remainder of 2022 finally see CSL shares crack the $300 mark and stay there?

Is the CSL share price heading back to $300?

Well, Rob Crookston, equity strategist at ASX broker Wilsons, thinks so.

In a recent memo, Crookston cited CSL as one of the ASX healthcare shares Wilsons is holding at the moment.

The broker has a 12-month share price target of $318.33 on CSL right now, implying a potential upside of close to 11% over the next year.

Crookston points to a forecasted compounded earnings growth of 19% that the broker reckons CSL will be able to achieve over the next three years as justification for this share price target.

The broker also likes CSL’s potential in the plasma collection market, which has just exceeded pre-COVID levels. It also points to the “supply-constrained market” and higher collection capacity for CSL’s immunoglobulin blood products.

So no doubt shareholders will welcome this bullish assessment on CSL shares’ immediate future. But we shall have to wait and see if CSL can indeed break the $300 share price market this year. With only six weeks or so of 2022 left, time is running out.

The post Can the CSL share price crack $300 before the year’s out? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. 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 Invictus Energy Ltd (ASX: IVZ) share price is having another stunning day.

At the time of writing, the energy exploration company’s shares are up 58% to 38 cents.

This means the Invictus Energy share price is now up almost 250% since last Wednesday.

Why is the Invictus Energy share price rocketing higher again?

Investors have been scrambling to buy shares again on Monday after the company released another promising update relating to the Mukuyu-1 well in Zimbabwe’s Cabora Bassa Basin.

Last week, the company revealed that elevated mud gas peaks (up to 65 times above background gas baseline) were observed while drilling through a depth of 3,070 metres measured depth (mMD) with marked increases from C1 to C5 compounds (methane, ethane, propane, butanes and pentanes).

According to today’s release, drilling activities have continued to a depth of 3,618 mMD. Pleasingly, multiple zones were encountered with fluorescence and elevated gas shows (up to 135 times above background levels) in the Upper Angwa primary target.

In light of this, a working conventional hydrocarbon system has been confirmed in Cabora Bassa Basin. Management is now preparing to run wireline logging tools to evaluate multiple zones of interest.

‘Further encouraging signs’

Invictus Energy’s managing director, Scott Macmillan, commented:

We have had further encouraging signs from the Mukuyu-1 well since drilling recommenced with multiple zones encountering elevated gas shows and fluorescence in our Upper Angwa primary target. The evidence of hydrocarbon charge throughout the Upper Angwa reservoir intervals provides further validation of our subsurface model and the presence of a conventional working hydrocarbon system in the Cabora Bassa Basin.

We have continued to observe elevated gas shows and fluorescence through multiple reservoir intervals in the Upper Angwa until TD [total depth] was called, and we will now acquire the necessary wireline data whilst the borehole conditions are still conducive in order to evaluate the zones of interest observed to date.

The post Invictus Energy share price rockets again, up almost 250% in under a week appeared first on The Motley Fool Australia.

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• Guess which ASX energy share is rocketing 150% on an ‘exciting development’

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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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.

There’s a reason so many investors want to own Warren Buffett stocks.

The so-called Oracle of Omaha has trounced the market in his long history an investor. Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has nearly doubled the annual return of the S&P 500 for nearly 60 years, and thanks to the magic of compounding, that means Berkshire has returned more than 100 times what the S&P 500 has in that time frame.

Luckily, for investors, Warren Buffett’s playbook is wide open, and he’s made it clear what kinds of stocks he favors. Here are five simple questions to ask to determine if a stock would get the Buffett stamp of approval.

1. Does it have an economic moat?

Buffett’s favorite concept in all of investing may be the “economic moat,” or what most investors call a sustainable competitive advantage. Buffett once said, “The most important thing [is] trying to find a business with a wide and long-lasting moat around it, protecting a terrific economic castle with an honest lord in charge of the castle.”

As he alludes to in that statement, this key attribute protects the company from competitors. Buffett likes stocks with well-known brands such as Coca-Cola or Apple; companies with limited competition and barriers to entry, like the railroad BNSF that he acquired a decade ago; or companies with strong market share and recurring revenue, like GEICO.

If you want to know if it’s a Buffett stock, ask yourself if the company can withstand competition over a long period of time.

2. Does it produce cash?

Buffett doesn’t generally waste his time with unprofitable growth stocks. He looks for companies that generate cash. 

Buffett likes to own businesses like insurers that produce cash in premiums that come in advance of claims. He refers to this as a “float” that allows him to reinvest that cash in stocks. He also likes sectors such as energy (for example, Chevron stock), which generate high levels of cash flow when oil prices rise. Buffett’s a fan of banks and financial companies like Bank of America and American Express that have reliable profit generation from commercial lending, and he’s known to invest in utilities and healthcare, which tend to generate steady cash flows.

What you’ll find among almost every Buffett stock is that they produce reliable cash flow, and many of them pay a dividend. 

3. Does it have a long track record? 

Warren Buffett doesn’t generally chase the latest trends whether they be dot-com stocks in the 1990s or cloud software stocks more recently.

Instead, he prefers to own companies with long track records and operating histories. Often, he’s studied these companies for years, or is well-acquainted with their brands. With Coca-Cola, for example, he had seen its success for 50 years before becoming an investor. When Buffett decided to invest in tech, he bought stock in IBM, because he’d followed it for decades and understood the business. While that investment didn’t pan out, it nonetheless reflects Buffett’s approach of studying a company for a long time.

Similarly, in financials, he prefers legacy banks over fintech, because banks have proven their business models over long periods of time. Not only are they less risky, but they also generate reliable cash flow.

4. Does it outperform in bear markets?

Historically, Berkshire has best demonstrated its fortitude during bear markets. Buffett hoards cash to buy stocks when they’re cheap, and he’s known for taking advantage of sell-offs like during the financial crisis when he took a high-yielding stake in preferred stock in Bank of America. Berkshire has also outperformed the stock market by a wider margin in bear markets, including this year.

Because many of Buffett’s favorite stocks have stood the test of time, they tend to do well in bear markets, and many of his favorite industries — including consumer staples, insurance, utilities, and healthcare — are known for being recession-resistant.

Buffett doesn’t exclusively buy recession-proof stocks. He owns cyclical stocks in industries like energy, banking, and industrials, but in general, he prefers to buy stocks that can outperform in bear markets or at least have demonstrated an ability to recover from them.

5. Is it a good value?

Finally, Buffett is a classic value investor. He wants to buy stocks that are trading below their intrinsic value, which is typically estimated with a discounted cash flow model.

The quality of the company is more important to the Berkshire chief than the price. He has famously said, “It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

However, if he finds a stock he likes, he’ll only buy it if he believes it’s a good value at the current price. In the bull market during the 2010s, Buffett often lamented that stocks had become too expensive. With prices now down, it wouldn’t be surprising to see Berkshire deploying its cash hoard, which is currently worth more than $100 billion.

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

The post Is it a Warren Buffett stock or not? 5 simple questions to ask yourself appeared first on The Motley Fool Australia.

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Jeremy Bowman has no position in any of the stocks mentioned. Bank of America is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $47.50 calls on Coca-Cola, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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The Rio Tinto Limited (ASX: RIO) share price is rocketing higher today despite no news having been released by the iron ore giant.

And it’s not alone in its surge. It’s joined in the green by many of its S&P/ASX 200 Materials Index (ASX: XMJ) peers as the mining sector leads the market with a 3.43% gain.

The Rio Tinto share price is up 4.58% right now, trading at $107.335. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has lifted 0.01%.

So, what might be bolstering the iron ore giant’s share price and those of its peers on Monday? Let’s take a look.

What’s driving the Rio Tinto share price higher today?

The Rio Tinto share price is taking off again amid reports China will ease some COVID-19 restrictions.

Today’s gain follows the 4.4% leap posted by the stock on Friday amid the latest US inflation figures, finding the nation’s consumer price index lifted just 7.7% over the 12 months to 31 October.

News China will relax some of its COVID-19 restrictions broke over the weekend. The slight easing of the country’s restrictions will see close contacts quarantining for fewer days while secondary contacts will no longer be recorded, BBC News reports.

Some inbound travellers will also spend less time in quarantine under the changes and airlines will no longer face major consequences if a certain number of passengers test positive for the virus after landing, according to CNN Business.

The move doesn’t appear to represent the beginning of the end of Beijing’s strict COVID-zero measures. Indeed, restrictions were also tightened in Guangzhou over the weekend, the Associated Press reports, via PBS.

However, it might have been enough to bolster confidence in markets closely tied to China, such as iron ore. Iron ore futures lifted 2.9% to US$90.79 on Friday.

The Rio Tinto share price has gained 5% year to date and 13% over the last 12 months.

Comparatively, the ASX 200 has slumped 4% this year and 4% since this time last year.

The post Why is the Rio Tinto share price having such a cracking run on Monday? appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 mining shares going nuts on Monday?
• China’s property crash has decimated the iron ore price. So what’s the outlook for Rio Tinto shares?
• Leading brokers name 3 ASX shares to buy today
• Why are ASX 200 mining shares bolting out the gates on Monday?
• Why is the Rio Tinto share price having such a stellar start to the week?

Motley Fool contributor Brooke Cooper 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 Telix Pharmaceuticals Ltd (ASX: TLX) share price is having a volatile day.

The biopharmaceutical company’s shares were pushing higher in early trade but have now dropped into the red.

At the time of writing, the Telix share price is down 4% to $6.53.

What’s going on with the Telix share price?

The company’s shares are falling on Monday despite the announcement of a proposed acquisition.

According to the release, Telix has entered into an agreement with Sacramento-based Northern California PET Imaging Center to acquire Optimal Tracers.

Optimal Tracers is a radiochemistry development business providing radiochemistry process development services and research tracers for use in clinical trials.

Management highlights that the acquisition will bolster Telix’s in-house radiochemistry development capability, by adding a highly skilled team and establishing a U.S. based laboratory and production footprint for clinical trial doses.

Furthermore, it notes that the acquisition includes a facility with a radiation and pharmaceutical manufacturing licence that will be sufficient to cover the company’s key diagnostic and therapeutic isotope requirements for pre-clinical and clinical research purposes.

Telix will fund the acquisition from operational cash flow, with the purchase price “non-material”.

Should you buy the dip?

The team at Wilsons is likely to see the weakness in the Telix share price as a buying opportunity.

As we covered here earlier, its analysts see plenty of upside ahead for the company’s shares. Prior to today’s news, the broker had a buy rating and $8.15 price target on them, which implies potential upside of 24% for investors over the next 12 months.

Wilsons is positive on Telix due to its belief that its products offer better diagnosis and treatment opportunities. It commented:

Better diagnosis and treatment: Telix’s pipeline of products is based on molecularly-targeted radiation (MTR) employing the use of radioisotopes attached to targeting agents, which specifically bind to cancer cells. Using this technology, numerous forms of cancer are able to be precisely imaged and treated, potentially offering better-informed treatment decisions and more personalised cancer therapy.

Finally, another reason it is positive is the company’s significant market opportunity. It adds:

The company’s core prostate cancer imaging product, ILLUCIX, has an estimated Total Addressable Market (TAM) of US$1b. Our analysts estimate TLX can attain a 28% share of the PSMA-directed PET/CT market. After its first full quarter, ILLUCIX’s early commercial performance in the US has exceeded market expectations. Meanwhile, the TLX250-CDx agent (Phase III trial) has an estimated TAM of US$500m in the US.

The post Why Wilsons is tipping 24% upside for the Telix Pharmaceuticals share price appeared first on The Motley Fool Australia.

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More reading

• 3 ASX shares to buy in a sector ready to explode: expert
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Why Hub24, Sezzle, Telix, and Westpac shares are rising
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has positions in TELIXPHARM DEF SET. 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) is having a pretty pleasing start to the trading week so far this Monday. At the time of writing, the ASX 200 is in the green at around 7,160 points. But it’s ASX 200 mining shares that are really going nuts today.

Just take the BHP Group Ltd (ASX: BHP) share price. It’s currently up a whopping 5.08% at $44.23 a share at present. Shares in Rio Tinto Limited (ASX: RIO) are doing almost as well, up 4.77% at $107.53 apiece.

But it’s Fortescue Metals Group Limited (ASX: FMG) that is the clear leader. Fortescue shares have leapt an eye-watering 9.01% today so far. The iron ore giant is currently at $19.36 a share after closing at just $17.76 last Friday.

These significant gains appear to be concentrated in the iron ore sector, though. Woodside Energy Group Ltd (ASX: WDS) is doing well today. But the energy share is ‘only’ up by a far tamer 1.32% at the time of writing to $39.01 a share. After a stellar week last week, ASX gold shares are barely breaking even today.

So why are the big iron miners basking in the sun today?

Why are ASX 200 mining shares like BHP on fire today?

Well, no doubt a rising iron ore price is helping. Iron ore had a stellar end to the trading week last week, closing at US$89 per tonne, up a healthy 2.02%.

But further, we have recently seen the news that could indicate that China may finally be prepared to loosen its much-maligned ‘zero-COVID‘ policies.

According to reporting in the Australian Financial Review (AFR) over the weekend, China has just announced a relaxation of travel-related restrictions. These include reduced quarantine times for both inbound travellers and close contacts of infected persons.

It includes removing rules suspending flights if more than five passengers on board test positive for COVID. This could boost travel in and out of the country.

According to the report, financial markets have interpreted these changes as representing “a growing willingness by Beijing to reduce the economic impact of lockdowns and move towards reopening the country”.

China is, of course, one of the world’s largest consumers of iron ore, and there is little doubt that the economic sluggishness that its COVID-zero policies have caused has played a role in the weakness of the iron ore price over 2022 thus far.

Thus, it makes sense that investors are interpreting his news as good for the largest ASX 200 iron ore mining shares like BHP, Rio and Fortescue.

The post Why are ASX 200 mining shares going nuts on Monday? appeared first on The Motley Fool Australia.

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More reading

• Why is the BHP share price having such a ripper day?
• Are ASX share investors getting their mojo back?
• Fortescue share price surges 9% amid Asian green steel plans
• 4 ASX 200 shares to play the global decarbonisation theme: fund manager
• 5 things to watch on the ASX 200 on Monday

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 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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