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ASX lithium shares are getting plenty of investor attention this year.

And for good reason.

Lithium miners, be they explorers or producers, have been major beneficiaries of soaring demand for the battery critical metal amid booming global EV growth. That strong demand has sent lithium prices to all-time highs, with the Australian government forecasting further price gains for lithium into 2023.

With that said, can you guess which ASX lithium share is soaring 57% today?

If you answered Winsome Resources Ltd (ASX: WR1), go to the front of the class.

With that huge intraday boost factored in, the Winsome Resources share price is now up a whopping 123% since the closing bell last Thursday.

Why is the Winsome Resources share price surging?

The ASX lithium share began its charge higher on Friday.

That followed on the release of positive drilling results at its Adina and Cancet lithium projects, located in Canada, reporting significant pegmatite intercepts.

Winsome Resources managing director, Chris Evans said the strong results will see the miner expand its exploration program:

These early intercepts, some of which appear to be significant pegmatite intervals, continue the positive stories developing at both Cancet and Adina.

The early success in intersecting these significant pegmatites at Adina has led us to add more holes to the drill program, taking the total expected drilling well over 5,000 metres.

The ASX lithium share looks to be catching another big leg up from an update with some additional data on those drill holes, released after market close yesterday.

Winsome Resources also released a non-price-sensitive investor presentation this morning, which could be further stoking ASX investor interest.

How has this ASX lithium share been performing longer-term?

We always like to take a step back and see how a stock has been performing over the longer term. But this ASX lithium share is a relative newcomer, having listed on 30 November 2021.

Since listing, the Winsome Resources share price is up 213%. By comparison, the All Ordinaries Index (ASX: XAO) is down 5% over that same period.

The post Guess which ASX lithium share is rocketing 57% today appeared first on The Motley Fool Australia.

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More reading

• 3 ASX resources shares leaping over 15% today
• Why did this ASX mining share just rocket 40% before being halted?

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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It’s been a fairly decent day of gains so far this Wednesday for the S&P/ASX 200 Index (ASX: XJO). At the time of writing, the ASX 200 has risen by a robust 0.28%, putting it just under 7,000 points.

But it has been even better for some ASX 200 shares today. Let’s discuss three that just hit new 52-week highs.

3 ASX 200 shares hitting new 52-week highs today

Insurance Australia Group Ltd (ASX: IAG)

ASX 200 insurance giant IAG is first up today. IAG shares have been firing on all cylinders in 2022. The company is up more than 13% this year, well outperforming the index. But IAG shares have had a cracker of a day today as well. In fact, the company hit a new 52-week high of $5.09 a share just before lunchtime.

There’s been no major news from the company today. However, IAG has been buying back its own shares with vigour in recent weeks, so perhaps this is helping to lift demand. Despite today’s new high, the IAG share price remains down by more than 36% over the past two years.

AMP Ltd (ASX: AMP)

ASX 200 financial services company AMP is next up today. AMP shares have also been enjoying some much-needed gains in recent weeks. This company is up close to 20% over the past month, which puts it at a pleasing year-to-date gain of 28% on today’s pricing.

It was only a few days ago that AMP was hitting new 52-week highs. But today, the company has given investors another one. AMP shares topped out at $1.28 this morning, the new high watermark. It seems investors might be changing their minds on this long-suffering company, perhaps thanks to its capital levels today.

Woodside Energy Group Ltd (ASX: WDS

ASX 200 oil giant Woodside is another share running hot this Wednesday. Energy shares have had a top year, thanks to the rising commodity prices that we’ve seen over 2022 thus far. Woodside is no different. Investors have enjoyed a rather extraordinary 66.2% return from the company over the year so far.

Today, the company adds to those gains with a new 52-week high. Woodside shares hit a high of $37.90 this morning, and remain up by 2.4% at $37.70 at present. Today’s gains seem to be a result of higher oil prices overnight.

The post 3 ASX 200 shares hitting new heights today appeared first on The Motley Fool Australia.

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More reading

• If you invested $1,000 in NAB shares 5 years ago, here’s how much you’d have today
• Why has the EML share price rebounded 30% in 2 days?
• Why is the Woodside share price storming higher on Wednesday?
• Have insiders been loading up on Suncorp shares recently?
• How did the Telstra share price fare over October?

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 positions in and has recommended Insurance Australia Group Limited. 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 last five years have been a wild ride for the National Australia Bank Ltd (ASX: NAB) share price.

It’s fluctuated between a high of $33.75 and a low of $13.195 in that time.

But if you sunk $1,000 into NAB shares exactly five years ago, would you be better off for it today? Keep reading to find out.

Would you have been better off for buying NAB shares in 2017?

Let’s assume you managed to snap up $1,000 worth of NAB shares at the bank’s intraday low on 2 November 2017. That would have seen you walk away with 31 shares and nearly $14 change, having paid $31.81 apiece. 

Right now, the NAB share price is trading at $32.76. That means those 31 shares would now command a value of $1,015.56.

That means a shareholder who got in on the stock exactly five years ago would be around $29 better off today.

However, if they panicked and sold during the worst of the COVID-19 crash, they would have lost more than half their investment – $577. On the other hand, if they sold at NAB’s April peak, they’d have walked away with an extra $60.

But there’s more to this story. NAB has paid out $7.23 per share in dividends over the last half-decade.

That means an investor with 31 shares would has received $224.12 worth of dividends in that time.

That would bring their total return on investment (ROI) to 25.7%. For comparison, the S&P/ASX 200 Index (ASX: XJO) has lifted 17.2% in that time.

Additionally, all dividends paid by the big four bank over the last five years have been fully franked at 30%. That means they may have brought additional benefits to some shareholders come tax time.

And NAB also operates a dividend reinvestment plan (DRP), allowing investors to receive their dividends in the form of new shares, rather than cash. That lets shareholders easily compound their dividends, if that is their prerogative.

The post If you invested $1,000 in NAB shares 5 years ago, here’s how much you’d have today appeared first on The Motley Fool Australia.

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More reading

• Why has the EML share price rebounded 30% in 2 days?
• Have insiders been loading up on Suncorp shares recently?
• How did the Telstra share price fare over October?
• Lake Resources share price leaps 10% on ‘excellent early results’
• Which ASX 200 mining shares managed to dig up gains in October?

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 Dogecoin (CRYPTO: DOGE) price is going nuts.

The meme token, with a Shiba Inu as its virtual mascot, is up 13% over the past 24 hours, currently trading for 14.2 US cents (22.3 Aussie cents).

That puts the crypto, originally created as a joke, up 125% since this time last week.

By comparison, the Bitcoin (CRYPTO: BTC) price has gained 2% over the week and the S&P/ASX 200 Index (ASX: XJO) is up 3% since last Wednesday’s closing bell.

With the past week’s gains in the Dogecoin price, the token now commands a market cap of US$18.95 billion, making it the eighth biggest coin in virtual circulation.

Mind you, though, that like most every crypto, Dogecoin is still trading well below its all-time high price of 73.8 US cents, reached on 8 May last year.

Still, you’re unlikely to hear crypto investors complaining about the past week’s phenomenal rally.

So, what’s going on?

Why is the Dogecoin price rocketing this week?

For an answer to this riddle, we need to look no further than Elon Musk, the world’s richest man and new owner of Twitter.

Musk is a big supporter of cryptos, including Dogecoin. In the past year, his tweets and comments have had the power to send the Dogecoin price soaring or tumbling, depending on the context.

Crypto investors have been keeping a keen eye on the developments over at Twitter, as Musk has signalled Dogecoin could potentially be used to pay for transactions on the social media site.

Adding fuel to the rally, yesterday Musk tweeted an image of a Shiba Inu wearing a Twitter themed t-shirt.

Commenting on the rally in the Dogecoin price, eToro analyst Simon Peters said, “Dogecoin saw an enormous price spike over the weekend on the back of Elon Musk completing his acquisition of Twitter.”

However, he cautioned investors should treat “the Musk bounce” with care.

“Although it is perfectly conceivable that Musk’s move has altered the investment case of the token, if you look at other businesses such as Tesla, adoption has been limited,” Peters said.

Investors should also be prepared for some significant volatility.

Over the past month alone, the Dogecoin price has traded as low as 5.6 US cents and as high as 15.7 US cents.

The post The Dogecoin price is up 125% in a week. What’s going on? appeared first on The Motley Fool Australia.

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More reading

• How Elon Musk caused Dogecoin, Shiba Inu, and BNB to spike again on Monday
• ‘Let that sink in’ — Dogecoin soars as Twitter deal seemingly set to close
• Why are Bitcoin, Ethereum, and Dogecoin leaping higher today?
• Why crypto cratered before a quick recovery today
• Is Google now joining the crypto party following its latest move?

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 Bitcoin. The Motley Fool Australia as positions in and has recommended Bitcoin. 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 EML Payments Ltd (ASX: EML) share price has been on a wild ride over the past few days.

Shares of the payment solutions provider dropped 35.71% on Monday, and then bounced back 30.86% the day after.

At the time of writing, the company’s shares are 0.94% lower and currently trade for 52.5 cents each.

To make sense of why EML’s shares plunged and then rebounded so strongly, let’s cover some events that unfolded.

What’s going on with the EML share price?

On Monday, EML said it would temporarily halt the onboarding of new users of its UK subsidiary as it contended with regulatory concerns.

The halt affected new customers, agents, and distributors of its subsidiary Prepaid Financial Services Ltd.

In its market announcement on Monday, EML said the delay was estimated to reduce group revenue by “less than $5 million” in FY23.

The company said the concerns of the UK’s Financial Conduct Authority (FCA) were “similar to those raised by the Central Bank of Ireland” with its Irish subsidiary, PFS Card Services.

Irish authorities questioned the company’s anti-money laundering credentials in May 2021. EML’s Irish subsidiary undertook a substantial remediation program but, in July, the Central Bank of Ireland found there were still gaps.

EML said it was “currently undertaking a remediation program” to address ongoing Irish concerns.

It seems another regulatory issue may have spooked investors, leading to an enormous red candle for the day on Monday with EML shares trading at record volume levels.

So why are EML’s shares back on the upswing?

There’s no news from the company to piece together why the stock rebounded almost 31% a day later.

One theory is that as older investors left in droves, new ones spotted an opportunity to pick up a piece of a potentially undervalued company, thus causing its share price to recover.

And when looking solely at EML’s valuation ratios, a case could be made that there is further upside in store. For instance, the company’s price-to-sales (P/S) ratio currently stands at 0.8. This means it costs around 80 cents to buy one unit of the company’s sales.

This is significant because, all else being equal, a share with a P/S ratio of one to two is good, while a share with a P/S ratio of less than one is extraordinary.

The other interpretation of this ratio though is that investors may not be feeling confident in the company’s long-term prospects. This, in turn, enables units of revenue to be bought at bargain prices due to their perceived riskiness.

Whatever the case, the market has certainly found an equilibrium for the EML share price and the negative events that have transpired.

EML share price snapshot

The EML share price is down 83.6% year to date. By comparison, the S&P/ASX 200 Index (ASX: XJO) is down around 6% over the same period.

The company has a current market capitalisation of approximately $198 million.

The post Why has the EML share price rebounded 30% in 2 days? appeared first on The Motley Fool Australia.

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More reading

• If you invested $1,000 in NAB shares 5 years ago, here’s how much you’d have today
• Have insiders been loading up on Suncorp shares recently?
• How did the Telstra share price fare over October?
• Lake Resources share price leaps 10% on ‘excellent early results’
• Which ASX 200 mining shares managed to dig up gains in October?

Motley Fool contributor Matthew Farley 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 EML Payments. The Motley Fool Australia has positions in and has recommended EML Payments. 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 CSL Limited (ASX: CSL) share price is slightly lower today, down 0.55% to $281.71 at the time of writing.

Meantime the S&P/ASX 200 Index (ASX: XJO) is up 0.34% to just above 7,000 points.

The market is a mixed bag today with some sectors up and some down. The S&P/ASX 200 Health Care Index (ASX: XHJ) is among those in the red, down 0.2% at the time of writing.

What did CSL announce today?

CSL has announced that it has entered into a new collaboration and licensing agreement.

The agreement is with Arcturus Therapeutics Holdings Inc (NASDAQ: ARCT). It’s costing CSL US$200 million upfront with further payments down the track if certain milestones are achieved. The companies have also agreed to profit sharing on future product sales.

Under the terms, CSL will have access to late-stage self-amplifying mRNA vaccine platform technology.

According to the release, Arcturus Therapeutics is developing next-generation mRNA vaccines.

CSL chief operating officer Paul McKenzie said:

This collaboration is an exciting opportunity to complement CSL’s own next generation mRNA program with a partner who developed a platform to deliver late stage clinical supplies at scale. These combined capabilities will accelerate our journey in mRNA.

CSL is looking to develop and commercialise enhanced vaccines for the flu as well as ‘multi-pathogen pandemic preparedness’.

CSL will have the exclusive licence to Arcturus’ mRNA technology for the flu, COVID-19, and other respiratory viral diseases.

The license for multi-pathogen pandemic preparedness is non-exclusive but CSL has the right to make it exclusive at a later date.

The deal is subject to regulatory approvals.

What’s next for the CSL share price?

As my colleague Monica reported, the CSL share price fell slightly last month.

The company held its annual general meeting on 12 October. CSL CEO and managing director Paul Perreault told shareholders the company was performing in line with its guidance for FY23.

On 17 October, CSL provided an update on its Vifor business. The company advised it expected more than 10% revenue growth in the medium term. CSL gave a new FY23 net profit after tax before amortisation (NPATA) guidance range of US$2.7 billion to US$2.8 billion, including Vifor sales.

Two company directors loaded up on more CSL shares during October. Non-executive director Alison Watkins AM invested $272,000 and non-executive director Dr Megan Clark AC invested $74,000.

The post Why is the CSL share price falling on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Did the CSL share price fall or rise in October?
• Bell Potter names 9 ‘champion’ ASX 200 shares to buy for the next five years
• 3 ASX 200 directors who have been buying up their company shares this week
• Directors have been buying up CSL shares this month. Should you?
• Is buying CSL shares right now a smart move?

Motley Fool contributor Bronwyn Allen 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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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.

What happened 

Shares of Chinese and other international companies jumped sharply on Tuesday as hope spread that China’s zero-COVID policy may be coming to a close. Rumors are floating that a government committee has been formed to study a plan for fully reopening China in March 2023. 

Markets across Asia were trading higher and some notable names were moving in U.S. markets today. Tencent (OTC: TCEHY) jumped as much as 11% in trading, Kingsoft Cloud Holdings (NASDAQ: KC) was up as much as 15.4%, GDS Holdings (NASDAQ: GDS) was up 18.7%, and Chindata Group Holdings (NASDAQ: CD) was up 13% at its peak. Shares of the companies are trading 9.4%, 9.5%, 10.9%, and 5.8% higher at 12:30 p.m. ET. 

So what 

China’s zero-COVID policy has been responsible for extended citywide shutdowns across the country in the past three years and has impacted both domestic demand as well as exports to the rest of the world. So, when rumors spread that a committee will be looking into how to end the lockdowns, the market cheered. 

What’s not clear at this point is if any committee is actually going to meet. China’s Foreign Minister’s spokesperson said they were “unaware” of the committee, and that’s the extent to which the government has commented. 

Given the recent end to the Party Congress, which sets the political leaders for the next five years in the Communist Party in China, this would be a likely time to start ending zero-COVID. Given what the rest of the world knows about the virus, it’s unlikely any economy could maintain a zero-COVID policy indefinitely and China will likely come to that realization eventually. In investors’ eyes, the sooner the better. 

Now what 

The market is simply reacting to rumors at this point, but I don’t doubt that changes are on the horizon. Data released yesterday indicates that factory activity contracted in China last month, which isn’t great for an export-heavy country. China is dealing with countries like the U.S. onshoring more of their production as rising labor and shipping costs have made outsourcing less economical. 

At the same time, domestic demand isn’t growing enough to fill the gap that falling exports may leave. That’s put China in a tough position, potentially forcing the government to open up the economy earlier than it might otherwise like. 

We don’t know exactly what any reopening would look like and it’s likely to be chaotic given the years of ups and downs Western countries dealt with during the pandemic. But today investors are cheering even the possibility of China reopening, overlooking the potentially problematic increase in President Xi Jinping’s political power that sent stocks lower just last week. Investors have short memories, and that’s why I would be very cautious investing in China today. 

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

The post Why Chinese stocks jumped on Tuesday appeared first on The Motley Fool Australia.

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More reading

• Why is the CSL share price falling on Wednesday?
• In what is regarded as a horror year for shares, the ASX 200 index continues to put up very respectable returns
• Why did the Qantas share price fly 16% higher in October?
• Is the Northern Star share price cheap or expensive compared to its peers?
• Why is the Woodside share price storming higher on Wednesday?

Travis Hoium 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.

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

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1) A day after the Dow Jones Industrial Average Index (DJX: .DJI) capped its best month since 1976, US stocks fell back on the first day in November as markets prepared for the Federal Reserve this week to hike interest rates by another 75 basis points.

Wall Street had rallied on hopes of a Fed pivot, whereby the US central bank would soon signal to the markets that it would slow the pace of interest rate rises. 

Ron Temple of Lazard Asset Management rained on that parade, quoted on Bloomberg…

“Hopes for a Fed dovish pivot are misplaced if today’s job openings are any guide. Despite other signs of economic deceleration, the job openings data taken together with nonfarm payroll growth indicate the Fed is far from the point where it can declare victory over inflation and lift its foot off the economic brake.”

2) October was also a good month for the S&P/ASX 200 Index (ASX: XJO), the benchmark index gaining 6%. 

Bank stocks roared back to life, the Westpac Banking Corporation (ASX: WBC) share price soaring almost 18% higher, whilst the Commonwealth Bank of Australia (ASX: CBA) share price jumped almost 17% higher for the month of October. 

After jumping another 113 points higher yesterday, the ASX 200 index is down less than 5% over the past 12 months, a very respectable return considering…

a) The falls on Wall Street, the S&P 500 Index (SP: .INX) being down almost 17% over the last year, with the NASDAQ-100 Index (NASDAQ: NDX) off 30% over the same period.

b) The shellacking handed out to growth stocks, particularly loss-making tech stocks.

c) The pace of interest rate rises as central banks fight rampant inflation.  

3) Investing is about looking forward, not in the rearview mirror.

Looking ahead, the short to medium term direction of the stock market will once again come mainly down to four things…

a) Interest rates.

b) Economic growth or recession.

c) Inflation.

d) Earnings risk.

Throw in a war in Ukraine and ongoing geopolitical risks, and it all adds up to the prospect of more volatility ahead.

As an investor, you can spend your time trying to predict these macro forces in the forlorn hope it will help you jump in and out of the market with perfect timing.

Good luck with that one. 

Would your macro “analysis” have told you to jump back into stocks on October 1st, in advance of the big rally for that month? 

And would your analysis now tell you to stay in, get in, get out or something in between?

I’d suggest it’s a futile exercise at best, and likely a sub-optimal investing strategy.

If you invest in the stock market, you should make it a lifelong endeavour, not something you jump into and out of depending on your mood, the market’s mood, or the macro environment.

For most people, investing monthly into a few low cost ETFs is the best option, something like…

Vanguard Australian Shares Index Fund (ASX: VAS)

Vanguard International Shares Index Fund (ASX: VGS)

Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

Vanguard International Small Companies Index Fund (ASX: VISM)

There are other options, and other providers, but something like the above will serve you well over a five plus year time frame.

4) Speaking of time-frames, when markets are on tenterhooks today awaiting the Fed’s next interest rate move, it’s easy to forget that the global economy will be far different in five year’s time than it is today.

For one, inflation is likely to be significantly lower. Interest rates likely won’t be rising as quickly as they are today. Corporate profits for many companies are likely to be far higher than they are today. 

If even some of that comes to pass, you can likely expect the share prices of many companies will also be significantly higher come 2027.

Between now and 2027, you will have to see through this period of volatility, plus you’ll have to endure further periods of volatility caused by factors like recession, natural disasters, inflation, deflation, conflict, politics… and that doesn’t include pandemic and financial crisis. 

In return, especially from these somewhat depressed levels, you have the opportunity to compound your investments at around 8 – 10% per annum, a return far in excess of leaving your money in the bank.

5) For those wishing to amp up the potential returns – by investing in individual stocks – by definition, they’ll also be amping up the risk. 

That’s because they’ll be less diversified than an index fund, and with each individual pick, there will be a chance they are wrong, with the company and therefore the underlying stock price significantly under-performing. 

Worst-case, your $5,000 investment into a company could turn into $500 or even less, as has happened to investors in fallen buy now pay later hero ZIP Co (ASX: ZIP), its share price having crashed 90% over the past 12 months.

Best-case, you could make many multiples of your money. Although the Domino’s Pizza (ASX: DMP) share price has had a rough time of it recently, over the past 10 years it has gone up almost 7 times in value. Since its IPO in late 2014, the Lovisa Holdings (ASX: LOV) share price has gone up over 12 times in value.

Personally, I enjoy the intellectual challenge of picking individual stocks, and the thrill of finding the hidden gem that has the potential to multiply my money several times in the years ahead.

I like to fossick in the micro-cap sector, a space where you can find fast growing companies that are either ignored, under-appreciated or unloved. Including a selection of such companies in an already diversified portfolio can be fun and profitable, not withstanding the reality that not every micro-cap stock will be a winner.

The post In what is regarded as a horror year for shares, the ASX 200 index continues to put up very respectable returns appeared first on The Motley Fool Australia.

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Motley Fool contributor Bruce Jackson 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 Lovisa Holdings Ltd, Vanguard MSCI Index International Shares ETF, and ZIPCOLTD FPO. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited, Lovisa Holdings Ltd, Vanguard MSCI Index International Shares ETF, and 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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The Qantas Airways Limited (ASX: QAN) share price was a very strong performer in October.

During the month, the airline operator’s shares ascended an impressive 16.3%.

Why did the Qantas share price take off in October?

The main driver of the Qantas share price gains in October was the release of a market update in the middle of the month.

That update revealed that the airline expects to generate a first half profit well ahead of the market’s previous expectations.

Based on forward bookings, current fuel prices, and second quarter assumptions, Qantas advised that it expects to report an underlying profit before tax of between $1.2 billion and $1.3 billion for the first half of FY 2023.

Analysts at Citi were shocked by this guidance, given Qantas’ previous outlook commentary. They commented:

A month and a half ago, QAN effectively guided to $1.3 billion PBT for the full year. Today however, expectations are to make that in a half. Given incremental extra costs, reductions in capacity and relatively soft passenger numbers, we assume yields were the driver of the circa 100%+ upgrade. While little detail was provided, we estimate 1H guidance implies yields circa ~40% higher than Pre-Covid.

Can its shares keep rising?

While Citi believes the Qantas share price has now peaked for the time being (neutral rating and $5.78 price target), others are more positive.

According to a note out of Morgan Stanley, in response to the update, the broker retained its overweight rating and lifted its price target to $9.00. Based on the current Qantas share price of $6.01, this implies potential upside of approximately 50% for investors over the next 12 months.

UBS is also positive and has a buy rating and $7.20 price target on its shares, implying potential upside of 20%.

All in all, it appears that many in the market believe Qantas’ shares could build on October’s gains in the months that follow.

The post Why did the Qantas share price fly 16% higher in October? appeared first on The Motley Fool Australia.

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More reading

• Qantas shares are up 13% this year, but could the CEO’s pay still be in jeopardy?
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• Qantas shares: Buy, hold, or fold?

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 Northern Star Resources Ltd (ASX: NST) share price has been on a bit of a tear of late. Since 26 September, Northern Star shares have risen a healthy 28% or so. That includes an 11.2% gain for the month of October.

But things are still looking a little bleak if we zoom out a little. Year to date, this ASX 200 gold miner has lost 5.2% of its value. Northern Star shares are also 1.1% lower than where they were this time last year.

Rising interest rates are never good for the gold price, and by extension gold miners. Gold as an asset has no yield. So investors tend to shun the yellow metal when interest rates give other assets higher yields. This could be what has gotten ASX gold miners like Northern Star down in recent months.

But after this recent recovery, it might be a good time to see how Northern Star’s share price valuation compares to its gold mining peers on the ASX.

How does the Northern Star share price compare to its ASX gold mining peers?

So a good metric to use to compare different ASX shares’ valuations is the price-to-earnings (P/E) ratio. This is especially so when comparing companies from one industry (in this case, ASX gold miners).

At the present time, Northern Star Resources shares command a P/E ratio of 23.75.

The first fellow gold miner we can look at by comparison is the largest one on the ASX: Newcrest Mining Ltd (ASX: NCM). Currently, Newcrest has a P/E ratio of 10.72.

So this means that investors are certainly placing a higher premium on Northern Star shares than those of Newcrest right now. Paying 10.72x earnings is quite different to paying 23.75x.

The difference isn’t quite so stark with some of the ASX’s other gold miners though. Take Gold Road Resources Ltd (ASX: GOR). Its P/E ratio right now is 21.6, just a few points under Northern Star shares.

Evolution Mining Ltd (ASX: EVN) is another gold miner that is closer to Newcrest than Northern Star when it comes to valuation though. Right now, Evolution Mining has a P/E ratio of 11.81.

The rather confusingly named Silver Lake Resources Limited (ASX: SLR) is another gold share trading cheaper than Northern Star. Its current P/E ratio of 13.02 is again far lower than that of the Northern Star share price.

So we can conclude that Northern Star Resources shares currently trade at a premium valuation compared to its peers in the ASX gold mining space. Clearly, this miner is a favourite amongst ASX gold investors.

The post Is the Northern Star share price cheap or expensive compared to its peers? appeared first on The Motley Fool Australia.

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More reading

• Which ASX 200 mining shares managed to dig up gains in October?
• 5 things to watch on the ASX 200 on Wednesday
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• Why are ASX 200 gold shares smashing the benchmark returns today?

Motley Fool contributor Sebastian Bowen has positions in Newcrest Mining Limited. 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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