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The Core Lithium Ltd (ASX: CXO) share price has rebounded from early morning losses and is currently up 0.2%.

Shares in the ASX lithium stock closed yesterday at $1.33. In late morning trade shares are swapping hands for $1.34.

The company has been a major beneficiary of soaring lithium prices amid a battery manufacturing boom to power the rapid growth in global EV markets.

Year to date that’s seen the Core Lithium share price rocket an eye-popping 110%. And this is in a year where the S&P/ASX 200 Index (ASX: XJO) has dropped 12%, no less.

But could Core Lithium’s dream run be at risk from the underwhelming quarterly results reported by EV giant Tesla Inc (NASDAQ: TSLA) yesterday?

Could Tesla impact the Core Lithium share price surge?

The Tesla share price closed down 6.7% yesterday after the company’s quarterly revenues came in shy of consensus expectations. The Tesla share price is now down just over 48% this calendar year.

Core Lithium, as you may recall, executed a legally binding term sheet with Tesla for the supply of lithium spodumene concentrate.

The deal, announced on 2 March this year, is for 110,000 tonnes of lithium spodumene concentrate over a four-year period, sourced from its Finniss Lithium Project, in the Northern Territory. The Core Lithium share price leapt 11% on the day of the announcement.

Commenting on the agreement at the time, managing director of Core Lithium, Stephen Biggins said, “Tesla is a world leader in electric vehicles and its investment in offtake and interest in our expansion plans for downstream processing are very encouraging.”

Indeed. Tesla is a world leader in EVs. Therefore, its disappointing quarterly earnings could be portending a slowdown in global EV markets and lithium demand, potentially throwing up some headwinds for the Core Lithium share price.

China’s slowing growth in the spotlight

According to Eliot Hastie, markets analyst at Australian digital brokerage Stake, “Some analysts believe that softening demand is the primary concern, with sales in China – Tesla’s biggest market – having slowed due to rising competition and a poor macroeconomic landscape.”

“Tesla still makes up just under a fifth of all global battery-only electric vehicles sales, so it’s a significant sentiment driver for Australian lithium stocks,” Hastie added. “The brand’s earnings could be seen as a negative sign for lithium demand in the short term by some, but the need for this commodity is still predicted to increase exponentially over the long term.”

A slowdown in China could indeed impact EV demand from the world’s most populous nation. While that could see a short-term dip in lithium prices, the longer-term outlook remains quite strong.

According to the Department of Industry Science and Resources’ latest quarterly Resources and Energy Report, “lithium exports are now forecast to rise by over 180% to $13.8 billion in 2022-23”.

Hastie notes the Core Lithium share price will be on watch next Wednesday, 26 October. That’s when the company is set to agree on the specific terms of its offtake agreement with Tesla.

The post Is the Core Lithium share price at risk following Tesla’s disappointing earnings? appeared first on The Motley Fool Australia.

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More reading

• Up 22% in a week, will Tesla’s results slow the Liontown share price surge
• Tesla’s growth is back on track. Is it time to buy?
• Tesla stock drops on earnings release: 7 key metrics you should see
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• 3 lithium ASX shares to watch after Tesla’s results

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 Tesla. 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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Warren Buffett, the ‘Oracle of Omaha’ and the man behind Berkshire Hathaway Inc (NYSE: BRK), is often heralded as the best investor of all time.

And if I were a few short decades from retirement with little to no cash in the bank, I’d turn to his wisdom to help grow wealth on the ASX.

The billionaire’s company offered investors an annual return of around 20% between 1965 and 2021.

That would have turned a $1,000 investment into around $28.5 million over the 56-year period – the power of compounding, folks.

So, what advice has the apparent guru offered over the years that might help an investor build up a nest egg over the age of 40 (potentially using ASX shares)? Keep reading to find out.

Buffett wisdom to help build wealth after 40

Choose wisely

A book could be ­­written on how to pick a stock to invest in – and many have been. But Buffett’s approach is a simple one.

He doesn’t rush into any and all investments, rather he takes time to evaluate and understand a business and its prospects. That’s how he finds the big winners.

Following that advice means an investor with no understanding of a particular sector or company would either need to get acquainted with it before buying in or staying clear.

Buffett is also said to have advised that someone looking to invest do so as if they could only make 20 investments in their lifetime.

Being selective about which shares he buys, and truly knowing the business behind it, is one way in which the billionaire has built his wealth.

Derisk, derisk, derisk

Buffett’s relationship with risk is a complicated one. He once famously said:

We think diversification ­­– as practiced generally – makes very little sense for anyone that knows what they’re doing.

However, to diversify a portfolio is to reduce risk. That’s because no one (or two, or three) ASX shares or sectors can be guaranteed to gain.

Buffett is also widely quoted as saying his first rule to investing is don’t lose money. His second rule? Don’t forget rule No. 1.

So, what Buffett might have meant, is to advise investors not to mindlessly build a huge portfolio purely to diversify. As noted above, the oracle advises people to invest wisely.

If I were aiming to build up my nest egg, beginning at 40, I would be deliberately and strategically (and reasonably) diversifying my ASX portfolio.

Time in the market > timing of the market

Buffett has previously said he doesn’t put much thought into what the market is doing at any particular time.

Additionally, the power of Buffett’s best friend, compounding, takes time.

Therefore, Buffett looks for businesses he believes to be winners and doesn’t attempt to pick the bottom. He once said, courtesy of CNBC:

If we’re right about a business, if we think a business is attractive, it would be very foolish for us to not take action on that because we thought something about what the market was going to do.

I believe waiting to buy into a good investment because of what the broader market is doing could delay future rewards.

The post No savings at 40? I’d use the Warren Buffett method to build wealth appeared first on The Motley Fool Australia.

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More reading

• How bear markets can be a blessing for dividend investors
• Looking for the best stocks to buy in a bear market? Here’s Warren Buffett’s advice
• Does it matter what share class of Berkshire Hathaway stock you buy? Maybe
• 2 reasons Amazon is a Warren Buffett stock
• What can we learn from how Warren Buffett invested through sky-high inflation?

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 Rio Tinto Limited (ASX: RIO) share price is on course to end the week in the red.

In morning trade, the mining giant’s shares are down almost 1% to $91.50.

This means the Rio Tinto share price is now down over 5% this week after investors responded negatively to the miner’s quarterly update.

Is the Rio Tinto share price good value?

Analysts at Morgans believe investors should take advantage of the weakness in the Rio Tinto share price.

According to a note, the broker has retained its add rating and $108.00 price target on the company’s shares.

This implies a potential 12-month return of 18% for investors before dividends and 24% including them.

What did the broker say?

Morgans was disappointed with the miner’s quarterly update and highlights that it was a reminder that that “there are no quick fixes to Rio Tinto’s productivity issues across its global operations.”

It also notes that the company has downgraded its guidance for iron ore shipments and refined copper production.

Nevertheless, this isn’t enough to change the broker’s view than Rio Tinto would be a great option in the resources sector right now. Particularly given how immaterial these downgrades are to the company’s long term outlook.

It explained:

The operational weak-points and guidance cuts are disappointing, but they alone are not material to RIO’s long-term fundamentals. Instead we remain focused on whether RIO can achieve sustainable operating changes to solve the productivity issues across its global business. We think that lasting change, especially to productivity in a business this scale, is not something that can realistically happen quickly with weak quarters like 3Q22 likely to continue to occur in the meantime.

Putting the 3Q22 result into perspective, we still see RIO boasting solid earnings quality, dividend yield, balance sheet strength and trading at a discount to our $108.00 Target Price. We maintain our Add rating.

The post Broker says Rio Tinto share price is trading at a discount appeared first on The Motley Fool Australia.

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More reading

• ASX dividend shares ‘likely to remain attractive’ despite rising bank deposit rates: expert
• Rio Tinto share price has 20% upside and 7% dividend yield: Goldman Sachs
• Top brokers name 3 ASX shares to buy today
• Why Adbri, Rio Tinto, St Barbara, and Whitehaven Coal shares are dropping today
• Rio Tinto share price higher despite mixed Q3 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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Plenty of eyes are on the banking space as the majors get a taste for Tyro Payments Ltd (ASX: TYR). Though, it hasn’t yet been confirmed whether the Commonwealth Bank of Australia (ASX: CBA) shares an interest in acquiring the payment terminal provider.

While CBA’s interest remains unconfirmed, it might be worthwhile exploring what Australia’s biggest bank could stand to gain if it made a beeline toward Tyro.

Let’s take a closer look.

Beefing up business banking

Rising interest rates might be boosting the net interest margin of ASX bank shares, but it also means a smaller appetite for home loans. As rates are expected to rise into next year, banks have the difficult task of determining how to increase profits as fewer loans to buy a home are signed off.

According to CBA’s 2022 annual report, around 51% of the company’s cash net profit after tax (NPAT) was derived from retail banking services. That means CBA shares hold a large exposure to the mortgage market and will likely need to look to other lending areas to maintain growth.

That’s where good ole’ business lending comes in. In FY22, business banking made up approximately 31% of CBA’s cash NPAT. No doubt, the banking giant will look to go toe-to-toe with the likes of National Australia Bank (ASX: NAB) and gain market share… enter scene Tyro Payments.

Tyro could make or break CBA’s market share

Tyro has grown to be a formidable competitor to the major incumbents over the years. According to its FY22 investor presentation, the fintech company now has 109,000 EFTPOS terminals across the country.

Importantly, the humble payment terminal is considered to be the ‘foot in the door’ for landing a business’s banking needs. Tyro proved this to be the case in FY22, growing its loan originations by a whopping 283.4% to $99.07 million.

This figure is rather paltry compared to the Commonwealth Bank’s last recorded $14.1 billion in business lending. Though, the market opportunity is what might have the major bank licking its lips.

As depicted above, CBA is currently the market leader in EFTPOS terminals in Australia. However, if Westpac Banking Corp (ASX: WBC) or NAB were to get ahold of Tyro, this would quickly change.

In the case of NAB, an additional 109,000 terminals from Tyro would take its total to 264,000 — dethroning CBA’s leading market share with 244,000.

Potential hurdles

Finally, if CBA does throw its hat in the ring for Tyro Payments, it might gain the attention of the Australian Competition and Consumer Commission (ACCC).

Despite the competitive payments landscape, with the entrance of international tech companies such as Block Inc (ASX: SQ2), the corporate watchdog may not be impressed with CBA owning a ~37% share of EFTPOS terminals in Australia.

For now, we will have to wait and see what offers arise. However, we know that it will need to be more than $1.52 — as per Mike Cannon-Brookes’ arrangement — if it is to be considered.

The CBA share price is down 4% compared to a year ago, currently residing at $99.30.

The post What could CBA shares stand to gain from a Tyro takeover? appeared first on The Motley Fool Australia.

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More reading

• 5 big ASX announcements making news this week
• ASX dividend shares ‘likely to remain attractive’ despite rising bank deposit rates: expert
• CBA share price smashes through $100-mark for first time in 2 months. What’s next?
• CBA shares: Buy, hold, or fold?
• Is the CBA share price a good value buy in October?

Motley Fool contributor Mitchell Lawler has positions in Block, Inc. and Commonwealth Bank of Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. and Tyro Payments. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended Tyro Payments 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 Novonix Ltd (ASX: NVX) share price is falling on Friday.

In morning trade, the battery materials and technology company’s shares are down 2% to $2.22.

This follows the company being quizzed by the Australian share market operator this morning.

What’s happening?

This morning Novonix responded to an ASX Aware Query or please explain request.

The stock market operator highlighted that the Novonix share price rocketed 20% higher on Tuesday from $1.79 to $2.15 despite there being no news.

And then lo and behold, big news was unveiled a couple of days later. That news was of course Novonix being selected for a $240 million government grant.

The response

Novonix admitted that it was aware of the grant selection on 14 October and that “does consider the Information to be information that a reasonable person would expect to have a material effect on the price or value of its securities.”

However, it felt that it was “an incomplete proposal or negotiation” and advised that it was “prohibited from disclosing its selection […] prior to the DOE making a public announcement about the matter.”

In fact, the company was “advised by DOE that failure to abide by this requirement could result in forfeiture of the opportunity.”

Asked why it did not request a trading halt during the interim period, management appeared to suggest that the market should have been expecting this news as “NVX was considered a logical candidate for the grant funding.”

Furthermore, it “had been monitoring information sources for any suggestion that confidentiality in the Information had been lost and watching NVX trading volumes and prices very closely.”

So, following the aforementioned 20% gain by the Novonix share price on Tuesday, it decided to act and requested a trading halt before the commencement of trade on Wednesday. It explained:

NVX noted the increase in NVX trading volume and prices over the course of 18 October 2022 and despite the fact that NVX believed confidentiality in the Information had not been lost, NVX decided that it would be prudent to go into a trading halt from 19 October 2022 in order to manage its continuous disclosure obligations until such time as it was in a position to announce the Information.

The post Novonix share price falls after ASX ‘please explain’ appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why Challenger, Novonix, Piedmont Lithium, and Woodside shares are racing higher
• Novonix share price rockets 26% on $240m US Government grant news
• Why is the Novonix share price stuck on standby today?
• Here are the top 10 ASX 200 shares 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 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 Liontown Resources Limited (ASX: LTR) share price is up 0.5% in morning trade on Friday.

The ASX lithium stock closed yesterday trading for $1.84 and is currently trading for $1.85 per share.

The Liontown share price has leapt 22% since last Thursday’s close, and handily outperformed the All Ordinaries Index (ASX: XAO) in 2022.

That outperformance has been driven by strong demand and near-record prices for the critical battery metal lithium.

The Liontown share price got a big boost from Tesla in February

Investors were particularly keen earlier this year after Liontown announced it had entered into a binding lithium supply agreement with global electric vehicle (EV) giant, Tesla Inc (NASDAQ: TSLA).

Tesla agreed to purchase lithium spodumene concentrate from Liontown’s $473 million Kathleen Valley Lithium Project, in Western Australia.

The initial five-year agreement, expected to commence in 2024, will see Liontown supply Tesla with 100,000 dry metric tonnes (DMT) of lithium spodumene concentrate in the first year. Tesla agreed to buy 150,000 DMT in the following years.

Liontown shares surged more than 16% on 16 February, the day of the announcement.

Why might Tesla’s results impact Liontown?

Despite some strong annual growth figures, investors were less than impressed with Tesla’s quarterly results, reported yesterday.

The disappointment likely stemmed from the EV giant’s quarterly revenue figures falling slightly short of consensus expectations. Whatever the cause, the Tesla share price closed down 6.7% yesterday, bringing its 2022 losses to a painful 48.2%.

While this doesn’t look to be having any immediate impact on the Liontown share price today, the broader picture could cast a shadow over the medium-term outlook for lithium demand.

According to Eliot Hastie, markets analyst at Australian digital brokerage Stake, “Some analysts believe that softening demand is the primary concern, with sales in China – Tesla’s biggest market – having slowed due to rising competition and a poor macroeconomic landscape.”

Hastie continued:

Tesla still makes up just under a fifth of all global battery-only electric vehicles sales, so it’s a significant sentiment driver for Australian lithium stocks. The brand’s earnings could be seen as a negative sign for lithium demand in the short term by some, but the need for this commodity is still predicted to increase exponentially over the long term.

I think Hastie nails it there with the long-term outlook for lithium demand and prices.

A slowdown in China could impact Tesla and the Liontown share price in the shorter term. But analysts are broadly in agreement that the 10-year global demand outlook for lithium remains very strong as EV markets are forecast to continue growing rapidly.

The post Up 22% in a week, will Tesla’s results slow the Liontown share price surge appeared first on The Motley Fool Australia.

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More reading

• Tesla’s growth is back on track. Is it time to buy?
• Tesla stock drops on earnings release: 7 key metrics you should see
• 3 lithium ASX shares to watch after Tesla’s results
• Why is Tesla stock falling if its business is stronger than ever?
• Here are the 3 most heavily traded ASX 200 shares 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 Tesla. 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.

Investors shouldn’t obsess about a company’s progress over just a three-month period, but quarterly results are still watched closely for good reason.

They help detect trends and can confirm or refute what stock analysts have been saying about a business’ prospects.

One of the most closely followed stocks is Tesla (NASDAQ: TSLA), and its third-quarter earnings report comes at a transitional time for the company and the entire electric vehicle (EV) sector.

Amidst competition that is ramping up and several other headwinds in the industry, Tesla just gave investors another good reason to think about buying its stock. 

More than just a stock split quarter

One of the highlights for shareholders in Tesla’s third quarter was the 3-for-1 stock split it completed in August. But that didn’t change anything about the business or the company. Investors just found out the details of what it did from its quarterly report, however. 

After its first quarterly drop in net income in the second quarter, the EV trailblazer rebounded with a near-record third quarter. Tesla’s bottom line more than doubled compared to the year-ago period, with $3.3 billion in net income. That was just $26 million shy of the record it set in the first quarter of this year.  

Importantly for investors, Tesla generated $3.3 billion in free cash flow — defined as operating cash flow less capital expenditures — as it is now reaping the benefits of the growth investments it’s been making. That was more than $1 billion more free cash than it generated in the record first quarter. 

Addressing the demand question

Business remains robust for Tesla as well. Some investors have worried about demand destruction as EV competition swells globally. But in the conference call for investors, CEO Elon Musk stated, “I can’t emphasize enough, we have excellent demand for Q4, and we expect to sell every car that we make for as far in the future as we can see.” 

That’s exactly why the company has spent billions to build its two new manufacturing facilities in Texas and Germany, as well as upgrading its Shanghai plant. That China plant now has the ability to produce 1.1 million vehicles annually at full capacity. It closed in on that run rate with a monthly record 83,135 units in September. 

The company has also said its energy division, which includes battery storage and solar rooftops, has more demand than it can supply. Sales from that division represented 5% of total revenue in the third quarter. 

Growth stock valuation

There’s no question the company is performing well, even as it faces supply chain and logistics headwinds.

The company produced 22,000 more vehicles in the third quarter than it was able to deliver due to shipping bottlenecks. Customers will take ownership of those vehicles in the fourth quarter. That issue could cause 2022 deliveries to miss the company’s 50% annual growth target, but it does expect production to still hit that level of growth.

But investors still wonder if the stock is valued appropriately. Its trailing-12-month price-to-earnings (P/E) ratio remains above 60 even as net income has accelerated this year. If the multi-year 50% annual growth level holds, however, that P/E will decline relatively quickly. 

Investors shouldn’t count on any stock to guarantee a certain return over just one or two years. There are too many outside factors like the current supply chain risks.

A visionary leader like Elon Musk has also been aggressive with his predictions. The Tesla Semi truck was first announced nearly five years ago, for example. But that vehicle is now set to begin deliveries next month.

Tesla shares could go lower even after it is down nearly 50% from their highs. But with its promising growth path ahead, long-term investors might want to take advantage of that decline and buy some Tesla stock now. 

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

The post Tesla’s growth is back on track. Is it time to buy? appeared first on The Motley Fool Australia.

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More reading

• Tesla stock drops on earnings release: 7 key metrics you should see
• 3 lithium ASX shares to watch after Tesla’s results
• Why is Tesla stock falling if its business is stronger than ever?
• Tough year for leading global growth fund laid bare with brutal fall in tech stocks
• Why Tesla stock was surging at the market open today

Howard Smith has positions in Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. 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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The Allkem Ltd (ASX: AKE) share price is tumbling on Thursday morning.

In early trade, the lithium miner’s shares are down 6% to $14.05.

Why is the Allkem share price tumbling?

Investors have been selling down the Allkem share price this morning following the release of the company’s first quarter update.

For the three months ended 30 September, Allkem delivered group revenue of US$298 million and a cash margin of approximately US$244 million.

This was driven by Olaroz lithium carbonate sales of 3,721 tonnes, generating record quarterly revenue of ~US$150 million with a gross cash margin of 89%, and shipments of 21,215 tonnes of Mt Cattlin spodumene, generating revenue of US$106.7 million with a gross cash margin of 80%.

In respect to its lithium carbonate, management advised that excluding shipments to Naraha, third party sales for the quarter averaged US$43,237 per tonne FOB. Whereas its Mt Cattlin spodemene commanded a price of US$5,028 per tonne CIF for SC 5.4%.

An additional US$35 million of revenue was generated from sales of 59,326 tonnes of low grade spodumene concentrate from pre-existing stockpiles and processing of fine-grained spodumene ore

Where are prices going?

The good news for lithium investors is that Allkem believes that lithium carbonate prices are going higher in the next quarter. It advised:

The lithium carbonate sales price to third party customers for the December quarter is expected to be approximately US$50,000/tonne. After accounting for actual pricing in the September quarter this remains in line with previous guidance of US$47,000/tonne for H1 FY23.

Things aren’t quite as positive for spodumene, with management expecting pricing to be “in line with the September quarter.” Though, this puts it on track to achieve its previous guidance of US$5,000 per tonne for the half.

Costs rising

One negative from the update was news that costs at its Mt Cattlin operation are increasing. After recording a cash cost of US$796 per tonne in the last quarter, its costs are expected to rise 13% to US$900 per tonne for the full year.

This reflects “the current operating environment and mitigation actions, ongoing development of the 2NW pit, lower ore grades of 0.93-0.94% and the associated metrics.”

Though, with a price of US$5,000 per tonne being commanded for its spodumene at present, it still has very high margins.

Management also warned that its other projects could be impacted by cost pressures. It said:

Capital expenditure for James Bay and Sal de Vida remain subject to the same cost pressures that all resource projects are experiencing globally. Allkem will continue to review and monitor the capital cost budgets for all its projects as they progress.

It appears that this could be putting a bit of pressure on the Allkem share price today.

The post Allkem share price tumbles on quarterly update appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• 3 ASX 200 companies among the top 10 lithium producers in the world
• 3 ASX 200 lithium shares that turned a $10,000 investment into $500,000
• Could Rio Tinto be coming for your ASX lithium shares?

Motley Fool contributor James Mickleboro has positions in Allkem 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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Sayona Mining Ltd (ASX: SYA) shares have become an ASX lithium staple, particularly after the company was added to the iconic S&P/ASX 200 Index (ASX: XJO) last month.

With its popularity apparently growing, prospective investors might be surprised to learn another ASX lithium share has beaten them to the punch.

Piedmont Lithium Inc (ASX: PLL) is currently Sayona Mining’s largest shareholder.

So, what drove one ASX lithium share to snap up a huge stake in its peer? Keep reading to find out.

The Sayona Mining share price closed Thursday’s session at 22 cents.

The ASX lithium share with a huge stake in Sayona Mining

There’s a simple reason behind Piedmont Lithium’s massive stake in Sayona Mining. The pair have partnered in a number of Canadian lithium projects.

Those projects include the North American Lithium (NAL) operation. The pair are working to kickstart lithium production at the operation, launching a pre-feasibility study earlier this month.  

But it was a different story back in early 2021. Then, NAL was just a twinkle in Sayona Mining’s eye as the company worked to develop several Canadian lithium projects.

That’s when the company caught US-focused lithium developer Piedmont Lithium’s attention. The pair signed a deal that would see Piedmont Lithium buy a 9.9% stake in Sayona Mining, with the option to receive another 10% through convertible notes, for up to $15.5 million.

Piedmont paid just 0.92 US cents for each Sayona Mining share it snapped up in January 2021. At that point in time, Sayona Mining shares were swapping hands for around 1 cent apiece.  

Piedmont also paid around US$5 million for a 25% stake in Sayona Québec.

Back to the present, Piedmont – which is also listed on the NASDAQ Index – holds around 1.19 billion Sayona Mining shares as of 12 October, according to the latter lithium favourite.

That represents around 14.3% of the company’s outstanding shares.

The post Guess which ASX lithium company is the biggest holder of Sayona Mining shares? appeared first on The Motley Fool Australia.

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More reading

• Why Challenger, Novonix, Piedmont Lithium, and Woodside shares are racing higher
• 3 ASX lithium stocks leaping higher on big news
• Piedmont Lithium share price shoots 12% higher on $226m US government grant
• If you’d bought $5,000 of Sayona Mining shares at the start of 2022, congratulations! Here’s what you’d have today
• Why are these ASX 200 lithium shares smashing it on Monday?

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 New Hope Corporation Limited (ASX: NHC) share price will be on watch today as the ASX 200 coal share prepares to take its latest dividends off the table.

On Monday, New Hope shares will be trading without entitlements to the company’s recently-declared monster dividend.

This includes a final dividend of 31 cents per share and a special dividend of 25 cents per share, both of which are fully franked.

With New Hope shares turning ex-dividend for this payment on Monday, today will be the last day to snap up these dividends, which will be paid on 8 November.

Since New Hope doesn’t have a dividend reinvestment plan (DRP), shareholders will have no choice but to receive this payment in cash.

Any New Hope shares purchased after today won’t lay claim to these latest dividends.

But to compensate investors, New Hope will likely be deep in the red on Monday as the value of these dividends leaves the share price.

These latest dividends alone represent a yield of 8.1%, so there’ll be a lot of downwards pressure on the New Hope share price to start the week.

How did New Hope perform in FY22?

New Hope operates on a slightly different financial calendar than most of the ASX. Its financial year ends on 31 July. So, New Hope handed in its full-year FY22 results last month.

It was a bumper set of results, supported by sky-high coal prices which have surged on the back of the Russia-Ukraine conflict.

These results were headlined by a 143% jump in revenue, which hit $2.6 billion, and a 1,139% increase in profit, which came in at $983 million.

Interestingly, New Hope’s production slumped by 18% in FY22, producing 7.9 million tonnes of saleable coal. The company’s operations were impacted by periods of unusually high rainfall throughout the year, along with COVID-related workforce shortages.

However, such was the strength in coal prices that New Hope delivered eye-watering financial growth. 

New Hope’s average realised prices surged from $101.36/tonne in FY21 to $281.84/tonne in FY22, an increase of 176%. Its average realised price in the fourth quarter came in at a whopping $493.52/tonne. 

This helped the ASX 200 coal miner to declare fully franked dividends of 86 cents per share in FY22, up a mammoth 681% compared to the total dividends of 11 cents declared in FY21.

Based on current prices and including special dividends, New Hope shares are spinning up a monster trailing dividend yield of 12.5%. With the benefit of franking credits, this yield cranks up to 17.8%.

What do brokers think about New Hope shares?

New Hope has been a standout performer on the ASX this year, rocketing nearly 200%. It’s kept the party going in recent months, taking out the title as the ASX 200’s best performer in September with a 28% gain. However, some brokers are wary. 

In the wake of New Hope’s FY22 results, Citi maintained its sell rating on New Hope shares and left its price target unchanged at $3. This implies a potential downside of 56% over the next 12 months. Citi’s sell rating is based on valuation grounds.

Goldman Sachs is also bearish. The broker currently has a sell rating on New Hope shares but its price target is higher than Citi’s, coming in at $4.40. This implies a potential downside of 36% over the next 12 months. Goldman’s rating is also based on valuation grounds, along with its view that New Hope’s Bengalla thermal coal mine has only modest production growth potential.

On the flip side, Morgans is fighting for the bulls. Analysts recently retained their add rating on New Hope shares and lifted their 12-month price target to $7.20, implying a potential upside of 4%. The broker’s positive view is being driven by higher-than-expected coal prices. Morgans also sees the potential Associated Water License (AWL) approval at the Acland coal mine as an underrated catalyst for the New Hope share price.

The post Hoping to dig into the monster New Hope dividend? Here’s what you need to know appeared first on The Motley Fool Australia.

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More reading

• These 2 ASX 200 shares have turned a $10,000 investment into $35,000 in 2022
• 3 ASX All Ords shares smashing multi-year highs on Friday
• Up 24% in a month, is it too late to buy New Hope shares?
• Could dark clouds be gathering for ASX 200 coal shares?
• 4 ASX 200 directors who raised the stakes in their company shares in September

Motley Fool contributor Cathryn Goh 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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