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  • Why did the AGL share price trail the ASX 200 in September?

    Stressed business woman sits at desk with head resting on her handStressed business woman sits at desk with head resting on her hand

    September is generally a rough month for markets, and it was no different in 2022. The S&P/ASX 200 Index (ASX: XJO) slumped 7% last month and the AGL Energy Limited (ASX: AGL) share price put on an even worse performance.

    There was plenty of news from the energy producer and retailer in that time. And it all came to a head on Thursday when the company announced its $20 billion plan to ditch coal by 2035.

    The AGL share price closed the final session of September at $6.84, 10.9% lower than it finished August.

    The ASX 200 dumped 7% in that time while the S&P/ASX 200 Utilities Index (ASX: XUJ) slumped 15%.

    So, what went wrong for the AGL share price last month? Let’s take a look.

    What weighed on AGL’s stock in September?

    This year has been a rough one so far for ASX 200 energy provider AGL.

    The company’s planned demerger was binned in May after a brutal campaign led by major shareholder Mike Cannon-Brookes. That saw a number of the company’s upper management vow to step down.

    Additionally, its Loy Yang A coal-fired power station was dealt a blow in April when one of its generators was taken out of action after an electrical fault.

    But why are we delving back into the company’s prior suffering? It’s because the market heard updates on both happenings last month.

    First, AGL revealed the generator would not return to service in September as planned. Its restart date was pushed back to mid-October after a fault was found during testing.

    Then, AGL updated the market on its new leadership team.

    Former chair Peter Botten stepped down on 19 September as Patricia McKenzie stepped up to the plate. Director Diane Smith-Gander also took her leave.

    The company also announced CEO Graeme Hunt planned to exit his role at the end of September. It will be temporarily filled by former chief financial officer Damien Nicks.

    But the big news was still to come.

    The company released the outcome of its major strategic review on Thursday, vowing to close its Loy Yang power station by financial year 2035. To do so, it will fork out $20 billion to decarbonise its portfolio.

    The company also provided earnings guidance.

    It predicts it will bring in between $1.25 billion and $1.45 billon of underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) and between $200 million and $320 million of underlying profit after tax in financial year 2023.

    AGL share price snapshot

    Each of the three announcements released by AGL in September saw its share price trade either flat or lower. However, most of the stock’s major falls came on days in which the company was silent.

    Instead, the stock seemingly tracked the utilities sector’s performance, with only one day in which it went against its peers. On Friday, the AGL share price gained 3.6%, while the utilities sector slumped 1.6%.

    But one poor month doesn’t make a long-term loss. The AGL share price has gained 8% since the start of 2022. It’s also trading 18% higher than it was this time last year.

    For comparison, the ASX 200 has fallen 15% year to date and 10% over the last 12 months.

    The post Why did the AGL share price trail the ASX 200 in September? 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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  • Experts name 2 ASX 200 dividend shares to buy next week

    A smiling woman with a handful of $100 notes, indicating strong dividend payments

    A smiling woman with a handful of $100 notes, indicating strong dividend payments

    If you’re looking for dividend shares to lift your income, then you may want to check out the two listed below.

    Here’s why these ASX 200 dividend shares have been rated as buys:

    BHP Group Ltd (ASX: BHP)

    The first ASX 200 dividend share to look at is mining giant BHP.

    In August, the Big Australian released its full year results and revealed record operating profits and free cash flow. This allowed the company to reward its shareholders with a bumper US$3.25 per share fully franked dividend in FY 2022.

    The good news is that the big dividend payments are expected to continue in FY 2023. For example, the team at Morgans is forecasting a fully franked dividend of ~A$3.95 per share. Based on the current BHP share price of $38.52, this will mean a yield of 10.25%.

    And while Morgans expects FY 2024’s dividend to reduce to approximately A$3.00 per share, this will still be a generous fully franked yield of 7.8%.

    Another positive is that Morgans sees plenty of upside in the BHP share price with its add rating and $48.40 price target.

    Centuria Industrial REIT (ASX: CIP)

    Another ASX 200 dividend share that has been tipped as a buy is Centuria Industrial. It is the largest domestic pure play industrial REIT on the Australian share market.

    Much like BHP, it delivered a strong result in August. Centuria Industrial reported a 22% increase in funds from operations to $111.7 million thanks to strong demand for its properties. This strong demand also underpinned a 99% occupancy rate, which bodes well for the future.

    Macquarie is positive on the company’s outlook and is expecting dividends per share of approximately 16 cents in FY 2023 and FY 2024. Based on the current Centuria Industrial share price of $2.59, this will mean yields of 6.2% for investors.

    The broker also sees plenty of upside for the company’s shares. It currently has an outperform rating and $3.69 price target on them.

    The post Experts name 2 ASX 200 dividend shares to buy next week appeared first on The Motley Fool Australia.

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    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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  • Experts name 2 ASX growth shares to buy in October

    Broker looking at the share price on her laptop with green and red points in the background.

    Broker looking at the share price on her laptop with green and red points in the background.

    If you have room in your portfolio for some new additions in October, then you might want to consider the two ASX growth shares listed below.

    Both have recently been named as buys by experts and tipped to climb meaningfully higher from current levels. Here’s what you need to know:

    IDP Education Ltd (ASX: IEL)

    The first ASX growth share that has been named as a buy is language testing and student placement company IDP Education.

    IDP is the co-owner of the IELTS test, which is the English test that is trusted by more governments, universities, and organisations than any other. This puts it in a great position to benefit from increasing demand for language testing, particularly given its strong position in key markets like India.

    Goldman Sachs is a big fan of the company and is expecting strong underlying system demand to result its stellar earnings growth through to FY 2025. It commented:

    IEL is trading c.40% below its 5-yr average P/E premium to the ASX200 Industrials with a forecast 37% FY22-25E EPS CAGR, we remain Buy-rated. We have upgraded EPS in FY23/FY24 by 1.7%/0.8% on the back of the stronger FY22 result, continued strong revenue growth and margin expansion. The balance sheet is in a resilient position with c.A$40mn of net cash to facilitate any bolt-on acquisitions or ramp up in organic investment in new offices and technology.

    Goldman has a buy rating and $36.00 price target on the company’s shares.

    Life360 Inc (ASX: 360)

    Another ASX growth share that analysts have tipped as a buy is Life360.

    Its is a technology company that operates in the digital consumer subscription services market, with a focus on products and services for digitally native families.

    The company’s flagship product is the Life360 app, which has a whopping 40 million+ active users. It offers families features such as communications, driver safety, and location sharing.

    Analysts at Bell Potter are very positive on the company. This is due to its huge total addressable market and material cross selling opportunities following recent acquisitions. It commented:

    Life360 has the potential to leverage its large and growing user base to enter new markets and disrupt the legacy incumbents. An example is roadside assistance where Life360 launched a subscription-based product called Driver Protect which disrupted the market and helped enable monetisation of its user base. Other markets Life360 could potentially enter include insurance, item & pet tracking, senior monitoring, home security and/or identity theft.

    And while Bell Potter acknowledges that Life360 isn’t profitable yet, which has been weighing on its shares this year, it isn’t concerned by this. The broker points out that the company is “expected to be operating cash flow positive from 4Q2023 and has more than sufficient cash to fund its operations till then.”

    In light of this, its analysts see the weakness in the Life360 share price this year as a buying opportunity for investors. Bell Potter has a buy rating and $8.23 price target on its shares.

    The post Experts name 2 ASX growth shares to buy in October appeared first on The Motley Fool Australia.

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    Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Idp Education Pty Ltd and Life360, Inc. 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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  • Why did the Qantas share price have a lousy end to the week?

    A sad woman sits leaning on her suitcase in a deserted airport lounge as the Qantas share price fallsA sad woman sits leaning on her suitcase in a deserted airport lounge as the Qantas share price falls

    The Qantas Airways Limited Limited (ASX: QAN) share price suffered on Friday.

    Qantas shares dropped 4.2% and finished the day at $5.02. For perspective, the S&P/ASX 200 (ASX: XJO) fell 1.23% on Friday.

    Let’s take a look at what may have impacted the Qantas share price on Friday.

    Qantas shares fall

    Qantas shares may have dropped on Friday, but they were not alone among ASX travel shares. The Flight Centre Travel Group Ltd (ASX: FLT) share price fell 4.44% today, while Webjet Limited (ASX: WEB) shares lost 4.23%.

    ASX travel shares have struggled after airlines in the USA dropped overnight. Qantas, Webjet and Flight Centre all have operations in the USA. The Delta Air Lines Inc (NYSE: DAL) share price fell 3.56% in the USA, while American Airlines Group Inc (NASDAQ: AAL) dropped 3.92%. United Airlines Holdings Inc (NASDAQ: UAL) shares fell 2.98%.

    Airlines fell amid Hurricane Ian in Florida, recession fears and pending interest rate rises. Interest rate rises increase the costs for households, potentially limiting spending on travel.

    Meanwhile, closer to home, Flight Centre CEO Graham Skroo Turner has leapt to the defence of Qantas despite recent travel woes. In an article in The Australian, Turner said “most in the travel industry” blame border closures and lockdowns for Qantas’ recent service issues. He said:

    History will show or has already shown that shutting borders and dictating widespread lockdowns not only were ineffective in stopping COVID-19’s spread but caused enormous societal and collateral damage.

    Qantas recently revealed that CEO Alan Joyce received $2.3 million in base salary and other benefits in FY22, 15% more than in FY21.

    Qantas share price snapshot

    The Qantas share price has slid 11% in the past year, while it has gained 0.2% in the year to date.

    In comparison, the ASX 200 has lost 11.7% in the past year and 13% in the year to date.

    Qantas has a market capitalisation of nearly $9.5 billion based on the current share price.

    The post Why did the Qantas share price have a lousy end to the week? appeared first on The Motley Fool Australia.

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    Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Webjet Ltd. 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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  • Here are the top 10 ASX 200 shares today

    A woman gives two fist pumps with a big smile as she learns of her windfall, sitting at her desk.A woman gives two fist pumps with a big smile as she learns of her windfall, sitting at her desk.

    The S&P/ASX 200 Index (ASX: XJO) dumped most of Thursday’s gains today. The index closed 1.23% lower at 6,474.20 points.

    That saw it posting a 1.53% week-on-week tumble and a 7.34% fall for the month of September.

    Today’s suffering followed a rough session overseas. The S&P 500 Index (SP: .INX) fell 2.1% to a two year low on Thursday while the Dow Jones Industrial Average Index (DJX: .DJI) slipped 2% and the Nasdaq Composite Index (NASDAQ: .IXIC) dumped 2.8%.

    It might come as no surprise, then, that the S&P/ASX 200 Information Technology Index (ASX: XIJ) led today’s downfall. The tech sector plunged 2.6% to its lowest point since July on Friday.

    Meanwhile, the S&P/ASX 200 Financials Index (ASX: XFJ) dropped 2.3% ahead of an expected rate hike next week.

    It wasn’t all bad news, however.

    Both the S&P/ASX 200 Materials Index (ASX: XMJ) and the S&P/ASX 200 Energy Index (ASX: XEJ) closed in the green, gaining 0.7% and 0.1% respectively.

    So, which ASX 200 share outperformed all others on Friday? Let’s take a look.

    Top 10 ASX 200 shares countdown

    The index’s top performing share on Friday was newcomer Capricorn Metals Ltd (ASX: CMM). The company was added to the ASX 200 earlier this month.

    Its gains today came amid news Macquarie is expecting big things for its future. The broker has tipped the miner’s stock to lift to $3.30, slapping it with an outperform rating, as my Fool colleague James reports.

    Today’s biggest gains were made by these shares:

    ASX-listed company Share price Price change
    Capricorn Metals Ltd (ASX: CMM) $3.00 8.7%
    Silver Lake Resources Limited (ASX: SLR) $1.18 7.27%
    Regis Resources Limited (ASX: RRL) $1.56 6.85%
    St Barbara Ltd (ASX: SBM) $0.74 6.47%
    Ramelius Resources Limited (ASX: RMS) $0.715 5.15%
    West African Resources Ltd (ASX: WAF) $1.05 5%
    Perseus Mining Limited (ASX: PRU) $1.52 4.83%
    Northern Star Resources Ltd (ASX: NST) $7.83 4.54%
    AGL Energy Limited (ASX: AGL) $6.84 3.64%
    Gold Road Resources Ltd (ASX: GOR) $1.28 3.64%

    Our top 10 ASX 200 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

    The post Here are the top 10 ASX 200 shares today 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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  • Novonix share price dips lower amid interest rate hike fears

    Man sits in front of laptop with head in hands.Man sits in front of laptop with head in hands.

    The Novonix Ltd (ASX: NVX) share price struggled on Friday amid losses seen across the ASX technology sector. The company’s shares closed down 2.49% on Friday.

    Shares of the battery metals and technology company ended the day at $1.76 each. Earlier today, they reached an intraday high of $1.79. and a low of $1.71.

    Today’s price action means its shares hit a new 52-week low, surpassing the previous 52-week low of $1.77 it reached on Wednesday.

    The S&P/ASX 200 All Technology Index (ASX: XTX) struggled today, too, ending with a 3.09% loss. It was also a tough day for the broader market, with the S&P/ASX 200 Index (ASX: XJO) closing 1.23% lower.

    There was no news from the company today to make sense of the sell-off in its share price. However, some developments have occurred for the company in the recent past. Let’s cover the highlights.

    What’s going on with Novonix?

    Novonix has had some negative news coverage over the last 10 days, which may have contributed to its share price downfall.

    The biggest news came on 20 September with Novonix’s auditor, PriceWaterhouseCoopers (PWC), noting a “material uncertainty” with the company existing as a going concern. as reported by my Fool colleague Zach.

    Reasons stated for the uncertainty was the fact that Novonix posted a $71 million loss in its annual report for FY22, along with a $40 million cash outflow, Zach said.

    More recently, Novonix could also be feeling the pinch of US jobless numbers coming in lower than expected on 29 September, leading to fears that the Fed will make further rate hikes to tame inflation.

    Investors may surmise that the higher interest rates get, the higher the likelihood the Fed will botch the soft landing it has been planning, thus steering them away from riskier investments.

    Novonix share price snapshot

    Novonix’s share price is down 80% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 13% over the same period.

    The company’s market capitalisation is around $878.45 million.

    The post Novonix share price dips lower amid interest rate hike fears appeared first on The Motley Fool Australia.

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    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 Hansen Technologies and Life360, Inc. 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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  • Macquarie share price dives 4% to new 52-week low

    Disappointed man with his head on his hand looking at a falling share price his a laptop.Disappointed man with his head on his hand looking at a falling share price his a laptop.

    The Macquarie Group Ltd (ASX: MQG) share price is drifting lower in afternoon trade on Friday.

    At the time of writing, shares in the investment bank are trading 4% lower at $153.25 apiece on no news. This marks a new 52-week low for the company, as seen in the chart below.

    In broad sector moves, the S&P/ASX 200 Banks Index (ASX: XBK) is also trading 2% down on the day.

    TradingView Chart

    What’s up with the Macquarie share price?

    ASX bank shares have copped a beating in the second half of 2022. Following a strong start to the year, the sector now trades at a low point.

    Chief to the sharp downturn was the Reserve Bank of Australia’s (RBA) decision to lift policy interest rates in order to curb inflation.

    Whilst ‘in theory’ the rise in rates is a net positive for the banking sector, the reality is that Australia’s lending market is tremendously concentrated, with razor thin net interest margins (NIMs) on offer.

    In addition, Australia’s housing market has been on a near-vertical trajectory for years, meaning many borrowers may exceed their capacity with the rising rates.

    And with inflation remaining stubbornly high, the path of interest rate hikes looks set for the time being.

    Hence, company fundamentals are second-tier in the Macquarie investment debate at present, with the market sentiment dominating the numbers instead.

    Brokers still rate it a buy too, with 9 out of 14 analysts recommending to buy Macquarie shares at these prices, unchanged from June, per Refinitiv Eikon data.

    With the pullback to yearly lows, Macquarie now trades on a forward price-to-earnings (P/E) ratio of 15.9 times, above the GICS Industry median’s 14.5 times.

    It also trades at a price-to-book ratio of 2.2 times and delivered a mammoth $12.30 in earnings per share (EPS) last year – well above the industry median’s 51 cents per share.

    Despite these strengths, pressure continues to mount on the Macquarie share price, with today’s trading volume more than 130% of the 4-week average at more than 1.02 million shares.

    As such the Macquarie share price is down almost 16% in the past 12 months, and down 25% this year to date.

    The post Macquarie share price dives 4% to new 52-week low appeared first on The Motley Fool Australia.

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    Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie 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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  • Broker gives its verdict on the AGL share price post-coal exit plans

    an engineer in hard hat stands amid solar panels, part of a solar farm, as she holds a tablet in her hand and smiles.

    an engineer in hard hat stands amid solar panels, part of a solar farm, as she holds a tablet in her hand and smiles.

    The AGL Energy Limited (ASX: AGL) share price is defying the market weakness and pushing higher on Friday.

    In afternoon trade, the energy company’s shares are up 3% to $6.80.

    This compares favourably to the ASX 200 index, which is down 1.1% this afternoon.

    Why is the AGL share price outperforming?

    Investors have been buying AGL’s shares on Friday after a number of brokers responded positively to the company’s coal exit plans.

    For example, according to a note out of Morgans, its analysts have upgraded the company’s shares to an outperform rating with an $8.20 price target.

    Based on the current AGL share price, this implies potential upside of 20% for investors over the next 12 months.

    Morgans is also expecting a 5% dividend yield in FY 2022, which brings the total potential return on offer to 25%.

    What did the broker say about AGL’s coal exit?

    The note reveals that Morgans is positive on the company’s coal exit and believes its target of 2035 is achievable. It commented:

    We think the strategy in today’s announcement is sound. Bringing forward Loy Yang’s closure date is an acknowledgment that inflexible brown coal plants will struggle as more and more variable renewables enter the grid. AGL has set itself an achievable timeframe to make the transition and, in our view, correctly identified that storage and firming assets will be the key investments needed to retain some form of competitive edge as the grid decarbonises.

    In addition, the broker notes that electricity futures prices are strong, which bodes well for its earnings in the coming years. Morgans explained:

    We’ve lifted our forecast for EBITDA in FY24 onwards due to the continued strength of futures prices and making some allowances for battery investments. This is partially offset by higher coal plant rehabilitation costs in later years. Overall this leads to an increase in our valuation and price target of 2% to $8.81ps.

    All in all, Morgans appears to believe that the beaten down AGL share price is great value at current levels.

    The post Broker gives its verdict on the AGL share price post-coal exit plans appeared first on The Motley Fool Australia.

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    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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  • ‘Far from being a flash in the pan’: Liontown shares dip despite chair’s upbeat lithium price outlook

    a sad looking engineer or miner wearing a high visibility jacket and a hard hat stands alone with his head bowed and hand to his forehead as he speaks on a mobile telephone out front of what appears to be an on site work shed.a sad looking engineer or miner wearing a high visibility jacket and a hard hat stands alone with his head bowed and hand to his forehead as he speaks on a mobile telephone out front of what appears to be an on site work shed.

    Shares of Liontown Resources Limited (ASX: LTR) are drifting lower today despite no market-sensitive news.

    At the time of writing, shares in the lithium player are trading 3% down at $1.45 apiece.

    While there’s been nothing price sensitive from Liontown today, the company did release its annual report for investors to digest.

    Optimism on lithium pricing

    In his address to the annual report, Liontown chairman Tim Goyder gave a high-level view of the company’s operations last financial year.

    Goyder spoke fondly of the company’s flagship asset, the Kathleen Valley Lithium project in Western Australia, noting it is progressing “rapidly towards development”.

    “At the heart of our success is the world-class quality, scale and location of the deposit [at Kathleen Valley],” he wrote.

    Liontown is on the path to becoming a “significant provider of battery minerals for the rapidly growing clean energy market”.

    This is now a concentrated space with only a few players currently successful in delivering metal to mine in the same process.

    All the hype boils down to the price of lithium, itself advancing to new all-time highs today at A$110,663 per tonne.

    Those unlocking the risk capital to mine and produce lithium will be rewarded with such handsome market prices, in theory.

    While there’s been some doubt on the longevity of the lithium rally, Liontown’s chairman is optimistic on future pricing.

    Far from being a flash in the pan, these remarkable pricing outcomes are being driven by a systemic shortage of lithium raw materials through the supply chain and a growing recognition that demand will continue to grow significantly out to 2030 and beyond, requiring a significant investment in new supply.

    Despite the optimism, Liontown shares are down more than 12% this year to date. They have also lost 12% over the past month of trade.

    The post ‘Far from being a flash in the pan’: Liontown shares dip despite chair’s upbeat lithium price outlook appeared first on The Motley Fool Australia.

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    Motley Fool contributor Zach Bristow 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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  • Why has the Lake Resources share price tumbled 17% in a week?

    A sad Carnaby Resources miner holds his head in his handsA sad Carnaby Resources miner holds his head in his hands

    The Lake Resources NL (ASX: LKE) share price has fallen 17.4% this week from the close of trade on 23 September to the time of writing today.

    That’s considerably more than the loss posted by the S&P/ASX 200 Materials Index (ASX: XMJ), which only dipped 1.41% over the same period.

    Other ASX lithium shares are also down during this time, including Pilbara Minerals Ltd (ASX: PLS), which is down 8.7% of its value. Allkem Ltd (ASX: AKE) also took a beating, losing 12.7%.

    Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has lost 3.29%.

    There’s no news from the company to make sense of the decline in the Lake Resources share price. However, some developments in the market unfolded. Let’s cover the highlights.

    What’s going on with the Lake Resources share price?

    On Monday, the Motley Fool reported that Lake Resources was among the top ten most shorted shares on the ASX, with a short interest ratio of 9.9% when the article was published.

    This follows insight in early September from research firm J Capital into why the Lake Resources share price might be targeted by short sellers. It claimed Lake Resources’ direct lithium extraction (DLE) technology was reportedly unproven and may not produce lithium in the clean way that the company expected, potentially producing toxic waste instead.

    Although my colleague James notes that Lake Resources has refuted J Capital’s claims, this negative commentary may still have a grip on the company’s share price, amid it falling to lower levels this week.

    More broadly, Lake Resources and other lithium shares could be feeling the bite of the prospect of interest rates rising even further, as well as the possibility that a ‘soft landing’ will not eventuate as the Fed hopes.

    My Fool colleague Tristian notes that these headwinds and others might culminate in a maelstrom of volatility we’ve witnessed over the past week.

    Lake Resources share price snapshot

    Shares in the company are currently trading for 87.5 cents apiece. Earlier today, shares made an intraday high of 90 cents and a low of 87 cents.

    The Lake Resources share price is down 13.12% year to date. Meanwhile, the ASX 200 has fallen 12.96%.

    The company’s market capitalisation is around. $1.22 billion.

    The post Why has the Lake Resources share price tumbled 17% in a week? appeared first on The Motley Fool Australia.

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    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 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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